Tier 5 'Lite' May Blaze City Police/Fire Trail

Chief Leader - December 08, 2009

by RICHARD STEIER

Governor Paterson's pension reform proposal came into sharper focus last week when the details of how it applies to cops and firefighters outside the city were revealed following the Tier 5 measure's passage by the State Legislature. What is now clear is that the pain inflicted on future employees by the new plan rises and falls in direct proportion to how desperate their unions are.

This was undoubtedly why the Bloomberg administration issued a statement lauding the approval of a Tier 5 deal it negotiated six months ago with the United Federation of Teachers but was silent on how the bill will affect its hopes of getting drastic changes in coverage for future cops and firefighters.

On that score, the Mayor's position-as it so often is-seemed to be summed up by a New York Post editorial, this one declaring that the Legislature "tried to slip a lipsticked pig labeled 'pension reform' past the people."

Took Sting Out of Initial Plan

Hyperbole notwithstanding, the general consensus among city union officials was that those lobbying for the police and fire union officials outside the five boroughs had done a good job of taking much of the sting out of Governor Paterson's original proposal, which was largely based on suggestions made by the Mayor. The bill, which Mr. Paterson is expected to sign into law shortly, is not without retrenchment: it limits the overtime that can be counted in calculating pension allowances, mandates a 3-percent employee contribution for the first time from those employees, and requires them to work five years longer-than previously before they are assured of a pension and health benefits after they retire.

But those changes amount to a haircut, rather than the scalping that was feared after Mr. Paterson stunned the police and fire unions in early June by vetoing what had been expected to be a routine extension of Tier 2 pension rights for future members. That had the effect of sending future members down the chute into Tier 3 of the system, which curtailed a number of key benefits and required that they work 22 years to qualify for a full pension and 25 if they wanted to collect cost-of-living adjustments on their basic allowance.

One veteran official summed up last week's bill this way: "With respect to police and fire, this is Tier 5 lite. It preserves the 20-year retirement and it preserves all the disability presumptions."

He was referring to the system under which if cops or firefighters contract a variety of cancers, heart or lung trouble, or certain other ailments, it is presumed to be the result of their jobs and entitles them to tax-free disability pensions. That right does not exist under Tier 3, another prime reason the unions were so unhappy about the Tier 2 veto.

The bill also makes no change in the right of cops and firefighters outside the city to retire after 20 years' service, regardless of age. Mayor Bloomberg has sought a revision under which future city cops and firefighters would have to spend 25 years on the job and be at least 50 in order to qualify for a full pension.

The chances of that happening through legislative action have effectively vanished. No matter how much money Mr. Bloomberg has spread among Republicans in the State Senate, he couldn't produce a majority in either house that would stick future city cops and firefighters with more-onerous conditions for retirement than exist for the rest of the state. Nor, for that matter, would it be in his interest to do so.

COs, SanWorkers Now Have Edge

The state bill only serves to accentuate the oddity of the current city position of requiring cops and firefighters to work two years longer than not only those in other jurisdictions but other municipal uniformed groups that got the 20-year retirement right through higher pension contributions.

As Detectives Endowment Association Legislative Director Lou Matarazzo noted, "Right now you have a situation where Correction and Sanitation have a 20-year pension and we don't. Does that make sense?"

He and DEA President Mike Palladino said that both the unions and the Bloomberg administration had reason to want to address the potential problem but that each side might figure the other had to blink first. (Neither Patrolmen's Benevolent Association President Pat Lynch nor Uniformed Firefighters Association head Steve Cassidy opted to comment last week.)

Another veteran union official, who spoke conditioned on anonymity, said the UFA arguably needed a way out of Tier 3 sooner than the PBA. Because the basic problem of working longer to qualify for a full pension won't hit home for 20 years, there isn't much urgency on that front for getting out from under Tier 3. But because firefighters are more susceptible than cops to presumptive diseases affecting their lungs due to the nature of their work, recapturing the old disability pension right is something the UFA would like to address as quickly as possible.

Speaking of both entry-level unions, Mr. Matarazzo-a former PBA president-said, "I would assume they would want to get out of Tier 3 pretty quickly. But I also think it's going to be a terrible recruitment problem for the city."

As Mr. Palladino noted, cops in Nassau and Suffolk at maximum salary are earning more than $20,000 above the $76,488 top pay for NYPD Police Officers. Force city cops, whose jobs are generally more-stressful, to work two years more than their suburban counterparts before qualifying for retirement, and you're making it tougher to recruit or retain them, he argued.

Widens the Attractiveness Gulf

"The suburban job, which was already attractive, remains attractive [notwithstanding the Tier 5 changes], while the city job, which is lesser-paying, becomes less-attractive" due to Tier 3, Mr. Palladino said.

Mr. Bloomberg and Police Commissioner Ray Kelly, having struggled for more than two years to recruit qualified cops after the administration persuaded an arbitrator to reduce starting pay to $25,000 in 2005, can't be anxious to court a repeat of that problem. It's one reason that the Mayor's crusade against the Variable Supplements Funds for cops and firefighters -aided by one-sided coverage in the Post-has seemed counterproductive. In past arbitration cases, the administration played down the difference in police salaries between the city and Long Island by noting that the $12,000 a year retired NYPD cops receive from the VSF should be part of the compensation comparison. Take that away from future hires and the pay gap becomes particularly glaring.

The Mayor may believe that unlike the bargain-basement starting salary, which had an immediate and obvious effect, reducing retirement-based rights will be less of a deterrent to recruiting for police and fire jobs because any perceived inequities are so far into the future as to escape jobseekers' focus.

Or he may be glossing over that possible problem because he's convinced that the current levels of police and fire compensation in retirement are too great a drain on the city treasury.

City Already Sets Them Apart

But the relatively disproportionate generosity those employees receive in comparison to other municipal workers is, ironically, consistent with the administration's own position that, along with Teachers, they are the city's most valuable employees. That is reflected in Mr. Bloomberg's demand for smaller percentage cuts in the Police, Fire and Education departments than he has sought from other agencies to cope with the current budget mess.

Those employees are also the ones most likely to be protected from layoffs, notwithstanding Mr. Bloomberg's recent Washington oratory on the need to be able to lay off Teachers without regard to seniority.

And the pecking order, at the state as well as the city level, is borne out by the way in which Tier 5 has been brought to bear on various employee groups so far. Because civilian workers were the most-vulnerable to state layoffs, the Civil Service Employees Association and the Public Employees Federation had to take the hardest hit for their unborn: retirement age to qualify for a full pension being pushed back to 62, with several other significant rollbacks from the benefits enjoyed by current workers.

The United Federation of Teachers preserved the age-55 retirement right for its future members, with some modifications under the portion of the Tier 5 deal it made with Mr. Bloomberg, and the police and fire unions outside the city also kept their basic retirement condition intact. (That was also true for court personnel with peace officer status, but in their case the pecking order can be seen by the fact that the status quo requires 30 years' service and age 55, compared to 27 years for new Teachers.)

Beyond Rhetoric, Reality Looms

However much he may be egged on by tabloid editorial writers and the kind of groups that always make the phrase "good government" sound like "anti-union," Mr. Bloomberg himself pays homage to some of the realities of the employee structure he confronts. It is why the most sweeping pension change he could have hoped for was already accomplished when Mr. Paterson vetoed the Tier 2 extender bill in June.

What he has to ask himself is whether Tier 3, which Mr. Matarazzo called "the best of both worlds for the city," could ultimately backfire if the rest of the state has future cops and firefighters operating under the kinder provisions of Tier 5. If the answer is yes, then it's time for the Mayor and the unions to see whether they can make an honorable peace on some middle ground between what had been and what now exists here for the newest members of the NYPD and FDNY.