Audit Report on Pensioners of the New York City Fire Department Working for the City after Retirement January 1, 2014 to December 31, 2014

Audit Report on Pensioners of the New York City Fire Department Working for the City after Retirement

January 1, 2014 to December 31, 2014

EXECUTIVE SUMMARY

The objectives of this audit were to identify those New York City pensioners who may be re-employed by a City agency and simultaneously illegally collecting a pension from the New York City Fire Department Pension Fund (FIRE)—post retirement City employees who do not comply with all necessary employment regulations are known as “double-dippers”—and to quantify the amounts of any improper payments to such individuals who appear to be violators of the New York State Retirement and Social Security Law (RSSL) §211 and §212 or New York City Charter §1117 during Calendar Year 2014.

FIRE provides retirement benefits to full-time uniform firefighters who were employed by the New York City Fire Department.  The reemployment of retired public employees in public service is governed by the RSSL.  Specifically, under RSSL Article 7, §212, a service retiree (a person receiving retirement benefits rather than a disability retirement) who is under the age of 65 can be reemployed in New York public service subject to an annual $30,000 earning limitation.¹  This means that a member of the FIRE system who retires before the age of 65 who is not collecting a disability pension may collect his/her pension and work for the City or State, provided he/she does not earn more than $30,000 per year from such a public sector position.

If a retiree’s post-retirement earnings in a New York City or State public sector position exceeds the annual earnings limitation, the retiree’s pension benefits should be suspended unless the retiree has obtained a waiver under RSSL §211.²  If a retired employee does not comply with all applicable restrictions and collects a pension while earning in excess of $30,000 in a covered public sector job, the retiree is said to be “double-dipping.”

Disability retirees are not subject to RSSL §211 and §212.  However, disability retirees in New York City are subject to the New York City Charter §1117, which prohibits a retiree from earning more than $1,800 a year (including pension payments) in New York public service unless the retiree’s disability pension is suspended during the time of such employment.

Audit Findings and Conclusion

Our audit found three FIRE pensioners who appear to have violated sections of RSSL §211-§212 or New York City Charter §1117.  Specifically, one pensioner worked as a teacher for the Department of Education (DOE) and earned a salary of $43,376 while collecting 12 pension checks.  According to RSSL §211 and §212, a service retiree who is under the age of 65, reemployed in New York public service without a waiver, and whose salary exceeds the income limitations of $30,000 in Calendar Year 2014, must have his or her pension benefits suspended.³

In addition, two FIRE disability pensioners violated New York City Charter §1117 because they were under the age of 65, received disability pension payments and earnings through New York public service exceeding the $1,800 income limitation, and did not suspend pension payments during the time of such re-employment.

These three pensioners received a total of $126,538 in post-retirement earnings for Calendar Year 2014, which resulted in $68,431 pension overpayments.

Audit Recommendation

To address the non-compliance issue, we recommend that FIRE officials should:

• Investigate those individuals identified in this report and commence recoupment action against them.
• Send special reminders to service retirees under the age of 65 and to all disability retirees that detail their responsibilities regarding public service reemployment.

Agency Response

FIRE officials agreed with our recommendations and provided an audit implementation plan.