A significant issue involving NYC Union Annuity Funds (there are about 30 of them) is a lack of oversight. These types of retirement plans are not subject to the stringent requirements of the Employee Retirement Income Security Act (ERISA). In general, the IRS has oversight of governmental retirement plans but audits of these retirement plans are not very common. The NYC Comptroller also has “oversight”, but is not a regulator and has no power enforcing fiduciary obligations. The NYC Comptroller is supposed to receive an annual report from each of the Union Annuity Funds, known as a Directive #12A or #12B, but the Comptroller can only provide recommendations on any issues uncovered and does not have audit/enforcement powers.
NYC retirees who have their retirement money in a NYC Union Annuity Fund should take the time to read the following press release and criminal complaint that involves the Law Enforcement Employees Benevolent Association (LEEBA). LEEBA represents members of the NYC Department of Environmental Protection, NYC Department of Sanitation, and NYC Department of Transportation. It appears, based on the press release and criminal complaint, there was a complete breakdown of any oversight and clearly a lack of internal controls by the LEEBA.
From the press release: from in or about 2014 through in or about 2019, Wynder caused the withdrawal of more than $500,000 from the individual retirement accounts that constitute the Annuity Fund, thereby wiping out the entire balance of certain members’ accounts.