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UFT and City Reach Agreement On Pension, Ending Two Days Before Labor Day

The UFT and New York City have reached a tentative agreement that will secure pension benefits and end the two days of work before Labor Day, while providing needed savings to the City. The actual agreement, which will be submitted to the Delegate Assembly for its approval, can be read here.

Under this agreement, the pension and health benefits of all UFT members — in service and retiree — remain completely intact. In particular, the agreement preserves the hard-won age 55 retirement pension. After completing ten years of service, future members will pay an additional contribution for these benefits. Effective September 2009, UFT members will no longer have to work the two days before the Labor Day weekend.

“This agreement is a win for everyone,” said UFT President Randi Weingarten. “We are all very concerned about the heavy losses our pension system has incurred during this economic crisis and the looming cuts for schools. No only does this deal help shore up the city budget with new savings, which will hopefully be used for schools, it also maintains the age 55 retirement benefit that we fought many years to achieve and returns us to the tradition of teachers and students starting school after Labor Day, something that our members, particularly those with families, very much wanted.”

The Context
As a result of the worst economic crisis in the United States since the Great Depression, public services – including public education – have been subjected to draconian budget cuts, public sector workers have been laid-off and public sector unions have come under pressure to diminish the salaries, health benefits and pension benefits of their members.

From the start of this economic crisis, the UFT has identified two primary objectives which have guided our response to this crisis: protecting the quality of the educational services provided to New York City public school children and securing the economic livelihood and professional status of our members.

The UFT has rightly rejected efforts to raise the retirement age of New York City public school educators and otherwise reduce their pension benefits – efforts that have grown in intensity since two large state public employee unions earlier this month negotiated agreements which included such measures.

The Agreement
Here are the details of the agreement:

  • Pension and health benefits for all UFT members — in service, retiree and future — remain intact.
  • All UFT members who have been required to report to begin work on the Thursday before Labor Day will report back to work the Tuesday after Labor Day, effective September 2009.
  • The 55/25 and 55/27 early retirement benefits are preserved.
  • All UFT members will continue to receive the 7% guaranteed annualized rate of return for the fixed investment option in the voluntary Tax-Deferred Annuity (TDA) programs for BERS and TRS members. The additional 1.25% rate above the state-guaranteed 7% will no longer be available, a modification that reflects the downturn in investment income after the stock market collapse last year.
  • New UFT-represented employees will continue to have the same pension benefits as current members, but they will make additional contributions for these benefits — a return to the old Tier Four contribution rules. Breaking it down, under the 55/27 retirement plan, new employees will make a 4.85% pension contribution for 27 years and 1.85% thereafter, up from the current 4.85% contribution for 10 years and then 1.85% through 27 years.
  • New UFT-represented employees will become vested in the pension plan after 10 years of service, rather than the current five. The impact of this change is modest since most UFT-represented educators can elect to withdraw their pension contributions as a lump-sum payment if they quit during their first 10 years on the job.
  • New UFT-represented employees will be eligible for retiree health insurance coverage after 15 years instead of 10 years.

Read the actual agreement here.

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15 Comments:

  • 1 jd2718
    · Jun 23, 2009 at 9:59 am

    I’m not here to debate. You know I will oppose the agreement, and I’ve posted on my own blog.

    Rather, I’m looking for clarification.

    The two days before Labor Day, will this agreement carry forward indefinitely? That’s what I assumed; that’s what I thought the letter said;

    or will it only apply to 2009, to the last year of the current contract? I’ve seen rumors to that effect. If they have substance, we should know. If they are false, the rumors should be squelched.

    Jonathan

  • 2 Lori 47
    · Jun 23, 2009 at 10:16 am

    If the teachers don’t report until the Tuesday after Labor Day, when is the students first day of school? If they both start on the same day it will be chaos. Teachers need a day or two to prepare for their students.

  • 3 Cristina K
    · Jun 23, 2009 at 1:07 pm

    Lori 47: I have the same question. Find any answers?

  • 4 Peter
    · Jun 23, 2009 at 5:18 pm

    Here is Weingarten’s complete statement:

    This agreement was born out of a need to create savings for the city, and it was the chancellor’s preference that students and teachers return on the same day. The chancellor could make a different decision later because the agreement says the first day after Labor Day may be an instructional day, but it doesn’t have to be. But it is surprising that the CSA would wait until now, at the end of the process, to blame the UFT for finding a way to save the city money when they have been totally absent in the fight to save our school system from budget cuts this year.

    1. Pension piece must be approved by State Legislature/Governor
    2. Length of school year is subject to collective bargaining … current agreement ends 10/31

  • 5 G
    · Jun 23, 2009 at 7:21 pm

    Here is an alternative to the above proposals: Instead of “give backs,” give “loan backs.” In other words, find ways to save the city money, but let the measures be temporary until the fiscal crises subsides– and clearly state that the cost cutting measures will be reversed when the fiscal crises ends.

    The budget shortfall for the school system is only about 5 percent. I suggest we loan the needed money to the city out of our future salary, (which we will eventually get back with interest.

    The UFT is suggesting we give away benefits (or increase costs of benefits) with no agreement to reverse the measures. It boggles my mind how anyone can agree to this.

    If a delegate hears this, please offer this suggestion to the delegate assembly, and stop letting the City eat away at our members.

  • 6 Educat
    · Jun 23, 2009 at 8:04 pm

    teachers and students return the same day? this was kleins preference?? if there ever was better evidence that the chancellor is out of touch with teachers, please show me.

  • 7 Leo Casey
    · Jun 23, 2009 at 8:10 pm

    The change in the two days is permanent. The language in the agreement is completely clear:
    Effective immediately, in return for UFT support of legislation to effectuate paragraphs (2), (3) and (4) of this agreement, the parties agree that UFT-represented employees whose current
    contract requires them to report two work days before Labor Day will no longer be required to
    report on the two work days before Labor Day.

  • 8 Peter
    · Jun 23, 2009 at 8:21 pm

    All CBA have a beginning and an end … and the terms and conditions are negotiable … since the change of dates is now in the current agreement it is up to the DOE to initiate the change … pursuant to the NYS Constitution pensions benefits for current employees may not be “diminished.” Only pension benefits are permanent.

  • 9 Lauren
    · Jun 24, 2009 at 9:22 am

    I actually have a question about the 55/27 retirement plan. I started work in Sept 2007 and was an active UFT member contributing to TRS when the 55/25 option came about. I did not opt into this plan and am wondering what plan I am on then. Am I 55/27 or is there a third retirement plan that no one is talking about.

  • 10 Jules
    · Jun 24, 2009 at 11:29 am

    The city spends a fortune on consultants who do not know any more than the current staff.One example is the Aussie consultant contract which earns 800 dollars a day to do things all teachers can do.WE are losing benefits while the city continues to spend millions on consultants that we do not need

  • 11 Leo Casey
    · Jun 25, 2009 at 12:11 pm

    If you did not opt into 55-25, you remain on the old Tier Four formula, where you must be 62 years old or have 30 years of service to retire without a penalty.

  • 12 shouldhavegonetomedschool
    · Jun 25, 2009 at 5:37 pm

    Since the city was desperate for our help, why didn’t we go back to the real good old days, when teachers didn’t report till the Wednesday after Labor Day with students not reporting until the following Monday. Talk to any true veteran teacher (if you can find any left) and they will tell you how much better that was. And there are still plenty of instructional days for state aid purposes.

  • 13 Larry
    · Jun 30, 2009 at 8:37 am

    According to your article, the fixed rate was reduced from 8.25% to 7% due to the downturn of investment income. In the actual agreement it states that the 1.25% of the fixed rate will go toward paying for the two days which were added to the summer vacation.
    What gives?

  • 14 Bill
    · Aug 14, 2009 at 11:35 am

    Here is the latest info. on TDA fixed accts. 8.25% is saved! Below is from Aug. TRSNYC.

    8.25% Interest Rate Renewed for Fixed Return Fund [posted 7/16/09]
    The New York State Legislature has extended the 8.25% annual interest rate for the Fixed Return Fund. This rate is retroactive to July 1 and is applicable through June 30, 2010, when it may be renewed or reset in accordance with applicable laws. We previously reported that the interest rate dropped to 7% as of July 1 because the State Legislature had not acted to extend the rate. However, this law supersedes that change, and members who participate in the Fixed Return Fund will, at this time, continue to receive interest at the annual rate of 8.25%.

    If there are further changes in the interest rate, we will provide additional information.

  • 15 Daniel Weintraub
    · Mar 24, 2010 at 8:14 am

    How come the supervisors are still getting 8.25% on their TDA accounts?