STATE OF THE UNION:
COBA LEGISLATIVE REPORT CONTINUED
By: Elias Husamudeen, treasurer
As you know the coBa obtained the Variable supplement
Fund legislation fromthe state of newYork,which
Was signed by governor Pataki in 2000. The VsF received
A “skim” of approximately $100,000,000 dollars
From nYcers in the year 1999. The VsF successfully
Made payments to retired correction officers from2000
To 2005. It made the following payouts.
$8,500 2000
$9,000 2001
$9,500 2002
$10,000 2003
$10,500 2004
$11,000 2005
The last year that full benefit payments were made to
CoVsF retirees was the December 2005 payment (I.e.,
Fiscal Year 2006). The VsF was unable to generate
Enough money to continue its annual payouts since
2006. Remember, theVsF hasn’t received any additional
“skim”since the deposit of the $100,000,000 in 1999. No
SkiM has been payable to the coVsF for Fiscal Years
2001 to 2009. There is a substantial amount of ground
To be made up by nYcers before the VsF is entitled to a
“skim” from the pension fund. It is also important to
Understand that the legislation establishing the VsF
Permits only full payments of benefits for each year. If
Funding is not available for all eligible recipients to
Receive a full VsF payment, then no payments at all can
Be made.
We will be carefully monitoring the funds available for
The VsF each year and a payout will be made as soon as
Adequate funds exist. Our VsF is guaranteed from the
Year 2019 onward, so ALL Correction Officers hired
Since 1999 will not be affected by this situation.
CoBa is unwilling to entertain any changes to this
Benefit, as some fromthe citymay have suggested, that
Would ultimately destroy the 2019 guarantee. Benefits
After Calendar Year 2018 are guaranteed by the City
Of NewYork (the “City”) to be paid regardless of the
Amount of assets in the COVSF.
PLAN NET ASSETS
AS OF JUNE 30, 2008, 2007, 2006
2008 2007 2006
Cash $243,532 $243,532 $249,263
Receivables for accrued earnings 68,496 125,466 20,575
Miscellaneous receivables 10,223 10,223 10,223
Investments, at fair value 35,000,293 35,554,6153 1,967,274
Total assets 35,322,544 33, 933,836 32, 247,335
Accounts payable - 150 150
Total Liabilities - 150 150
Net assets held in trust $35,322,544 $33,933,686 $32,247,185
FINANCIAL HIGHLIGHTS
The assets of coVsF exceed its liabilities by $35.3million
And $33.9 million as of June 30, 2008 and 2007
Respectively. These net assets are held in trust for the
Payment of future benefits to eligible recipients.
coVsF’s net assets held in trust increased by $1.4million
(4%) during 2008, and increased by $1.7 million (5%)
During 2007. Under current law, in order for any
Benefits at all to be paid to the eligible recipients,
The Plan would need to possess assets sufficient to
Pay benefits in full to all eligible recipients. The law
Does not provide for partial payments to be made.
The theoretical benefits payable during fiscal year 2007
Would have been approximately $36 million. However,
Since plan net assetswere only $33.9million, no benefits
Were payable at all. Likewise, for fiscal year 2008, the
Theoretical benefits payable would have been
Approximately $45 million. Since the plan net assets
Were only $35.3 million, no benefits were payable at all.
The coBa does not control the direction of the stock
Market nor the investments made by nYcers. We will
Continue to address this issue for those officers retiring
In the next few years and we will continue to diligently
Protect the financial interests of our members and their
Families.