Tuesday, December 8, 2009

The Transit Authority's New $22M Pension Liability

Recently, some genius at NYCERS decided to overturn a 20 year old legal interpretation of the death benefits payable to Tier 4 Transit Force members & retirees. The new interpretation creates a new annual benefit payout of approximately $22M.

The T.A. will have to pay the cost of this new benefit. On top of the on-going annual cost, the T.A. will also have to pay for the retroactive payment to the beneficiaries of every Tier 4 Transit retiree who retired after 1986 and has since died. I am sure Gary Dellaverson is thrilled but maybe, no one has given him the good news.

In 1986, the original interpretation was determined by my predecessor, Harold Herkommer, and the head of the pension division at the NYC Law Department, Jerry Dwyer. It was the correct decision. It appears in the NYCERS Tier 4 SPD (page 41) which was reviewed by the Law Department before it was published. But you better have a hard copy of that SPD because NYCERS has taken it off its web site.

A change of this magnitude should have been supported by an authoritative opinion from the Law Department and not by the fantasy of political operative at NYCERS.

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