Our lives have been upended. We are all operating in uncertain times, knowing that our routines and circumstance could keep changing, day by day. We are all being tested not only by our strength to adapt, but our ability to stay steady and resilient.
The New York City Office of the Actuary (NYCOA) is the agency responsible for making sure the pensions are secure for nearly 800,000 active and retired New York City workers who rely on them. As the head of this agency, I want to share that our operation remains steady during these challenging times, and our staff is demonstrating unwavering resilience.
Planned for Interruption
For months, my team and I have been discussing, monitoring, and ultimately planning for the effects of business interruptions, such as COVID-19, on our operations and the work we produce daily. The staff at NYCOA are all currently working from home, interacting through email, instant messaging systems, remotely shared computer screens, text messages, phone calls, conference calls, video chats, and virtual meetings to conduct business and complete tasks. We are continuing to do what we have always done, caring for the pensions of the public servants who are serving us now, many of whom are on the front lines of this crisis, and the ones who served this great city already.
Our remote operations are, first and foremost, keeping my staff safe and allowing us to do our part in helping to flatten the curve of this virus, while allowing us to continue to perform the work expected of us. From certifying individual retirement pensions to determining the city's annual pension contributions to costing pension-related legislation being considered in Albany (through what's called a Fiscal Note), it is business as usual for NYCOA. Incidentally, we just produced a Fiscal Note that would suspend the earnings limit for our New York City neighbors who already served this city but are called back to service to help combat this health-related state of emergency. The legislation would allow them back to work without their pension being suspended when they reach the earnings limit currently imposed by law. Our work is even adapting to the needs of the moment.
When the dust settles and life returns to normal, the effects of COVID-19 will be with us for some time as we navigate an uncertain New York City economy. Let's hope that the experiences and lessons learned from the storms we already weathered as a city serve us well as we adapt to some new economic realities.
When it comes to public pensions, there is no better time than now, to be reminded of how a pension promise is kept.
Fair for All Ages
Pension funds are designed for all members to share in the common goal of funding them, together, and over time. This is what makes the funding of the benefits intergenerationally fair for all: The city workers (both veteran and newer ones) and the taxpayers who benefit from the services provided by these very workers. This way, no one group shoulders the effects of the bad years or solely benefits from the good years. For example, when times are good and the market investments used to support pensions experience high returns, those gains are banked to weather the storm when times are not as good. Conversely, when times are not as good and pension investments have smaller returns, those losses aren't accounted for all in that particular year. Gains and losses are spread out over time so generally, every generation of workers pays for the pension costs equally.
What we are living through right now provides a very real example of this. The entire economy is and will continue to be affected by COVID-19 but rest assured New York City's funding policy will hold its course and we will share the effects of this difficult time and, equally important, share in the results of better days to come.
Funding steadily, adequately, and responsibly over someone's working lifetime is always the best way to provide someone with a secure retirement. NYCOA will continue to follow this mantra as we work together with our stakeholders, partners, and elected officials in the spirit of resiliency and hope after COVID-19.
(Editor’s Note: Ms. Chan is New York City’s Chief Actuary)
We depend on the support of readers like you to help keep our publication strong and independent. Join us.