As we explained in our case summary, the question in this case was whether retention payments made to Port Authority executives after September 11, 2001, should be included in the executives’ final average salaries in calculating their retirement benefits. The Court (Fahey, J.) held that the retention payments should not be counted toward the executives’ retirement and therefore reversed the Third Department’s decision below.
In this case, the Comptroller upheld an administrative finding that the executives’ retention payments were made “in anticipation of retirement” and therefore, under Retirement and Social Security Law (RSSL) § 431, should be excluded from the executives’ salaries in calculating their pensions. In reviewing that determination, the Court first addressed the meaning of “in anticipation of retirement” in RSSL § 431. The Court interpreted the phrase broadly to encompass any salary adjustment made to employees “with the goal of increasing their final average salaries and enhancing their pensions.” The Court rejected an argument that a salary adjustment could not be “in anticipation of retirement” if it was made to delay retirement. What was critical, the Court explained, was whether the adjustment was “designed to boost pension benefits.” And the Court found that substantial evidence supported the Comptroller’s determination that the retention payments in this case were designed to do just that.
Next, the Court rejected petitioners’ argument that exclusion of the payments made in anticipation of their retirement violated Article V, § 7 of the State Constitution. That constitutional provision, the Court explained, barred any law that would impair a vested pension right that existed before the law’s enactment. And there was no vested right to have payments made in anticipation of retirement included in pensionable salary prior to 1971, when the statute prohibiting that practice (RSSL § 431) was enacted.
Return to the case page for Matter of Bohlen v. DiNapoli.