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UFT President Michael Mulgrew joined Mayor Bloomberg and other union leaders to announce new pension reforms

Management of the teachers’ retirement fund is being merged with other public pensions systems under a proposal unveiled today by city officials and union leaders.

In an effort to chip away at the rising costs of the city’s $120 billion pension fund, Mayor Bloomberg and Comptroller John Liu announced a proposal to overhaul city unions’ scattered pension systems. Until now, each of the five different funds – for teachers, police, fire, school employees and other public sector — had been managed by a handful of trustees under the comptroller’s office.

Under the proposal, the pools of money from each union will be kept separate but the same professional investors will manage all of the funds. Those investors will not be part of the comptroller’s office and will not change when a new comptroller is elected, as they have in the past.

Bloomberg, Liu, and union leaders said today that the fund’s underperformance had resulted in part from its management structure.

But the proposal does not address other issues underlying the city’s growing pension costs, which have soared in the last 10 years. (more…)

The city Department of Education is spared the worst of city agencies’ impending budget cuts, according to the executive budget proposal released by Mayor Bloomberg today for the fiscal year that begins July 1.

Lots of city agencies are being asked to fire employees, and spending citywide on capital projects has been slashed by 27 percent, Bloomberg said at a briefing for reporters about the plan today. On the other hand, he said, “We have a school system that we are putting more money in than we did last year.” The budget proposed today includes $10,810,000 in city funds for public schools. By the end of the current fiscal year, according to budget documents distributed today, the DOE will have received $10,462,000 in city funds. 

The DOE is being asked merely not to replace teachers who leave, not outright fire teachers, Bloomberg said. Plus, he said, federal stabilization money will allow the DOE to escape the deep cuts in capital funds that other city agencies are experiencing. Although the new capital plan is smaller than the one that is now ending, the DOE is being spared the 27 percent capital budget reduction that other agencies are set to experience. Whether the DOE would be included in a citywide reduction in capital spending had been an open question.

Responding to a reporter’s question about cuts to other agencies that could impede their ability to help needy New Yorkers, Bloomberg cited the philosophy of his chancellor, Joel Klein. “You’re never going to fix poverty until you fix public education,” Bloomberg said.

“I’m always happy to hear the mayor adopt my philosophy,” Klein told me when I asked him what he thought about hearing the philosophy he has promoted as the founder of the Education Equality Project being used to explain cuts in city services that some have called “ruthless.”

Klein sounded less sanguine when discussing the school budget picture. (more…)