PEP July-Aug. 2002: Union wins early-out plans

By GREGORY N. HEIRES

Thousands of DC 37 members will be eligible for the two early retirement incentive plans enacted in May.

"This is a tremendous victory that our activists lobbied hard to win," said DC 37 Executive Director Lillian Roberts. "Early retirement should be a very attractive option for many members, but people should be very careful about weighing the pluses and minuses."

For help with this important decision, the union urges members to consult their retirement system and the Health and Pension Unit of the DC 37 Health and Security Plan at (212) 815-1200.

The early retirement legislation contains two parts.

Part A is a traditional early retirement incentive (ERI).

The ERI can increase some members' pensions for life. It provides additional service credits based on the length of the employee's service.

In Part A, employers select eligible titles. Participants must be at least 50 years old with 10 years of service and have two years of membership in a pension plan. Under the plan, participants may be subject to a penalty - reduced pension payments - that is determined by their age at retirement.

Part B, which is new, is known as the"25-55 no penalty" plan.

During a limited period, Part B allows any employee to retire without penalty at 55 with 25 years of credited pension service.
Part B is particularly tailored for members of the Tier 2 and Tier 4 pension plans who did not opt for a similar 55/25 plan offered several years ago.

The purpose of the retirement incentive legislation is to help New York City and State deal with the current huge budget shortfalls.

The gaps resulted from the recession, the economic impact of the Sept. 11 attack, and falling revenues due to years of unwise tax cuts. Historically, early retirement incentives have helped to reduce the work force while avoiding layoffs.

"At a time when the city is dealing with a big budget gap, we believed it was especially important to push for the early retirement incentive," said Local 1320 President James Tucciarelli, who chairs the DC 37 Pension Committee.

Board of Ed program underway
The Board of Education has already launched the early retirement incentive. While employers may offer Part A and Part B during separate periods, the Board is running them simultaneously in order to end the incentive offer in time for the new school year.

School employees interested in participating should contact their district office to determine whether their title is on the eligibility list.

As PEP went to press, the city and state had not announced their timetables. Historically, the city made the traditional ERI available during the last three months of the year. The state law permits the city to offer the ERI no later than Dec. 31 and the state to offer it no later than March 31, 2003. The 25-55 no penalty plan may be offered during a 90-day period that ends no later than March 31, 2003.