New York City’s budget office is conducting a review of the city’s retirement benefit contributions for cultural institutions and child care providers, which officials suggest may have been overpaid for years.
The revelation came at a city budget hearing at the City Council chambers on Monday.
“I don’t think we really know what’s going on, quite honestly, and it’s not through lack of asking,” Mark Page, director of the Office of Management and Budget, told the City Council Committee on Finance.
City budget director Mark Page testifies Wednesday at the City Council’s first budget hearing of the season. Photo: William Alatriste, New York City Council
Committee chair Domenic Recchia had asked Page why the city has not paid the bill this fiscal year for the Cultural Institutions Retirement System (CIRS), which makes payments to private pensions on behalf of nonprofit arts and child care organizations delivering services on behalf of the city. The current city budget apportioned $23.7 million this year for contributions to the fund — $8.3 million on behalf of institutions like museums and zoos, and the other $15.4 million for child care nonprofits. Page said the city is investigating the bookkeeping.
“As we’ve looked back on the past history on that, it turns that the information we were given by a substantial number of these enterprises we have those contracts with about what they owed has not been true,” Page told the council committee. “They’ve basically told us that we were responsible for the benefits not just for the employees that were working for New York City, but responsible for the employees that were working for someone else.”
Recchia said the Office of Management and Budget needed to meet with the council to discuss the issue, “because this is really going to hurt a lot of people.”
Speaking to reporters in the hallway outside the hearing, Page said the amount of money paid out was “significant” and “something we are trying to get a handle on.”
Page said the Office of Management and Budget had found instances where it had been told to pay the pension contribution for 65 workers of an agency but discovered there only 50 people worked on its city contract.
The retirement system makes payments on behalf of the employees of dozens of private but city-subsidized cultural organizations such as the American Museum of Natural History, New York Hall of Science, Staten Island Historical Society, Wave Hill and the Battery Park City Conservancy. Also served by the fund are child care workers under contract with the city. Employees of the nonprofit organizations are not considered public employees.
Page could not say exactly how widespread the problem had become, how many contractors were involved or how much money the city had overpaid.
At the hearing, Page testified that the Office of Management and Budget had found gathering information difficult. He said “a lot of open questions” remain regarding the value taxpayers received for their money.
The Cultural Institutions Retirement System has been providing workers’ pensions since the 1950s, and expanded in the 1960s and 70s to cover child care organizations as well, said Doug Turetsky, chief of staff at the Independent Budget Office.
