Statement Regarding the
Agreement Reached with the Governor
Negotiations with Governor Paterson regarding layoffs have concluded with an
agreement.
The
agreement provides for a two year no-layoff pledge, a non-pensionable targeted
severance buyout of $20,000 for eligible employees, and more access by our
members to programs that allow for voluntary reductions in work schedules.
Under the agreement, PEF will not oppose the
Governor’s proposal for a Tier V in the retirement system for future hires.
Details of the
severance buyout and the governor’s Tier V proposal can be found on the PEF Web
site.
Given the
significant movement by the governor from his original demands for concessions
from the state’s work force and in consideration of the deteriorating condition
of the state’s finances, this represents a reasonable accommodation which
provides cost savings to the state in lieu of layoffs while preserving the
integrity of our contracts.
We are
disappointed the governor continued to insist on additional sacrifice from the
state work force, beyond cuts already made to agency operations.
Under these difficult circumstances, we stand ready
to continue to provide high-quality services to the citizens of the state to the
best of our ability.
Retirement Incentive Program
Under the
incentive program, employees who voluntarily leave state service will receive an
incentive payment of $20,000.
The incentive
payments are not pensionable, and they are subject to the usual taxes and
withholdings.
The
payments will not impact final average salary nor will it alter the value of
payments for accrued but unused leave credits.
Additionally, employees who receive the incentive
payments will be barred from returning to State employment, in any capacity, for
five years.
The
incentive payments will be targeted to specific titles chosen by the agency.
Since the agency will not be allowed to refill the
position for at least one year (if they are allowed to refill at all), it is
possible that not all incumbents in a targeted title will be offered the
incentive. Where the number of employees in a targeted title exceeds the
number of positions the agency wants to eliminate, the incentive will be offered
in seniority order. The incentive payments will continue to be available
throughout the fiscal year until the agency has met the savings target
established by the Division of Budget.
With this
agreement, DOB has disapproved all agency plans what relied on layoffs to meet
their spending targets.
Although they cannot use layoffs to achieve the
savings DOB requires, the new incentive program will encourage employees to
voluntarily leave state service.
Agency Commissioners are also being directed to make
liberal use of the Voluntary Reduction in Work Schedule program to help meet
their spending targets for the coming years.
More information
will be available as the State moves ahead with implementation of this program.
As details become available, we will post them on the PEF website.
Tier
V proposal
Retirement
benefits for current employees are unchanged.
In accordance
with constitutional requirements, the new Tier V will apply only to employees
hired after the effective date of the legislation after it has passed in the
legislature and signed into law by the governor.
While the
Governor dropped a number of his demands from his original proposal, the Tier V
benefits will be different from the current Tier IV. Among the important
changes are:
·
Increases the minimum age at which an individual can retire without penalty from
55 to 62, and imposes a penalty of up to 38 percent for any employees who retire
prior to age 62.
·
Requires employees to continue contributing 3 percent of their salaries towards
pension costs for their entire careers rather than ending their contributions
after 10 years of service.
·
Increases the minimum years of service required to draw a pension from 5 years
to 10 years.
·
Capping the amount of discretionary overtime that can be considered in the
calculation of pension benefits at $10,000 per year,
there is no change on inclusion of mandated overtime.