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

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

EXECUTIVE SUMMARY

The objectives of this audit were: (1) 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 Police Department Pension Fund (known as POLICE); and (2) 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.

POLICE provides retirement benefits to full-time uniform police officers who were employed by the New York City Police Department.  The re-employment 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 age of 65 can be reemployed in New York public service subject to an annual $30,000 earning limitation.  This means that a member of the POLICE retirement system who is not collecting a disability pension, under age 65, may collect his/her pension and work for the City or State so long as he/she does not earn in excess of $30,000 per year from such a public service position.  If an under 65 service retiree’s post-retirement earnings in a New York City or State public service position exceed the annual earning limitation, the retiree’s pension benefits should be suspended unless the retiree has obtained a waiver under RSSL §211.

Disability retirees are not subject to RSSL §211 and §212, but rather 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 in New York public service unless the retiree’s disability pension is suspended during the time of such employment.  A retiree’s disability payments are included in the calculation of whether the $1,800 cap has been exceeded.

Audit Findings and Conclusions

Our audit found four POLICE pensioners who violated either sections of RSSL §211–§212 or NYC Charter §1117.  Specifically, we found one service retiree covered by RSSL §211–§212 under the age of 65 who was re-employed in New York public service and whose salary exceeded the $30,000 income limitation in Calendar Year 2014 without a waiver.  This pensioner was hired by the City Council in 2014 and received $49,302 in salary.  Besides receiving income from the City, this pensioner also worked for the New York State Assembly and received $5,046 in salary during Calendar Year 2014.  Based on our calculation, this pensioner received $11,514 in improper pension payments.

In addition, we found three POLICE disability pensioners who violated New York City Charter §1117 because they received disability payments from the POLICE and earnings through New York public service of more than $1,800, and did not suspend pension payments during the time of such re-employment.  As a result, these pensioners improperly received a total of $198,537 in pension payments.

These four pensioners received a total of $154,890 in public service post-retirement earnings for Calendar Year 2014.  As a result, they were improperly paid a total of $210,051 in potential pension overpayments.

Audit Recommendations

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

• Investigate those individuals identified in this report and, if confirmed to have received pension payments in violation of State or City law, recoup the overpayments.

• Send reminders to service retirees under the age of 65 and to all disability retirees that clearly state the applicable income limitations and the retirees’ responsibilities regarding public service reemployment.

Agency Response

POLICE officials agreed with our recommendations and provided us with information demonstrating the steps that they had taken to recoup the overpayments and methods that they are using to inform their members regarding the re-employment restrictions.