New York Law Review

Tag: Retirement and Social Security Law

  • Kaslow v. New York City Employees’ Retirement System, 23 N.Y.3d 80 (2014): Determining Pension Benefits Based on Tier and Credited Service

    23 N.Y.3d 80 (2014)

    The calculation of pension benefits for New York City employees depends on the specific retirement tier and plan applicable to the employee, and the definition of “credited service” varies accordingly.

    Summary

    David Kaslow, a Tier 3 correction officer, sought to include his prior civilian service with the New York City Department of Environmental Protection (DEP) in the calculation of his pension benefits. The New York City Employees’ Retirement System (NYCERS) denied this request, arguing that his pension was solely defined by Retirement and Social Security Law § 504-a (c) (2), which does not account for prior civilian service. The Court of Appeals reversed the lower courts’ decisions, holding that NYCERS properly calculated Kaslow’s pension, as the relevant statute defined “credited service” in a way that excluded his prior civilian employment. This case highlights the importance of understanding the nuanced rules governing pension benefits in New York, where eligibility and calculation methods vary significantly based on the employee’s retirement tier and specific plan provisions.

    Facts

    David Kaslow worked for DEP from September 1987 to April 1991, during which he was a Tier 4 NYCERS member.
    In April 1991, he became a correction officer with the Department of Correction (DOC), placing him in the Tier 3 CO-20 retirement plan because his DOC employment began after December 19, 1990.
    Kaslow bought back service credit for three years of military service in 2001.
    Prior to retirement, Kaslow was informed by NYCERS that his DEP service would not be included in his pension calculation.

    Procedural History

    Kaslow filed an Article 78 proceeding against the City and NYCERS, seeking to include his DEP service in his pension calculation.
    Supreme Court granted Kaslow’s petition, ordering NYCERS to recalculate his pension to include his DEP service.
    The Appellate Division affirmed the Supreme Court’s decision, finding NYCERS’ interpretation of “credited service” unreasonable.
    The Court of Appeals granted leave to appeal and reversed the Appellate Division, dismissing Kaslow’s petition.

    Issue(s)

    Whether NYCERS properly calculated Kaslow’s pension benefits by excluding his prior civilian service with DEP, based on the provisions of Retirement and Social Security Law § 504-a (c) (2).

    Holding

    No, because Kaslow’s pension is defined entirely by Retirement and Social Security Law § 504-a (c) (2), which does not include a component to reflect any previous civilian government service.

    Court’s Reasoning

    The Court of Appeals reasoned that NYCERS’ interpretation of “credited service” in the context of section 504-a (b) (4) and the Tier 3 CO-20 program is entitled to deference because NYCERS is the expert agency managing the City’s public employee retirement plans. The court emphasized that “What constitutes ‘credited service’ obviously differs from plan to plan.”
    The Court noted that for Tier 3 employees who became subject to Article 14 after December 19, 1990, the term “credited service” should be applied in the same manner as it would be applied to a similarly situated correction officer governed by Article 11 and participating in the Tier 2 CO-20 plan under Retirement and Social Security Law § 445-a.
    The court found that NYCERS’ explanation of how section 504-a (b) (4) applies and fits into the overall statutory design is coherent and reasonable. The court stated that Kaslow’s interpretation conflicted with Retirement and Social Security Law § 504-a (c) (2). Specifically, the court said that Kaslow’s approach of “claiming a benefit for non-uniformed service under section 13-155 (a) (3) (c) but electing to apply the higher fraction in section 504-a (c) (2) (i) (B) to compute the amount owed him for additional correction service — would maximize his pension but does not create a harmonious whole.” The court, therefore, deferred to NYCERS’ interpretation of the statute and upheld its decision to exclude Kaslow’s prior civilian service from his pension calculation.

  • Sullivan v. New York City Employees’ Retirement System, 3 N.Y.3d 641 (2004): Eligibility for Special Medical Review Committee for EMTs

    Sullivan v. New York City Employees’ Retirement System, 3 N.Y.3d 641 (2004)

    Retirement and Social Security Law § 607-b, providing performance-of-duty disability retirement benefits to EMTs, does not entitle applicants to review by a Special Medical Committee pursuant to Retirement and Social Security Law § 605(e), as § 607-b only incorporates § 605(c) by reference.

    Summary

    This case concerns whether Tier IV EMTs, who apply for performance-of-duty disability retirement benefits under Retirement and Social Security Law § 607-b, are entitled to a review of their application by a Special Medical Committee under Retirement and Social Security Law § 605(e). The New York Court of Appeals held that they are not. The petitioners, EMTs injured on the job, had their applications initially denied by the NYCERS Medical Board but were later approved by a Special Medical Committee. NYCERS subsequently discontinued their benefits, arguing that § 605(e) review was not available to EMTs applying under § 607-b. The Court of Appeals reversed the lower courts’ decisions, finding no basis in the statute’s language or legislative history to extend § 605(e) review to § 607-b applicants.

    Facts

    The petitioners were Tier IV EMTs employed by the City of New York.

    Each petitioner sustained on-the-job injuries, rendering them unable to perform their duties.

    They applied for three-quarter disability retirement benefits pursuant to Retirement and Social Security Law § 607-b.

    The NYCERS Medical Board initially denied their applications.

    The petitioners appealed to a Special Medical Committee, which reversed the Medical Board’s determination and approved the benefits.

    NYCERS subsequently discontinued the benefits, claiming that § 605(e) review does not apply to § 607-b applications.

    Procedural History

    Petitioners initiated a CPLR article 78 proceeding challenging the termination of their benefits.

    The Supreme Court ruled in favor of the petitioners, finding ambiguity in § 607-b and holding that the medical review procedures in § 605(e) should apply.

    The Appellate Division affirmed the Supreme Court’s decision, stating that § 607-b is not a “stand-alone” statute.

    The Court of Appeals reversed the Appellate Division’s order.

    Issue(s)

    Whether Tier IV EMTs applying for performance-of-duty disability retirement benefits under Retirement and Social Security Law § 607-b are entitled to review by a Special Medical Committee pursuant to Retirement and Social Security Law § 605(e)?

    Holding

    No, because the plain language of § 607-b only incorporates § 605(c) by reference, and the legislative history does not support extending § 605(e) review to § 607-b applicants.

    Court’s Reasoning

    The Court emphasized that § 607-b expressly references only § 605(c), which addresses the procedures for the NYCERS Medical Board’s initial disability retirement allowance determinations. The Legislature did not amend § 607-b to incorporate § 605(e) after enacting it. The Court noted that § 605(e) explicitly applies to those seeking benefits “pursuant to this section”—i.e., § 605—and not the enhanced benefits under § 607-b.

    The legislative history of § 605(e) indicates that it was intended to rectify “Tier inequity” by providing Tier III and IV members of NYCERS with the same medical review rights as Tier I and II members under § 605. According to the court, applying § 605(e) to EMTs under § 607-b would frustrate the legislative intent of § 607-b, which aimed to eliminate the disparity between EMTs and firefighters, as firefighters are not entitled to § 605(e) review.

    The Court reasoned that it was unlikely the Legislature would implicitly create a new disparity between EMTs and firefighters shortly after specifically acting to eliminate one. The court stated, “If EMTs are now afforded the additional level of review provided for in section 605 (e), the legislative intent of section 607-b would be frustrated and a new disparity introduced between EMTs and firefighters, as firefighters are not entitled to section 605 (e) review.”

    The Court focused on the specific language chosen by the legislature and declined to expand the scope of a statute beyond its explicit terms. The decision underscores the importance of statutory interpretation, particularly when dealing with complex retirement benefit schemes.

  • Public Employees Federation v. Cuomo, 62 N.Y.2d 450 (1984): Constitutionality of Changes to Public Employee Retirement Benefits

    62 N.Y.2d 450 (1984)

    Changes to public employee retirement benefits that diminish or impair previously granted benefits violate the New York State Constitution, even if the statute granting the initial benefits had a limited duration.

    Summary

    This case addresses whether amendments to the Retirement and Social Security Law, specifically regarding Tier III employees’ rights to withdraw contributions and the calculation of ordinary death benefits, unconstitutionally diminished or impaired pension benefits. The Court of Appeals held that the amendments violated the New York Constitution’s provision that pension benefits shall not be diminished or impaired. The court reasoned that once the legislature grants pension benefits, they cannot be impaired, even if the statute creating them has a limited duration. The court found that both the restriction on contribution withdrawals and the change in death benefit calculations impaired the rights of Tier III employees.

    Facts

    Employees who joined the New York State public retirement system on or after July 1, 1976 (Tier III) were initially entitled to withdraw their contributions if their service terminated before completing a 10-year vesting period. Subdivision c of section 613 was enacted, changing this by allowing refunds only upon death or reaching age 62. Subdivision c of section 606 was also enacted, reducing the ordinary death benefits payable to the estates of most Tier III employees who died after September 1, 1983, compared to the previous benefit calculation under section 508.

    Procedural History

    Several lawsuits were filed challenging the constitutionality of the changes. Special Term granted summary judgment in part, declaring that subdivision c of section 613 violated the New York Constitution. The court denied the claim that subdivision c of section 606 was similarly invalid and denied the claim that Tier III employees were entitled to recover contributions made after September 1, 1983. Cross-appeals were taken, leading to a consolidated direct appeal to the Court of Appeals.

    Issue(s)

    1. Whether subdivision c of section 613 of the Retirement and Social Security Law unconstitutionally diminishes or impairs pension benefits by restricting Tier III employees’ right to withdraw contributions.

    2. Whether subdivision c of section 606 of the Retirement and Social Security Law unconstitutionally diminishes or impairs pension benefits by reducing the ordinary death benefits payable to the estates of Tier III employees.

    Holding

    1. Yes, because the right of Tier III members to the return of their contributions upon termination of their service with the State before the 10-year vested period may not be impaired by the effectuation of article 15. Moreover, the right to a return of all contributions made in reliance on section 517 of article 14 was constitutionally protected.

    2. Yes, because the death benefit was a benefit of membership in the retirement system rendered contractual in nature by section 7 of article V, regardless of whether specific funds were earmarked for a death benefit fund or not.

    Court’s Reasoning

    The court relied on Section 7 of Article V of the New York Constitution, which states that membership in any pension or retirement system of the state shall be a contractual relationship, the benefits of which shall not be diminished or impaired. The court referenced previous cases such as Birnbaum v New York State Teachers Retirement System, where it held that changes reducing annuity benefits violated the constitutional provision. The court also rejected the State’s argument that because Article 14 was enacted for a limited duration, Tier III employees had no reasonable expectation that the benefits were permanent.

    The court cited Matter of Central School Dist. No. 2 v New York State Teachers’ Retirement System, stating that the legislature often enacts new benefits on a year-to-year basis to allow for changes if a provision proves unworkable, but this does not mean the benefits are intended to be temporary. "[N]o benefit so enacted has later been discontinued." The court reasoned that interpreting statutorily conferred benefits as permanent, despite the limited duration of the statute, prevents an unconstitutional impairment where a benefit is conferred and then taken away upon the statute’s expiration. The court concluded that the right of Tier III members to a return of contributions and the death benefit was constitutionally protected and could not be impaired.

  • DeMeo v. New York State Policemen’s and Firemen’s Retirement System, 41 N.Y.2d 1045 (1977): Vesting of Retirement Benefits

    DeMeo v. New York State Policemen’s and Firemen’s Retirement System, 41 N.Y.2d 1045 (1977)

    Retirement benefits do not vest at the time of application but only upon approval by the state comptroller, and an application is canceled upon the applicant’s death before the comptroller’s approval.

    Summary

    This case addresses whether an application for ordinary disability retirement benefits vests upon filing or upon approval by the State Comptroller. The applicant, a member of the New York State Policemen’s and Firemen’s Retirement System, filed for disability retirement but died before the Comptroller approved the application. The court held that the application was canceled upon his death because retirement benefits do not vest until the Comptroller approves the application and sets an effective date. The court also found no undue delay in the Comptroller’s processing of the application.

    Facts

    The appellant’s intestate, a member of the New York State Policemen’s and Firemen’s Retirement System, filed an application for ordinary disability retirement on August 14, 1975.
    The applicant died on October 6, 1975.
    At the time of death, the State Comptroller had not yet approved the retirement application nor fixed an effective date for retirement.

    Procedural History

    The Comptroller determined that the application was canceled upon the applicant’s death.
    The Appellate Division affirmed the Comptroller’s determination.
    The Court of Appeals affirmed the Appellate Division’s order.

    Issue(s)

    Whether an application for ordinary disability retirement benefits vests at the time of filing, or whether it is canceled upon the applicant’s death before the State Comptroller approves the application and fixes an effective date for retirement.

    Holding

    No, because Section 362(aa)(2) of the Retirement and Social Security Law expressly states that retirement shall not be effective until “as of a date approved by the [State] comptroller,” and the Comptroller had not yet approved the application or set an effective date before the applicant’s death.

    Court’s Reasoning

    The court based its reasoning on the explicit language of Section 362(aa)(2) of the Retirement and Social Security Law, which requires the State Comptroller’s approval for retirement to become effective. The court emphasized that the retirement did not vest at the time of filing. The court stated that “retirement shall not be effective until ‘as of a date approved by the [State] comptroller’”. The Comptroller had not completed the necessary investigation to pass on the merits of the application, nor had an effective date been fixed before the applicant’s death. The court deferred to the administrative process required for the Comptroller to make a determination. The court also rejected the argument that the time between the filing and the death constituted undue delay, finding no error of law in the Appellate Division’s finding on this issue. This holding reinforces the principle that statutory requirements for vesting of benefits must be strictly met, and that administrative processes are given deference in the absence of clear evidence of error or undue delay. The court did not elaborate further but affirmed the lower court’s decision based on the existing legal framework.