NYC Pays $20.6 Million Settlement over Nurses’ Pension Dispute

City wrongly denied ‘physically taxing’ status that would have allowed early retirement.

New York City has tentatively agreed to pay $20.6 million to settle a lawsuit filed by the New York State Nurses Association (NYSNA) alleging that more than 1,600 city nurses were improperly denied status that would have permitted them to retire years earlier at full pension.

The settlement is based on a sex discrimination complaint filed with the US Equal Employment Opportunity Commission (EEOC) in 2008 by NYSNA and four NYSNA-represented public sector nurses after the city refused to classify nursing work as “physically taxing.” The classification allows workers to retire early with no reduction in their pensions because their jobs are physically strenuous.

The physically taxing pension rules require the payment of additional pension contributions, but allows employees in either the NYCERS Tier 4 55/25 retirement plan or the NYCERS Tier 4 57/5 retirement plan to retire as early as age 50, assuming the employee has at least 25 years of qualifying service in relevant job titles. The city has the authority to add job titles to the physically taxing list.

“The settlement is a victory for all nurses and a testament to the hard, physically demanding work that nurses do every day for those in need of care in the public hospitals,” Anne Bové, NYSNA board member, and one of the plaintiffs in the case, said in a release.

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In 2004, NYSNA began making repeated requests for nursing job titles to be added to the list of physically taxing occupation titles, but the requests were denied.

In 2008, Bové, three other nurses, and NYSNA filed a formal charge with the EEOC, alleging they were discriminated against on the basis of their gender because registered nurse and midwife titles, typically performed by women, were not on the “physically taxing” list.

The EEOC sided with the nurses, and said that the physical requirements needed to care for patients in public hospitals exposed nurses to rates of injury, illness, and physical strain that are among the highest among all job titles.

More than 1,600 negatively affected nurses will share in the $20.6 million  settlement, based on their age and years of service. Under state law, only nurses who are in the Tier 4 55/25 and 57/5 pension plans are eligible for physically taxing pension rights. Employees in the Tier 4 62/5 or the Tier 6 pension plan that went into effect in April 2012 are excluded by state law, and ineligible to receive money from the settlement.

“Unfairly denying pension benefits to NYSNA nurses was wrong and fixing this wrong was long overdue,” Judith Cutchin, an NYSNA board member, said in a release. “Regardless of our gender or occupation, nurses are as deserving as anyone of equal benefits and respect for the tireless work we do every single day.”

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Rhode Island Pension Fund Returns 8%

State pension outpaces benchmark over the past 10 years.

The $8.3 billion Employees Retirement System of Rhode Island returned 8.03% for the fiscal year ending June 30, ahead of its 7.0% annual target, and its benchmark, which returned 7.5% during the same period.

The fund also outperformed a traditional 60% stock/40% bonds portfolio, which would have earned just 6.25%. The fund also reported three-, five-, and 10-year annualized returns of 6.3%, 7.2%, and 5.8%, respectively, compared to its benchmark’s three-, five-, and 10-year annualized returns of 6.0%, 7.0%, and 5.6%, respectively.

“We have taken our investment strategy back to basics for our members,” General Treasurer Seth Magaziner said in a release, referring to his “Back to Basics” asset allocation plan, which was enacted in 2016. Under the plan, a majority of the pension fund is invested in strategies designed to produce strong returns over time. The growth and income strategies consist mainly of low-fee index funds, while the rest of the portfolio invests in assets designed to protect the pension system against market risks such as inflation and volatility.

Part of the strategy included exiting most hedge funds in favor of more traditional strategies for growth and stability. Over the past 12 months, Magaziner said investments in private equity returned 17.9% and global index funds earned 11.5%, net of fees and expenses.

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As of May 31, the fund’s asset allocation was 54.8% in “growth,” 37.5% in “stability,” and 7.4% in “income.”

The “growth” assets include US equity, international developed equity, private equity, emerging market equity, non-core real estate, and opportunistic private credit.  The “stability” assets include investment-grade fixed income, absolute return, core real estate, long-duration Treasuries, systematic trend following, cash, Treasury inflation protected securities (TIPS), private infrastructure, and natural resources.  And the “income” assets include liquid credit, high-yield infrastructure, private credit, and real estate investment trusts.  

All performance figures are net of fees and expenses.

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