In New York, an Important Pension Bill is Slipping Through the Cracks

Every year, around this time, we get to experience one of summer’s finest, most deeply rooted traditions.

No, I’m not talking about Fourth of July. I’m talking about the end of New York’s legislative session, which typically gives us as many fireworks as any Independence Day celebration, and twice the drama.

This year is no exception. So when the state’s legislative session ends on June 19^th, get ready for a flurry of activity and, likely, the rushed passage of a few bills that have been subject to very little scrutiny or debate, if any at all.

One particular bill is taking center stage in the days leading up to the 19^th. It was introduced quietly, its sponsors have been relatively hush-hush, and now several watchdog groups are concerned the bill could slip into law without much fanfare.

It’s officially called A9594/S7326, but often goes by the more colloquial “NYPD Pension Bill”.

We’ll dive into the details of the bill, but first some back-story is necessary. Back in 2009, then-New York City mayor Bloomberg passed a measure altering pension benefits for police officers hired after July 1, 2009; officers hired after that date were placed into a category called “Tier III”, the details of which are outlined here:

Tier III requires members to work for 22 years, instead of 20, to collect full-service pensions. Disability benefits are 44 percent of the final average of the last three years’ salary with an offset for Social Security benefits, instead of 75 percent of the final year’s salary with no offset.

The measure was projected to save the City $31 billion over 30 years.

The new bill, A9594/S7326, attempts to undo these changes. And actually, the bill isn’t new at all. A bill with the same language was proposed in 2009 with the aim of doing away with “Tier III” altogether and restoring larger benefits for newer hires. That bill was vetoed by then-governor David Paterson.

But now it’s back. And, if passed, it would represent a major expense for the City. The cost:

With more than one-third of all police retirees, approximately 15,000 people, collecting disability pensions, the proposed changes would increase New York City’s costs by $35 million in fiscal year 2015. The actuarial value of contributions required by the City to fund the new benefit would be far greater: $266.4 million in fiscal year 2015, growing to $617.9 million in 2019.

Those aren’t particularly palatable numbers, which explains why many typically pro-union politicians are shying away from supporting the bill.

Among them is New York City Mayor Bill de Blasio, who avoided commenting on the bill for weeks before news broke this week that he won’t support it. As reported by Capital New York:

Mayor Bill de Blasio, generally a champion of unions, opposes a state Assembly bill that would boost disability pensions for New York City police officers because he believes it would put too big a dent in the city budget, Capital has learned.

In response to an inquiry, an administration official confirmed the mayor’s opposition to the legislation…The City Hall official, who would only speak on background, stressed that the mayor supports the NYPD but views the bill, as written, as cost-prohibitive.

A source in the Assembly confirmed to Capital that aides to the de Blasio phoned on Tuesday to state the mayor’s opposition.

“They’re not supportive of the bill at all. It’s based on the assumed cost of the legislation,” said one source within the State Assembly.

City Council Speaker Melissa Mark-Viverito, who typically votes pro-union, said she has not yet determined her position on the bill.

In fact, not even the bill’s sponsor, Marty Golden (R-Brooklyn) seems to want to discuss it.

“We are looking at it and trying to get it out,” Golden told the New York Post. “We’re discussing it, and I don’t want to go any further than that as to the purpose of the changes.”

Police disability pensions are an especially sensitive issue because of several recent events that have exposed disability fraud in New York City. In January, a state investigation revealed that as many as 1,000 public workers had been collecting fraudulent disability payments to the tune of $400 million.

The retired New York City police officers and firefighters showed up for their psychiatric exams disheveled and disoriented, most following a nearly identical script.

They had been coached on how to fail memory tests, feign panic attacks and, if they had worked during the Sept. 11, 2001, terrorist attacks, to talk about their fear of airplanes and entering skyscrapers, prosecutors said. And they were told to make it clear they could not leave the house, much less find a job.

But their Facebook pages told investigators a starkly different story, according to an indictment and other court papers.

Former police officers who had told government doctors they were too mentally scarred to leave home had posted photographs of themselves fishing, riding motorcycles, driving water scooters, flying helicopters and playing basketball.

More recently, a Journal News investigation revealed that 25 retired cops and firefighters in the Lower Hudson Valley were collecting disability pensions of over $100,000. Some of those retirees claimed disability stemming from incidents years before they retired, and were healthy enough to put in a large amount of overtime hours their last year on the job. That group of 25 retirees will collect $3.17 million in combined pension payments in 2014.

Photo by Giacomo Barbaro via Flickr CC License