Home -> Law Blog Directory -> Labor & Employment Law Blogs -> New York Public Personnel Law

Labor & Employment Law

: New York Public Personnel Law

Retirement System excludes expense allowance payments received pursuant to a collective bargaining agreement in determining the retirement allowance

Retirement System excludes expense allowance payments received pursuant to a collective bargaining agreement in determining the retirement allowance
Matter of Maillard v New York State Teachers' Retirement Sys., 57 AD3d 1299

Glenn Maillard, John Raptis and John Pidgeon retired from their respective administrative positions with the William Floyd Union Free School District [Albany County].

Maillard, a Tier II member of the New York State Teachers? Retirement System [NYSTRS], together with Raptis and Pidgeon, Tier I members of NYSTRS, filed an Article 78 petition seeking a review of a determination of NYSTRS' calculation of Maillard's final average salary [FAS] in calculating his retirement allowance.

In determining Maillard's FAS for purposes of calculating his retirement allowance, NYSTRS excluded 2% of his income he had received as an expense allowance under the applicable collective bargaining agreements. NYSTRS concluded that such income did not constitute regular compensation within the meaning of the Retirement and Social Security Law.

The Appellate Division said that as NYSTRS' determination was rendered without a hearing, its review is limited to whether it is arbitrary, capricious or without a rational basis.

As to the merits of Maillard?s claim, the court said that a three-year final average salary is used for computing retirement benefits for Tier II members under Retirement and Social Security Law §443(a) and is defined as "the highest average annual regular salary earned by a member over a period covering three consecutive years of New York State service credit."

Certain payments, such as those made in anticipation of retirement, or for deferred compensation, sick leave or accumulated vacation credit, are specifically excluded from the calculation of a member?s FAS. In addition, the relevant regulations [see 21 NYCRR 5003.1] provide that "[r]egular salary earned shall exclude termination pay and payments which are not part of the salary base and/or are not paid over a period of years; for example, bonuses and one-time-only increments."

Significantly, the Appellate Division commented that in the case at hand, the 2% expense allowance Maillard claimed should have been incorporated in computing his FAS is not found in any Article in the collective bargaining agreements governing administrators' salaries but in an entirely separate Article entitled "Fringe Benefits And Miscellaneous Compensations." Here, said the court, ?The section describing the benefit states that it is ?an allowance for expenses incurred for attendance at various weekend and evening school-related meetings and activities.??

Accordingly, the court viewed ?the unambiguous contractual language distinguishing this type of compensation from that provided to the administrators in the form of salary? as payments that NYSTRS could rationally conclude did not constitute regular compensation of the type to be included in calculating Maillard's final average salary.

The Appellate Division sustained Supreme Court?s dismissal of Maillard?s petition but then noted that ?the proceeding is premature with respect to Raptis and Pidgeon inasmuch as they are in Tier I and NYSTRS did not issue a final determination concerning their retirement benefits.

Full post as published by New York Public Personnel Law on March 12, 2010 (boomark / email).