Sunday, January 25, 2015
Can A Terminated Teacher Lose Their Pension? The Answer Is No If They're Already Vested!
Over the years I have been contacted by teachers who are going through their 3020-a termination hearings and the one question they have is "will I lose my pension if I am terminated"? I have always reassured them that they do not lose their pension, no matter the outcome of their 3020-a hearing. Part of the problem is that back in the early 1980s, before the law was changed, New York City had the right to not give a pension for employees found guilty of misconduct. The police and firefighters, with less than 20 years of service, still have that rule but to my knowledge, nobody else does.
For teachers who are vested, if they are terminated at their 3020-a hearing, they still qualify for a pension and can take it at age 55 (reduced pension) or 62/63 (full pension). Retiree health benefits are also provided for as long as the terminated teacher worked the appropriate amount of years to qualify for the benefit (Tier 4, 5/10 years, Tier 5, 10 years, Tier 6, 15 years).
Vested teachers who are terminated and want to take their retirement contributions rather than waiting for a pension can do so. Included would be the member contributions, the 5% interest paid on the member contributions by the City, and the money the city contributes to the Annuity Savings Accumulation Fund (ASAF). If they have money in the Teachers Deferred Annuity Fund (TDA), they can either leave it there or take it out.
For the teachers who are not vested and are terminated, they can receive their member contributions plus the 5% interest. However, they will not be eligible for a pension unless they secure another position with either New York State or the local governmental agencies under the New York State public employee pension plan. If you withdrawal your member contributions then you also must take out your TDA contributions as well.
Approximately 50% of the teachers never last long enough to be vested and only 33% will make it to full retirement age and this is before the Governor's proposed teacher evaluation system that will result in an increasing exodus of teachers from teaching in the City and State. That means both the City and State can expect to see fewer teachers drawing pension benefits and an eventual surplus in their pension funds in the next decade or two.
The bottom line is if you are terminated after your 3020-a hearing and you are vested, then you are eligible for a pension.and possible retiree health benefits.