Labor & Employment Law

Back pay award excluded in determining employee?s retirement allowance

Back pay award excluded in determining employee?s retirement allowance
Matter of Yovino v New York City Employees? Retirement System, 18 Misc.3d 1105(A), Supreme Court, Kings County

This case concerns an aspect of a disciplinary action rarely encountered: What is the impact of an award of back salary as a result of a successful appeal of a disciplinary determination insofar as the calculation of the individual?s retirement allowance is concerned?

Michael Yovino challenged New York City Employees? Retirement System?s [CERS] determination that his annual retirement allowance is $35,984.57, claiming that his annual retirement allowance should be $54,309.00.

According to the decision, Yovino, a Department of Sanitation employee, was terminated from his position after being found guilty of performing his work in an incompetent manner. He appealed this determination and the New York City Civil Service Commission reversed Sanitation?s dismissal of Yovino and ordered the Department to reinstate him to his former position with back pay and benefits.

Following this action, Yovino submitted an application for service retirement having accrued 20.08 years of service. He elected to receive the maximum lifetime retirement allowance. CERS notified Yovino that his annual maximum retirement benefit would be $35,984.57, based upon his ?final average salary? [FAS] of $73,680.54.

Contending that his annual retirement allowance should be $54,309.00 based on ?his actual 2002, 2003 and 2004 earnings? -- $130,889.00 for 2002, $88,719.00 for 2003, and $80,246.00 for 2004 -- Yovino sued to compel CERS to include in its calculation of his FAS the retroactive monies that he received in 2005 and 2006 for back pay for the three years reflecting his termination/reinstatement as a result of the Department?s taking disciplinary action against him (i.e., 2002, 2003 and 2004).

Supreme Court said that a review of the record reveals that CERS calculated Yovino?s FAS for the periods May 31, 2002 to May 31, 2003, May 31, 2003 to May 31, 2004, and May 31, 2004 to June 1, 2005 and that its decision not to include the $130,889.00 amount in the calculation of petitioner?s FAS for 2002 is rationally based.

Conceding that Yovino received a total of $130,889.00 during 2002, CERS did not include this total amount in its FAS calculation because ?Mr. Yovino did not actually earn the entire amount during 2002.? CERS, in reaching its conclusion, relied upon the plain language of Retirement and Social Security Law §608(a), which specifically states that a member?s FAS is ?the average wages earned by such a member during any three consecutive years which provide the highest average.?

Citing Selkin v Regan, 120 AD2d 204, where the Appellate Division ruled that an individual?s FAS ?consists of income actually earned during the subject year,? Supreme Court said that CERS reasonably concluded that ?the majority of the lump sum back pay that Mr. Yovino received in 2002 was actually attributable to the wages that he would have regularly earned during the period of his termination from the Sanitation Department, November 9, 2000 to April 10, 2002.? CERS, however, did not consider the $130,889.00 that Yovino received during 2002 as wages earned and consequently, did not include this amount in the calculation of Yovino?s FAS.

Supreme Court found that CERS?s ?interpretation of the relevant statutory provisions and case law is rational and ?entitled to great deference . . . [because] such interpretation is not unreasonable or irrational.??Rejecting other claims advanced by Yovino alleging CERS had miscalculated his retirement allowance, Supreme Court Justice Arthur M. Schack dismissed his petition.

Full post as published by New York Public Personnel Law on May 21, 2008 (boomark / email).