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Newsline: August 2002

Bloomberg Signs Off on Early Retirement Incentive Program

In an effort to reduce the city's workforce and cut costs, Mayor Bloomberg declared last month that the city is participating in the new early retirement incentive program created by state legislation in May. Officials say they expected the program to save city about $50 million this fiscal year.

The program is open to all city titles except law enforcement. The measure also allow the mayor to exclude certain jobs if they are deemed critical to public health and safety.

The early retirement incentive legislation offers two retirement options, and employees can choose one of the two options.

Option One offers incentive benefits for prior years of service -- employees who are at least 50 years old and have 10 years of service would qualify for one month of additional pension credit for each year of service, up to an additional three years. However, members should be aware that there are penalties for this option and these penalties can be substantial.

From age 50-60 the penalties are 3 percent a year;

From age 60-62, the penalties are 6 percent a year.

It is critical that members who are considering this option do the math calculation to determine how they will be affected by the penalties.

Option two offers employees between the ages of 55 and 61 with at least 25 years of service to retire without financial penalties.

City agencies may offer one or both of these programs to their employees.

"Clearly the city is anxious to push the early retirement incentive as the city's budget deficit worsens, but members must not allow themselves to be coerced or persuaded to sign onto a program that may or may not be beneficial," said Local 237 President Carl Haynes. He added: "Members must understand what the options are and how they personally would benefit from it. Members must consider all the options and do what will benefit them the most."

Members can seek further advice by contacting Local 237's Retiree Department for an appointment for pension counseling.

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