By
SHERRY HALBROOK
The long months of worry about job, pay and retirement security have turned a
corner with the announcement June 5 of an agreement between PEF and the governor
to stop the threatened layoffs and help bridge the state’s budget gap.
“Not only have we been able to save our members’ jobs, we hung tough against
pressure to reopen our contract, give up our members’ pay raises for 2009 and
allow the state to withhold a week’s pay,” said PEF President Ken Brynien “We
bent to respond to the state’s fiscal crisis, but we did not break.”
“I want to thank the union leadership for doing what is right by their workers
and New York,” said Gov. David Paterson.
“We are taking Gov. Paterson at his word, that he is foregoing his plan for
8,700 state layoffs, and that no PS&T employees will be laid off in this fiscal
year or next, beyond those originally specified in the budget and related to the
facility closings and program reductions,” Brynien said.
Under the terms of the agreement negotiated by PEF and the Civil Service
Employees Association, the state will offer a $20,000 non-pensionable, severance
buyout to selected employees.
And Paterson is directing state agencies to give their employees more access to
programs that allow for voluntary reductions in work schedules (VRWS).
“Our PS&T contract has provided for VRWS for more than 20 years,” Brynien said.
“However, some state agencies have been reluctant to approve our members’
applications to use it. We are very hopeful that this new agreement will spur
much wider acceptance of VRWS by all state agencies.
Once they get used to it, we believe they will find it can be as valuable to
them as it can be for our members who are interested in restricting their time
on the job and are willing to sacrifice some of their pay to get more time off.”
In return for these accommodations by the governor, the unions agreed not to
actively oppose his proposal for creating a Tier 5 in the retirement system for
future hires. However, Paterson was persuaded to modify some of the provisions
he had originally proposed for the new tier.
While the union does not welcome the creation of yet another pension tier,
Brynien said the unions recognized that it will provide some financial relief to
local governments as well as the state.
“The governor moved significantly from his original demands for major contract
concessions from the state’s work force,” Brynien said in announcing the
agreement. “Considering the deteriorating condition of the state’s finances,
(the creation of Tier 5) represents a reasonable accommodation which preserves
the integrity of our contract and provides cost savings to the state in lieu of
layoffs. We will continue to push the governor and the Legislature to reduce the
reliance on costly private consultants as a way for the state to address future
financial crises.”
As the state work force is stripped further by the hiring freeze and buyouts,
workloads and responsibilities will mount for all the state employees who remain
on the job, Brynien said.
Nevertheless, even “under these difficult circumstances, we stand ready to
continue to provide high-quality services to the citizens of the state to the
best of our abilities.”
Brynien praised PEF members for their courage and staunch refusal to cave in
under the state’s efforts to intimidate them into reopening their contract and
giving up their hard-won pay raise or other benefits.
“We had a great deal at stake, but we prevailed because we stood together and
did not flinch,” Brynien said.
Buyout
The state Division of Budget (DOB) and the various state agencies will decide
which employees will receive the $20,000 buyout offers.
According to Paterson’s announcement of the agreement, the state will offer the
buyouts to approximately 4,500 employees in positions that will be permanently
abolished. Those employees who accept the buyout will be barred from returning
to state employment, in any capacity, for five years.
As part of its strategy to save $240 million over two fiscal years, the state
also will abolish another 2,500 funded positions that are currently vacant.
Although agencies cannot use layoffs to achieve the savings DOB requires, the
buyouts are meant to encourage employees to voluntarily leave state service.
Employees who receive and accept the buyouts, will not be able to add that money
to their final average salaries on which their pensions will be based. The
buyout also will not alter the value of payments for accrued but unused leave
credits. The $20,000, however, will be subject to the usual income taxes and
withholdings, including FICA.
Where the number of employees in a targeted title exceeds the number of
positions the agency wants to eliminate, the incentive will be offered in
seniority order. The buyouts will continue to be available throughout this
fiscal year until the agency has met its savings target as established by the
DOB.
VRWS
To help meet their spending targets for the coming years, agency heads are being
directed to make liberal use of the VRWS program that lets employees reduce
their pay in exchange for more time off.
In past negotiations, PEF proposed various solutions in response to concerns
that many state agencies were routinely denying VRWS applications.
In a June 3 memo, Dennis Whalen, director of state operations, told state agency
heads to “promote the VRWS program and encourage employees to participate in
it.”
Whalen told the agencies to “quickly review and approve employee requests for
reduced work schedules which can result in real payroll savings throughout the
2009-10 state fiscal year.”
Whalen set a 7 percent employee participation goal for each agency.
“Additional use of VRWS can occur beyond the 7 percent threshold at agency
discretion,” Whalen said. He said the 7 percent is a temporary threshold.
As defined in Appendix 4 of the PS&T contract, individual VRWS agreements may be
for up to 26 biweekly pay periods and must expire no later than the end of the
last payroll period in the fiscal year.
Participating employees may reduce their work schedules (and salaries) a minimum
of 5 percent, in 5 percent increments, up to a maximum of 30 percent.
PEF members should refer any denied VRWS application to their PEF field
representative.
Tier 5
Retirement benefits for current employees are unchanged.
The proposed Tier 5 would require a change of law, passed by the Legislature and
signed by the governor. It would apply only to employees hired after the
effective date of that legislation.
Tier 5 benefits would differ from the current Tier 4. Notably:
• 62 would be the minimum age for retirement without penalty;
• penalty of up to 38 percent for retirement prior to age 62;
• 3 percent (of salary) employee pension contribution for entire career;
• 10 years service required for retirement; and
• Maximum of $10,000 annually in voluntary overtime inclusion for final average
salary.
