Pittsfield Retirement Board tackles city employee benefit dispute

Monday February 4, 2013

By Jim Therrien, Berkshire Eagle Staff

PITTSFIELD -- The Pittsfield Retirement Board wrestled recently with a dispute that could alter the retirement benefit amount for city employees who work at other jobs, primarily during the summer.

Chairman Gerard E. Miller said his "intent is to do no harm" to the employee at the center of the issue -- a paraprofessional in the city school system who also is rehired each summer to perform a similar job with some of the same children.

Miller said he’s unsure whether it would be better to deny the summer wages to be counted toward the worker’s retirement wages -- and therefore allow the appeal process to proceed administratively or in the courts -- or to approve the extra wages and possibly see the city or school system mount an appeal.

He said he wants to avoid a lengthy appeal because the worker is close to retirement, but he also would not want to see her ultimately lose an appeal and for the board to "have to take the money back."

The issue is further complicated, board members said, because retirement deductions were taken out in the past for the woman’s summer wages, but that was halted for a time after the board was advised by the state Public Employee Retirement Administration Commission (PERAC) that under revised state law the summer compensation should not be counted toward the level of retirement benefit.

However, PERAC later amended its definition of eligible income and reversed that opinion to the city board during an audit process.

The PERAC recommendation was an opinion, board members said, and the issue of which wages count for retirement purposes is likely to be decided by the courts in appeal cases elsewhere or through revisions to state law.

The board has asked its attorney, Michael Sacco, for an opinion, and he advised that the summer wages should not count toward retirement income, in part because the worker has to apply for the summer position every year.

City Solicitor Kathleen Degnan also has now weighed in on the issue, after receiving a copy of Sacco’s opinion. She said in a memorandum to retirement system Executive Director Karen Lonto that she agrees with Sacco’s determination.

Degnan stated in part, "... I have reviewed both the opinion referred by Joseph Connarton, executive director of PERAC, and attorney Michael Sacco, attorney for the Retirement Board, and I am of the opinion that attorney Sacco is correct that the wages earned by the paraprofessional during the summer months are not compensation for the purposes of retirement."

Among arguments in favor, Degnan said, are language in state law as of 2009 that describes wages for determining retirement benefits as "base salary or other base compensation," including "predetermined, nondiscretionary, guaranteed payments paid by the employer ... ."

Since the paraprofessional must apply for the job each summer, "it cannot be said that such compensation is guaranteed," Degnan said in stating her agreement with Sacco’s opinion.

Board member Edward M. Reilly raised several issues, including whether there is anything at this point that could be appealed by the employee, since the Retirement Board is merely deducting for her retirement from summer wages -- not actually paying or denying a higher level of benefit.

He suggested that the board table the issue and ask Sacco for further information concerning questions raised by the board and the ramifications of approving or denying the summer wages for retirement purposes. That was agreed upon.

Board members also pointed out that the city and the school system are the entities that actually would pay or not pay more in benefits -- not only for the specific employee but for others as well working under similar circumstances.

In that case, the city might appeal a vote by the board to approve to summer income for determining retirement amounts.

Reilly and Miller proposed asking teachers union officials and others who may have experience dealing with the issue for information and opinions.

To reach Jim Therrien:
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