March 14, 2011

55/25 retirement option safe

Source: NYSUT News Wire

March 14

55/25 retirement option safe

NYSUT members who elected to retire under Chapter 45 in 2010 can rest easy.

The court ruling that upheld the 55/25 early retirement option will not be appealed by the plaintiffs, and the time for doing so has now expired. The law enabled NYSUT members in public schools and higher education to retire, during a brief window, before the age of 62 without penalty if they were members of the state Employees' Retirement System or the Teachers' Retirement System, were at least 55 years old and had 25 years of creditable service.

The Empire State Supervisors and Administrators Association challenged the law signed by Gov. David Paterson, claiming ESSAA members were illegally excluded from the early retirement incentive offered to retirement system members in bargaining units where the local union is a NYSUT affiliate.

NYSUT attorneys vigorously defended the constitutionality of the option, and the courts agreed, protecting the pension rights of those who took the option in 2010 and who saved their districts much-needed funds.


January 28

35 day period within which the plaintiffs must act to attempt to appeal the decision of the Appellate Division

On January 26, 2011, the office of the Attorney General served the ESSAA attorneys with a document known as a Notice of Entry.  That document began a 35 day period within which the plaintiffs must act to attempt to appeal the decision of the Appellate Division. As previously reported, it is unknown whether ESSAA will attempt to further appeal the decision of the Appellate Division to New York's highest court, the Court of Appeals. We will update as soon as there are developments.


January 20

Court affirms that early retirement incentive was legal

A mid-level appeals court has unanimously ruled the early retirement incentive offered to NYSUT members over the summer is constitutional.

The Third Department of the Appellate Division upheld the July 27 ruling by Justice Kimberly O'Connor and also dismissed the lawsuit brought by the Empire State Supervisors and Administrators Association claiming they were illegally excluded from the early retirement incentive offered to NYSUT members. It is unknown whether ESSAA will attempt to further appeal this decision to New York's highest court, the Court of Appeals.

NYSUT applauded the court's decision, which protects the pension rights of those who took this option in 2010 and who saved their districts much-needed funds in these financially tough times.

NYSUT attorneys vigorously defended the constitutionality of the option which enabled NYSUT-represented employees in public schools and higher education to retire before the age of 62 without penalty if they were at least 55 and had 25 years of service in the state Employees Retirement System and/or Teachers Retirement System.

The appeals court ruling affirms NYSUT's position that it is lawful to offer the incentive to a specific group of individuals to generate cost savings, a long established practice in New York state.

The complaint was filed in state Supreme Court in Albany County. The administrators initially sought an injunction against the plan moving forward, but that was denied.

The decision was much welcomed by Linda Cornelio, who retired after 29 years of service over 31 years in the Jamestown elementary schools.

"When the litigation started, you can't imagine the sleepless nights," said Cornelio, who turned 60 July 1. "I am ecstatic and so thankful to the NYSUT lawyers and the staff in legislation who all worked on this.

 


November 15

Arguments heard. Awaiting decision.

Arguments on the case were heard by the Appellate Division, Third Department, of the New York State Supreme Court on 11/15/10. We await a decision of the Court on the case and will update the website as soon as it is issued.


October 4

Notice of appeal.

(Updated 10/4/2010 - no significant change since notice of appeal was filed)

Argument for appeal is scheduled for mid-November.

From the New York State Teachers Retirement System (TRS) website:

Plaintiffs have filed a notice of appeal. Argument of the appeal is scheduled for mid-November. The payment of the unreduced retirement benefit to eligible members who retired pursuant to Chapter 45 will be subject to the final outcome of any appellate process. Once the case has been decided, we will provide information as to whether or not there is an impact on members who retire under Chapter 45.

Members considering retirement under Chapter 45 may wish to consult with their collective bargaining representative and/or attorney.

Read the court’s decision in PDF format.


July 27

New York State Supreme Court: Retirement option is constitutional and valid.

Great news for NYSUT members who took advantage of the Chapter 45 Early Retirement Option: the New York State Supreme Court has declared that Chapter 45 of the Laws of 2010, establishing an early retirement option for eligible members of NYSUT, is constitutional and valid. The court denied summary judgment to the plaintiffs and granted summary judgment to the defendants.

Attorney General Cuomo is being sent the original decision and order and is required to file it with the clerk of the court and serve it on all parties. The plaintiffs, the Empire State Administrators and Supervisors Association, will have a right to appeal, but will not have an automatic stay of the decision - so the decision stands until a higher court decides otherwise.

NYSUT President Dick Iannuzzi hailed the decision, noting that NYSUT had vigorously and successfully made the case that the state's decision to offer an early retirement option for NYSUT members was an example of a long-standing and legal practice. The administrators unsuccessfully argued that the option had to be also offered to them.

From the New York State Teachers Retirement System (TRS) website:

"As of this writing it is not known whether this decision will be appealed.  The payment of the unreduced retirement benefit to eligible members who retired pursuant to Chapter 45 will be subject to the final outcome of any appellate process.  Please watch the NYSTRS Web site for news of any further developments. Members considering retirement under Chapter 45 may wish to consult with their collective bargaining representative and/or attorney."


July 16

As of 2:00 pm Friday July 16th there has been no change in the status of the lawsuit.

For the latest information on the 55/25 lawsuit, please download the NYSTRS "Important Notice for Members and Employers Regarding the 55/25 Lawsuit" document. (PDF)


June 2

At a conference with the court this morning, NYSUT attorneys pressed for a speedy decision on the case brought by the Empire State Administrators Association. The state may be seeking more time to prepare.

In the meantime, Chapter 45, an early-retirement option for NYSUT members in the state TRS and ERS remains in effect.


May 28

Early retirement option for NYSUT members still safe

The state Supreme Court Thursday turned down a request by the Empire State Administrators Association (ESAA) to temporarily block "Chapter 45," an early retirement option for NYSUT members in the Teachers' Retirement System and the Employees' Retirement System.

NYSUT attorneys are vigorously defending the constitutionality of the early retirement option. This option enables NYSUT-represented employees in public schools and higher education to retire before the age of 62 without penalty if they are at least 55 and have 25 years of service in ERS and/or TRS.

This Early Retirement Option provides for a retirement period between June 1 and Aug. 31 this year. For public higher education members, it provides another three-month period designated by public higher education institutions ending no later than Dec, 31. The bill became Chapter 45 of the laws of 2010.

ESAA argued that its members should be offered the Chapter 45 early retirement option.

NYSUT and ESAA will appear at a conference with the court on June 2. NYSUT expects the court will act quickly on the merits of the claim.

"NYSUT will continue to pursue all necessary legal or legislative remedies to ensure members' pension rights are fully protected," said NYSUT President Dick Iannuzzi.


May 24

NYSUT urges quick legal action on 55/25 challenge

NYSUT attorneys expect that the New York State Supreme Court will rule by June 1 on the constitutionality of Chapter 45, a 55/25 retirement option for NYSUT members in the Teachers' Retirement System (TRS) and Employees' Retirement System (ERS). The option is being challenged by the Empire State Administrators Association, whose members are not included. In oral arguments, NYSUT's legal staff last week pressed the point that the option is constitutional and that a speedy resolution is essential to protect members who have filed for retirement under Chapter 45.

NYSUT urges members who are considering submitting retirement or resignation notices, or have already done so based upon your eligibility under Chapter 45, to consult with your appropriate retirement system about the implications of any court ruling on individual retirement benefits. Notices of retirement submitted to TRS and/or ERS may be rescinded up to 14 days following submission, and resignations submitted to a school district can be rescinded until accepted by the Board of Education.

Gov. Paterson signed a bill April 14 which enables NYSUT-represented employees in public schools and public higher education to elect to retire before age 62 without penalty if they are 55 and have 25 years of service in ERS and/or TRS. This Early Retirement Option provides for a retirement period between June 1 and Aug. 31 this year; for public higher education members, it provides another three-month period designated by public higher education institutions ending no later than Dec. 31. The bill became Chapter 45 of the Laws of 2010.

The Empire State Administrators Association has filed a legal challenge to Chapter 45, asserting that it is unconstitutional and seeking to include non-NYSUT-represented bargaining unit personnel in the retirement option. The attorney general, NYSUT, TRS and ERS are opposing the complaint.

While NYSUT's legal team is confident that Chapter 45 will be upheld, it's important for members to know that the litigation is pending, that the outcome cannot be guaranteed, and that a finding of unconstitutionality could have significant consequences in terms of retirement benefits. NYSUT Executive Director Pauline Kinsella said: "While we fully expect to win, if we do not prevail in this round, NYSUT will pursue any and all legal and legislative remedies to honor this agreed-upon retirement option."

In addition to Chapter 45, a bill has been introduced in the Legislature (A11144 Abbate / S7909 Savino) which, if enacted, would provide employers the option to authorize eligible employees to take advantage of a retirement incentive of either (1) one month of service credit for each year of service up to 36 months, or (2) to retire without penalty with at least 25 years of service and attainment of age 55. Those options cannot be combined with Chapter 45 or any local incentives. More information on the 2010 early retirement incentive proposal is available online.

NYSUT is pursuing all steps necessary to protect our members from any adverse action by the courts. In the meantime, we will continue to keep you fully briefed on the pending challenge to Chapter 45 and the status of the proposed retirement incentive in the Legislature.