Veto Bill Meant To Safeguard Retiree Benefits

By MEREDITH KOLODNER

Governor Spitzer has vetoed a bill that would have prevented reductions in retirees' health benefits unless similar cuts were made affecting active employees.

GOVERNOR SPITZER: Several areas of concern.

Many municipalities opposed the bill, fearing it would tie their hands in addressing budget deficits during fiscal crises. Civil Service Employees Association officials, who lobbied for the bill, are hoping that the Governor's instructions to his Office of Employee Relations to begin investigating the issue with the relevant unions will lead to a solution.

"We are disappointed," said Steve Madarasz, CSEA's director of communications, "but he's recognizing there's an issue here. He wants to find a reasonable response to this, and we're taking that as a positive."

In 1994, a law was passed that protected retired school district employees from cuts to their health benefits. The vetoed measure would have protected workers enrolled in the New York City Employees' Retirement System, the Optional Retirement System and the Teachers' Retirement System from benefit reductions and premium increases through May 15, 2008.

Separate Benefits, Politics

CSEA had hoped to tie the process of any consideration of benefit reductions to the bargaining table. "We want to make sure that retiree benefits are not going to be subject to politics and budget fights," Mr. Madarasz said.

The Governor raised several objections to the measure in his veto memo, including the effect the school district law has had on employer costs and whether, because of the unique set of benefits available to retirees (such as Medicare), there were circumstances where equivalent treatment of retiree and active employee benefits was not warranted.

The memo also questioned "whether there are other statutory or regulatory means for protecting retiree health benefits - such as by changing collective bargaining rules or otherwise - that would be a better way of addressing the problems articulated by the bill's supporters."

Mr. Madarasz said that the union was willing to listen to any proposals from the Governor's Office about how to protect retirees.

Most city unions did not oppose the bill, but neither did they lobby for it. Mayor Bloomberg has not tried to reduce retiree health benefits, making the bill less of an immediate priority.

Feared Contract Impact

In addition, some union officials were concerned that linking the possibility of retiree benefit reductions to those of active members' benefits could have the unintended consequence of allowing cuts to retiree benefits when and if a trade-off was made at the bargaining table. Because retirees no longer receive paychecks, they would not have the same ability to offset a reduction in health benefits.

Mr. Madarasz said that CSEA felt comfortable linking the to collective bargaining, since that would give the unions greater control over the process than they currently have.

"There should be a reasonable expectation on the part of retirees," he said, "that their benefits are their benefits, and they're going to be there for them."