Judge 'Tiers' Apart 3% Pension Kick-In

NY Post - January 28, 2012

by DAVID SEIFMAN City Hall Bureau Chief

One of the city's rare victories in persuading Albany to corral pension costs has been overturned by a Manhattan judge, The Post has learned.

In a little-noticed decision issued on Jan. 20, state Supreme Court Justice Carol Edmead struck down a requirement that cops and firefighters hired after July 1, 2009, chip in 3 percent toward their pension costs.

Officials said the ruling would affect 3,500 cops and all future hires in the NYPD and FDNY, which was excluded in this round only because a federal judge has blocked the hiring of new firefighters for the last three years in a dispute over minority hiring.

The added cost to taxpayers was put at $7 million the first year, increasing by another $7 million each succeeding year.

City officials said they'd appeal. "We strongly disagree with Justice Edmead's decision, which would provide a pension to Tier 3 members, like newly hired police officers, at no cost whatsoever to the employee," said city lawyer Inga Van Eysden.

Mayor Bloomberg, who is counting on Gov. Cuomo to enact sweeping pension reforms for all new city employees this year, scored a rare pension win in Albany in 2009 when then-Gov. David Paterson vetoed an extension of Tier 2 pension benefits for cops and firefighters, thrusting them into a new Tier 3.

Union leaders hollered and screamed, but Paterson's veto was upheld in the Legislature.

As a result, cops hired after the cutoff date received a number of reduced benefits. They have to work 22 years, instead of 20, before being eligible for retirement. At age 62, their pensions will be cut by the amount of their Social Security checks. And they'd have to kick in 3 percent every paycheck for 25 years toward their pensions.

The city's coup received remarkably little attention from the general public -- but the unions were inflamed, and several, including the Patrolmen's Benevolent Association, the police Captains Endowment Association and the Uniformed Fire Officers Association, filed lawsuits.

Under an agreement reached in 2000 that allowed the Giuliani administration to raid pension funds, the city agreed to cover much of the pension contributions of cops and firefighters in order to increase their take-home pay, what came to be known as ITHP.

"The ITHP was never a gift from the city to the members," said Al Hagan, president of the UFOA. "It was negotiated in lieu of a salary increase and to allow the city to restart the pension."

Judge Edmead ruled that the city has a continuing obligation to pay those pension contributions because of a statute dating back to 1976 that's independent of the tier system.

$o much for that idea

A state Supreme Court judge ruled that the city cannot ask cops hired after July 2009 to contribute 3% of their annual salaries to their pensions.

* 3,500 NYPD cops affected, plus future hires in NYPD and FDNY

* $7M cost to city in first year

* $14M cost to city in second year