Wednesday, May 7, 2014

Retirement Disincentive

Before the proposed UFT contract came out, there were whispers that may the city would offer retirement credit instead of retro money. This made sense, because the extra credit would allow teachers to retire in droves, saving the city a bundle in salary. So, of course, this is not what happened.

Instead, when the contract was first announced, there were other whispers that anyone who chose to retire before July 1, 2015 would get the retro money in a lump sum payment instead of having to wait 5 years after their retirements. This would have caused people like myself to retire, saving the city money without having to give pension credit. This also made sense, so, of course, this is not what happened, either.

Here is what did happen, according the UFT site:
Those who retire on or before June 30, 2014 will receive full retroactive pay for time worked in a lump sum. Those who retire after June 30, 2014 and employees who have been continuously employed and are in active service as of the date of the payout will receive retroactive pay in five lump-sum payments of roughly 12.5 percent in October 2015, 12.5 percent in October 2017, 25 percent in October 2018, 25 percent in October 2019 and 25 percent in October 2020.

The problem for people like myself is that I was born in the summer, and so I won't have the age to retire for a few months after the deadline. Something tells me that putting in my papers before the deadline won't count, even though I've had my final consultation.

Speaking of which, given the time constraints, how many people will be able to retire in time to grab that lump sum? I'd be willing to bet that all the slots for final consultations were filled long ago, so the only people who will end up retiring this year will be the ones who already intended to. So instead of giving the highest salaried teachers a reason to retire, the city and UFT have actually created a retirement disincentive--we may as well hang around long enough to get the higher final average salary upon which our retirement allowance is based.

What the city and UFT should have done was agree that anyone retiring before 2020 would receive whatever retro they were owed in a lump sum upon retirement. That would give the highest salaried teachers an incentive to leave, thus saving the city money.

I was already ambivalent about retiring this year. The prospect of getting the retro money up front really pushed me towards the door. Now, I'm not so sure.


Anonymous said...

Where did you see this on the UFT website? I don't see this.

Mr. Talk said...

The link is in the blog post, but you can just go here: