Chief-Leader

June 6, 2016, 6:00pm


Math, Politics Complicate Disability-Pension Talks

PBA Arguing Newer Hires Shouldn’t Pay More To Qualify for Benefit

By RICHARD STEIER

IT’S NOT JUST ABOUT THE NUMBERS: Uniformed Sanitationmen’s Association President Harry Nespoli recently reached an agreement with the city to have newer members contribute an extra 1.3 percent of salary to qualify for an improved disability benefit, based on calculations by Chief City Actuary Sherry Chan (center). But after the de Blasio administration agreed with Uniformed Firefighters Association President Steve Cassidy (right) on an added contribution that was more than two points below Ms. Chan’s valuation for his members, the Patrolmen’s Benevolent Association took the position that a similar discount should mean no added pension contribution for newer cops.

The math problems presented by the variables and probabilities of public-employee pension systems can make you dizzy trying to keep track of why an improved disability benefit for city uniformed workers hired after 2009 can have such a different impact depending on whether you’re a cop, firefighter, sanitation worker or correction officer.

Add politics to the equation and things really get confusing.

For the past three years, the Uniformed Firefighters Association and the Patrolmen’s Benevolent Association have made concerted efforts to undo the damage inflicted upon their newer members by then-Gov. David Paterson’s 2009 veto of a perennial extender bill that continued to allow those employee groups to stay under Tier 2 of the pension system decades after the rest of the city workforce had moved into the less-generous Tiers 3 and 4.

The Political Value of ‘Sunsets’

Extenders are needed when a law has what is called a “sunset clause,” meaning its provisions expire at the end of a given period, usually two years. While sunset clauses are ostensibly attached to bills so that their fiscal impact can be re-examined every couple of years or so, there has long been a suspicion that they are installed by legislators with the idea that this will produce continued gratitude from the unions that benefit once those legislators are up for re-election.

After all, if they had memorialized Tier 2 status for cops and firefighters at the time that Tier 3 took effect for the rest of the city workforce in mid-1976, those legislators might need to approve other bills beneficial to those employees every couple of years in order to keep getting their votes. Even in Albany, the cost of such largesse would add up. Better to keep giving uniformed workers more of the same to satisfy any questions about “what have you done for me lately?”

The pitfall that accompanies this method, however, is that you just need one Governor, in the right time and circumstance, to take out his veto pen and that protection is gone with one disapproving signature.

Mr. Paterson’s veto stripped future cops and firefighters of the right to retire at full pension, equaling half their final average salary, after 20 years on the job, moving them into Tier 3, which granted that benefit after 22 years’ service. It also took away “presumptions,” something that was especially beneficial to firefighters, under which certain illnesses they contracted during their careers were presumed to be job-related. For example, if you came down with lung disease, it was deemed to be the result of years of breathing in toxic air at fire scenes, mixed with the diesel fumes that could waft from the firehouse garage into the kitchen and even the upstairs quarters where firefighters stayed and sometimes slept while awaiting the next alarm. It didn’t matter if you were a chain-smoker; you had the presumptions on your side.

Those benefits vanished with the veto of the Tier 2 extender, but the UFA is now due to regain the “presumptions.” And because Tier 3 required that the new cops and fire-fighters work for 25 years in order to qualify for pension cost-of-living adjustments, a case could be made that moving into that tier forced them to work an additional five years to get the full benefit that more-senior employees qualified for after 20.

Also Involved Sanit, COs

Last year, when the de Blasio administration was feeling heat from Governor Cuomo and the State Senate to rectify what is considered the most-onerous consequence of Mr. Paterson’s veto (even by his own, retroactive admission): the loss of a meaningful disability-pension benefit for career-ending injuries and illnesses sustained on the job, it decided to pursue a possible substitute for newer correction officers and sanitation workers as well. By that time, those other employees were in Tier 6 of the retirement system if they were hired beginning April 1, 2012, when that even-less-generous tributary began to flow thanks to some maneuvering by Governor Cuomo.

There was logic to taking this step, given the physical risks posed by each of those very different jobs. A cynical person might have argued that the new sets of variables this brought into play figured to slow the progress of an improved benefit confined solely to cops and firefighters. The reality was that under the rules of the New York City Employees’ Retirement System, to which both SanWorkers and COs belong, their unions were entitled to ask for an improved benefit provided they agreed to have the full cost covered by additional employee contributions.

This added to the fits and starts on upgrading the disability benefit, even though no state legislation was actually needed to make the changes for the uniformed workers under NYCERS. Last August, the UFA reached contract terms, despite President Steve Cassidy’s unhappiness with raises totaling just 11 percent over seven years, because of the city’s agreement on two significant non-wage gains, one of which involved its willingness to support legislation in Albany that would give post-2009 Firefighter hires the right to a disability pension equaling 75 percent of final average salary, tax-free. That put the benefit on a par with the one for those who came on the job in earlier years, but to prevent the city from incurring additional pension costs, it was agreed that those Firefighters would have to contribute an extra 3 percent of salary toward their pensions, double the contribution required of more-senior colleagues.

Actuary Weighs In

Early this year, costing estimates prepared by Chief Actuary Sherry Chan complicated matters by indicating that the city would actually be making money on the deal if newer Correction Officers had to make that same additional 3-percent payment as Firefighters. She had placed the value of giving the benefit to Firefighters at 4.3 percent, while it would be just .9 percent for Correction Officers. Correction Officers Benevolent Association President Norman Seabrook quickly decided he didn’t want any part of that arrangement, prompting further discussions that eventually resulted in the added salary charge of just .9 percent. And the valuation Ms. Chan set of 1.3 percent for Sanitation Workers was accepted by both the city and the Uniformed Sanitationmen’s Association, which like COBA achieved the change through a recent memorandum of understanding.

Brooklyn Assemblyman Peter Abbate, who chairs his body’s Committee on Government Employees, said last week that he thought it made sense to go the legislative route—once a bill had been enacted into law, it would be more difficult to eradicate its provisions than if all that supported it was a memorandum of understanding that some future Mayor might find objectionable. That wasn’t what the unions believed: USA President Harry Nes­poli cited the rules of NYCERS when he said in a June 2 phone interview, “I don’t need Albany and Correction doesn’t need Albany,” and so he was ready to live with the MOU that had just been finalized.

Things were more complicated when it came to the UFA and PBA, the latter of which remains at odds with the de Blasio administration on contract terms, which is partly responsible for why there has been no meeting of the minds on an upgraded disability benefit for Police Officers.

Harmony vs. Friction

In contrast with the UFA, which made obtaining the city’s legislative support a key selling point to its members when they voted last fall to ratify the wage contract, the PBA chose to have its contract decided in arbitration. Forced by that process to have the award limited to just two years, it came away with the same 1-percent raises the UFA got in each of the first two years of its longer deal, and with no commitment from the city on disability legislation.

PBA President Pat Lynch made clear he wasn’t going to bend on contract terms in order to get such support. Two weeks ago, he held a rally outside both gates of City Hall trying to enlist City Council support for the disability improvement while making the public aware of what was at stake. The chances of getting the Council to approve a home-rule message, however, without the Mayor’s backing seemed slim given Mr. de Blasio’s close working relationship with Council Speaker Melissa Mark-Viverito—who was elected to that position more than two years ago thanks to a strenuous public lobbying campaign he engaged in on her behalf.

The PBA had taken an alternative route as a fall-back if it couldn’t get the home-rule, signing on to a bill pressed by some other police unions throughout the state upgrading disability benefits. Because this measure affected police forces outside the city, it didn’t require a home-rule message. But Mr. Abbate was blunt about the political realities a couple of weeks ago when asked about the PBA’s chances of getting something through the Assembly: it might happen despite Mr. de Blasio’s alliance with Speaker Carl Heastie if the Council defied the Mayor and submitted a home-rule message, but without such a statement from the city’s legislative body, he said, it was­n’t going to happen.

The Tier 5 Complication

Bringing police and fire departments from outside the five boroughs into the conversation created another issue. Members of those departments belong to Tier 5 of the pension system, which Mr. Paterson first implemented with the two-largest state-employee unions, representing largely civilian workers, just a few days after his veto of the Tier 2 extender for city cops and firefighters. Post-2009 hires in those uniformed departments pay 6 percent of their salaries into the pension system. In return, however, they retained the right to a 20-year pension.

That raised the issue of why post-2009 Firefighters should have to contribute that same 6 percent if they were going to have to work longer to qualify for a full pension. And so new negotiations began, and by late last month it appeared that new Firefighters would have a full point shaved off their added contribution to the Fire Pension Fund and would only have to contribute 5 percent of salary in return for the disability-benefit upgrade.

By the time the memorandums of understanding were complete for Sanitation and Correction, newer Sanitation Workers had to pay a total of 4.3 percent for that benefit, while newer Correction Officers were to pay 3.9 percent based on the Chan valuations.

There remained one unhappy party, however: the PBA. This is known from the accounts of several sources; the union itself did not respond to questions about the machinations last week, apparently willing to stand on earlier statements Mr. Lynch made at the City Hall rally.

Sought UFA ‘Discount’

One of those sources said that while Ms. Chan’s valuation for the benefit was 4.3 percent for the UFA, it was 2 percent for the PBA (numbers she confirmed). And so, he and others said, since the UFA added contribution was going to be just 2 percent, the police union thought it should be able to get the benefit without any additional salary contribution by newer members.

The math was simple: giving the PBA the same “subsidy” of 2.3 percent that the city was giving the UFA would “get down to zero” what cops should be obligated to pay.

The difference in the cost for the two forces is based on usage of the disability benefit over the years. Over the past decade, the physical toll ta­ken on firefighters of spending a month or more at the World Trade Center searching for the remains of their 343 colleagues who perished on 9/11 swelled the disability-pension rate to roughly 70 percent. Even in the years before 9/11, the hazards of a job in which breathing toxic fumes is a condition not only of going into burning buildings or extinguishing car fires but of the diesel fumes in their quarters had led to disability retirements in the vicinity of 50 percent, give or take a few points. One mitigating factor is that the camaraderie in firehouses has often led many to remain on the job for years beyond their qualifying for a full pension, which increases the chances of eventually having their careers ended by injuries or illnesses that result from the cumulative toll of the job rather than a single event or mishap.

Police Disability Rate 20%

Neither the high disability numbers nor the extended careers are common among cops—generally 20 percent or slightly less than that retire on disability pensions. One factor may be that they have more typically retired—on regular pensions—not long after marking their 20th anniversary of service, unless they have moved up in the command structure enough to be off the streets and with less physical risk involved in remaining longer in their jobs.

It’s hard to quarrel with the subtraction involved. Too other factors intrude, however: the tradition of cops and firefighters making the same contributions toward their pension in the same way that there is parity between the two forces when it comes to maximum salary, and the bad blood that exists between the de Blasio administration and the PBA.

Those hard feelings have roots not only at the bargaining table but dating back to the death of Eric Garner and statements the Mayor made after the cop who used what looked like a department-banned chokehold that figured into his death wasn’t indicted by a Staten Island grand jury in December 2014. When two cops were assassinated later that month by a crazed killer who claim­ed he was taking revenge for Mr. Garner, Mr. Lynch led other union officials in turning their backs when Mr. de Blasio came to Woodhull Hospital, where the two slain officers had been brought.

That demonstration might have been chalked up to spontaneous anger growing out of the tragic deaths of two union members. The lines hardened, however, when hundreds of cops repeated the gesture as Mr. de Blasio spoke at the funeral of one of the officers and—despite a command from Police Commissioner Bill Bratton not to do it at the funeral of the second officer because it was an inappropriate way to mourn him—a sizable contingent repeated it eight days later.

Reason to Buck Mayor

The lingering hard feelings aren’t going to evaporate by the time the State Legislature adjourns June 16 or shortly thereafter. One source said there would be City Council Members who were sorely tempted to break with the Mayor as they prepare to seek new terms at the same time that he does next year, explaining, “De Blasio’s not the guy you wanna be next to if you’re out in Queens running for re-election. What better opportunity to break away” than by voting to give the PBA a home-rule message?

But Ms. Mark-Viverito blunted one past effort to even get hearings held on a joint police/fire bill because the Mayor opposed it, and given that she is term-limited and not expected to seek other citywide office next year, it’s hard to imagine her letting a home-rule message even come up for a vote. In fact, it appeared that the only reason for a delay until June 6 in announcing a home-rule message was likely to be approved for the Firefighter disability bill was continued discussion on its terms that one official from another union surmised were related to a brief flare-up between the Speaker and UFA President Cassidy last year over an earlier version of the bill.

The political in-fighting and the varying costs of the bills depending on which employee group is affected almost obscure the reason the unions are pushing so hard for the upgrade.

Sanman’s 17 Surgeries

“It’s a very, very important benefit for my members,” Mr. Nespoli said, explaining that two young SanWorkers have serious-enough injuries that it’s unlikely they’ll be able to return to work. One of them, he said, has had 17 operations on his leg after a mishap involving a van.

“I’m tired of seeing these young kids get into a situation where they’d get a pension that’s less than minimum wage” if they retired under the current disability program, the USA leader said. “It’s gonna change their life immensely” now that the memorandum of understanding with Mr. de Blasio clears the way for retirement on 75 percent of final average salary.

Mr. Nespoli continued, “I’d like to thank the Mayor and his administration for recognizing that it’s important that when people get hurt working for the city, they get as much money as possible to live on.”

Mr. Lynch, who has two sons in the NYPD who are working under the shadow of the inferior disability pension, wouldn’t share that sense of gratitude toward Mr. de Blasio. Unless, of course, just as the numbers have changed recently, minds and positions do over the next week.

Assemblyman Abbate, musing over the projected costs—all of which will be subject to review in three years to see whether adjustments further raising employee contributions are required—said that from a financial standpoint the PBA’s case that its members should not have to contribute more for the benefit “makes sense. But just because it makes sense doesn’t work in the world of politics, unfortunately.”