Public Employee Press

City tries to duck costs of cultural pensions

The Bloomberg administration is trying to shift costs of the Cultural Institutions Retirement System to the workers. In negotiations, the administration revealed its plan to abandon the longstanding funding formula of the 50-yearold pension system to cut its financial obligation.

CIRS is a stable pension system, 110 percent funded, but its investments were hurt by the 2008 stock market crash, and another downturn would threaten its financial health. A pullback by the Bloomberg administration would seriously destabilize the pension system.

If CIRS becomes underfunded, federal law would let the trustees cut benefits to reduce management's retirement obligations.

The negotiations are under way as CIRS faces the challenge of meeting its future obligation to vested workers who were laid off from city-funded day-care centers due to the Bloomberg administration's Early Learn program, which replaces the current centers with private providers that are not in CIRS. AFSCME District Council 1707 represents the current workers.

The administration aims to cut costs by ending payments for the pensions of the remaining workers at the not-forprofit day-care centers and reducing its contributions toward the pensions of workers and managers at city cultural institutions.

CIRS covers nearly 13,000 retirees, managers and workers, including 1,200 DC 37 members at museums and daycare centers. Early Learn has reduced the number of city day care workers in CIRS 4,800 to 3,200.

The loss of 1,600 workers has created a $64 million, long-term "withdrawal liability," or funding obligation, for the pensions of the laid-off workers.

Although the city has covered their pension costs for 20 years, it has not accepted its responsibility for the former employees of the closed day-care centers. A dozen museums and botanical gardens are members of CIRS.

"We need more information from management and the city to continue the negotiations," said Associate Director David Paskin of the DC 37 Research and Negotiations Department. "These are very challenging negotiations, but we are confident that we will be able to protect members' retirement benefits."