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Taylor Made: The Cost and Consequences of New York's Public-Sector Labor Laws
by Terry O'Neil and E.J. McMahon

Defusing New York's Public Pension Bomb: A Fair Approach for Workers and Taxpayers
by E.J. McMahon

Early retirement for state workers: Money-saver, or costly sweetener?
May 2010

State Payroll Drops and Wages Rise; Workforce Still Above 2004 Level
March 2010

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March 08, 2010

NYSUT scores again

Amid Governor David Paterson's various troubles, a bill quietly was introduced last week--at his request--offering a pension sweetener to public employees represented by a single union: New York State United Teachers.

The bill would allow teachers and State University employees to retire at age 55 without penalty after only 25 years of service (instead of the customary 30 years) during a 90-day period. The hitch is they must be represented by NYSUT or its affiliate United University Professions.

The "55-25" measure would apply to teachers who retire between June 1 and August 31, 2010. Faculty at the State University and community colleges would be given a 90-day retirement window during 2010.

The retirement incentive has its origins in the bill creating a new Tier 5 pension system for future employees, which Paterson signed into law December.

That measure declared the Legislature's "intent" to enact a future bill to offering 55-25 plan during calendar year 2010 for "members of the collective bargaining unit of the New York State United Teachers" within the Teachers Retirement System (TRS) and the New York State and Local Retirement System (NYSLRS). However, such a statement of intent is unusual. It is not clear that the clause actually binds the Legislature and governor to deliver.

The Tier 5 legislation has been described as granting "an incredible set of special concessions to unionized school teachers in New York" (here).

In addition to the promised pension sweetener, Tier 5 allows teachers with 30 years service to retire with full benefits at age 57; other civilian employees must wait until 62. The law makes it impossible for school districts to alter retired teachers' health benefits without negotiating similar changes for unionized employees.

The fiscal note in the "55-25" bill estimates it would cost school districts and other employer members of TRS $13.2 million or .09% of payroll. "The cost of this incentive will be socialized [sic] across all employers," it states. In other words, costs would be subsidized by districts that happen to have few or no early retirements.

While the fiscal note offers no estimate of the number of public school teachers who would take advantage of the incentive, it anticipates fewer than 1,000 ERS members would participate.

We estimate that the per-member cost could average approximately 110% of a member's final average salary. … For every 100 participants, we estimate that there would be an increase in the annual contributions of approximately $260,000 to the State of New York and $360,000 to the participating employers in the ERS.

Posted by Lise Bang-Jensen

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