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

EXECUTIVE SUMMARY

This audit was performed to identify those New York City Employees’ Retirement System (NYCERS) 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.

A computer match of New York City pensioners against a listing of all City workers who received a W-2 wage statement for the year 2000 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, 148 were NYCERS retirees. For all 148 retirees, we obtained additional detailed information about their individual year 2000 pension and payroll payments. We analyzed the timing, and, to some extent, the types of payments received. We also verified the amounts shown on the computer match listing. In addition, we met with retirement system representatives, who assisted us in searching their files for waivers and other relevant information.

This audit did not identify any NYCERS retirees who were in violation of RSSL § 211 or § 212, or who were in violation of § 1117 of the New York City Charter. However, we did identify an individual who improperly received and cashed 14 pension checks totaling $3,734 from July 1999 through August 2000. According to NYCERS officials, this individual filed an "Application for Service Retirement" on April 15, 1999, stating that she was retiring from her Clerical Associate title at the Department of Finance on June 11, 1999. However, according to Department of Finance officials, this individual did not retire until August 21, 2000. Consequently, 14 pension checks were inappropriately issued to this individual.

Consequently, we recommend that NYCERS officials:

• Recoup the $3,734 in improper pension payments cited in this report.
• Review the City Payroll Management System records to ensure that individuals filing for retirement benefits are actually off the City payroll before issuing pension checks to them.

The matters covered in this report were discussed with NYCERS officials during and at the conclusion of this audit. A preliminary draft of this report was sent to NYCERS officials and was discussed at an exit conference on March 12, 2002. On May 7, 2002, we submitted a draft report to NYCERS officials with a request for comments. NYCERS officials responded to the draft report on May 21, 2002. In his response, the Deputy Director Finance of NYCERS stated, in part:

"It appears that there is a difference of opinion concerning what constitutes employment after retirement and eligibility to be covered by § 212 . . . Under NYCERS interpretation of the laws that deal with employment after retirement, a retiree may request that § 212 be applied, regardless of whether they had continuous employment, or had a break in service before returning to public employment."

The full text of the NYCERS response is included in as an addendum to the report.

After consultation with our Legal Bureau, this office continues to maintain that the provisions of RSSL §212 apply only to those employees who retire and at some later date return to public service, not to those employees who merely file a retirement application but never act upon it and who continue to serve as full-time city employees. Furthermore, although the employee in question filed a "Certificate of Employment Under §212 of the Retirement and Social Security Law (RSSL)," it was not applicable because she was not in fact retired. In fact, the certificate itself states that the form is "to be completed by pensioners who have [emphasis added] City service."