Wants to buy service credit
To the Editor,
I have seen a few letters in The Communicator advocating the “rule of 80” which would be an enhancement to the NYS Retirement System. I would like to mention another option that would be beneficial, particularly to those who find themselves a few years shy of 30 years service at age 55.
In accordance with 2001 changes in federal law, many states allow active pension plan members to purchase up to five years of “non-qualified” service credit using payroll deduction or deferred compensation funds. Further, some states offer additional service for purchase to every employee.
Vermont offers the purchase of five years service after 25 years of credited service. It’s called “air-time.” California, Colorado and Nevada allow every active member the option to purchase five additional years of service; no specific previous service need be claimed. These options would allow every employee to equitably (at or near actuarial cost) extend service credit.
Under the existing system in NYS, if you retired at age 55 with only 25 years service credit, you would be subject to a 27 percent pension benefit reduction for life. If you could purchase up to five years of additional credit that would be an equitable remedy.
I have many years of so called non-qualified service and I will have only 26 years service at age 55. Purchasing service would allow me to retire at age 55 without a devastating reduction in pension benefit. Of the 30 people with whom I work, three of us face benefit reduction, in the absence of a retirement incentive, for retirement at age 55.
PEF and other NYS employee unions would do well to push for this option.
DAN FITZPATRICK
Albany
PEF should challenge law
To the Editor:
In light of the recent Supreme Court decision on age discrimination, it is now time for PEF to sue New York State to get rid of the punitive “drop down” in the rate at which retirement benefits are earned by state workers with more than 30 years service. That “drop down” can only affect older workers. Who else, other than older workers, would have 30-plus years of service?
It is blatantly unfair that older state workers with 30-plus years of service earn retirement benefits at a rate of 1.5 percent per year, when younger workers with less than 20 years earn at the rate of 1.667 percent per year and other younger workers, with 20 to 30 years of service, earn at the rate of 2 percent per year.
Regardless of its intent, the despicable law that established the “drop down” is blatantly discriminatory against older workers and must be overturned.
WILLIAM HASTBACK
East Setauket
Editor’s note: PEF is reviewing the legal issue raised in this letter. Further research is needed to determine the extent of the reach of the U.S. Supreme Court’s decision in Smith v. City of Jackson, Mississippi. In that decision, the court held that employers may be sued under the federal Age Discrimination in Employment Act for actions that have a disparate impact on older workers, but that the police officers and dispatchers who brought this particular case failed to prove their claim.
The Communicator
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We welcome letters to the editor about union
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All letters are subject to editing for space, fairness and good taste.
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Public Employees Federation
P.O. Box 12414
Albany, N.Y. 12212-2414
Editor of The Communicator
Sherry Halbrook, - shalbrook@pef.org
The
Communicator May 2005
Inside This Issue
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Weak security bugs near WTC
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