June 6, 2016, 6:00pm
By RICHARD STEIER
The de Blasio administration has reached agreements with the unions representing Correction Officers and Sanitation Workers that will significantly improve disability benefits for newer members in return for slightly higher employee contributions to their pension system.
UFA Gain Albany-Ready
The administration announced June 6 it had also wrapped up details with the Uniformed Firefighters Association on a similar upgrade with a slightly higher contribution charge for those hired from 2010 forward that needs City Council approval before a home-rule message can be sent to Albany, where Governor Cuomo and both houses of the State Legislature are expected to advance the changes into law. (Albany’s approval is not required for the changes affecting SanWorkers and COs, because the rules of the New York City Employees Retirement System permit them provided the unions find a way to offset the additional costs involved.)
PBA on Outside?
But the fourth union involved in seeking the disability-benefit upgrade, the Patrolmen’s Benevolent Association, has had little interaction with the city on the issue, appearing to be pinning its long-shot hopes on being included in a bill that covers cops in other state jurisdictions. It chose that course after city negotiators balked at the union’s argument that under valuations provided by the Chief City Actuary, Sherry Chan, its newer members should get the improved benefit at no additional cost to them.
Mayor de Blasio said in a statement, “With these agreements, we are confident that New York City’s Bravest, Boldest and Strongest can go to work feeling secure that they have the support of the city behind them.”
There are a couple of key changes that will affect all three unions. The disability payment will be pegged to a final-average salary derived from the final five years on the job, rather than the three-year standard for more-senior employees, with a limit to how much a single year’s earnings can exceed the other four. On the plus side for employees, the Social Security offset will be eliminated.
Both the UFA and PBA saw their members’ disability rights badly diminished by then-Gov. David Paterson’s 2009 veto of a bill that would have extended eligibility to join the more-generous Tier 2 of the pension system to future hires for another two years.
The veto automatically relegated those hired beginning in 2010 to Tier 3 of the system, which meant they had to work at least two years beyond the traditional 20 to qualify for a full pension. It also wiped out their right to a tax-free disability pension equaling 75 percent of final average salary if a job-related injury or illness left them unable to complete their careers. They instead now receive a pension equal to just 50 percent of salary, which is reduced based on Social Security disability benefits they may receive, and are prohibited from working at less-demanding private-sector jobs until they mark what would have been their 22nd anniversary in their department.
UFA, Mayor in Accord
In both 2014 and 2015, those unions were unable to break through mayoral resistance to their bid for a restoration of the Tier 2 disability benefit, even though they made clear they weren’t seeking reinstatement of the other generous aspects of that pension tier for the newer hires. Last August, as part of a contract deal, the UFA received a commitment from Mayor de Blasio to support legislation to provide that Tier 2 disability payment to newer hires in return for those employees contributing an additional 3 percent of salary to the Fire Pension Fund.
The PBA opted to seek a better deal than other uniformed unions obtained in bargaining by pursuing arbitration, but last November it wound up getting the same two 1-percent raises those other unions negotiated in the opening years of their seven-year contracts providing 11-percent raises, with the bigger hikes coming in the final years of those deals. The arbitration award also contained no commitment by the de Blasio administration to support a disability upgrade for Police Officers hired after 2009.
A glimmer of hope for the union materialized when, after the Correction Officers Benevolent Association and the Uniformed Sanitationmen’s Association expressed interest in upgraded disability benefits, Ms. Chan was asked to provide cost estimates.
High Fire Disability Rate
The biggest toll of providing the upgrade would be among Firefighters, who historically had the highest disability rate even before the ravages of their work at the World Trade Center site on 9/11 and in the months afterward searching for remains of their colleagues pushed it to 70 percent. Police Officers have a disability rate of roughly 20 percent, with smaller numbers of Correction Officers and Sanitation Workers forced to retire early because of job-related illnesses or injuries.
Ms. Chan put a value of 4.3 percent on providing the upgraded benefit to Firefighters, 2 percent to Police Officers, 1.3 percent to Sanitation Workers and 5.9 percent to Correction Officers.
Correction Officers Benevolent Association President Norman Seabrook, after objecting to the city’s attempt to have his members contribute the same additional 3 percent of salary that was being assessed for newer Firefighters, recently agreed to the valuation set by Ms. Chan. He issued a statement last week saying, “We have pledged to protect and serve and we are grateful to those who stand with us and assist with just a little added protection to ensure that no officer is left behind.”
Uniformed Sanitationmen’s Association leader Harry Nespoli said June 2 after the memorandum of understanding with the city was finalized, “It’s a very, very important benefit to my members,” 1,700 of whom are in Tier 6 of the pension system and have been subject to the inferior disability benefit.
He continued, “Right now I have two that are seriously hurt” and unlikely to be able to resume their duties, including one who has needed 17 operations on his leg following a workplace accident. “It’s gonna change their lives immensely.”
UFA Got Payout Break
UFA President Steve Cassidy was able to persuade the city to reduce the charge for his newer members from the original 3-percent agreement to 2 percent, based on a disparity that exists with cops and firefighters in other parts of the state. Those employees, who are part of Tier 5 of the state system, pay 6 percent of their salaries toward their pensions, but have retained the right to retire after 20 years at full pension.
Mr. Cassidy had argued that the added 3-percent contribution for his members, on top of the 3 percent that is paid by more-senior colleagues in the FDNY, would mean they were paying as much into the system as firefighters in other state jurisdictions but were forced to work at least two more years to qualify for a full pension. And so over the past couple of weeks, he was able to persuade administration officials to reduce the added payment to 2 percent of salary, for a total of 5 percent for post-2009 hires. The actual cost of the benefit based on usage will be re-evaluated in three years—as is the case also for SanWorkers and COs—and contributions could be increased at that time.
Firefighters will also regain the Tier 2 “presumptions,” under which certain illnesses, including cancer and lung diseases, will be presumed to be job-related and automatically entitle them to disability pensions.
The UFA leader said in a June 6 statement that Firefighters “risk their lives every day and need to know that they, as well as their families, will be protected if seriously injured in the line of duty...This bill will resolve that for over 2,000 current New York City Firefighters who don’t have disability protections and for all future Firefighters.”
The PBA has had little discussion with the city on the disability upgrade, Mr. Lynch said at a May 25 rally. But when the union learned that the UFA was being charged a contribution rate that was more than 2 points below the valuation set by Ms. Chan, sources said it contended its newer members should be given a similar discount, which would mean no added contribution to the 3 percent paid by veteran cops.
Potential City Counters
The potential objections the city could make boil down to the UFA having gotten this break as part of a negotiated deal and that Firefighters and Police Officers have traditionally contributed the same amounts to their pensions.
It is not clear that the PBA will be able to reach terms with the city prior to the Legislature adjourning, although that would not preclude the matter from being considered at a Special Session that could be convened after the November elections. The likelihood of the union getting the upgrade through the bill in which it is included with other state unions is slim, according to Brooklyn Assemblyman Peter Abbate, who chairs that body’s Committee on Government Employees. He has emphasized that if the Assembly were to go against Mr. de Blasio’s wishes and vote in favor of the benefit to the PBA, it would be because the Council had approved a home-rule message; the state bill is unlikely to get any traction in the Assembly even though it has support in the State Senate.