Public Employee Press

Arbiter nixes city pension RIP-off
Decides on “look back” and retro pensionability after a waiting period

An impartial arbitrator ruled for DC 37 in January in a dispute over of the two-year waiting period required for recurring increment payments to become part of members’ base salaries for calculating pensions.

The city was refusing to base pension calculations on the first two years of RIP payments, even after employees completed the waiting period, while the union contended that after the two years a “look back” would see the payments as part of wages and include them for pension purposes.

The arbitrator decided that once employees have completed the waiting period, the city must include in their pensionable base salaries the RIP payments they received during their first two years of getting the RIP.

Many bargaining units chose RIPs for their members as they decided on how to use the Additional Compensation Fund negotiated by DC 37 that provided an additional 1.5 percent of payroll for each unit.

Units with RIPs
Units that settled on RIPs included Clerical, Blue Collar, Accounting and Electronic Data Processing, Engineering and Scientific, Health Services, Hospital Technicians, Motor Vehicle Operators and Real Estate titles.

The union expected RIPs to be handled like longevity and service increments had been. But when it came time to calculate members’ pensions the city refused to count the RIPS and claimed that after the two years, there would be an additional waiting period for the funds to become pensionable.

DC 37 took the matter to arbitration. In hearings held in 2004, 2005 and 2006, extensive evidence and numerous witnesses were presented.

The union argued that the city had reneged on the position it had stated during negotiations and described in its own interpretive memos.

City witnesses agreed that for pension-ability purposes, RIPs were to be treated like longevity and service increments. Former New York City Employee Retirement System official Norman Rosenfeld testified that with respect to such payments, after the waiting period employees are normally credited with the first two years of payments.

The arbitrator found this evidence and the testimony of Associate Director Evelyn Seinfeld and Assistant Director Mike Musuraca of the DC 37 Research and Negotiations Dept. “compelling.”

“In calculating contract costs, the city had charged RIP as pensionable from Day One,” said DC 37 attorney Leonard Poletta, “but when it came to actual members and their pensions, they claimed that it wasn’t — which was contradictory.”

Hundreds of DC 37 members who retired on or after March 1, 2002, are affected immediately, Polletta said, and ultimately the decision could mean thousands of dollars each to thousands of employees.

As PEP went to press, DC 37 was in discussions with city, NYCERS and the Board of Education Retirement System about how to implement the decision.