PEP July-Aug. 2002: Facts on traditional incentive

Part A of the early retirement legislation is a traditional incentive. It is modeled after plans that the city has offered to DC 37 members in the past.

This plan grants workers extra credited service as an incentive to leave the workforce. The additional credited service increases members' pensions and also counts toward the years required for participants to qualify for retirement.

The employee benefit in the Part A plan provides for a month of additional retirement service credit for each year the participant has been enrolled in the pension plan. The maximum credit is 36 months.
This plan is open to anyone in a job title targeted by their employer who is at least 50, has 10 years on the job, and is eligible to retire. Participants must have at least two years of credited service in their pension system.

Under the early retirement incentive law, employers must decide whether to offer the traditional ERI, and the plan may be open for 30 to 90 days.

The New York City Board of Education has already put into place its early retirement incentive. The program ends Aug. 31.

The enrollment periods have not been announced at city agencies and other employers, such as the Health and Hospitals Corp., City University of New York, libraries, the New York City Housing Authority, MTA New York City Transit, the Office of the Comptroller, the Off-Track Betting Corp. and the Triborough Bridge and Tunnel Authority. They have until Aug. 31 to decide whether to opt in; they may offer the traditional incentive for 30 to 90 days ending no later than Dec. 31.

At state agencies, the law permits the incentive to be offered until March 31, 2003. State employees represented by DC 37 work at the New York State Division of Housing and Community Renewal and in the court system (the Office of Court Administration).

To participate, members must be eligible for retirement under the terms of their retirement plan. In addition to meeting the 50-year age and 10-year service requirements, workers must have been on the payroll from Feb. 1 through the starting date of the open enrollment period. If the employer targets limited numbers in a title, eligibility will be determined by seniority.

Part A includes these other benefits:

State employees retiring at least 30 days before April 1, 2003, will be eligible for longevity performance or lump sum payments that are contractually due on that date.
City and CUNY employees shall be paid their accrued annual leave balance in three equal installments on the second, 14th and 24th month after their retirement.
Participants in the ERI may be subject to the following penalties (reduced pensions) based on their age at retirement:
a 6 percent reduction for each year for participants between the ages of 60 and 62 and a 3 percent reduction for every year before 60.
a reduction of 5 percent for each year before age 55 for members enrolled in the Chapter 96 25-year pension plan.
a reduction of 3.3 percent for each year for the ages of 57-65 and 5 percent for each year under the age of 55 for members of the Chapter 96 age 57 plan.