The New York State Teachers’ Retirement System has a dutyto correct errors in the computation of a member's retirement allowance
During the three years immediately prior to retirement, ateacher* participated in the school district’s"Senior Teacher Program,” a three-year program available upon request on aone-time basis to teachers with at least 15 years of employment with the schooldistrict. A participating teacher received a stipend of $12,000 peryear in addition to his or her base salary and was required tocomplete preapproved annual projects.
In this instance the stipend paid to the "participating teacher" was initially included in the calculation of the teacher’s final average salaryfor purposes of determining her retirement allowance by the New York State Teachers’ Retirement System [NYSTRS] upon her retirement from the school district.
NYSTRS subsequently determined that the stipend paid to the teacher in connection with her participation in the school district's "Senior Teacher Program" should have been excluded from its calculation of the teacher’s “final average salary” for the purposes of determining her appropriate retirement allowance as it constituted "nonregular compensation." When it sought to recoup the“overpayment” resulting from its inclusion of the stipend in its initialcalculation, the teacher sued.
Supreme Court dismissed the teacher’s petition and theAppellate Division affirmed the lower court’s ruling, noting that the retirement system was obligated to correct errors in its computation of retirement benefits. Further, said the court, therecoupment of funds erroneously paid by the retirement system was proper.
Considering the relevant regulation**provided that "[r]egular salary earned shall exclude termination pay andpayments which are not part of the salary base and/or are not paid over aperiod of years; for example, bonuses and one-time-only increments,"NYSTRS had concluded that the stipend paid to the teacher in connection with her participation in the school district's "Senior Teacher Program" did not constitute "regularsalary earned" because:
1. The contract between the faculty and the school districtspecifically provided that the stipend was not to be included as part of ateacher's base salary;
2. The stipend was for work done in addition to and outside thescope of a teacher's regular duties; and
3. Participation in the program was available only once duringa teacher's employment with the school district.
The Appellate Division said that it found that NYSTRS’sdetermination had a rational basis and, accordingly, sustained theadministrative decision
* In this instance theteacher was a “Tier II” member of the New York State Teachers’ RetirementSystem.
** See 21 NYCRR 5003.1[a].
Thedecision is posted on the Internet at:
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