The city’s generous payroll and benefits system continues to draw fire for exorbitant overtime and often unchecked disability pensions.
In 2016, 76,166 rank-and-file city employees pocketed more than $100,000 mostly thanks to $1.3 billion in overtime charges, according to payroll data analyzed by OpenTheBooks.com.
That year, the watchdog group found city employees worked 33 million hours of overtime costing a whopping $1.9 billion. And of the top 100 city employees paid in overtime, more than half of that pay was higher than their base salary, the data showed.
The data also showed the Police and Fire Departments billed 58 percent of all overtime, or nearly $1.1 billion, while 90 other agencies dished out $795 million.
“Hard working taxpayers are upset when they find out that every dime collected by the New York City income tax goes to pay the 76,000 highly compensated city employees who make more than $100,000 per year,” said Adam Andrzejewski, the founder and CEO of OpenTheBooks.com. “When city employees can make more in overtime than they do in salary, then the pay and benefit systems are being abused.”
Not just overtime, but the city’s disability benefits have been questioned too.
Last month, State Sen. Marty Golden, who receives an NYPD disability pension and was paid more than $1 million in tax-free pension money since he was injured on the job in 1983, was spotted having a blast skydiving, the Daily News reported.
The paper has also uncovered retired cops receiving disability pensions running marathons, as well as taking up new careers, like bodybuilding.
With pensions costs slated to reach $10 billion annually, an expense that represents about 11 percent of the city’s total budget and about 35 percent of the city’s payroll, according to a report from the Manhattan Institute — what kind of checks and balances does the city have in place to ensure city employees are not abusing overtime and pension payouts?
The sheer number of the city’s employees, coupled with generous pension benefits, especially for those in the uniformed services, and the fact that overtime pay can be included in the calculation of an employee’s final average salary, are some of the main factors driving up the cost of the pension system, said Maria Doulis, the vice president of the nonpartisan Citizens Budget Commission.
Jumps in Pension Contributions
Mayor Bill de Blasio’s latest executive budget includes $9.8 billion in pension contributions for fiscal year 2019 — a 2.3 percent rise from his previous budget. From fiscal year 2018 to 2022 the mayor’s budget anticipates a 7.6 percent jump in what the city contributes to pensions, spending $10.3 billion on pensions in 2022.
“[The pension system’s] already increased to a degree that would have been considered astounding and unimaginable if you would have told people this circa 2000 that we would be paying $10 billion a year to the pension fund in New York City, which is almost 10 times what it was then,” said Edmund J. McMahon, an adjunct fellow at the Manhattan Institute and research director of the Empire Center for Public Policy.
“It will remain sustainable at the expense of everything else, there’s no choice but to sustain it,” he continued.
Who’s Checking When it Comes to OT?
According to the city, agencies are responsible for authorizing employee’s overtime work and most civilian employees have a cash overtime cap.
Although pension calculations vary by plan, those benefits are calculated as a percentage based on the length of service multiplied by an average salary, typically three to five years.
Cash overtime earnings count as part of an employee’s base salary to calculate benefits and can increase an employee’s pension within limits set by the pension plan, the city said.
There are also restrictions to prevent employees from spiking their overtime in the last year to increase their pension, but Doulis pointed out that overtime is often given out by seniority in the last few years before retirement.
Doulis said often times senior police officers, firefighters, and corrections officers work a tremendous amount of overtime to increase their final average salary to lock in higher a pension.
“Every day New Yorkers see the results of the hard work done by our dedicated public servants, including police officers, teachers and firefighters,” a City Hall spokesperson said. “Occasionally, overtime is necessary to face unplanned events or meet critical operational need. We take our fiscal responsibility seriously and are constantly monitoring its use citywide.”
The city also said that a waiver of employee cash overtime caps must be pre-approved by the Office of Management and Budget and the Office of Labor Relations, and that it has also set caps on city-funded uniformed overtime for FDNY, NYPD, and the Department of Correction.
When it comes to proving a disability, whether or not someone is eligible is determined by the individual pension systems. Each fund has an independent medical board that gives recommendations reviewed by the pension funds’ board of trustees.
Based on 2015 and 2017 available data from the financial reports of the city’s five pension funds, the top three funds with members on disability were the New York Employees’ Retirement System — the largest of the five pension systems — the Police Pension Fund, and the Fire Pension Fund.
In 2017, 16,888 members of NYCERS, which represents civil servants, sanitation and correction employees, the MTA, NYCHA, Health and Hospitals, and appointed and elected officials, collected disability payouts. Some 10,515 FDNY employees collected disability payouts, and data from 2015 showed that 15,366 NYPD employees collected disability payouts.
“Disability pensions are paid out on a more generous basis than your typical service pension,” CBC’s Doulis said. “It increases the cost of pensions paid overall and the uniformed services in particular have higher rates of disability, which is part of the reason why pension benefits for those workers are more expensive overall.”
For members of the Police Pension Fund, the fund can call a disability retiree back for a medical review once a year, however, once that retiree is eligible for service retirement, state law prohibits the fund from bringing the retiree in for reexamination, even if it may appear they are abusing the benefit.
“We are prohibited by law from bringing anybody back once they have more than 20 years,” Police Pension Fund’s General Counsel Nicole Giambarrese said. “They can’t come back to work, it would kind of be a waste of time and money to pay a doctor to examine them … absent the statute changing which is probably not likely.”
The Fire Pension Fund has a similar system to the Police Pension Fund Giambarrese said, but the fund could not be reached for comment.
With the NYCERS, the fund said that upon the request of its medical board, a disability pensioner who is under the minimum age or service requirement for retirement may be required once a year to undergo a medical exam to determine if they can work.
Doulis said disability payouts raise the overall cost of the pension system in the long run.