Taxpayers on hook for school bigs’ perk

Mayor de Blasio’s pension rateof-return guarantee for school officials is an A-plus deal for them, but an F for taxpayers, critics say.

De Blasio’s preliminary budget sets aside $50 million to have taxpayers guarantee an 8.25 percent return on a special pension fund covering more than 20,000 school principals, supervisors and staffers.

This supplemental fund is on top of the regular pension educators receive from the city, which guarantees a 7 percent return.

The fund is called a Tax Deferred Annuity, which educators contribute to — akin to a privatesector 401(k). But here’s the difference: the taxpayers are on the hook even if the investments tank.

Teachers also used to have an 8.25 percent return guarantee, but de Blasio’s predecessor, Michael Bloomberg, negotiated with the United Federation of Teachers to lower it to 7 percent following the 2008-2009 recession. Other city government workers are not of-

This is an outrageous benefit . . . We’re asking that the guaranteed [8.25%] rate of return be scrapped to eliminate the risk to taxpayers. — Maria DDoulis, Citizens BBudget Commission Comm

fered such a sweet deal for their own tax-deferred plans, and private-sector workers generally have no fixed-rate guarantees.

The city for the first time is listing the guarantee as a $50 million line item in the budget, according to an analysis to be released Monday by the Citizens Budget Commission.

“This is an outrageous benefit,” the CBC’s Maria Doulis told The Post. “This guarantee is now requiring money from the city budget. We’re asking that the guaranteed rate of return be scrapped to eliminate the risk to taxpayers.”

The Mayor’s Office blamed Albany for the generous guarantee for school staff pensions.

“This is a state statutory requirement that the city is required to fund,” said de Blasio spokeswoman Freddi Goldstein.

But the teachers union defended the guaranteed return, arguing that it hasn’t been a drain on the treasury.

“The city has made a profit from this fund, since its investment returns over the last 25 years have exceeded the guaranteed rate of return promised by the TDA,” said UFT President Michael Mulgrew.

The special pension perk kicked in when the state Legislature in 1988 allowed teachers and principals to designate all or part of their pension contributions to the fixed-return fund. After the 2008 stock market crash, the fixed-rate option grew in popularity. More than 93,000 employees are now enrolled in the TDA.

The CBC said a market crash would burn the city and taxpayers.

“[The] CBC estimates that if [the Teachers Retirement System] experienced market losses comparable to 2008 and 2009, the TDA would need to cover a $4.5 billion loss,” the report said.