New York Codes, Rules and Regulations › Title 2 - DEPARTMENT OF AUDIT AND CONTROL › Chapter VI - New York State and Local Employees' Retirement System and New York State and Local Police and Fire Retirement System › Part 374 - Continuation Of Elective Office Upon Retirement From Other Public Service › Section 374.1 - Background

Current through Register Vol. 46, No. 28, July 10, 2024
The Retirement and Social Security Law clearly envisions that
				  an employee must separate from the service of the public employment upon which
				  his or her benefit eligibility is based, in order to commence receiving a
				  retirement allowance based on such employment. However, the provisions of such
				  law do not specifically address the situation faced by an individual who
				  desires to retire from a public position, but does not wish to resign from a
				  secondary position of elective office. We believe this situation should be
				  addressed by regulation, in view of the public policy concerns which underlay
				  the special rules applicable to elective office that are provided by section 150  of the Civil Service Law, and the
				  practical effects of such rules. Sections 101, 211, 212, and
				  401  of the Retirement and Social Security
				  Law provide strict limits on the amount a pensioner may earn in public service
				  without requiring a reduction or suspension of the retirement allowance.
				  Notwithstanding these general rules, section 150  of the Civil Service Law provides a
				  significant exception under which public pensioners may earn unlimited sums
				  from post-retirement elective office, without a resulting suspension or
				  diminution of their retirement allowances. It is clear that the public policy
				  basis for this provision is to encourage - or at least remove an obstacle that
				  may discourage - retirees from running for and holding elective office. The
				  current effect of the general rule requiring separation from all covered public
				  service upon retirement controverts public policy concerns that underlay
				  section 150  of the Civil Service Law. While section 150  of the Civil Service Law exempts
				  individuals who are elected to public office after retirement from the earnings
				  limitations provided in sections 101, 401, 211 and 212, an individual who
				  wishes to retire from a nonelective position while remaining in a secondary
				  elective position must separate from the payroll of both positions in order to
				  commence receiving a retirement allowance. This is true even though that the
				  individual may then return to public payroll within days, without suspension or
				  diminution of the retirement allowance, where the annual compensation for the
				  elective position is within the post-retirement public service earnings limit
				  provided by section 212  of the Retirement and Social Security
				  Law. The clearly unintended effect of this statutory framework is that officers
				  elected to office in a municipality who belong to the party which holds the
				  majority of seats on the municipality's governing body frequently resign from
				  the elective office at retirement, in order to commence drawing a retirement
				  allowance - only to be reappointed by the board to complete the remainder of
				  his or her elective term. By contrast, a member of the minority party may be
				  prevented from retiring from the primary (nonelective) public position, because
				  he or she would not be reappointed to the elective office upon resignation.
				  Clearly, the regulatory structure should not make one's ability to receive a
				  pension based on the nonelective position dependent on whether he or she serves
				  in the majority party with respect to his elective position. Furthermore, the
				  current regulatory framework can create the appearance of impropriety in
				  situations where an elective official resigns from an elective position and
				  becomes reinstated very soon thereafter in order to receive a retirement
				  allowance. This action will solve the above discussed problems, by permitting
				  an individual to receive a retirement allowance that is based primarily on a
				  nonelective position without having to resign from a secondary, elective
				  position. It is structured in a manner that will do so without permitting undue
				  double dipping, in view of the following. The permissive exception established
				  by this regulation will not apply to any individual whose only covered
				  employment is the elective office. Neither will it apply to an individual whose
				  elective position is higher paying than the nonelective position. Accordingly,
				  it will not apply in situations where the elective office is actually the
				  primary position upon which his or her retirement allowance is based. Lastly,
				  the rule established by this regulation will only apply to situations in which
				  the compensation for the elective office does not exceed the applicable section
				  212 earnings limit. Section 212 establishes the maximum compensation that a
				  public pensioner may earn in public office without a resulting suspension or
				  diminution of his or her retirement allowance. Accordingly, this measure
				  effectively incorporates the existing standard for what should be considered de
				  minimus post-retirement income for the purposes of allowing pensioners to
				  receive their retirement allowances without suspension or
				  diminution.