DC 37 members can increase their savings and reduce current taxes by using the city’s pre-tax programs, which were negotiated by the union.

The city Office of Labor Relations’ Pretax Benefits Program helps employees use payroll deductions to save money for retirement, medical expenses and child care.

Below are descriptions of the programs. For additional information, consult the 2001 “Summary Program Description” of Office of Labor Relations’ Employee Benefits Program.

Deferred Compensation Plan
The Deferred Compensation Plan allows city workers to save for their future before paying federal, state and local taxes on their income.

Section 457 of the Internal Revenue Code permits public employees to contribute up to $8,000, or 25 percent, of their income a year, whichever is less, to the retirement savings plan. The Plan has open enrollment; contributions can be suspended and resumed at any time. Participants choose among eight professionally managed investment options. A $12.50 administrative fee is charged quarterly. Information is available at (212) 306-7760 or on the plan’s Web site, nyc.gov/deferred.comp, which also includes software to help you decide how much to defer.

Dependent Care Assistance Program
DC 37 members covered by the citywide bargaining agreement are eligible for DeCAP, a pre-tax benefit that allows participants to deduct up to $5,000 a year from their paychecks. The funds are put into a non-interest-bearing account to pay expenses for dependent care.

The care must be provided to children under 13; dependents who are physically or mentally unable to care for themselves and spend at least eight hours a day in the participant’s home (for example, a parent, a handicapped child of any age or an incapacitated spouse); or other dependents under 13 with gross incomes below $2,500.

Like the flexible spending accounts, DeCAP follows Internal Revenue Service “Use it or lose it” rules. Enrollment forms are available at DeCAP, (212) 306-7760 or your benefit office. The deadline to enroll for 2002 is Nov. 15.

HealthCare Flexible Spending Account
The Health Care Flexible Spending Account offers employees a tax break on medical costs not covered by insurance. A coalition of unions led by DC 37 won this option through negotiations with the city.

The account lets employees set aside money for expected medical bills by accumulating funds through pre-tax paycheck deductions. Participants receive a tax break ranging from $260 to $5,000 for eligible out-of-pocket medical expenses.

The account can be used to pay for health-related expenditures not covered by health, dental or vision benefits.

You can get information about enrolling from your benefits office or the Pre-tax Benefits Administrator at (212) 306-0776 or at nyc.gov/html/olr

The deadline for enrolling to participate in 2002 is Nov. 15. Once you enroll, you must stay in the program for the entire plan year. HCFSA follows Internal Revenue Service “Use it, or lose it” rules, which means participants cannot reclaim unused funds at the end of the plan year.

New Benefits: College Savings Account and 401 (k)
City unions won two important new benefits in bargaining with the city that concluded at the beginning of 2001:

• Beginning in 2002, municipal workers will be able to contribute to 401(k) accounts through payroll deduction. Public Employee Press will provide information once the program is established.
  
  
• Employees can now have contributions deducted from their paychecks for the state’s College Savings Program, which permits participants to save on state taxes. The city recently notified employees of the benefit.