Article 5, §7. After July first, nineteen hundred forty, membership in any pension or retirement system of the state or of a civil division thereof shall be a contractual relationship, the benefits of which shall not be diminished or impaired. (New. Adopted by Constitutional Convention of 1938 and approved by vote of the people November 8, 1938.)
What is a pension Tier?
New York City and New York State maintain a variety of pension systems for public employees, wholly independent of each other. All public school teachers outside of New York City are members of the New York State Teachers Retirement System, public school teachers in New York City belong to the New York City Teachers Retirement System, usually referred to as the TRS.
Prior to 1970 the NYC teacher retirement plan was called, “Clancy 1%” … teachers had to work till age 65 … pension plus social security plus savings provided a barely adequate pension.
After teachers strikes in 1967 and 1968, and a bruising battle over the decentralization law a reviled mayor negotiated Tier 1 … a 25/55 (years/age) pension plan. Politics makes strange bedfellows (and strange bedfellows make for funny politics … but that’s a topic for another blog). Lindsay wanted to run for president and didn’t want the UFT, with many retirees in a key state, Florida, campaigning against him: the result was Tier 1.
As Dave Wittes, the “father” of Tier 1 walked out of the signing ceremony in Governor Rockefeller’s office he leaned over and whispered to my wife, “They have no idea .. this is going to cost them a fortune.”
The NYS Constitution does not allow for pension benefits to be “diminished or impaired.”
The legislature realized the fiscal impact, and the residue of the 68 strike resulted in upper West Side Assemblyman Jerome Kretchmer (current restaurateur) leading the charge to create Tier 2 in 1973 and Tier 3 in 1975. Tier 3 was a 30/62 plan, allowing for an age 55 retirement with a social security offset.
The passage of Tier 3 motivated the UFT to get involved politically, the union created the Committee on Political Education (COPE), the lobbying arm that collects voluntary contributions from members.
The first major positive result was Tier 4 in 1984 that created a 30/55 plan without the social security offset and included paraprofessionals in the plan.
Another change was the 3% contribution was terminated after ten years of service, and, last year, in a major gain, after decades of attempts, 25/55 was restored.
Pension benefits are not mandatory subjects of negotiations, however there is no prohibition. If pension benefits are negotiated they require a home rule message from the governing authority, the approval by a mutually agreed upon actuary and action by the legislature/governor.
Attacks on public employee pension benefits are increasing, see here and here. The Empire State think tanks calls for replacing the current “defined benefits” plan with a “defined contributions” plan … explaination in detail here.
This year Governor Patterson called for the creation of Tier 5, a pension tier with lesser benefits for new employees, usually referred to as “newbies.”
The Executive Budget creates a new tier of pension benefits (Tier V) for state and local employees. Many of the requirements for Tier V would simply remove pension enhancements added in recent years to Tier IV, including restoring the minimum retirement age to 62 instead of 55, requiring employees to contribute to the pension fund after their tenth year of service, restoring the minimum years of service required to draw a pension from five to ten, and others. New requirements for Tier V include excluding overtime compensation when calculating pension benefits, which will prevent “salary spiking” in an employee’s final years of service. Under the state constitution, Tier V requirements can only apply to new employees.
Facing layoffs in the thousands two unions representing 120,000 employees agreed to a new pension tier in exchange for a two year “no layoff” agreement.
The UFT and their parent organization, New York State United Teachers (NYSUT) have opposed the creation of a new pension tier.
The pundits have speculate that the UFT might agree to a Tier 5 in exchange for a favorable contract; the current contract ends October 31, however, under the Triborough Doctrine the existing agreement remain in full force.
Speculation abounds that she will agree with Mayor Michael Bloomberg, with whom she has frequently been allied, despite what you may gather from some press reports, to allow a cheaper pension tier, or Tier 5, for future union members in the Department of Education.
Does the union position on mayoral control presage agreement on a contract? or, just wishful thinking?
The NY Post muses that Randi Weingraten, UFT President will finish negotiating the next contract before she leaves the UFT,
After she steps down, Weingarten will continue as head of the 1.4 million-member AFT, but not before finishing city business, sources said. This includes negotiating a new teachers contract — which expires in October. “She doesn’t like to leave thing undone,” said one source. “Whatever she thinks she needs to do before she leaves, she’ll get done.”
If a contract is not agreed to before Election Day, can we expect a major confrontation over core union values?
If the parties cannot reach an agreement the Public Employee Relation Board (PERB) enters the negotiating process … from mediation to impasse to fact finding … easily a six to twelve month process.
Two of the key elements in negotiations over dollar issues are “pattern bargaining,” and “ability to pay.” Other unions have received two year (4% + 4%) contracts with no give backs, however, the eroding fiscal landscape may have extinguished the pattern.
In a full fledged fact finding the City would ask the arbitrators to muse on:
* should teachers in ATR pool be laid off if they cannot find a job within a reasonable period of time?
* should “merit,” however we define it, play a role in salary increases?
* should student performance play a role in teacher evaluation/tenure?
Weingarten may be moving on to the national union, she has a major piece of unfinished business.
UPDATED: (6/23) UFT negotiates changes in pension benefits for new employees.