Denial of Legal Benefits: Incompetence and Arrogance

It is difficult to see NYCERS treat disabled retirees with contempt when the agency has statutory backing for its heartless and sloppy actions. It is absolutely despicable when NYCERS does this without legal backing.

In 2009, I wrote about about errors in the newly issued NYCERS Tier 4 summary plan description (SPD), in particular filing for retirement under Tier 4. At the time the issue was hypothetical. I now have come across a real live person who NYCERS is denying his legitimate right to retire under Tier 4.

This person is currently disabled and receiving a Social Security disability benefit. After working for the city for 16 years he left the city in 2000. He is now 55.

NYCERS has refused to accept his Tier 4 retirement application and is forcing him to apply for retirement under Tier 3. The benefit for this person at age 55 under Tier 3 & 4 will be the same, however, under Tier 3 this person's benefit will be reduced at age 62 by 50% of his Social Security retirement benefit.

The Tier 4 & 3 benefit for this person is only 19.4% of his three year average earnings with a 27% reduction for early retirement at age 55. Assuming this person's three year average salary was $50,000, his annual benefit would be $9,700 at age 55. At age 62, however, the Social Security offset could easily be $8,000 per year. This drops the person's benefit and NYCERS liability to $1,700 a year when this person turns 62. It is also possible that the offset could obliterate the Tier 3 benefit and in turn, put the pensioner's health insurance coverage at risk.

The Tier 4 benefit is not what you would call a gold mine. In fact, it is typical of a NYCERS pension for average city worker. NYCERS, however, is flaunting the law and depriving this man of his legal benefit. Over the years I have seen NYCERS and the city try to save money by denying legal rights to both part-time and female workers but let a former police commissioner get pension service credit for double dip Section 211 service.

To obtain his rightful benefit, this member will have to sue NYCERS. Along with the resulting legal expense, it is not certain that he will win. At least, I would testify that as of 2005 this member was eligible for a Tier 4 early retirement benefit and that, in my opinion as the executive director at the time the law was passed, the current executive director is illegally denying this person his statutory Tier 4 retirement benefit.