Good News ... maybe. The unions have negotiated a number of very important changes in the various pension systems for State and City employees. Nothing is final for New York City at this time since all of the changes are dependent upon legislation not yet passed.Basically, under consideration is a "restart" of the actuarial assumptions that mandate the required reserves in our pension funds, in return for improvements in the pension.
OSA members in Tiers I and II will gain up to an extra two years service credit (value= 3.4% in most cases), and members in Tiers III and IV with over ten years of service will see their pension contribution reduced by 3%.
We are close to an agreement, as you can see from the draft below, but until the legislation is passed and the Governor signs off, no one should celebrate just yet.
5/26/00 12:37 PM DRAFT # U1
Randi Weingarten, Chair
Municipal Labor Committee
Re: Agreement on Jointly Supported Pension Enhancements
Dear Ms. Weingarten:
By this letter, the parties agree to the following. The unions agree to support the recommendations of the City Actuary for various actuarial assumptions and methods for the New York City Retirement Systems, as set forth in his reports to the various Boards of Trustees, to be effective fiscal year 2000. Savings from these changes shall be used as a funding source for pension improvements reflected in the legislative bills recited below, as modified pursuant to this agreement, each of which shall be jointly supported by the City of New York and the Municipal Labor Committee.
Each of the following bills shall be effective as noted below (There shall be no liability for interest on any retroactive payment, refund or award of benefit.) as to each bargaining unit, contingent upon ratification of a successor contract to their 1995 - 2000 agreements or a final and binding impasse award:
Police and Fire Pension Systems
With an effective date of October 1, 2000:
ITHP S.5624-a/A.8362-a
(This bill changes the ITHP rate from 2.5% to 5%.)
With an effective date of July 1, 2000:
Final Average Salary
(The current Tier II FAS calculation is the average wages earned during any three consecutive calendar year period or the final 36 months immediately preceding the date of retirement, whichever is greater. This bill would allow current employees to choose either a three year or one year FAS and future employees, a one year FAS.)
Teachers Retirement System/ NYCERS/ BERS
Each with an effective date of October 1, 2000:
1. Retirement benefit enhancements contained in the agreement between the State of New York and CSEA
(CSEA reached an agreement with New York State as part of their overall contract settlement to eliminate the 3% employee pension contribution for employees in Tiers III and IV with 10 years of system membership, and to provide Tier I and II members with one month of retirement service credit per year worked up to a maximum of 24 months.
2. Tier Equity bills, S.7303/A.9875
(This bill would create an option for NYCERS Tier IV members to begin receiving pension benefits at less than 62 years of age. It would impose on those selecting this option the same early retirement benefit reductions as in Tier II. For Tier IV members of TRS it would equalize the existing early retirement benefit reductions with those in Tier II)
3. Service Credit, S. 5781-a and A.8309-a
(Current law permits members to purchase credit for prior service with the same employer. They cannot purchase other service with a different employer. This bill would allow public employees to purchase credit for service with any public employer that predates membership in a retirement system if the service would have been creditable at the time the service was rendered. It also reduces the amount of service that must be completed from five years to two years before the prior service could be credited)
4. Death Benefit Option, S. 6542/A. 9530
(Current law provides for two death benefit options, one of which must be selected upon joining the retirement system. Once selected, that choice is irrevocable. Generally, Option 2 is more generous. This bill would allow beneficiaries of members who chose Option 1 to choose Option 2. Future members will be covered by Option 2.)
In the event that legislation needed to adopt the actuary's recommendations is not enacted by the end of the FY 2000, this agreement shall be null and void. In the event any or all of the above legislative bills are not passed by the legislature and/or signed by the governor, or, if after being enacted into law, any or all of these bills are found to violate state or federal constitutional provisions, then the parties shall reopen this agreement for the limited purpose of discussing these matters.
If you concur with the contents set forth herein, please execute the signature line provided below.
Very truly yours,
JAMES F. HANLEY
AGREED AND ACCEPTED ON BEHALF OF THE MUNICIPAL LABOR COMMITTEE
RANDI WEINGARTEN, CHAIR
Draft #U1
THE COUNCIL OF THE CITY OF NEW YORK
CITY HALL * NEW YORK, NY 10007 *
PETER F. VALLONE, SPEAKER
May 24, 2000
Mr. Robert Croghan Chairperson
The Organization of Staff Analysts
220 East 23rd Street Suite 707
New York, NY 10010
Dear Mr. Croghan:
Later today I will be releasing the attached letter that details some of the fiscal challenges facing New York City in the coming months.
I want to make it clear that I support a permanent COLA with the same terms for retirees of all systems statewide and the elimination of contributions for qualified employees in tiers 3 and 4. I will fight for legislation that grants these hard fought benefits to City employees. But, I need your help.
Let us work together to craft legislation that protects your members and the soundness of the City's budget. Together, let us ask the Governor and legislative leaders to insure that we achieve a fair, equitable and fiscally sound pension reform package that compensates dedicated public employees for their sacrifice, but also allows the City of New York to meet its obligations well into the future.
I have supported a permanent COLA for City employees since 1989, and I am pleased to see that in principle, the Governor and the legislative leaders have indicated their favorable support for such legislation during this session. The City Council has proposals that we believe will strengthen any bill, insuring its equity and fiscal soundness well into the next century. This will allow the City to meet all of its future obligations and at the same time give our retirees and members the dignity and security they deserve.
I am dedicated to working with you to achieve these goals, and ask for your help.
Sincerely,
Peter F. Vallone, Speaker
