The Fight Goes On: Overtime and Final Average Salary - Tier 4 and Tier 6 members

I previously posted a write up concerning the compensation base (Final Average Salary: FAS) used by NYCERS to compute Tier 4 retirement benefits. For most retirees this is the most important component in their retirement calculation.

In the posting I referred to a member I was helping with her dispute with NYCERS over the calculation of her compensation base to be used in her retirement benefit calculation. This member is currently working in a classic part-time title. This dispute was the reason I began to dig into the statutory definition for the Tier 4 FAS. The posting was the result of that research.

The dispute was caused by the fact that the member did not have five years of continuous full-time service to be used in the calculation of her FAS. This is a situation that occurs much more often for women than men because of child care responsibilities that fall on women for the most part and also the care of aging parents. The part-time law, that was passed in 1992, was aimed at fixing these types of problems (Chapter 749/Laws of 1992).

Through correspondence and in-person meetings with NYCERS the member clearly pointed out the statutory provisions she wanted applied to her case. On March 20, 2019, the NYCERS Deputy General Counsel, Maya Khodos, sent the member a final decision on the dispute and notified her of her right to file an Article 78 within four months of the letter’s date. We have the King v. NYCERS decision to thank for the clear appeal notice.

The key paragraph in the letter is listed below:

“NCERS is unable to perform a calculation of your Final Average Salary (FAS) pursuant to New York Administrative Code (Ad. Code) section 13-638.4(e)(14)(ii) using the years of 2000 through 2005 as you requested because such a calculation is contrary to the law. A six-year average calculation pursuant to Ad. Code 13-638.4(e)(14)(ii) may only be performed using part­time service. Full-time service is defined by this statute as City-service rendered in a title in which a person is regularly scheduled to work at least eighteen hundred twenty-seven hours per year. Your service, as reported by your agency, was full-time from 2000 to 2005.”

The key sentence in this paragraph is “A six-year average calculation pursuant to Ad. Code 13-638.4(e)(14)(ii) may only be performed using part­time service.”.

If that were a correct statement, I am fairly certain that Ms. Khodos would have stated the statutory language for restricting the six year calculation to only part-time service. She, however, did not state any statutory basis. That is because there is none. Based on my over 30 years of experience working at NYCERS I know this statement is clearly incorrect. Note: the “(ii)” references in the paragraph are incorrect. They should be “(i)(B)”. The “(ii)” reference covers Tier 6 members.

This member will now have to file an Article 78 in order to fight for her pension rights. My opinion is that NYCERS is stonewalling the member and wants her to just go away. NYCERS is denying a benefit without statutory authority.

This issue not only affects this member. It will affect any Tier 4 member who may have a better six year average FAS than a FAS based on a 110% limited 36 month service period.

Section 13-638.4(e)(14) (NYC Admin Code) is the primary definition of the FAS for all Tier 4 members. It was enacted in 1992 in response to the Doctors Council court decision. Prior to that Section 608 (NYS RSSL) was the controlling statute in 1992 it was amended to refer to the new Section 13-638.4. I have included the text of this section at the end. You can read it for yourself and see that there is no part-time service limitation placed on the six year calculation.

NYC Admin Code Section 13-638.4.e.(14)

(For Tier 4 Members)

(i) Subject to the provisions of subdivision f of this section and the provisions of subdivision c of section six hundred eight of the RSSL, where those provisions are applicable, and notwithstanding the provisions of subdivision a of section six hundred eight of the RSSL,

for a tier IV member of NYCERS

who is not a New York city revised plan member (as defined in subdivision m of section six hundred one of the RSSL) or

for a tier IV member of BERS

who is not a New York city revised plan member,

the term "final average salary", as used in article fifteen of the RSSL,

shall be equal to the greater of:

(A) one-third of the highest total wages earned by such member during any continuous period of employment for which the member was credited with three years of service credit;

provided that if the wages earned during any year of credited service included in the period used to determine final average salary exceeds the average of the wages of the previous two years of credited service by more than ten percent,

the amount in excess of ten percent shall be excluded from the computation of final average salary; or

(B) the total wages earned during any six consecutive years from service for which the member received service credit divided by the amount of such service credit earned during that six-year period,

(added as of April 1, 2012 and if limiting benefits, is not applicable to Tier 4 members)
provided, however, that "wages", as used in this paragraph, shall mean the applicable provisions and limitations of the term "wages", as defined in subdivision 1 of section six hundred one of the RSSL.

(For Tier 6 Mmebers)

  (ii) Subject to the provisions of subdivision f of this section where those provisions are applicable, and notwithstanding the provisions of subdivisions a and c of section six hundred eight of the RSSL,

for a tier IV member of NYCERS

who is a New York city revised plan member as defined in subdivision m of section six hundred one of the RSSL) or

a tier IV member of BERS

who is a New York city revised plan member,

the term "final average salary", as used in article fifteen of the RSSL,

shall be equal to

one-fifth of the highest total wages earned by such member during any continuous period of employment for which the member was credited with five years of service credit;

provided that if the wages earned during any year of credited service included in the period used to determine final average salary exceeds the average of the wages of the previous four years of credited service by more than ten percent,

the amount in excess of ten percent shall be excluded from the computation of final average salary,

provided further that "wages", as used in this paragraph, shall mean the applicable provisions and limitations of the term "wages", as defined in subdivision l of section six hundred one of the RSSL.