Relates to eligibility for participants in the automotive 25 year/age 50 pension plan with more than 30 years of credited service who remain in active service…

• Democratic1

◆ The sponsor's argument

Why Robert Jackson says this is needed

The 25-year/age 50 retirement program for Automotive members was enacted by Chapter 414 of the Laws of 2002 (see Retirement and Social Security Law Section 604-g). It is a special early retirement program for New York City employees in certain automotive mechanic and related titles, enabling those employees to retire after they have attained at least 25 years of credited service and are at least 50 years of age. The automo- tive 25/50 program requires that covered employees make additional member contributions in excess of those required of Tier 4 members. The Automotive 25/50 program provides that the retirement benefit of covered members shall be 50% of final average salary for 25 years of credited service and an additional 2% of final average service for each additional year of credited service up to a maximum of 30 years. Notwithstanding the early retirement option provided by the Automotive 25/50 program, a number of covered employees have chosen to continue working in covered employment well beyond their 50th birthday and have accrued more than 30 years of service. Ironically, these employees are disadvantaged by the Automotive 25/50 service program when their age and years of credited service reaches a certain level. The retirement allowance for participants in the standard Tier 4 program who have at least 25 years of credited service is 2% of final average salary for each year of service up to a maximum of 30 years, and an additional 1.5% of final average salary for years of credited service beyond 30 years (see Retirement and Social Security Law Sections 603 and 604). Thus, a Tier 4 member with more than 30 years of credited service is entitled to a retirement benefit calculated at a higher rate than the rate applica- ble to an Automotive 25/50 program member. And yet, the Tier 4 member has not had to pay the additional member contributions required of the Automotive 25/50 member. This act will enable members of the Automotive 25/50 program to revert to the standard Tier 4 formulation in the event they attain more than 30 years of credited service and have reached the retirement age provided for in Tier 4. In these circumstances, the member can accrue the addi- tions to retirement allowance for service beyond 30 years that are available to members in the standard Tier 4 program. There is no rational basis for disadvantaging these employees who have decided not to avail themselves of the early retirement option afforded by the 25/50 Automotive program and have continued to render service to New York City. This law remedies a structural inequity that the drafters of the 25/50 Automotive program did not foresee and certainly did not intend.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.