The New York State Teachers’ Retirement System has a duty to correct errors in the computation of retirement allowances

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

Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli

Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli

Issued during the week of September 24 - 30, 2012 [Click on the caption to access the full report]

DiNapoli Proposes Early Warning System To Identify Local Governments In Fiscal Stress

With a growing number of local governments facing significant fiscal stress, State Comptroller Thomas P. DiNapoli announced plans Monday to implement an early warning monitoring system that would identify municipalities and school districts experiencing signs of budgetary strain so that corrective actions can be taken before a full financial crisis develops.

DiNapoli Invests $2.5 Million From State Pension Fund in Ithaca–Based Printing Company CognitiveTPG

New York State Comptroller Thomas P. DiNapoli announced Tuesday that DeltaPoint Capital Management has acquired a majority stake in Ithaca–based CognitiveTPG, a supplier of point–of–sale transaction and barcode printers. The Common Retirement Fund is an investor in DeltaPoint through the In–State Private Equity Program. Photos are available here.

Empire State Plaza Assigns New Director After Audit Reveals Elevator Safety Lapses

Elevators at the Empire State Plaza went unrepaired for months despite 32 maintenance deficiencies, according to an auditreleased Thursday by State Comptroller Thomas P. DiNapoli. The audit prompted the Office of General Services to assign a new director and deputy director of plaza operations to properly oversee elevator maintenance.

DiNapoli: August Cash Report Shows Continued Economic Uncertainty

Tax receipts through August 2012 were $147 million below projections and $204.3 million below collections for the same period last year, reflecting continued volatile economic conditions, according to the August Cash Report released last Wednesday by State Comptroller Thomas P. DiNapoli.

Comptroller DiNapoli Releases Municipal Audits

New York State Comptroller Thomas P. DiNapoli Tuesday announced his office completed the following audits:

Town of Evans;

Town of Fort Edward; and,

Town of Schodack.

Comptroller DiNapoli Releases School Audit

New York State Comptroller Thomas P. DiNapoli Tuesday announced his office completed the audit of the Ark Community Charter School.

Comptroller DiNapoli Releases Audits

New York State Comptroller Thomas P. DiNapoli last Tuesday announced his office completed the following audits:

Department of Transportation;

New York State Thruway Authority;

Department of Health; Office for the Aging; and,

Office of Parks, Recreation and Historic Preservation.

Trial court may not substitute its judgment for that of the arbitrator when the record supports the arbitrator’s ruling

Trial court may not substitute its judgment for that of the arbitrator when the record supports the arbitrator’s ruling

Supreme Court, New York County, vacated, in part, an arbitrator’s finding that a tenured teacher guilty of disciplinary charges alleging sexual misconduct and dismissed certain specifications, vacated the penalty imposed by the arbitrator -- termination of the teacher's employment, and remanding the proceeding for a new hearing before a new arbitrator to determine if the teacher was guilty of the surviving allegations and for a redetermination of the penalty to be imposed in the event the new arbitrator found the teacher guilty of one or more of the surviving disciplinary charges and specifications.

The Appellate Division(1) reinstated the initial arbitrator’s finding of sexual misconduct and (2) reinstated the penalty imposed by the arbitrator, termination.

The court said that judicial review of the arbitrator’s award in this instance is limited to the grounds set out in CPLR §7511(b)1* as required by §3020-a(5) of the Education Law.

The court explained that where, as here, “the arbitration is compulsory,” the excess of power standard under CPLR §7511(b) includes review of "whether the award is supported by evidence or other basis in reason, as may be appropriate, and appearing in the record." Thus, the "determination must be in accord with due process and supported by adequate evidence, and must also be rational and satisfy the arbitrary and capricious standards of CPLR Article 78."

The Appellate Division said there was adequate evidence to support the arbitrator's conclusion that teacher committed sexual misconduct by performing an "action that could reasonably be interpreted as soliciting a sexual relationship" within the meaning of the relevant provisions in the collective bargaining agreement. By finding to the contrary, the Appellate Division said that Supreme Court “impermissibly substituted its own judgment for that of the arbitrator” by crediting the teacher’s testimony that had been rejected by the arbitrator.

In light of the evidence, the Appellate Division said that the penalty of termination, notwithstanding teacher's “prior lack of disciplinary history,” did not shock its sense of fairness.

* §7511 of the Civil Practice Law and Rules provides for “Vacating or modifying” an arbitration award. With respect to “Grounds for Vacating,” §7511 (b)1 provides for the vacation of an arbitration award in the event the court finds that the rights of the party challenging the award were prejudiced by: 

     (i) corruption, fraud or misconduct in procuring the award; or 

     (ii) partiality of an arbitrator appointed as a neutral, except where the award was by confession; or 

     (iii) an arbitrator, or agency or person making the award exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made; or 

     (iv) failure to follow the procedure of this article, unless the party applying to vacate the award continued with the arbitration with notice of the defect and without objection.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2012/2012_06255.htm