Current Pension Topics
Why Not 55/25 for All?

By JOEL L. FRANK

Q.: It is nice to see the United Federation of Teachers (UFT) and the city agree on a new 55/25 Plan. Why is it that only a few unions have this? I have contacted my union and they want no part of me asking about the 55/25 Plan, or any question, for that matter. Spitzer should unilaterally make this plan effective immediately.

Mr. Frank is a fee-only Retirement Financial Planner and a retired NYC High School Teacher of Accounting. He can be reached by telephone at (732) 536- 9472, or via e-mail at rollover@optonline.net.

T.D.

A.: Tell your union that you demand respect and if they don't change their manners, you will report them to the appropriate authorities. They must be held accountable.

Having said that, I am in full agreement with you. All non-emergency personnel should be treated the same. I suggest that if you feel you are being treated as a second-class public employee, you write to your union, Mayor Bloomberg, Governor Spitzer and your state Assemblyman and Senator and tell them that you demand parity with UFT/TRS/BERS members. Now is the time to act as individuals. Don't wait for your union to fight for what is rightfully yours. Stand up and be counted.

The 55/25 agreement is simply the direct result of having two separate retirement systems for city educational personnel: Teachers' Retirement System (TRS) and Board of Education Retirement System (BERS). The UFT is the largest union local in the nation with over 201,000 dues paying members, counting retirees.

The following information, presented in Q&A format, comes from the Web site of the UFT. It can be downloaded at: http://www.uft.org/news/teacher/top/55-25/

The landmark agreement on a pension improvement, commonly known as 55/25, is something UFT President Randi Weingarten has been trying to achieve for many years. It would give all of the members of Tiers II, III and IV - educators who were hired (or who joined the retirement system) after 1973 - the ability to have an un-reduced pension at age 55 if they have 25 years of service. The union has fought for and has achieved many pension improvements for Tiers II, III and IV members over the years. However, fiscal constraints and politics - namely the growing burden of retiree costs on governments and rising antipathy toward more generous benefits for public workers when the private sector was cutting back and even eliminating those benefits - has made 55/25 for all unattainable - until now.

This benefit is particularly important for women who started teaching at a young age and who would have had 30 years in service had they not left to raise a family. So 55/25 is an important matter of gender equity.

Legislation is required for this benefit to take effect. The joint support of the city and the union was an essential step, as legislation attempting to achieve this has been previously vetoed twice by this state's governors. We are confident this time we will succeed.

Members who opt in may retire and collect full benefits at age 55 if they have 25 years of service. Previously they had to work 30 years or wait until they were 62 in order not to have their pensions reduced.

The newly negotiated agreement affects current members of the retirement system; future members of the TRS and Board of Education Retirement System (BERS) will have a slightly different plan.

The UFT is planning a full-scale campaign to provide all members with all the information they will need to make the important decision of whether to opt into this plan or not. There will be a six-month opt-in period and much more information will be provided after the legislation is enacted into law.

Here is a preliminary Q&A that answers questions about 55/25.

What does 55/25 mean?

The 55/25 Plan will allow members in Tiers II, III and IV to collect the actual pension they have earned (un-reduced) if they retire at age 55 and have 25 years of service.

Who is eligible for the 55/25 Plan?

All current members of TRS and the following UFT-represented titles in BERS in Tiers II, III and IV are eligible to apply for the 55/25 Plan: All nurse and therapist titles, substitute vocational assistants, all non-annualized adult education titles, directors and assistant directors of drug and alcohol programs, sign language interpreters, all military science instructor titles and all education officer and analyst titles.

Is 55/25 automatic for all current members?

In order to get the 55/25 Plan current members must file an application to opt in.

How long is the opt-in period?

The opt-in period will be the six-month period following the enactment of the enabling legislation.

What if I don't opt into the 55/25 Plan during the open period?

If you do not opt into the 55/25 Plan during the open period you will be covered by the existing provisions of Tier IV. That means in order to get an un-reduced pension you must be age 62 or have 30 years of service.

What will it cost me to opt into the 55/25 Plan and for how long?

If you opt into the 55/25 Plan, you will pay 1.85 percent of salary to your 25-year date in addition to the current 3 percent of salary for the first 10 years. That is, you will contribute 4.85 percent of salary for the first 10 years of service and 1.85 percent of salary for the next 15 years of service and then all contributions will stop.

I am on an approved leave of absence without pay. Am I eligible to opt into the 55/25 Plan?

Yes, if you are on an approved leave of absence without pay, you are eligible to enroll in the 55/25 Plan during the opt-in period.

I will be age 62 before I have 25 years of service. Should I opt in?

If you will be 62 before you have 25 years of service you should NOT opt in.

I will have 30 years of service or more before I retire. Should I opt in?

If you believe you will work for 30 years (in New York City or have bought back some other time) you may not want to opt in. However, if your career plans change and you don't complete 30 years of service or you don't work until you reach age 62 your pension will be reduced by the statutory actuarial calculation. This will be a personal decision you will have to make, which is one of the reasons the opt-in period is six months: to give you both the facts and the time to make it.

If I don't opt into the 55/25 Plan during the open period, will I be able to opt into the new 55/27 Plan that will be in effect for new hires?

No.

If I opt in, will I have to pay 1.85 percent on per session as well?

Yes.

When can I enroll in the 55/25 Plan?

After the enabling legislation is enacted into law, TRS and BERS will have the necessary enrollment forms.

Will future members of TRS or BERS be eligible for the improved benefits?

Future members of TRS and BERS will be eligible for the new 55/27 Plan only.

What is the 55/27 Plan?

The 55/27 Plan will allow future members of BERS and TRS to receive an unreduced retirement allowance if they retire at age 55 with 27 years of service.

Who is eligible for the 55/27 Plan?

Employees who join TRS or BERS after the enactment of the enabling legislation will be in the 55/27 Plan.

Is the 55/27 Plan optional?

The 55/27 Plan will be mandatory for all new employees. They will be required to pay 4.85 percent for 10 years and 1.85 percent for an additional 17 years.

Where can I get more information?

The UFT is planning a full-scale campaign to provide all members with all the information they will need to make the important decision of whether to opt into this plan or not. More specific information will be provided after the legislation is enacted into law.