Final Average Salary and NYSL Employees Retirement System and the NYC Teachers Retirement System

I have been complaining for several years about how NYCERS short changes its retirees when it comes to overtime and part-time earnings. In particular, how it computes the three year period used for determining the compensation base, FAS, used in the benefit calculation.

Someone just recently pointed out to me how the state system, NYSLERS, handles the FAS. Just below are the words for the NYSLRS news website run by the State Comprtoller:

When we calculate your pension, we find the set of consecutive years (one, three or five, depending on your tier and retirement plan) when your earnings were highest. The average of these earnings is your FAE. Usually your FAE is based on the years right before retirement, but they can come anytime in your career. The years used in determining your FAE do not necessarily correspond to a calendar year. For FAE purposes, a “year” is any period when you earned one full-time year of service credit.

The state system has been doing this since 1983, the start of Tier 4, based on Section 608.b (RSSL). In 2010, members of the NYC Teachers Retirement System (NYCTRS) were added to Section 608.b to provide a statutory basis for previous practice.

On May 31, 1988 the NYS Court of Appeals unanomously found that NYCERS had no legal basis to deny membership to part time workers. In 1992, the state legislature passed legislation to correct the mistakes caused by NYCERS improper actions, one of which was to create a new definition of FAS for all Tier 4 members using a new subsection, 608.d (RSSL), which in turn pointed to another newly created subsection, 13-638.e.(14), in the NYC Admin Code. The new definition in S.13.638.e.(14) was identical to S.608.b. The relevant sections are listed below if you want to follow the bread crumbs.

Bottom line, NYSLERS and NYCTRS are treating their members correctly and NYCERS is screwing all over a large part of its membership. I am putting the NYCERS trustees on notice that they are in violation of the law and they better have a substantial memo from the the NYC Law Department to cover their asses.

In addition, since there are two city pension systems doing two different things with the same statute, the Law Department has a problem. The Law Department has a history of quietly letting two systems go different ways but when one system finds out what the other is doing, the show is over. By the way, do not count on in-house staff with law licenses. They are not your statutory counsel.

FAS Statutes - Tier 4 and 6

Section 608.b (RSSL)

b. Notwithstanding the provisions of subdivision a of this section, with respect to members who first became members of the New York state and local employees' retirement system and the New York city teachers' retirement system before April first, two thousand twelve, a member's final average salary shall be equal to

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, however, 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. With respect to members who first become members of the New York state and local employees' retirement system and the New York city teachers' retirement system on or after April first, two thousand twelve, a member's final average salary 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, however, 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.

Section 608.d (RSSL)

d. Subject to the provisions of subdivision c of this section, and

notwithstanding the provisions of subdivision a of this section,

with respect to members of the New York city employees' retirement system and the New York city board of education retirement system who are subject to the provisions of this article, a member's final average salary shall be determined pursuant to the provisions of paragraph fourteen of subdivision e of section 13-638.4 of the administrative code of the city of New York, provided, however, that the applicable provisions and limitations of the term "wages", as defined in subdivision l of section six hundred one of this article, shall apply to such determinations of final average salary.

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

(14) (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, 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. (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.

Dr. Barry Liebowitz's Retirement

I just cane across this notice below of Dr. Barry Liebowitz's upcoming retirement.

October 28, 2013
By Neal Tepel
New York, NY, - Dr. Barry Liebowitz announced that he will step down as President of Doctors Council SEIU on December 31, 2013, the nation's oldest and largest union of attending physicians and dentists. His notable leadership of Doctors Council has spanned 33 years, one of the longest tenures of a union President in New York City, during which he helped grow the organization from a few hundred members in New York City to a national union for doctors and voice for patients.

I want to take this moment to let every NYC municipal worker know what an enormous impact this labor leader/doctor had on their pension benefits. For over seven years (1981-1988) Dr. Liebowitz and the late Don Meyers fought the city in the NYS courts to stop the illegal exclusion of part-time workers from membership in NYCERS and their lawful pension rights.

After losing battles in the trial and the appellate courts Dr. Liebowitz finally won the war at the N.Y.S. Court of Appeals (Doctors' Council v. NYCERS, 71 N.Y. 2d 889 (1988)) with an unanimous reversal of the lower courts' decisions. I can not overstate how powerful this decision, along with subsequent 1992 Part-Time Pension Law (Chapter 749), was not only to the benefits of part-time workers but for all city workers.

It put the City of New York, the Law Department, and NYCERS on notice that it could not restrict pension benefits unless the state legislature gave them specific authority to curtail those rights granted by the legislature.

This was a case of a union defending its members, something that we don't see a lot these days. Not bad for a doctor!

COIB and Martha Stark

On April 24, 2012, COIB issued a press release stating that as part of a settlement it was fining Martha Stark $22,000 for multiple Chapter 68 violations. These violations involved her work for Tarragon Realty starting in 2005 while she was still Finance Commissioner.

Legal Problems Beyond COIB

There are several legal problems with this settlement. While COIB has oversight over Chapter 68 of the NYC Charter, it has no jurisdiction over Chapter 49 of the city charter, in particular, Sections 1100 and 1118. See text below.

§ 1100. Head of department; whole time. Every head of an administration or department or elected officer except council members who receives a salary from the city shall give whole time to the duties of the office and shall not engage in any other occupation, profession or employment.

§ 1118. Officers and employees not be ordered to work outside public employment. No officer or employee of the city or of any of the counties within its limits shall detail or cause any officer or employee of the city or of any of such counties to do or perform any service or work outside of the public office, work or employment of such officer or employee; and any violation of this section shall constitute a misdemeanor.

COIB asserts in its press release that

The Board advised, in writing, that she could serve as a Tarragon Board Member, provided that, among other things, she not use her City position to obtain any advantage for Tarragon or its officers or directors and she not use any City equipment, letterhead, personnel, or resources in connection with her Board service.

COIB, however, does not have the power to suspend the above Section 1100 of Chapter 49.

In the past there has been some mention that the Law Department gave Stark a verbal approval to take a second job. Whether the Law Department has the authority to suspend Section 1100 of Chapter 49, is open to debate. COIB, however, makes no mention of this alleged verbal approval in its press release.

It is clear that in 2005 Stark was in violation of long standing statutory requirement that city commissioners "give whole time to the duties of the office" and not have a second job.

In addition, Stark dangerously admits to the following in the settlement of this issue:

j. Despite the written instructions from the Board, I asked the First Deputy Commissioner at Finance and my Executive Assistant at Finance to perform administrative tasks for me on Tarragon-related matters, which tasks they performed.

It appears that by this admission Stark puts herself at risk of a misdemeanor charge under the above Section 1118 of Chapter 49.