Tuesday, January 28, 2020

Early Retirement for all NYCERS Tier-4 62/5 Plan Members, Including Vested Members

Recently a 55 year old Tier 4 NYCERS member told me that NYCERS had denied his retirement application. The resason that they gave him was since he was vested, he had to wait until he was 62 to retire. This reason is not currently supported by law.

Prior to 2000, this reason was valid. (See Section 612 (NYS - RSSL) below).

In 2000, however, the law was changed by Chapter 553 which was enacted as of 10/31/2000, The new law allowed most Tier 4 members to retire early subject scaled benefit reductions. See Section 603.1.2 (NYS RSSL) below. Specifically, as of October 31, 2000, Tier 4 NYCERS members who were not eligible for any of the following special retirement plans

  1. 1) 55/25 Plan (Chapter 96),
  2. 2) 57/5 Plan (Chapter 96), or
  3. 3) the Transit 25/55 Plan
were now entitled to apply for retirement starting age 55 through age 62 with varying levels of benefit reductions.

This statute does not require the member to be in city-service to be eligible to apply. Therefore all members, both in city-service and vested, are eligible. The technical term, “in city-service”, is used when meaning to indicate only members on payroll as opposed to vested members who, by definition, are not on payroll .

As executive director of NYCERS, this is the way I administered this benefit between 2000 and 2005.

I left NYCERS in 2005. Based on my experiences with helping NYCERS members since then, I have found NYCERS legal support to be incompetent and possibly intent on reducing members’ benefits without legal authority.

I have been writing this blog since 2009. It is a great vehicle for presenting information about the horrendously involved pension law which NYC workers have to deal with. I am always amazed that NYCERS does not attempt to communicate with its members through the internet. They could warn members of the pitfalls of the law by laying out in detail how the specific sections of law impact the members. The SPD's are very incomplete when it comes some of the dark corners of the law.

Considering how much money NYCERS spends, you would think that NYCERS would give detailed and precise explanations to members about its decisions, especially when denying benefits.

Teir 4: Relevant Statutes

Effective Sept. 1, 1983 and retroactive to July 1, 1976.

§ 612. Vesting.

a.

A member who has five or more years of credited service, upon termination of employment, other than a member who is entitled to a deferred vested benefit pursuant to any other provision of this article, shall be entitled to a deferred vested benefit at normal retirement age computed in accordance with the provisions of section six hundred four of this article.

As of October 31, 2000, the new Section 603.1.2 (reduction at 27% at age 55)
§ 603. Eligibility for service retirement benefits; age and service requirements.

… i. …

2. A member of the New York city employees' retirement system or the board of education retirement system of the city of New York who has met the minimum service requirement, but who is not

(a) a participant in the twenty-five-year early retirement program, as defined in paragraph ten of subdivision a of section six hundred four-c of this article (as added by chapter ninety-six of the laws of nineteen hundred ninety-five), or

(b) a participant in the age fifty-seven retirement program, as defined in paragraph three of subdivision b of section six hundred four-d of this article, or

(c) a New York city transit authority member, as defined in paragraph one of subdivision a of section six hundred four-b of this article,

may retire prior to normal retirement age, but no earlier than attainment of age fifty-five, in which event,

(this clause was added after 2000)

unless such person is a member of the board of education retirement system of such city who is otherwise eligible for early service retirement pursuant to subdivision c of section six hundred four-i of this article,

the amount of his or her retirement benefit computed without optional modification shall be reduced in accordance with the following schedule:

(i) for each of the first twenty-four full months that retirement predates age sixty-two, one-half of one per centum per month; and

(ii) for each full month that retirement predates age sixty, one-quarter of one per centum per month,

but in no event shall retirement be permitted prior to attainment of age fifty-five.

Tier 6: Cautionary Note

As of April 1, 2012, Tier 6 radically changed this early retirement benefit. The new law added the wording below to Sections 603 and 612. The result of which was to exclude Tier 6 vested members form the early retirement benefit, increase the normal retirement age to 63 for both in-service and vested benefits, and made the early retirement benefit reductions range from 6.5% at age 61 to 52% at age 55. I have highligthed the wording that restrict the benefit.

§ 612. Vesting.

a. …

Anything to the contrary notwithstanding, a member of a public retirement system of the state who first became a member of such system on or after April first, two thousand twelve must have at least ten years of credited service in order to qualify for a deferred vested benefit under this section; such member shall not be entitled to such benefit prior to the member's attainment of age sixty-three; and such deferred vested benefit shall be computed pursuant to subdivision b-1 of section six hundred four of this article.

§ 603. Eligibility for service retirement benefits; age and service requirements.

i. …

3. A member of a public retirement system of the state who has met the minimum service requirement, but who is not a New York city transit authority member, as defined in paragraph one of subdivision a of section six hundred four-b of this article, may retire prior to normal retirement age, but no earlier than attainment of age fifty-five, in which event, the amount of his or her retirement benefit computed without optional modification

shall be reduced by six and one-half per centum for each year by which early retirement precedes age sixty-three.

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