Current Pension Topics
How to Collect Second Pension

By JOEL L. FRANK

Over the last couple of weeks, I have taken calls on the same topic. The callers wanted to know if a second state/city pension may be earned by working for a Public Benefit Corporation after retiring on a state/city pension.

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

For example, a Teacher retires from the Department of Education and receives his/her pension from the Teachers' Retirement System. The retiree subsequently gets a job with the Health and Hospitals Corporation (HHC). The pensioner is not only allowed to continue to receive his/her full TRS pension while employed by the HHC, but is also permitted to join the New York City Employees' Retirement System by virtue of being employed by the HHC. Assuming the retiree remains employed by the HHC for 15 years, he/she will get a second city pension, based on 15 years of credited service, from NYCERS upon her subsequent retirement from the HHC.

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Again I have been reminded that the TRS/UFT does not operate on a level playing field. The TRS competes with the Deferred Compensation Plan for the voluntary, pre-tax retirement savings of Teachers. But both agencies do not have equal access to the newly-hired Teacher. New Teacher appointees must, as a matter of law, join the Teachers' Retirement System. The law requires them to contribute 3 percent of their salary for the first 10 years of employment. After being on the Department of Education payroll for about a month or so, the new Teacher is furnished with a TRS enrollment kit directing the Teacher to fill out the enrollment forms, etc. These forms must be returned to the TRS in a timely manner.

Along with this information, however, is information peculiar to the voluntary pre-tax retirement savings program offered by the TRS called the Tax-Deferred Annuity Program (TDA). The TRS objective is to have the new Teacher enroll in the voluntary TDA Program at the same time he/she formally enrolls in the TRS.

But the new Teacher is also offered by the Department of Education another voluntary pre-tax retirement savings program thru the New York City Office of Labor Relations called the Deferred Compensation Plan of the City of New York. Information about both plans should be in the hands of the newly hired Teacher at the same time.

When does the new appointee first receive information about the Deferred Compensation Plan? Does the Deferred Compensation Plan furnish an enrollment kit without a request? I think not. Does the Department of Education furnish an enrollment kit? I think not. Does the UFT furnish an enrollment kit? I think not. Just like Macy's doesn't tell Gimbels, you can't expect the TRS/UFT to inform its new members about the existence of a second voluntary savings plan operated by a city agency other than the TRS.

Based on this unfortunate but elementary fact of life, I implore the Department of Education, as employer, to furnish the newly-appointed Teacher, within a month of being hired, with an information/enrollment kit for the Deferred Compensation 457(b)/401(k) Plan of the City of New York. This must be done lest the TRS signs up the new Teacher for its voluntary pre-tax retirement savings program before the newly hired Teacher even learns about the existence of the Deferred Compensation Plan. Now, TRS/UFT, we cannot let that injustice happen, can we? Only employees who must join the TRS need this special treatment, because out of the eight public-employee retirement systems in this state, the city TRS is the only one that administers a voluntary, pre-tax retirement savings plan in addition to its statutory responsibility of administering a Defined Benefit pension plan to which Teachers must contribute, the Qualified Pension Plan (QPP).