Wednesday, February 22, 2006

Some City Jobs Top Off Salary With Pension

The New York Times
Some City Jobs Top Off Salary With Pension

One of Mayor Michael R. Bloomberg's first acts on starting his second term was to write a letter to personnel officials asking that his correction commissioner, Martin F. Horn, be allowed to collect a pension along with his $178,200 salary.

But to accomplish that under a state retirement law that seeks to prevent such "double-dipping," Mr. Bloomberg had to make the case that Mr. Horn was singularly qualified for the job, and that no one else of his talents and skills could be found for it.

So Mr. Bloomberg essentially declared that Mr. Horn, who also oversees the Probation Department, was the greatest commissioner in the world, and would, he wrote, "bring qualifications to these positions which cannot be matched by any other individual."

Mr. Horn, 57, is just one of several high-ranking city officials who have been granted waivers from laws prohibiting double-dipping by retirees who rejoin the city work force, making them eligible for tens of thousands of dollars a year in pension payments. More than 100 waiver requests from city department heads were approved last year alone, most of them seeking permission to hire retired police officers as investigators with other agencies.

While the practice has become more common as employers try to retain qualified workers, it has sounded alarms in other states, where allowing double-dipping has sometimes backfired and led to calls to restrict the employees from collecting government pensions and paychecks at the same time.

The Bloomberg administration defends the practice by saying it allows the city to keep talented commissioners who might otherwise gravitate toward the private sector.

Other recipients of a public sector pension and city paycheck include Joseph F. Bruno, a retired judge and fire commissioner, who Mr. Bloomberg said was "uniquely qualified" to become emergency management commissioner in 2004.

The mayor wrote to personnel officials that he had considered 50 applicants and interviewed 7 of them before settling on Mr. Bruno. In Mr. Horn's case, the mayor did not mention conducting a job search, but simply cited his recent experience running the two departments.

Beyond the waivers, Mr. Bloomberg has also gone to unusual lengths to allow Mr. Horn and the sanitation commissioner, John J. Doherty, to collect pensions while they are still working. He approved a bookkeeping maneuver in January in which the city "retired" the two men and immediately rehired them, making them eligible for retirement benefits on top of their salaries.

Mr. Doherty, who has worked for the city for 46 years, did not need a waiver because he is over 65. He and Mr. Bruno are each paid $178,200 a year.

The waivers have been granted at a time when Mr. Bloomberg has been calling for unions to help him curtail pension costs. The city maintains that the waivers do not cost taxpayers money, since the employees would be eligible for the pensions anyway, and that they allow the city to retain skilled administrators who might otherwise retire.

Some government watchdog groups said that while such practices did not appear to cost the city any extra money, they nevertheless constituted an abuse of the pension system, one that has gone on for years and is not unique to the Bloomberg administration. At a minimum, they illustrate how huge public-sector pension funds are used for reasons beyond their core purpose, which is to provide a livable stream of income for employees who reach the end of their working life.

"It underscores the need for the kind of reform that the mayor claims to support," said E. J. McMahon, a fiscal analyst at the Manhattan Institute, a conservative policy research group. "Retirement benefits should be reserved for people who are retired. Period."

Administration officials strongly defended the waivers and other actions.

Jordan Barowitz, a spokesman for Mr. Bloomberg, said that the mayor's actions would not only keep qualified commissioners from leaving for better-paying private-sector jobs, but that they were not in conflict with his broader aim of curbing the escalating future costs of public-employee pensions. The mayor, he said, does not begrudge the right of longtime employees to collect pensions they have already earned while they continue to serve the city.

"The qualifications necessary to be a New York City commissioner are unique," Mr. Barowitz said last week. "Given the job John Doherty did leading the Sanitation Department in the snow-clearing operation this week, for example, he's clearly worth his weight in gold." While the pensions for some of Mr. Bloomberg's commissioners have been previously reported, the wider practice of issuing waivers has not been closely examined.

A review of the more than 200 waiver applications received by the city over the last two years reveals a process that occurs entirely beyond the public eye, with some of the beneficiaries senior city officials who make relatively large salaries. Internal Revenue Service rules generally prohibit someone not of retirement age from collecting both a salary and a pension from the same employer, but governments and private businesses desperate to retain workers with specialized skills have increasingly found ways around the rules. Some companies rehire retired employees through a temporary-employment agency, thereby allowing them to continue collecting a company pension while being paid by someone else.

Other federal, state and local agencies have variations of New York's waiver policy, and most have engendered controversy at one time or another. In 2004, the Social Security Administration drew criticism from Congress after it rehired about 300 retired employees, on both salary and pension, because it had underestimated its staffing needs.

Lawmakers in Ohio reacted angrily five years ago when it was discovered that some elected judges were collecting pensions and salaries by declaring themselves retired for two months after their re-election, and then rejoining the payroll. And legislators in Washington were forced to tighten a 2001 law intended primarily to lure retired teachers back to work, after a few high-ranking state officials stepped off the payroll just long enough to qualify for pension benefits. In New York, under most circumstances, retirees under the age of 65 are prohibited from rejoining the public payroll and drawing a pension.

But with a waiver, retirees can be hired by a different public employer and keep their regular pensions (a retired city worker hired by a state agency, for example), or by the same employer at a reduced pension (a former city police officer joining the parks department).

The state's Civil Service Commission handles waiver requests for most public employees in the state but not for those in New York City, where under state law the local Civil Service Commission is the controlling authority. But the city's commission has never handled the issue, according to its chairman, Stanley K. Schlein.

Instead, the task was delegated some 30 years ago to the Department of Personnel, and then, when that agency was eliminated, to the Department of Citywide Administrative Services. Lewis S. Finkelman, the general counsel for administrative services, said the procedure was authorized by the City Charter, which vests the department with most of the powers that would otherwise reside with the Civil Service Commission, including approval of pension waivers.

Martha K. Hirst, the administrative services commissioner, said that approvals "are not given out in any cavalier way," and that applicants invariably have experience that cannot easily be found elsewhere.

"The city of New York can benefit from the expertise of these individuals," she said. "It's really a benefit to the city in these small number of cases." Among those who have been granted waivers are scores of former police officers, most of whom are eligible to retire at half pay after 20 years. They often seek new jobs at district attorneys' offices or other agencies seeking experienced investigators.

Others who were granted waivers last year included a retired teacher who was hired as chief lifeguard at Coney Island; a former Police Department budget official, whom Police Commissioner Raymond W. Kelly wanted to retain as his chief of staff; and a former Police Department pension counselor who was tapped for a similar job with the New York City Police Pension Fund, where he advises officers on, among other things, pension waivers.

Employers applying for waivers must provide evidence that they advertised for the job and considered other applicants before settling on the retiree. To clear that hurdle, many department heads all but declare that their favored candidates are so irreplaceable that city government would grind to a halt without them.

In going to bat for their preferred lifeguard, Arthur Miller, at Coney Island, the Department of Parks and Recreation pointed to Mr. Miller's experience in that job and suggested that people's lives would be in danger if it could not hire him to patrol the beaches: "To do such will not only put the public at risk but also endanger one of the most important recreational activities New York City has to offer."

Mr. Kelly, in seeking a waiver for his chief of staff, Joseph P. Wuensch, wrote that "there is no other person that has comparable experience, expertise or knowledge of the intricacies that being a manager at this level in law enforcement entails." Mr. Wuensch, who worked for the city for 36 years before retiring in 2000, earns $154,000 in his new position.

The size of the pension payments available to those seeking waivers could not be immediately determined. An administration official said that Mr. Bruno's combined pension and salary came to more than $200,000 a year. Mr. Horn and Mr. Doherty became eligible for pension payments only last month. But city employees who reach a certain age can typically retire at half their salary after 25 years on the job, and Mr. Horn and Mr. Doherty "retired" from six-figure jobs after decades of working for the city.A more precise glimpse of the money to be had by retiree-workers at the highest levels of city government could be found in financial disclosure statements by Fire Commissioner Nicholas Scoppetta on file with the Conflicts of Interest Board. Mr. Scoppetta, who did not need a waiver because he was over 65 and already collecting a pension when Mr. Bloomberg rehired him four years ago, received $97,000 in pension benefits in 2004, in addition to his $163,000 commissioner's salary.

Waiver decisions are issued in the form of a letter from a deputy commissioner. A typical one was sent to parks and recreation officials last June in response to their request to exempt Mr. Miller from restrictions that would have diminished his pension payments if he made more than $27,500 in his new job.

The request was approved, the letter said, "in light of your need to fill this position on a seasonal basis with someone who has significant experience as a lifeguard and supervisor of lifeguards, particularly in the lifeguard operations of Coney Island, and based further upon Mr. Miller's unique qualifications."