Pension Politics: PBA, UFA At Barricades

There are several fundamental realities, political and financial, in the cold war raging between Mayor Bloomberg and Governor Paterson on one side and the police and fire unions on the other concerning major pension changes for future employees.

The Mayor and the Governor both seem convinced that the future financial health of the city and state depends on reducing retirement costs, particularly as workers live longer, and the problem is especially acute in the case of cops and firefighters who can retire at full pension as young as 41.

While Mr. Bloomberg would be pushing the 25-year, age-50 standard even if he weren't being cheered on by newspaper editorial writers, conservative pundits and business interests, Mr. Paterson has apparently become convinced that his chances of gaining a full term next year would improve measurably if he could force a Tier 5 on the police and fire unions.

'Told to Attack Unions'

"He's been told attacking public-sector unions is the way to go politically," said one union official, a claim that was seconded by someone from management, neither of whom would speak for attribution.

CALLING GOVERNOR'S BLUFF: Patrolmen's Benevolent Association President Pat Lynch (left) and Uniformed Firefighters Association leader Steve Cassidy (right) have refused to negotiate inferior pensions for new members even after Governor Paterson threatened to veto a bill extending key benefits to current members. Torpedoing that bill could also throw the entire pension system into chaos, since it includes extensions of Tiers 3 and 4 covering other employees.

The union official is among those who believe that there is too great a disparity between benefits for cops and firefighters and those received by other city employees. One of his colleagues said that it was remarkable that those groups have been able to maintain Tier 2 benefits for the past 33 years even as other workers were forced into the moreonerous Tiers 3 and 4 and compelled to contribute additional percentages of salary to either be able to retire after 20 years at full pension or be allowed to do so at 55.

Fortunate or not, the leaders of the two unions for entry-level cops and firefighters, Pat Lynch of the Patrolmen's Benevolent Association and Steve Cassidy of the Uniformed Firefighters Association, understand one thing: they don't want to be the ones in charge if and when the more-generous treatment is scaled back.

And their decision, supported by their police and fire colleagues from throughout the state, to dig in against any incursion on pension rights—notwithstanding their willingness in the past, however reluctantly, to make contract deals that treated future workers less-advantageously than incumbents—has spurred Mr. Paterson to threaten to go nuclear.

He fired his opening shot four weeks ago with a surprise veto of a bill that would have extended Tier 2 rights to new cops and firefighters for another two years. He has not only resisted union entreaties since then to restore the status quo long enough to have a special commission appointed to recommend pension changes, he has upped the ante by threatening to veto a "general extender bill" that includes several cherished benefits that apply to cops and firefighters.

Among them are temporary laws presuming that cancers or heart trouble contracted by those employees were the result of the hazards of their work and therefore grant them disability pensions without their having to prove they were job-related.

But the general extender bill also includes matters that cover the rest of the workforce, most notably Tiers 3 and 4 of the retirement systems. Tier 1, which covers only those hired prior to July 1973, is the only "permanent" pension tier.

All Systems Gone?

Which was why one official wrestling with the potential consequences if the Governor makes good on his veto threat said last week, "If he does that, there is no pension plan for police or fire, and possibly not for NYCERS (the New York City Employees' Retirement System, which includes municipal civilian workers and correction and sanitation personnel) and the Teachers."

A mayoral spokesman did not respond to a request for comment on whether Mr. Bloomberg was concerned about those potential ramifications, but one source said city lawyers were trying to determine what exactly would happen, and that the inability to say for sure was particularly worrisome.

"Nobody's checked whether it's possible to go back to the fractional plans for civilians," he said, referring to what existed until the 1960s and assigned values to each year of employees' public service in determining pension allowances.

Neither Mr. Cassidy nor Mr. Lynch was available for comment last week on the state of discussions with the Governor, or how the pension deal reached by United Federation of Teachers President Randi Weingarten might affect their efforts to resist changes for their own future members.

Ms. Weingarten owes much of her success as a negotiator to figuring out when the forces aligned against her union are sufficiently formidable that it's time to abandon lofty goals and try to make the best of a bad situation. It is one reason why, even though she lacks the right to binding arbitration that Mr. Lynch at the PBA enjoys, she has been able to make contract deals that were at least as good as and much more timely than what the police union has gotten throughout the Bloomberg administration.

She said last week that she read Mr. Paterson's veto of the Tier 2 extender for cops and firefighters, which was quickly followed by a Tier 5 deal with the two-largest state-employee unions, as a clear signal that "this is a very different environment we're living in." (Her perception probably wasn't hurt by the fact that her outside labor counsel, Basil Paterson, is the Governor's father.)

'Controlled Our Own Destiny'

In that circumstance, she decided that "controlling one's own destiny was a better path" than hoping the momentum for significant pension changes would evaporate in the mists of the State Senate power struggle and the close of the legislative session.

She made sure to preserve the right for her members to retire at full pension at age 55 and as part of the bargain with Mr. Bloomberg won back two days off prior to Labor Day that she surrendered four years ago in a contract deal.

More than one of her colleagues was angry that she also agreed to require 15 years of service before employees were guaranteed the right to continued health benefits in retirement— something that could be particularly problematic for District Council 37, which has sizable contingents of parttime workers and seasonal employees whose service time is pro-rated based on the days and hours they actually work.

There was also some concern that she agreed to reduce the guaranteed return for those with Tax-Deferred Annuity accounts from 8.25 percent to 7 percent. But she pointed out that similar programs in other jurisdictions are averaging about a 4-percent return. Another official remarked, "Seven-percent interest on the TDA money is getting away with murder, except it's maybe second-degree murder now instead of first-degree."

Even one union official who claimed "she got taken to the cleaners" on the deal acknowledged, "If I could get 7 percent, I'd jump up and down."

'Police, Fire in the Cross-Hairs'

Referring to his uniformed colleagues, he said, "Police and fire have to wake up and smell the coffee. They're in the cross-hairs."

But Lou Matarazzo, the legislative director for the Detectives Endowment Association and the Captains Endowment Association, argued that the police and fire unions were being stampeded into changes that would neither provide significant short-term relief for the city and state nor help the quality of the workforces, since the 20-year pension is a powerful recruiting tool in offsetting concerns about taking on a life-risking occupation.

That is true for uniformed positions with lower death rates as well. Uniformed Sanitationmen's Association President Harry Nespoli said June 26 he wouldn't consider any pension change that removed the right of Sanitation Workers to retire after 20 years at full pension, citing the physical toll of the job. It is the reason, he said, that the union long ago agreed to have members contribute 8.5 percent of salary to NYCERS during their first 10 years of service and 5 percent in the final 10, which he claimed were the highest contribution rates for any employee group.

'Bodies Torn Up After 20'

Referring to the 25-year service requirement under the Tier 5 bill as it would apply to future uniformed workers, Mr. Nespoli said, "That's a lot of pails to pick up. My members after 20 years their bodies are totally torn apart."

And where Teachers and Sanitation Workers have generally trusted the judgment of their union leaders, leading to remarkable stability and long tenures for their presidents, cops and firefighters—either because of the stress of their jobs or the nature of those who perform them—have tended to be more demanding and less forgiving in cases where they believed their leaders fell short.

Pay Freeze Doomed Him

Mr. Matarazzo knows that as well as anyone: his tenure as PBA president was doomed after a 1997 arbitration panel handed down a contract that froze Police Officer salaries for its first two years. It didn't matter that this might have been beyond his control, given the fact that a slew of civilian deals with similar freezes had already been negotiated by the Giuliani administration and many arbitrators are reluctant to ignore such patterns in rendering their decisions.

The UFA has historically been at least as volatile—during the late 1980s and early 1990s, when delegates voted down deals brought back by two different presidents, even though the resulting arbitrations produced terms that were much worse, it sealed the fates of those leaders, neither of whom sought re-election.

Incentive to Resist

And so whatever political incentives Mr. Paterson may have for pushing the drastic pension changes for future uniformed employees, Mr. Cassidy and Mr. Lynch have similar motivation for resisting them and less room for compromise. They represent employees who feel a certain sense of entitlement because of the nature of their work, and are not going to accept the idea that they have it much too good and must sacrifice some of the pension rights of future colleagues for the good of the state and city, or else risk losing some of the benefits they themselves can now receive.

It is no doubt galling that the loudest editorial voices for the pension changes have been the Post and the Daily News, which run up the flag and break out the sentiment whenever a cop or firefighter dies in the line of duty but seem decidedly less sympathetic to those fortunate enough to make it to retirement.

And Mr. Matarazzo, confronting the possibility that what even a few months ago was unthinkable is now threatening future cops and firefighters, said with a mix of frustration and conviction, "All these politicians show up at the funerals. We are different, and the failure to recognize that is a shame."