Audit Report on Pedagogical Pensioners of the New York City Teachers’ Retirement System Working for the City after their Retirement

EXECUTIVE SUMMARY

This audit was performed to identify those New York City Teachers’ Retirement System (TRS) pensioners who may be illegally re-employed (‘double-dippers’ or ‘disability violators’), and to quantify the amounts of any improper payments to individuals who appear to be violators of New York State Retirement and Social Security Law (RSSL) § 211 and § 212, or New York City Charter § 1117, during calendar year 2000.

To discover the extent to which retired City employees were being improperly re-employed by City agencies, we asked the Audit Bureau’s EDP Unit to perform a computer match of the approximately 245,000 New York City pensioners against a listing of all City workers (approximately 380,000) who received a W-2 wage statement from the Financial Information Services Agency (FISA) for the year 2000. This matching process identified 2,033 individuals under the age of 70 who either received more than $17,000 in 2000 (service retirees) or $1,800 in 2000 (disability retirees). Of the 2,033 matched individuals, 1,599 were TRS retirees. Thirty-seven of these 1,599 individuals appeared to lack valid reasons for being on this list of matched pensioners. Accordingly, these re-employed TRS retirees may be in violation of applicable laws and regulations, and may have obtained approximately $262,000 in improper pension payments in 2000.

Consequently, we recommend that TRS officials:

• Investigate the individuals identified as concurrently receiving a pension while being re-employed in public service. TRS officials should also commence prompt recoupment action against those individuals found to be illegally collecting pensions.

• Forward to the Department of Investigation, if the circumstances warrant such action, the names of those individuals found to be illegally collecting pensions.

• Ascertain whether previous pension overpayments have been recouped and whether current pensions have been suspended for those individuals who have been cited in previous audits as ‘double-dippers’ or ‘disability violators.’

• Send special reminders to service retirees under the age of 70 and to all disability retirees that clearly state their responsibilities regarding public service re-employment.

• Set up a monitoring program, in conjunction with the other retirement systems, to identify those City retirees re-employed in New York public service.

• Reinforce to City agencies, in conjunction with the other retirement systems, the importance of maintaining effective procedures to ensure that City pensioners comply with State and City laws regarding public service re-employment.

The matters covered in this report were discussed with officials of TRS during and at the conclusion of this audit. A preliminary draft of this report was sent to TRS officials and was discussed at an exit conference on March 2, 2002. On April 11, 2002, we submitted a draft report to TRS officials with a request for comments. TRS officials responded to the draft report on April 26, 2002. In his response, the Deputy Director of TRS stated:

‘Please be advised that the Teachers’ Retirement System (TRS) is in full compliance with all your recommendations. Attached, please find a TRS updated status report, which describes the types of action that will be taken by TRS.

‘Again, as part of the TRS original audit plan, it is customary for TRS to suspend a member’s pension allowance when that member exceeds his/her earnings after the limitation as cited under Section RSSL 212, RSSL 211, or NYC Chapter 1117 in an appropriate timely fashion.’

We also sent the draft audit report to the waiver-issuing agencies and to those agencies that re-employed TRS pensioners. We received a written response from the City University of New York (CUNY). In this response, CUNY’s Director of Internal Audit stated, in part:

‘While the ultimate responsibility of keeping track of post retirement earnings remains with the re-employed retiree, the University and colleges will continue to monitor the employment activities of these individuals and work with the retirement systems to ensure compliance with the RSSL requirements. The two colleges, which employed the three adjunct instructors cited in the draft report, will provide whatever assistance is requested by TRS officials to resolve any pension overpayment situations for these three individuals.’