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Settlement of Pension Lawsuits After almost eighteen months of litigation and two Supreme Court victories in favor of the PBA, the City and the PBA have reached a settlement of three lawsuits arising out of the City’s and NYPD’s wrongful denial of certain pension benefits to our members. As a result of this settlement, eligible members will be able to have certain prior state time and prior uniformed and law enforcement-related city time credited toward their twenty-year minimum service requirement. By way of illustration, one police officer who had 8 ½ years of state service prior to becoming a police officer will now have that time counted towards his retirement. On the day before the settlement, the officer had eighteen years of police service. As a result of the settlement, the member now has 26 ½ years of police service, making him eligible for immediate retirement and to receive 1/60th of a year credit for the years after 20, rather than the 1/80th of a year that the unlawful Department guideline provided. There are numerous examples of police officers picking up four or more years of service under this settlement. The resolution of these lawsuits will provide significant monetary benefits to our active, retired and even future members, and also enable numerous officers to leave the job years earlier than they would have been eligible. This communication will advise members of who may benefit from this settlement and how to take advantage of this settlement. In addition, the Department will be promulgating four Operations Orders (with applications attached) implementing the terms of this settlement agreement. If you have any questions regarding eligibility, please contact Joe Maccone at the PBA at (212) 298-9163. Background As you may recall, the PBA had filed three separate lawsuits challenging certain of the City’s and Department’s pension practices. Some of these practices had gone unchallenged for years. The PBA initiated this strategy with the goal of securing for members the pension rights they are entitled to by requiring the City and Department to follow the laws governing the pension system. The PBA believed that the City and Department narrowly interpreted pension benefits to which our members were entitled, resulting in our members’ losing valuable benefits. Transit and Housing Pension Litigation First, in June 2001, the PBA filed suit against the City for wrongfully denying former transit and housing officers the benefits of the Child-Care Bill and the Bowden Bill — two pieces of legislation which allowed members to buy back time for previous child care leave taken (Child-Care Bill) and to buy back time not properly transferred from another retirement system prior to June 30, 1992 (Bowden Bill). The lawsuit also challenged a practice that the NYPD first adopted after the merger in 1995, which effectively treated transit and housing officers’ prior governmental service differently from all other New York City police officers. The PBA alleged that the City and Department wrongfully denied former transit and housing police officers the right to have prior state time that was properly transferred counted as police service toward the minimum retirement period of twenty years. Almost immediately, the City offered to settle the child care issue, agreeing to provide women transit and housing officers the same benefit as other NYPD police officers. The remaining two issues proceeded through litigation. On July 8, 2002, the New York County Supreme Court ruled in favor of the PBA on the remaining two issues. The court concluded that former transit and housing police officers “are entitled to have their state time, properly rolled over into NYCERS (while they were transit and housing police officers) counted toward their twenty-year service period for retirement”. Similarly, as to the benefits of the Bowden Bill, the court concluded that former transit and housing officers are entitled to the benefits of the Bill to the extent that they can establish that they were a member of Transit or Housing in 1992. Finally, and perhaps most significantly, the court concluded that “the question of which police officers are eligible for a particular benefit, such as the Bowden Bill, is in the nature of a rule concerning ‘disposition’ of pension funds, which the Board of Trustees of the PPF is authorized the determine. To the extent the operations order declaring former Transit and Housing officers ineligible was not approved by the required majority of the [Pension] Board, it is without effect”. In other words, the Department has no right to decide what pension benefits a member may receive. That issue is left to the Police Pension Board, where the police unions have six of the twelve votes. The City appealed the decision. Pending the outcome of the appeal, the case was settled, giving the PBA everything won in the lawsuit. Litigation Challenging Department's In 1999, the New York State Legislature passed Chapter 646, which allowed our members to purchase credit for time spent in another retirement system. The Department took the position that the time purchased under Chapter 646 should be counted only after a member has performed the minimum twenty-years of service and, at that time, should be counted as 1/80th value in computing a member’s retirement allowance. The Department purportedly relied on an interpretation of Chapter 646 rendered by the NYC Corporation Counsel - - the lawyers for the City. The PBA filed suit challenging, among other things, the Department’s and Corporation Counsel’s right to make this interpretation. On September 19, 2002, the New York State Supreme Court found in the PBA’s favor, concluding that “[n]either Corporation Counsel, nor the police department are authorized to determine such matters”. According to the Court, the Police Pension Board must resolve these issues. As a result of this decision, the City and Department agreed to settle the litigation. Litigation Challenging Department's In 2000, the New York State Legislature enacted Chapter 552, a law which allowed members with two years of public service to purchase time spent in previous public service if such service would have been creditable in one of eight public employment retirement systems within the state. However, the Department promulgated Operations Order 11-2 which stated that any time purchased under Chapter 552 would only count after the members completed 20 years of service and, at that time, one year of prior service would count as 1/80th value in computing a member’s retirement allowance. The PBA filed suit challenging the Department’s Operations Order. The City agreed to settle the lawsuit. The Settlement was significant in that it provided that certain prior City and State time would count toward the minimum twenty-year retirement. In addition, after twenty years of service, most of the prior service will be credited as 1/60th value, rather than credited as 1/80th value in computing a member’s retirement allowance. Conclusion The litigation wins and the eventual favorable settlement mark a significant victory for the PBA and its membership. We have been told by the Police Pension Section that upwards of 10,000 active, retired and future police officers may benefit from the settlement. Significant numbers of former transit and housing officers will likely be eligible to pick up time since membership in their prior pension system — NYCERS — often lagged behind the date of appointment to the police force. In addition, former transit and housing officers who were wrongfully denied benefits of the Bowden Bill and the favorable treatment of prior State time will be allowed to pick the best one-year period of overtime for retirement purposes; they may choose any date between July 15, 2002 and February 25, 2003 as their effective date of retirement for overtime purposes. (Members taking advantage of this benefit must retire on or after July 15, 2002 and on or before February 25, 2003). This will result in a tremendous windfall to those members. Finally, but also significant, is that any police officer with two years of service can pick up credit for certain prior time employed in state or city service, even if the member was not enrolled in a pension system (but was eligible to join such system). If the prior time is in one of the qualified groups, the purchased time will count toward a member’s minimum retirement period, resulting in a significant monetary benefit effectively reducing the number of years in police service required to retire. Even if not in the qualified group, other prior time will count after the minimum 20-year service as 1/60th value rather than 1/80th value, as the Department initially ordered. This PBA will continue to fight to ensure that members receive the rights they are entitled to under law. We thank those individual officers who stepped up to protest these practices and lend their names to the litigation. Only with your continued support will our efforts on your behalf continue to be successful.
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