McCaffrey v. New York City Employees’ Retirement System, 46 N.Y.2d 38 (1978)
A former member of a retirement system who rejoins the system after their membership terminated is considered a new entrant and is subject to the retirement rules in effect at the time of re-entry, not the rules in effect during their original membership.
Summary
McCaffrey, a former member of the New York City Employees’ Retirement System, rejoined the system after his prior membership had terminated due to an extended absence from city service. Upon reapplying for retirement, he was denied benefits because he did not meet the five-year service requirement enacted after his initial membership ended but before he rejoined. The court held that because McCaffrey’s original membership had terminated, he re-entered as a new member and was therefore subject to the new eligibility requirements. The constitutional non-impairment clause did not apply because his rights under the original membership had lapsed.
Facts
1. McCaffrey became a member of the New York City Employees’ Retirement System on February 22, 1964, while serving on the New York City Council.
2. He left city service on December 31, 1965, and his membership in the retirement system terminated on December 31, 1970, due to a provision in the Administrative Code regarding extended absences.
3. In 1973, Article 11 was added to the State Retirement and Social Security Law, imposing a five-year minimum service requirement after July 1, 1973, for retirement eligibility.
4. McCaffrey re-entered city service on January 1, 1974, as President of the City Council and rejoined the retirement system on January 22, 1974.
5. His application for retirement, effective January 1, 1978, was denied because he had not met the five-year service requirement after July 1, 1973, as mandated by Article 11.
Procedural History
1. McCaffrey initiated a CPLR Article 78 proceeding challenging the denial of his retirement benefits.
2. Both the lower court and the Appellate Division denied his application.
3. McCaffrey appealed to the New York Court of Appeals on constitutional grounds.
Issue(s)
1. Whether the non-impairment clause of the New York State Constitution (Article V, § 7) precludes the application of the limitations on retirement eligibility contained in Article 11 of the Retirement and Social Security Law to McCaffrey, who rejoined the retirement system after his prior membership had terminated.
Holding
1. No, because McCaffrey’s membership in the system had terminated, and when he rejoined in 1974, he did so as a new entrant, subject to the rules then in effect. Therefore, the non-impairment clause does not apply.
Court’s Reasoning
The court reasoned that McCaffrey’s situation differed significantly from that of the petitioner in Matter of Donner v. New York City Employees’ Retirement System, where the petitioner was a retiree already receiving benefits when he returned to city service, giving him a statutory right to re-enter under the original terms. In contrast, McCaffrey had no statutory or contractual right to re-enter the system arising from his previous membership because his membership had been terminated according to the Administrative Code.
The court emphasized that McCaffrey only had the right to enter the system as a new member in 1974, subject to the rules and regulations then in effect, including Article 11’s five-year service requirement. The court stated, “Donner had the right to rejoin the system in its configuration at the time he left it; appellant had only the right to enter the system in 1974 in the configuration then existing. Thus the application of the article 11 limitation to appellant does not diminish or impair his retirement benefits.”
Therefore, applying Article 11 to McCaffrey did not impair any vested right, as his previous membership and associated benefits had been extinguished upon termination of his initial membership. The constitutional non-impairment clause protects existing contractual rights, not potential future rights based on a prior, terminated membership.