The New York State Teachers’ Retirement System has a duty to correct errors in the computation of a member's retirement allowance
During the three years immediately prior to retirement, a teacher* participated in the school district’s "Senior Teacher Program,” a three-year program available upon request on a one-time basis to teachers with at least 15 years of employment with the school district. A participating teacher received a stipend of $12,000 per year in addition to his or her base salary and was required to complete preapproved annual projects.
In this instance the stipend paid to the "participating teacher" was initially included in the calculation of the teacher’s final average salary for purposes of determining her retirement allowance by the New York State Teachers’ Retirement System [NYSTRS] upon her retirement from the school district.
NYSTRS subsequently determined that the stipend paid to the teacher in connection with her participation in the school district's "Senior Teacher Program" should have been excluded from its calculation of the teacher’s “final average salary” for the purposes of determining her appropriate retirement allowance as it constituted "nonregular compensation." When it sought to recoup the “overpayment” resulting from its inclusion of the stipend in its initial calculation, the teacher sued.
Supreme Court dismissed the teacher’s petition and the Appellate Division affirmed the lower court’s ruling, noting that the retirement system was obligated to correct errors in its computation of retirement benefits. Further, said the court, the recoupment of funds erroneously paid by the retirement system was proper.
Considering the relevant regulation**provided 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," NYSTRS had concluded that the stipend paid to the teacher in connection with her participation in the school district's "Senior Teacher Program" did not constitute "regular salary earned" because:
1. The contract between the faculty and the school district specifically provided that the stipend was not to be included as part of a teacher's base salary;
2. The stipend was for work done in addition to and outside the scope of a teacher's regular duties; and
3. Participation in the program was available only once during a teacher's employment with the school district.
The Appellate Division said that it found that NYSTRS’s determination had a rational basis and, accordingly, sustained the administrative decision
* In this instance the teacher was a “Tier II” member of the New York State Teachers’ Retirement System.
** See 21 NYCRR 5003.1[a].
The decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2012/2012_06355.htm