Patrick Lynch,, et al., Respondents,v.The City of New York, et al., Appellants.BriefN.Y.May 8, 2014 To be argued by PAUL T. REPHEN 15 Minutes COURT OF APPEALS STATE OF NEW YORK PATRICK LYNCH, as President of PATROLMEN’S BENEVOLENT ASSOCIATION OF THE CITY OF NEW YORK, INC., on behalf of the Aggrieved Police Officers, and the PATROLMEN’S BENEVOLENT ASSOCIATION OF THE CITY OF NEW YORK INC., & ROY RICHTER, as President of THE CAPTAIN’S ENDOWMENT ASSOCIATION OF THE CITY OF NEW YORK, INC., on behalf of the Aggrieved Police Surgeon and its future adversely affected members, & ALEXANDER HAGAN, as President of the UNIFORMED FIRE OFFICERS ASSOCIATION, on behalf of the Aggrieved Medical Officer, and its future adversely affected members, Plaintiffs-Respondents, -against- THE CITY OF NEW YORK, the NEW YORK CITY POLICE PENSION FUND, and the NEW YORK CITY FIRE DEPARTMENT PENSION FUND, Defendants-Appellants. APPELLANTS’ REPLY BRIEF Jeffrey D. Friedlander, Acting Corporation Counsel of the City of New York, Attorney for Respondent-Appellants, 100 Church Street, New York, New York 10007. PREPHEN@LAW.NYC.GOV (212) 356-2600 Paul T. Rephen Of Counsel January 8, 2014 TABLE OF CONTENTS Page TABLE OF AUTHORITIES .................................................................................... ii ARGUMENT .............................................................................................................1 AS MEMBERS OF TIER THREE OF THE RETIREMENT AND SOCIAL SECURITY LAW, PETITIONERS ARE NOT ENTITLED TO ITHP, CONTAINED IN SECTION 13-226 OF THE ADMINISTRATIVE CODE. .....................................................1 CONCLUSION..........................................................................................................8 ii TABLE OF AUTHORITIES Cases Pages Matter of Guido v. New York State Teachers’ Retirement System, 94 NY2d 64 (1999).............................................................................................3 Matter of Wertheim v. New York City Teachers’ Retirement System, 91 AD 2d 514 (1st Dept. 1982) ..........................................................................4 Statutes 22 N.Y.C.R.R. § 670.10.3(a)(3).................................................................................9 22 N.Y.C.R.R. § 670.10.3(f) ......................................................................................9 Administrative Code §13-225....................................................................... 4, 5, 6, 7 Administrative Code §13-226................................................................... 3, 4, 5, 6, 7 Administrative Code §13-228....................................................................................5 Administrative Code §13-255....................................................................................4 RSSL § 480 ................................................................................................................6 RSSL § 480(b) .................................................................................................. 2, 3, 6 RSSL § 480(c)............................................................................................................5 RSSL § 500 et seq......................................................................................................2 RSSL § 517 ................................................................................................................3 RSSL § 500(a)............................................................................................................4 COURT OF APPEALS STATE OF NEW YORK PATRICK LYNCH, as President of the PATROLMEN’S MEN’S BENEVOLENT ASSOCIATION OF THE CITY OF NEW YORK, INC., on behalf of the Aggrieved Police Officers, and the PATROLMEN’S BENEVOLENT ASSOCIATION OF THE CITY OF NEW YORK INC., & ROY RICHTER, as President of THE CAPTAIN’S ENDOWMENT ASSOCIATION OF THE CITY OF NEW YORK INC., on behalf of the Aggrieved Police Surgeon and its future adversely affected members, & ALEXANDER HAGAN, as President of the UNIFORMED FIRE OFFICERS ASSOCIATION, on behalf of the Aggrieved Medical Officer, and its future adversely affected members,, Plaintiffs-Respondents, -against- THE CITY OF NEW YORK, the NEW YORK CITY POLICE PENSION FUND, and the NEW YORK FIRE DEPARTMENT PENSION FUND, Defendants-Appellants. APPELLANTS’ REPLY BRIEF ARGUMENT AS MEMBERS OF TIER THREE OF THE RETIREMENT AND SOCIAL SECURITY LAW, PETITIONERS ARE NOT ENTITLED TO ITHP, CONTAINED IN SECTION 13-226 OF THE ADMINISTRATIVE CODE. 2 Respondents Lynch and Richter rely entirely on the language of RSSL §480(b) in support of their contention that police officers appointed on or after July 1, 2009 are entitled to ITHP. 1 As we noted in our main brief (page 5) section 480 was enacted in 1974 (ch. 510, §24) and subdivision b of that section provided: Any program under which an employer in a public retirement system funded by the state or one of its political subdivisions assumes all or part of the contribution which would otherwise be made by its employees toward retirement, which expires or terminates during nineteen hundred seventy-four, is hereby extended until July first, nineteen hundred seventy-six, notwithstanding the provisions of any general, special or local law. At the time section 480 was enacted, Tier Three did not exist. Therefore, the Legislature could not have contemplated extending this benefit to then non- existing members. The Legislature continued to extend RSSL §480(b) annually or bi-annually until December 2009 when governor Paterson approved legislation making that section permanent. Laws of 2009, ch,.504, Part A, §5. It is undisputed that police officers appointed on or after July 1, 2009 are members of Tier Three of the Retirement and Social Security Law which is contained in Article 14 of the RSSL §500 et seq. It is equally undisputed that the 1 No brief was filed on behalf of the firefighter respondents but our analysis applies equally to them. 3 only provision describing an ITHP “program” for police members is contained in Administrative Code §13-226. It is the police respondents’ contention that since an ITHP “program” exists, all police officers are entitled to participate in it regardless of tier status. They do this without any cogent analysis whether their position is consistent with the legislative intent in creating Tier Three or whether the Tier Three scheme is compatible with the ITHP structure set forth in §13-226. Lastly, they ignore the legislative history of the 1974 Act creating section 480(b). Moreover, that provision cannot be read in isolation, but must be read within the statutory tiered scheme that encompasses RSSL Article 14 and the relevant Administrative Code provisions. See Matter of Guido v. New York State Teachers’ Retirement System, 94 NY2d 64, 69 (1999). It is undisputed that Tier Three as embodied in RSSL Art. 14 is a separate and distinct retirement program, unrelated to its predecessor tiers. An essential part of Tier Three is the requirement that members contribute three percent of annual wages to the retirement system in which they have membership. RSSL §517. See Also 1976 Legislative Annual pps. 412-413 (“The basic elements of [Tier Three] are … employee contributions of 3% of payroll.”) There is no provision for any offset by the employer of the required employee contribution. In fact, there is no provision in Article 14 requiring any employer contributions under the Tier Three Scheme. 4 The intention of the Legislature to restrict Tier Three members to the rights and obligations of the provisions of Article 14 is made clear by RSSL §500 (a) which provides that such article shall govern in the case of any conflict with the provisions of any other law or code. “[T]he Legislature clearly evinced an intention to restrict post-June 30, 1976 applicants solely to membership under procedures established in Article 14. Under subdivision a of section 500, only a conflict enumerated in subdivision c of section 500, a section not applicable to [petitioners here] permits circumvention of the legislative scheme”. Matter of Wertheim v. New York City Teachers’ Retirement System, 91 AD 2d 514, 516 (1st Dept. 1982). Any interpretation that would relieve Tier Three members of the obligation to make the required three percent contribution would conflict with the legislative intent in creating that tier. Having demonstrated that the application of ITHP to Tier Three members would be inconsistent with the legislative intent in creating that tier, we turn to the precise language of the ITHP “program” contained in §13-226 of the Administrative Code. As we indicated in our main brief (pps. 3-4) Tiers One and Two police officers upon retirement receive a retirement allowance based upon an annuity and a pension. Administrative Code §13-255. The annuity portion is based upon contributions made by the officers in accordance with his or her age at the time of appointment. Administrative Code §13-225. Subdivision b of §13-225 5 states that the Police Department “shall deduct from the compensation of each member … the proportion of his or her earnable compensation so computed [to fund the annuity].” On the other hand, the pension portion of the retirement allowance is contributed by the City. Administrative Code §13-228. In contrast to Tiers One and Two, Tier Three police members upon retirement receive a retirement benefit equal to fifty percent of final average salary, less fifty percent of the primary social security benefit commencing at age sixty-two. RSSL §505. Tier Three members have no annuity component to their retirement benefits. That benefit as noted above is based solely upon the three percent of annual salary contribution they had made over their careers. The only ITHP provision for police members found in law is contained in Administrative Code §13-226. That section specifically permits the City to assume a portion of the “contribution of each member made pursuant to subdivision b or e of §13-225 [the annuity provision discussed above]”. RSSL §480(c) provides that the ITHP assumed by the City shall be five percent of salary. The average contribution made by Tier One and Two police officers is about seven percent of salary. Thus ITHP results in a reduction of some but not all of a Tiers One or Two officers’ contributions. Since §13-226 was intended to reduce an officer’s annuity contribution, and in view of the fact that a Tier Three officer has no annuity component to his or her 6 retirement benefit, that section cannot be applied to such a person without contradicting the plain language of the provision. Lastly, when we examine the legislative history of §480(b) itself, it is readily apparent that that provision was intended only to extend the then temporary ITHP benefit provided by §13-225 and was not intended to create a new benefit to individuals not specifically covered by it. The language of §480(b) relied upon by petitioners and the majority below was first added in 1974. Laws of 1974, ch. 510, §24. Prior to that time, the Mayor was authorized in his discretion to implement or extend ITHP. However, by that amendment, the Legislature deprived by Mayor of his discretionary authority and extended ITHP for an additional two years. In approving the legislation, the Governor stated that the purpose of §480 was to: extend until July 1, 1976 all temporary retirement benefits scheduled to expire this year. 1974 Legislative Annual pps. 43, 390. Contrary to the assertion of the majority below, §480 is nothing more than a legislative extension of the ITHP provision contained in Administrative Code §13- 226 and did not create a new ITHP program or create any substantive rights not found in that provision. In summary, the provisions of the Tier Three statute (RSSL Art. 14) to which officers appointed on or after July 1, 2009 admittedly belong requires all persons in that tier to contribute three percent of annual salary towards retirement. 7 It does not contain an ITHP program or require the employer to assume all or a portion of the required employee contribution. The only ITHP provision for police members contained in law is set forth in Administrative Code §13-226 which requires the City to assume a portion of the annuity contributions required by employees. Since only Tiers One and Two employees have annuity components to their retirement allowances, and Tier Three members do not, §13-226 is not applicable to those individuals. Finally, §480(b), upon which petitioners solely rely, represents nothing more than a legislative “extension” of what had historically been a temporary benefit provided solely to Tiers One and Two by Administrative Code §13-225. Nothing contained in the briefs of the petitioners persuasively or cogently rebuts our explication of ITHP contained in our briefs or in the dissent of Justice Friedman. 8 CONCLUSION THE ORDER APPEALED FROM SHOULD BE REVERSED AND THE PETITION DISMISSED WITH COSTS. Jeffrey D. Friedlander, Acting Corporation Counsel of the City of New York, Attorney for Respondent-Appellants, 100 Church Street, New York, New York 10007. PREPHEN@LAW.NYC.GOV (212) 356-2600 By ____________________________ Paul T. Rephen Paul T. Rephen Of Counsel