Martin Scheinman and The Retiree Retro Issue (November 2014)

Martin Scheinman

Arbitrator to help resolve retiree retro issue

BY DEIDRE MCFADYEN | DECEMBER 4, 2014 NEW YORK TEACHER ISSUE

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A new arbitration decision has cleared a pathway for paying recent retirees the lump-sum retroactive payments they have been expecting.

One of the independent arbitrators who helped the UFT and the Department of Education reach a new collective-bargaining agreement last spring has offered his services to find a way to make up the $60 million shortfall in the settlement fund set up to make whole all UFT members who retired between Nov. 1, 2009, and June 30, 2014.

The arbitrator, Martin Scheinman, wrote in his Nov. 17 decision that he would determine how to cover the shortfall by adjusting the contract’s terms.

“Out of a multiyear package costing billions of dollars, such modification shall not be difficult and shall be relatively minor,” he wrote. “I also conclude such an approach would be reasonable, equitable and would serve the purpose for which the Settlement Fund was created.”

UFT President Michael Mulgrew said he was eager to work with the arbitrator to swiftly resolve the issue.

“An arbitrator has now said that our members should receive all the money they are entitled to,” he said. “We accept his offer to quickly work out the details. We appreciate working with the city getting this contract done and will now work out this detail to make sure everyone is made whole.”

During the contract ratification process, the UFT explained that all its retirees who were in service at the time covered by the contract would receive full retroactivity for the two 4 percent wage increases arising from the 2009–11 period. The union said that the retroactive monies would arrive in a one-time, lump-sum payment to those submitting retirement papers by June 30, 2014.

Scheinman said it was “readily discernible” from reading the Memorandum of Agreement that the goal shared by both sides was to make the retirees whole, but the $180 million set aside to pay the retroactive wages was not adequate to cover the number who opted to retire. According to the Teachers’ Retirement System, there was a 48 percent increase in retirements by UFT members employed by the DOE at the end of the 2013–14 school year compared to the end of the previous school year.

While he concluded that the city’s obligation to fund the retirees’ claims was capped at $180 million, Scheinman offered to find alternatives to make up the shortfall to avoid any reduction in payments.