Public Employee Press

Union answers Bloomberg's pension lies

By GREGORY N. HEIRES

"They have basically wiped out traditional pensions in the private sector. Now they are coming after us."
—James Tucciarelli, DC 37 Pension Committee Chair

MUNICIPAL unions are gearing up for a major battle over Mayor Michael R. Bloomberg's attack on public workers' pensions.

Bloomberg unveiled a comprehensive plan Feb. 2 to make city employees pay more and work longer for smaller pensions.

"The mayor is taking advantage of the recession to try to cut our members' retirement income," DC 37 Executive Director Lillian Roberts said.

Bloomberg's strategy to get political support for the cutbacks is to scapegoat public employees, misrepresent the causes of the so-called pension crisis and exaggerate instances of abuse.

"Ultimately what's at stake here is the standard of living of our middle class," said DC 37 Pension Committee Chair James Tucciarelli, the president of Sewage Treatment Workers and Sr. STWs Local 1320. "They have basically wiped out traditional pensions in the private sector. Now they are coming after us."

Under Bloomberg's plan, future municipal employees in DC 37 would come under a new pension tier that would substantially reduce the benefit of the New York City Employee Retirement System's 57/5 plan that covers most current members.

The new plan would make workers contribute much more for their benefit; work nearly a decade longer for full coverage; eliminate overtime credit; double the time to qualify for a pension; eliminate the costof- living adjustment, and scale back disability retirement. (See box.) The changes would cut retirees' income deeply.

Currently, a worker who retires with a salary of $40,000 gets $16,000 after 20 years of service, $20,000 after 25 years and $24,000 after 30 years. Under the new plan, the pension of that worker would plummet to $13,360 with 20 years of service, $16,700 with 25 years and $20,040 with 30 years.

"A growing number of our retirees would receive a pension payment below the official poverty line," said DC 37 Associate Director Henry Garrido. In 2010, the federal guideline for poverty was $10,830 for an individual and $22,050 for a family of four.

"The lower benefit would likely increase in the number of retirees who get public assistance at the taxpayers' expense. What kind of savings is that?" Garrido asked.

Currently, pension changes such as new tiers must be legislated, but Bloomberg wants to put pensions on the bargaining table, suggesting that he aims to threaten wages to get unions to agree to a new pension tier.

"It makes no sense for us to agree to include pensions in collective bargaining," said Local 371 Vice President Anthony Wells, a member of the DC 37 Pension Committee. "Why would we open the door to an attack on another one of our benefits?"

Retirees Association President Stuart Leibowitz, the vice chair of the pension committee, said concerns about the financial health of the pension system are overblown.

The 2008 stock market debacle and economic downturn caused by Wall Street greed coupled with employers' decisions to cut or skip contributions when the stock market was booming caused underfunding of pensions. But the city's pension systems are on the road to recovery, Leibowitz said.

Tucciarelli bristles at the false idea that DC 37 members and retirees have bloated pension benefits.

The average DC 37 retiree covered by NYCERS, which was founded in 1920 and has over 300,000 active and retired municipal employees, gets a pension of $17,166 a year. Retired DC 37 school workers get pensions averaging $13,600 from the Board of Education Retirement System.

Tucciarelli points out that pensions are funded through employee and employer contributions as well as investment returns. "We have paid for our pension through our contributions and what we have sacrificed in wages to have our health-care coverage and a decent, though modest, retirement," he said. "Our retirees certainly aren't living high on the hog, and most of them have to get by on modest pensions."

"Overtime is capped in our pension calculations. Our average member retires at 62 with a pension of $17,000 a year, and some get as little as $5,000, so the critics are simply wrong," Roberts said. "The cuts they want would rob us of dignity in our old age."

The Attack on Our Pensions
	Current (57/5 Plan)	City's Proposal
Employee Contribution	4.85% for fi rst 10 years, 1.85% for later years for employees hired after June 28, 1995	5% for all years
Service Benefit Formula	• 1.67% x Final Average Salary* x Years (with less than 20 years of service) • 2% x FAS x years (with over 20 years)	1.67 x FAS* x Years of service
Qualification for Pension (Vesting)	• 5 years, payable at age 57
Early Retirement	• Full pension at age 57 & 5 years • 3% per year penalty for early  retirement between 55 and 60 and  • 6% per year penalty between 60 and 62	Full pension at age 65 & 10 years, penalty of 5% per year for early retirement between age 55 and 60
Accidental Disabilty Retirement	• No service requirement. • Benefi t (generally) = 33% FAS* • Disability presumption (for 9/11 work)	No disability presumptions (otherwise same)
Ordinary Disability Retirement	10 years of service required Benefi t (generally) = 33% FAS*	Same
Cost of Living Adjustment (COLA)	Yes	No
Overtime	Overtime is pensionable (10% cap)	No overtime credit
Other	No notice needed to retire	30-day notice required
*Final average salary of best three years.