KEEPING YOU INFORMED…

We are writing to provide an update about Chapter 45 of the Laws of 2010, which established the “55/25” early retirement incentive (“the Incentive”) for members of the New York State Teachers’ Retirement System (“TRS”) and the New York State and Local Employees’ Retirement System (“ERS”). The New York State Supreme Court, Albany County, recently upheld the constitutionality of the 55/25 incentive.

The Incentive, adopted in April 2010, is available only to TRS and ERS members who are represented by bargaining units affiliated with the New York State United Teachers (“NYSUT’), are at least 55 years but less than 62 years of age, and have at least 25 but fewer than 30 years of service credit. The Incentive allows eligible Tier 2, 3 and 4 members to retire without reduction in benefits even though they do not have 30 years of service.

The Empire State Supervisors and Administrators Association and the Baldwin Supervisors Association filed a court challenge to the Incentive, claiming that their members had been unfairly excluded from it and that it was unconstitutional because it singled out a specific group (NYSUT members) for the benefit. The New York State Supreme Court, Albany County, held that Chapter 45 was constitutional. The plaintiffs have since filed a notice of appeal of this decision, but the appeal has not yet been heard by the appellate court.

As of this date, the TRS has indicated that it will continue to implement the Incentive as written, but that the payment of the unreduced retirement benefit will be subject to the final outcome of the appellate process. The ERS has not yet indicated how it will proceed.

Please contact us if you have any question regarding the Incentive.

THIS MEMORANDUM IS MEANT TO ASSIST IN GENERAL UNDERTANDING OF THE CURRENT LAW. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. THOSE WITH PARTICULAR QUESTIONS SHOULD SEEK THE ADVICE OF COUNSEL.

© Lamb & Barnosky, LLP, 2010