Saturday, January 23, 2010

The New "Tier 5" Law

Last December, the governor singed the new state wide “Tier 5” pension law (December 10, 2009 - Chapter 504). It does not, however, impact most new NYC workers, yet. It does, however, cover city workers who are represented by the UFT and are members of TRS or BERS.

It is reasonable to expect that the state legislature will enact a second “Tier 5” law this spring covering remaining city workers who join a city pension system after this new law becomes effective. You can gauge the outline of the new city law in the structure of this new state law.

While Chapter 504 is a pension benefit reduction law, it doesn’t really create a new pension tier. It imposes benefit reductions within the frameworks of the existing Tiers 2, 3, and 4.

Technically, Tier 2 is a reduction structure placed on top of the old Tier 1 model.

This law is really three laws in one, representing agreements between the effected employers and the unions representing the associated employees.

  • - Part A applies to State & county police officers & firefighters.
  • - Part B applies to general state & local workers & teachers outside NYC.
  • - Part C applies to NYC teachers and workers who are both represented by the UFT and eligible to join TRS and BERS.

New York City was only involved with Part C which represents a deal between the city and the UFT and effects only TRS and BERS members. The following are write ups on the three parts:

Part A: Tier 5 for Members of NYS-PFRS

Part B: Tier 5 for Members of NYSL-ERS & NYS-TRS

Part C: Tier 5 for Members of NYC-TRS & NYC-BERS

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