If you are an adjunct who has not yet joined the New York City Teachers’ Retirement System (TRS), please fill out an enrollment form immediately. Eligible adjuncts are entitled to a pension benefit; by enrolling now in TRS you can make full use of a benefit that you have worked to earn but there will be serious financial consequences for adjuncts who delay enrolling in TRS if the New York State legislature agrees to pension changes recently proposed by Governor Andrew Cuomo.
Cuomo wants major changes in pensions for New York’s public employees that would hurt employees’ interests (see Clarion, August 2011), and his plan may get legislative attention early next year. The PSC and other labor unions will be fighting hard to make sure that this proposal does not become law. It would do almost nothing to address current budget shortfalls, while extending the “millionaires’ tax” – which the governor opposes – would make a real contribution.
But the outcome of this struggle is unknown. What’s certain is that adjuncts whose TRS applications are processed before any new pension legislation may go into effect would be covered under the current rules.
The governor has said his proposal will only affect employees who have not yet been hired. But this is true only for full-time public employees, who are required to join a pension system at the beginning of their employment. For CUNY adjuncts, participation in a pension plan is optional. If the governor’s plan is approved, it will apply to all employees who join a pension system after that legislation takes effect. This means that adjuncts who delay joining TRS could end up in a new, inferior pension tier no matter how long they have worked at CUNY.
So CUNY adjuncts should protect their interests in two ways: (1) by responding to union alerts to take action against Cuomo’s plan; and (2) if you are not already a TRS member, sign up immediately so you can lock in current pension terms. (Note that your enrollment does not take effect until TRS has completed processing of your application, which can take several weeks – so don’t delay.)
CUNY adjuncts often live on very tight budgets, and some put off joining TRS because of the 3% employee contribution that is initially required (details below). But CUNY also makes an employer contribution – money that adjuncts who don’t join TRS will never see. Deciding not to join TRS could mean walking away from thousands of dollars in retirement income that you may badly need later.
At present, CUNY adjuncts who join TRS become members under New York’s Tier 4 pension terms. Vesting – the right to collect a pension on retirement – occurs after an adjunct has the equivalent of five years of full-time service as a pension system member. TRS considers 360 paid adjunct hours equivalent to one full-time year, so adjuncts in Tier 4 need a total of 1,800 hours to qualify for a pension. Since adjuncts do not all have the same workload, it takes them different amounts of time to be vested. Let’s look at one fairly typical example: an adjunct who teaches two 3-hour courses in both fall and spring terms, and is paid for one office hour per week. In Tier 4, this adjunct will be vested in about 8 years.
But under Cuomo’s proposed new pension tier, vesting would not occur until an employee had the equivalent of 12 years of full-time service. This means the adjunct in the example above would take about 20 years to be vested. Since many adjuncts work for fewer than 20 years, and most do not teach more than two courses per term, far fewer adjuncts would qualify for pensions if Cuomo’s proposal becomes law.
The longest-term adjuncts would still qualify for pensions under the governor’s proposal, but they would contribute much more of their own money and could get smaller pensions.
In the current Tier 4, adjuncts contribute 3% of their gross pay to the pension system for 10 years. Once the ten-year threshold is reached, CUNY takes over the adjunct’s contributions. But under Cuomo’s proposed new pension tier, all members of New York public pension plans who join after it takes effect would contribute 6% of their gross pay for their entire careers. For an adjunct who does qualify for a pension, this could mean a fourfold increase in employee pension contributions.
Despite this spike in employee contributions, the governor’s proposal would reduce the pension payout for employees with at least 20 years of credited service. For example, under the current Tier 4, an employee with 20 years of credited service receives an annual pension equal to 40% of final average salary. Under Cuomo’s proposal, the same employee would receive an annual pension equal to 33.4% of final average salary. In Tier 4, twenty-five years of service equals 50% of final average salary; under Cuomo’s proposal, it would equal 41.75%.
Here’s an example of the how this works in practice. Under Tier 4, an employee with 25 years of credited service and a final average salary of $40,000 receives a pension of $20,000 per year. But under Cuomo’s plan, the pension for the same employee would be $16,700. Over 20 years of retirement, this sample retiree would receive $66,000 less under the governor’s proposal.
And that isn’t all. Many adjuncts join TRS several years after they begin working at CUNY. Adjuncts in Tier 4 are able to get credit for their prior service by paying 3% of past earnings, plus 5% interest, compounded annually. The governor’s proposal would double this cost to 6% of past earnings, making buying back prior service twice as expensive as it is now.
Finally, the retirement age would increase under Cuomo’s plan. In Tier 4, employees with 5-29 years of credited service can receive an unreduced pension at age 62 and a reduced pension at age 55; employees with at least 30 years of credited service can receive an unreduced pension at age 55. Under the governor’s proposal, employees could not receive a pension until they reach age 65.
A note on eligibility: adjuncts are not eligible to join TRS if they are currently receiving a pension from any New York City or State pension system, or if they are active members of any other New York City pension system. (Active members of NY State pension systems who are not yet collecting benefits, however, are allowed to join NY City’s Teachers Retirement System.)
CUNY adjuncts who already belong to the TIAA-CREF pension system as a result of previous CUNY employment may also be ineligible. If you have a TIAA-CREF account from previous CUNY employment, please contact me at [email protected] to discuss your situation.
Adjuncts who are also full-time teachers and administrators in the New York City public schools already belong to TRS and do not need to fill out a new application, but do need to provide their TRS membership number to the Human Resources office at their CUNY campus.
All other adjuncts are eligible to join TRS as long as they are appointed for at least 45 hours in the semester they enroll. There’s no length of service requirement; adjuncts can join TRS in their first term at CUNY. (Adjuncts who leave CUNY before their pensions are vested can receive a refund of their contributions plus interest, or they can remain members of TRS for up to seven years while their contributions continue to accrue interest.)
To join TRS, adjuncts must fill out two forms, an enrollment form and a beneficiary form. The enrollment form can be downloaded. The beneficiary form must be notarized. Both forms need to be submitted to the campus Human Resources office, along with proof of birth – either a birth certificate or a passport.
Adjuncts can find more information about the advantages of a Tier 4 pension. Anyone with questions after reading this article can contact me at [email protected].
In 2009, the PSC successfully resisted efforts by then-Governor Paterson to impose inferior terms on new pension plan members at CUNY. With your participation, the PSC and other public unions aim to defeat Cuomo’s cutback plan. Support those efforts – and if you’re an adjunct not enrolled in TRS, get signed up without delay. Protect yourself both ways.