Friday, April 23, 2021

The Early Retirement Incentive legislation recently adopted by the State of New York allows for the City of New York to adopt a local law on or before June 30th, 2021 that would allow, but not require, a participating employer to provide its employees the incentives provided under the program.  The Early Retirement Incentive programs creates two separate and distinct incentive programs referred to as Subpart A and Subpart B:

  • Subpart A enables a City agency. Board or commission to offer a temporary retirement incentive to certain public employees working in specific job titles that the City employer designates as “Eligible Titles.” 
  • Subpart B provides another temporary retirement incentive for certain City employees who are age 55 and have 25 years of service.

Subpart A would provide to eligible members (as determined by title, seniority, and certain policy considerations) an additional service credit.  Subpart B would remove the application of early retirement reduction factors for qualifying members.  The benefits of the respective parts cannot be combined.

Under Subpart A, eligible employees would have anywhere from 30 to 90 days in an “open period” to take the incentive and retire; this would be 90 days for Subpart B.  

Assuming such local law is adopted, and a member is in a title eligible for SubPart A,  he or she:

  • Would have to otherwise eligible for service retirement;
  • Would have to be at least age 50 with 10 or more years of service and is not in a plan which permits retirement at half-pay with 25 or fewer years of service without regard to age; or
  • In a plan that permits retirement at half-pay at 25 years of service without regard to age and would reach 25 years of service considering the additional service credit provided in Part A.

Assuming such local law is adopted, a member is eligible to participate in Part B of the ERI Program if he or she is age 55 or older and has at least 25 years of service.

In addition to the eligibility conditions above, members must also:

  • Be in continuous active service preceding the commencement date of the open period;
  • For Part A - provide timely written notice of the intent to avail himself or herself of the ERI and file for service retirement that is effective within the open period;
  • For Part B - file for service retirement that is effective within the open period and otherwise be eligible to retire for service as of the effective date of retirement.

Part A would provide one-twelfth of a year of additional retirement service credit for each year of pension service, up to a maximum of 3 years of additional retirement service credit. Some benefits provided under Part A could be subject to Early Retirement Factors (ERF) as specified in the bill.

Part B would allow members to retire with an unreduced benefit if they are at least age 55 with 25 or more years of service.

The legislation defines Participating Employer as the City of New York or the board of education of the City of New York. Other public benefit corporations such as NYCHA and H+H are not expressly included in the State legislation.

For more information, you can review NYCER’s website regarding the State’s early retirement legislation.  The website can be found at:

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