Albany, N.Y.-- The 2010 Retirement Incentive Program (Chapter 105, Laws of 2010) is a temporary program for certain New York State and Local Government Employees’ Retirement System (ERS) members. This program does not apply to Police and Fire Retirement System members.
The Program has two distinct parts.
Part A is a targeted incentive. Employers must identify eligible titles. Part A provides one additional month of service credit for each year of credited service an eligible member has at retirement. The maximum additional incentive service credit is three years.
Part B is not targeted. It is open to all eligible Tier 2, 3 and 4 members unless you deem a member’s position critical to the maintenance of public health and safety. Part B allows members who are at least age 55 and have 25 years or more of service credit to retire without a benefit reduction. We assume that most Local 828 members will fall into Part B.
Members whose employer offers both parts of the program, and who meet the eligibility requirements of both parts, must choose between the two. They can have either part, but not both.
Employers that participate in the New York State and Local Employees’ Retirement System can elect to provide Part A incentive benefits to certain members on or before August 31, 2010.
Employers that elect to participate in Part A must target positions as eligible for the incentive. If there are more employees interested in the incentive than positions targeted in that title, the law requires that eligibility shall be determined by seniority. Employers are not required to eliminate the targeted positions if they have developed a savings plan. The plan must demonstrate that replacement employees’ base salaries result in a minimum savings of 50 percent of the targeted employees’ combined two-year salaries during the following two years.
Benefit Description
Part A provides eligible employees with one additional month of service credit for each year of service credit as of the date of retirement. The maximum amount of additional service credit provided under Part A is three years.
The Open Period
Any employer that adopts Part A of Chapter 105 must establish an “open period” during which eligible employees can retire and be entitled to incentive benefits. The open period must be at least 30 days but not more than 90 days. Additionally, it cannot begin before June 2, 2010 and cannot extend beyond December 31, 2010.
Formal Adoption Procedures
Counties, cities, towns and villages must enact a local law in accordance with Municipal Home Rule Law, and the rules and regulations established by the New York State Department of State. The enactment must be completed no later than August 31, 2010. Local laws must be filed with the Department of State in accordance with its regulations.
Employers must file a certified copy of that local law with the Retirement System. (The original law must be filed with the Department of State.) Please indicate the type of incentive (Part A or Part B) on the local law.
The certified copy of the local law must be accompanied by an affidavit stating whether employees are eligible for a separate, employer-provided incentive through a collective bargaining agreement, or by any other arrangement with their employer, and if the employer will allow employees to collect both benefits. The affidavit must also indicate the payment option selected by the employer.
If an employer does provide a separate incentive and will not allow their employees to collect both benefits, employees who wish to receive the benefits of Part A must waive their rights to the employer-provided incentive. The employer must send the Retirement System a list of the names, Social Security numbers and registration numbers of those employees along with a copy of each member’s waiver. Retirement incentive payments will not be made until a copy of the waiver is on file with the Retirement System.
Incentive Cost for Part A
At the conclusion of the incentive program, the Retirement System will calculate the cost for each employer that participated in Part A. Employers can choose to pay the cost in one lump sum or in five annual installments with the first installment due February 1, 2012. The estimated annual cost may be determined by multiplying the annual salary of those anticipated to retire by the appropriate rate. That figure should then be multiplied by five to determine the total five-year cost.
Age 55/25-year Retirement Benefit (Part B)
Employers that participate in the New York State and Local Employees’ Retirement System can elect to provide Part B incentive benefits to certain members on or before September 1, 2010.
Benefit Description
Part B allows Tier 2, 3 and 4 members who are at least age 55 and have 25 or more years of service to retire without a benefit reduction. All employees who meet the age and service requirements and retire during the open period established by their employer are eligible for the benefit unless the chief executive officer or the governing board determines that the employee’s position is critical to the maintenance of public health and safety. Any individual denied may request a review of that decision under Article 78 of the Civil Practice Law and Rules. Employers must submit a list of excluded employees by the beginning of their open period. If a list is not received by this date, employees who are otherwise eligible for this benefit will not be denied.
Employers must file a certified copy of that local law with the New York State and Local Retirement System. (The original law must be filed with the Department of State.) Please indicate the type of incentive (Part A or Part B) on the local law.
Incentive Cost for Part B
At the conclusion of the incentive program, the Retirement System will calculate the cost for each employer that participated in Part B. Employers can choose to pay the cost in one lump sum or in five annual installments with the first installment due February 1, 2012. The estimated annual cost may be determined by multiplying the annual salary of those anticipated to retire by the appropriate rate. That figure should then be multiplied by five to determine the total five-year cost.
Detailed eligibility requirements are provided under Member Eligibility Requirements & Exclusions. For questions regarding the 2010 Retirement Incentive Programs provided by Chapter 105, email RTEmpSer@osc.state.ny.us or contact Mary Ellen Kutey, Assistant Director, Member & Employer Services Bureau at (518) 474-0167.
Here are some more FAQ's that your EMPLOYER is asking the NYS Retirement System:
How do I elect to participate in the incentive?
You must enact a local law or, if you are not empowered to enact law, pass a resolution. The enactment/adoption must be on or before July 30, 2010 for educational employers or August 31, 2010 for State and other participating employers. You can download a Sample of a Local Law .
Do I have to adopt both Part A and Part B?
No. You can adopt either or both parts.
If I adopt Part A and Part B, can my eligible employees receive both?
No. Employees can be eligible for Part A and Part B, but can only receive one part of the incentive. If you adopt Part A and Part B and the open periods overlap, your eligible employees will receive the greater benefit. However, if the open periods do not overlap, your employees must choose the part they wish to receive.
How long must the open period be?
An open period for Part A must be at least 30 days in length but not more than 90 days. Part B open periods must be 90 days in length. All open periods must occur during the time frames specified in the legislation. Please see the detailed information for your employer type in the navigation for specific dates.
If I target a position and the employee in that position retires, can I hire someone to fill that position?
State employers must eliminate the position unless this position can be filled by the appointment, transfer or reassignment of another State employee. The former position of that State employee must then be eliminated. Please note, educational employers, municipalities, SUNYs for unclassified employees (faculty) and community colleges can rehire someone to fill that position, but they are required to demonstrate that they will achieve a 50 percent savings over a two-year period.
We are offering our own retirement incentive. Can our employees have both our local incentive and either Part A or Part B?
Yes, if the employer elects to allow its employees to accept both the local and the State provided incentive. If an employer does not elect to allow its employees to have both, employees must file a written statement agreeing to waive any right to a local incentive with you. You must file a copy of this waiver with us. You can download a blank Local Incentive Employee Waiver form for this purpose.
Who determines whether an employee is eligible for Part A?
As the employer, you determine whether an employee can participate in Part A. Only members in positions you target as eligible for Part A (and who meet the other eligibility requirements) can retire with Part A.
What is active service?
*For the 2010 Retirement Incentive Program, active service is defined as:
*Being paid on the payroll
*On a leave of absence with pay
*On another approved leave without pay not to exceed 12 weeks from February 1, 2010 to the beginning of the open period
*The period of time between the end of the June 2010 school term through August 31, 2010
*The employee is employed on a school year basis
*The employee was otherwise in active service on February 1, 2010
Is Part B a targeted incentive?
No. However, if you elect to participate, you can deem certain positions critical to public health and safety. Members in these positions would be excluded from retiring under Part B. All other members who are at least age 55 and have 25 or more years of service credit can retire under Part B.
Will members retiring with the incentive receive any extra service credit?
Only if they retire under Part A. Part B does not provide any additional service credit.
What should I consider in determining eligibility for inclusion in the incentive?
Eligibility for inclusion in the incentive should be determined by seniority.
Who do I contact if I have additional questions or need help?
For more information, please contact the NYS and Local Retirement System Call Center toll-free at 1-866-805-0990 or go to their website.
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