Sunday, December 13, 2009

EMS Disability Retirees -- August 11, 2008 Letter to EMS Retirees Association

This is the first in a series of items that I will be posting. They will outline a vendetta that Karen Mazza has undertaken against disabled EMS retirees.

August 11, 2008

Ms. Marianne Pizzitola

FDNYEMS Retirees Association, Inc. -- PO Box 260153 -- Bellerose, NY 11426

Dear Ms. Pizzitola:

I am writing in response to your August 11, 2008 letter requesting an analysis of the attached May 5, 2008 letter from Karen Mazza concerning NYCERS’s new earnings limits for disabled retirees who retired under Section 607-b of the NYS Retirement and Social Security Law (RSSL). For the record I was the executive director at NYCERS from 1990 to 2005, deputy executive director from 1986 to 1990, and deputy director of information technology from 1977 to 1986.

The May 5, 2008 letter from Karen Mazza to Dennis Sullivan appears to notify District Council 37 of the reinterpretation of RSSL Section 607-b, a line of duty disability benefit for EMS workers. Locals 2507 and 3621 represent those workers and belong to DC-37. It is interesting that DC-37 needed to be notified since DC-37 is a full voting member of the Board of Trustees which administers NYCERS. DC-37 would have had to vote on any change in NYCERS rules.

Ms. Mazza states that according to the new interpretation retirees under Section 607-b are now subject to an annual earnings limitation, both public and private sector, equal to $26,000 during 2007.

She claims that the NYC Law Department affirms this new finding. She does not, however, provide a copy of the NYC Law Department’s confirmation or interpretation. My experience with Ms Mazza leads me to doubt that such written confirmation or interpretation exists. Verbal statements are useless as Ms. Mazza should know.

In addition, Ms. Mazza is not authorized to make legal determinations on NYCERS pension statutes. That authority rests solely with the NYC Law Department.

Ms. Mazza attempts to justify the new interpretation by pointing out the following clause in Section 607-b “subject to the provisions of subdivision c of Section 605 of this article”. She then incorrectly argues that this wording imposes the Section 605 gainful employment criteria on Section 607-b retirees and in turn the amellorative earnings definition adopted by the NYCERS trustees in response to 1983 legislation.

Ms. Mazza refers to the resolution and rules adopted by the trustees in 1983 in conjunction with the passage of Section 605 into law. Please note Ms. Mazza does not provide copies of the resolution or rules. Ms. Mazza was not present in 1983 when the trustees were dealing with Section 605. I, however, was.

In 1983 the state legislature enacted a new disability benefit to replace the Tier 3 ordinary and accident benefits (Sections 506 & 507) which were dependent on the Social Security Administration for a determination of disability. Depending on an outside agency caused serious operational problems for the five effected NYS retirement systems (NYSLERS, NYSTRS, NYCERS, NYCTRS, and BERS).

The new Sections 605 and 507-a returned the disability determination to the associated five retirement systems but incorporated the gainful employment concept used by the Social Security Administration into the new statutes. Specifically Section 605 states:

“If the retirement system determines that the member is physically or mentally incapacitated for the performance of gainful employment, and that he was so incapacitated at the time he ceased his performance of duties and ought to be retired for disability, he shall be so retired.”

This still presented the trustees with a serious problem. On its face Section 605 only allows a member to retire for disability if he/she was determined to be physically or mentally incapacitated for the performance of gainful employment.

This is different than the traditional Tier 1 & 2 performance of the duties of member’s current job title. This meant a bus driver who lost both his legs in a bus accident would be denied disability because he/she could work at a desk job. It would also inevitably create pressure to have employers provide alternative employment for injured employees who were denied disability benefits. Management was not happy with that prospect.

As a compromise the NYCERS trustees and the NYC Law Department established a dollar threshold as a proxy for the gainful employment criteria. As long as a retiree was disabled with respect to the duties of his/her job title and did not earn more than $13,000/year (indexed for inflation, $26,000 in 2007), he/she was deemed not to be gainfully employed.

This was an easing of a requirement, not an imposition of a limitation. While it was an improvement over a strict interpretation of gainful employment, it was still harsh. If a retiree earned more than $13,000, he/she permanently lost the disability benefit on the theory that he/she was capable of gainful employment.

This is not an annual earnings limit. It was a marker for the performance of gainful employment. Section 605 does not authorize the Board of Trustees to impose annual earnings limitations on disabled retirees, only to determine if they are disabled and continue to be disabled as time goes on.

Section 607-b is fundamentally a different type of disability benefit from Section 605. It is a ¾ quarters line of duty benefit granted to a member if he/she is etermined to be physically or mentally incapacitated for the performance of his/her duties, and not the performance of gainful employment. See the following wording of Section 607-b:

“becomes physically or mentally incapacitated for the performance of duties as the natural and proximate result of an injury, sustained in the performance or discharge of his or her duties shall be paid a performance of duty disability retirement allowance equal to three-quarters of final average salary, subject to the provisions of subdivision c of section six hundred five of this article,…”

The reference to Section 605.c does not bring gainful employment into play for this benefit. The specific wording of Section 607-b quoted above supersedes the “gainful employment” criteria of Section 605.c which Ms. Mazza mistakenly depends on. Contrast the Section 607-b words above with the Section 605 words below:

“If the retirement system determines that the member is physically or mentally incapacitated for the performance of gainful employment, and that he was so incapacitated at the time he ceased his performance of duties and ought to be retired for disability, he shall be so retired.”

They are in conflict and clearly the Section 607-b takes precedence. In fact, Section 607-b.b carves out a special line of duty presumption for a member who contracts HIV, tuberculosis, or hepatitis. This clearly shows that these conditions are considered disabling independent of the gainful employment criteria.

It is rather the following portion of Section 605.c that is applicable:

“Each retirement system shall be entitled to adopt appropriate procedures for making the foregoing determination, including but not limited to the conducting of medical examinations, if any, for the purpose of determining initial entitlement of an applicant for disability retirement or to continued entitlement to a disability retirement allowance. Such retirement shall be effective as of a date approved by the head of the retirement system.”

This provision addresses the determination of the original disability and the continued existence of that disability. Performance of duties, not gainful employment is the criteria, clearly stated in Section 607-b. Again, as stated above, Section 605.c does not authorize the trustees to impose earnings limitations on disabled retirees.

Section 607-b was designed to provide a special disability benefit to EMS members who were injured in the line of duty. Absent clear language, similar to Section 13-171 of NYC Administrative Code, the trustees have no authority to impose earnings limitations on this benefit. This was the original interpretation adopted by NYCERS and it is the correct interpretation.

It should be noted that the legislature clearly incorporated Section 13-176 of the NYC Administrative Code into Section 607-b but chose not to include Section 13-171 of that code.

Ms Mazza refers to “gainful employment safeguards”. This is a mistaken use of words in Tier 4. As I indicated above, there is a safeguards provision in Tier 1 & 2 (Section 13-171 Safeguards on disability retirement, NYC Admin Code), but there is no such provision in Tier 3 or 4.

From my personal experience with Ms. Mazza she has very poor legal insight due to her aversion to reading the applicable statutes, her lack of overall effort, and the limited time she spends in the office. She has also had serious ethical lapses which are indicative of poor judgment on her part.

It is unfortunate that the trustees have allowed Ms. Mazza to be in a position where she can improperly deny benefits to members and retirees of NYCERS.

Sincerely yours, John J. Murphy

Cc: Inga Van Eysden, NYC Law Department Dennis Sullivan, DC-37

 
§  605.  Disability retirement.  a.  Application  for  a disability
  retirement allowance for a member may be made by:
    1. Such member, or
    2. The head of the department in which such member is employed.
    b. At the time of the  filing  of  an  application  pursuant  to  this
  section, the member must:
    1. Have at least ten years of total service credit, and
    2.  The  application  must  be filed within three months from the last
  date the member was being paid on the payroll  or,  in  the  case  of  a
  member  who was placed on a leave of absence for medical reasons without
  pay, either voluntarily or involuntarily, at the time  he  ceased  being
  paid,  application  may  be  made not later than twelve months after the
  date the employee receives notice that his employment  status  has  been
  terminated.    In  the  case of a member of the New York state teachers'
  retirement system, the application must be filed not later  than  twelve
  months  after the last date the member was being paid on the payroll or,
  where the member was placed on leave  of  absence  for  medical  reasons
  without  pay, either voluntarily or involuntarily at the time the member
  ceased being paid, not later than  twelve  months  after  the  date  the
  member  receives  notice  that  the  member's employment status has been
  terminated.
    3. Provided, however, if the retirement system  determines  that  such
  member  was  physically  or  mentally  incapacitated  for performance of
  gainful employment as the natural and proximate result  of  an  accident
  not caused by his own willful negligence sustained in the performance of
  his  duties  in active service while actually a member of the retirement
  system the requirement that the member should have ten years of credited
  service shall be inapplicable.
    c. If the retirement system determines that the member  is  physically
  or mentally incapacitated for the performance of gainful employment, and
  that  he  was  so incapacitated at the time he ceased his performance of
  duties and ought to be retired for disability, he shall be  so  retired.
  Each retirement system shall be entitled to adopt appropriate procedures
  for making the foregoing determination, including but not limited to the
  conducting   of  medical  examinations,  if  any,  for  the  purpose  of
  determining  initial  entitlement  of  an   applicant   for   disability
  retirement  or  to  continued  entitlement  to  a  disability retirement
  allowance. Such retirement shall be effective as of a date  approved  by
  the head of the retirement system.
    d.  Upon  retirement  for  disability  one of the following retirement
  allowances shall be payable:
    1. In the case of a member of a retirement system other than  the  New
  York  city  employees'  retirement  system,  the  New York city board of
  education retirement system or the New York  city  teachers'  retirement
  system,  if  the  member  has  attained  age  sixty when such retirement
  becomes effective, his retirement allowance shall be equal to that which
  he would receive in the case of service retirement at normal  retirement
  age  based on his credited service but in no event shall such retirement
  allowance exceed the amount he would receive pursuant to  paragraph  two
  of this subdivision.
    2.  In  the case of a member of a retirement system other than the New
  York city employees' retirement system,  the  New  York  city  board  of
  education  retirement  system  or the New York city teachers' retirement
  system, if the member has not attained age sixty  when  such  retirement
  becomes   effective,   his  retirement  allowance  shall  consist  of  a
  retirement allowance which shall equal one-sixtieth of his final average
  salary multiplied by the number of years of his credited service,  which
  formula  shall  be  used  only  if  the retirement allowance so computed
  exceeds one-third  of  his  final  average  salary.  If  the  retirement
  allowance  so computed shall amount to one-third or less of the member's
  final average salary, his retirement allowance shall  be  computed  upon
  the  basis  of  the  total  service  which  he would have rendered if he
  continued in service until he  attained  age  sixty  provided  that  the
  resulting  retirement allowance computed by resort to this formula shall
  not exceed one-third of the member's final average salary.
    3. In the case of a member of the New York city employees'  retirement
  system,  the  New  York city board of education retirement system or the
  New York city teachers'  retirement  system,  his  retirement  allowance
  shall be equal to the greater of:
    (i) one-third of his final average salary; or
    (ii) one-sixtieth of his final average salary multiplied by the number
  of  years  of  his  credited service; provided, however, that where such
  member is otherwise eligible to retire for service, and  the  retirement
  allowance  which  he  would receive in the case of service retirement is
  larger than the retirement allowance he would  otherwise  receive  under
  this  subparagraph or subparagraph (i) of this paragraph, his disability
  retirement allowance pursuant to this paragraph shall be  equal  to  the
  retirement allowance he would receive if he had retired for service.
  e.  The  board  of trustees of the New York city employees' retirement
  system may, consistent with the provisions of this section, adopt  rules
  and  regulations  establishing  a  procedure  for  the medical review of
  determinations made  by  such  retirement  system  on  applications  for
  disability retirement filed pursuant to this section. Any medical review
  procedure  adopted  pursuant  to this subdivision shall be substantially
  similar to the medical review procedure provided in  section  13-169  of
  the  administrative code of the city of New York, and shall provide that
  where a request for medical review is filed on behalf  of  an  applicant
  for disability retirement, such request for medical review shall be void
  and  of  no effect unless such applicant for disability retirement, or a
  person acting on his or her behalf in accordance  with  such  rules  and
  regulations,  executes  a waiver providing that he or she waives any and
  all rights which he or she might otherwise have to seek  or  obtain  any
  other disposition of such application for disability retirement by court
  or administrative proceedings or otherwise.


§ 607-b. Performance of duty disability retirement. a. Any member of
  the  New  York  city employees' retirement system who is employed by the
  city of New York or by the New York city health and hospital corporation
  in the position of emergency medical technician  or  advanced  emergency
  medical technician, as those terms are defined in section three thousand
  one  of  the  public  health  law,  who,  on or after March seventeenth,
  nineteen   hundred   ninety-six,   becomes   physically   or    mentally
  incapacitated for the performance of duties as the natural and proximate
  result of an injury, sustained in the performance or discharge of his or
  her  duties  shall  be  paid a performance of duty disability retirement
  allowance equal to three-quarters of final average  salary,  subject  to
  the  provisions  of  subdivision  c  of section six hundred five of this
  article and section 13-176 of the administrative code of the city of New
  York. Any member who has made application or who,  after  the  effective
  date  of the chapter of the laws of two thousand four which amended this
  subdivision, makes application for  such  performance  of  duty  pension
  shall be entitled to invoke the medical review procedure provided for in
  subdivision  e of  section six hundred five of this article, subject to
  the terms and conditions set forth in such subdivision.
  b. Notwithstanding any provision of this chapter or of any general  or
  special  law  to  the  contrary,  a  member  covered by this section who
  contracts HIV (where the member may have been exposed to a bodily  fluid
  of  a  person  under  his  or her care or treatment, or while the member
  examined, transported or otherwise had contact with such person, in  the
  performance  of  his  or  her duties) tuberculosis or hepatitis, will be
  presumed to have contracted such disease in the performance or discharge
  of his or her  duties,  unless  the  contrary  be  proved  by  competent
  evidence.



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.