I read, with great interest and knowledge, the article, “Pension system needs reform” in the Oct. 23 edition of The Spotlight.
I base my knowledge and opinion of having worked for 37 years in a management position in the New York State Retirement System. I must say that I agree with the premise of your article, and the title, however it is not as easy as some may think, and that you could have implied.
In the early 1970s the State of New York and its Legislature realized that some of the benefits provided by the retirement system were, in some cases, quite generous and costly. It was at that time that legislation was enacted in 1971 to provide some pension reform, and reduce the employers’ cost for benefits. This did not have much of an effect, and in 1973 dramatic legislation was enacted to create a whole new tier of membership for new entrants in the retirement system after a specified date. This new Tier II membership provided less generous and costly benefits for new entrants. However, due to state constitutional rights, current members of the state system were not affected. This was soon followed by the enactment of Tier III in 1976 for new entrants after that date. This was different in the fact that for new entrants in Tier III, for the first time in 11 years, employees were required to provide a cost for their benefits. This was followed by the enactment of new tiers, which now number six which attempts to reduce benefits, as compared to earlier, more generous tiers, and also the cost to municipalities. So, there has been an attempt by the state to provide reform, as permitted by the state Constitution.
The other major point that you made in your article is so-called “double dipping.” The first method that you correctly pointed out is provided in Section 212 of the RSSL in which a pensioner, under the age of 65, may return to a position in public employment, and earn up to $30,000 in a calendar year, without any effect on their pension. The other method is provided in Section 211 of the RSSL. This provision permits an individual to exceed the amount provided in Section 212, however there are restrictions, depending on the amount of their pension, and the salary of the new position. It also requires that the employment is somewhat justified. I must point out, however, is that both of these situations require the prospective employer to hire a current pensioner for these positions, so, there may be some culpability. However, before you think, and I agree, is that most of the time, politics is the main issue for the determination. The other issue of double-dipping is provided by Section 150 of the CSL. This allows the employment of an elected or appointed individual, who is a public pensioner. I must point out, however, is that the individual must be appointed to a position, or more difficultly, is to win an election. So, I believe that there is, and can be, some control by the prospective employer.
The last point that you made in your story, specifically, is the situation of the Mahans. You stated that Joe has been paid a pension of more than $30,000 since 1989 totaling more than $947,000. I believe that is a pension that he has earned based upon his employment with the Town of Colonie. What has that got to do with the premise of your article calling for pension reform? An uninformed reader may think that Joe is a villain involved in this debacle of pension reform. The other point that you made, which I would like to clarify, is Supervisor Paula Mahan’s “retirement” situation. She was correctly advised of her situation, however, not in the manner that you presented. There is a difference in the amount of a death benefit paid to a beneficiary of an individual who dies in active public service, as compared to a pension benefit. At the time that a pension becomes effective, the pensioner is required to choose an optional method of payment. Some of these options allows a percentage of the benefit to be paid to a single beneficiary of their choice. If one of these methods is chosen, there is a premium, or optional cost, which reduces the “full” benefit that may be provided to the chosen beneficiary, and not the full benefit, as you stated.
I agree with the overall subject that there is a need for some reform, and I tried to point out that there has been some action taken from the pre-1973 days of Tier I to the current Tier VI participants.
I enjoy your publication, and will continue to follow local news.