Take-home pay rises by 1% in “55/25” and “57/5” plans

Gov. George E. Pataki signed into law three union-backed bills Nov. 21, including legislation that will reduce the pension contributions of more than 30,000 of DC 37 members hired since mid-1995.

Under the new pension law, members in the “55/25” and “57/5” pension plans will receive an immediate 1 percent boost in their take-home pay.

The cut in contributions is the latest in a series of pension gains DC 37 has won in the past two years. Earlier laws provided automatic cost-of-living increases for retirees, gave two years of extra credit in Tiers 1 and 2, and eliminated the basic 3 percent contribution for employees with over 10 years in Tiers 3 and 4.

“This legislation addresses the needs of a big group of members who didn’t immediately benefit from the earlier victories,” said Local 1320 President James Tucciarelli, who chairs the DC 37 Pension Committee.

The law reduces the extra payments that members make for the “55/25” and “57/5” plans on top of the basic 3 percent contribution. It cuts the extra amount from 2.85 percent of salary to 1.85 percent. The increase in take-home pay is effective immediately.

Chapter 96 of the laws of 1995 established the two plans to permit members of the New York City Employees’ Retirement System and the Board of Education Retirement System to retire prior to 62 without a reduction in their benefit.

Under Chapter 96, employees in Tiers 2 , 3 and 4 had the option of buying into the 55/25 plan, which is now closed, allowing them to retiree at 55 with 25 years of service. Chapter 96 also includes the 57/5 plan, which is the only pension plan offered to new employees. Participants can retire at 57 with five years of service.

In 1997, an agreement between the city and the municipal unions reduced the extra contribution rate from 4.35 percent to 2.85 percent of annual salary.

The city agreed to consider this latest 1 percent reduction in payroll deductions for pensions in negotiations on the current economic agreement. The pact lasts from April 1, 2000, to June 30, 2002, and it provides for two 4 percent raises plus another 1 percent in additional compensation.

The pension reduction bill was part of a package of DC 37-backed proposals considered by the New York State Legislature during the 2001 legislative session.

Crucial support for the measure came from Senate Majority Leader Joseph L. Bruno and Sens. Guy J. Velella, Vincent L. Leibell, and Nicholas A. Spano, as well as State Assembly Speaker Sheldon Silver and Assembly members Catherine T. Nolan, David F. Gantt and Eric N. Vitaliano.

Besides the pension reduction, the DC 37-backed bills signed into law by Mr. Pataki during Thanksgiving week included the following:

Other union-backed laws

• Pension Opt Out (A.8414 and S.4471): This legislation will allow part-time workers to opt out of the 55/25 plan. Some part-timers mistakenly joined the plan, not realizing that they would be unable to put in enough years to meet the 25-year service requirement.
  
  
• Community Service Sentences (A.8751 and S.5580): This legislation amends the state penal law so that offenders who are mandated to perform community service as a condition of probation or discharge will not displace city employees or interfere with existing union contracts.