While I have no intention of retiring anytime soon, I did show up to the UFT retirement seminar to hear about the retirement process. With the new UFT/DOE contract retiring on June 30th rather than July 1 makes quite a difference. This post will try to explain the difference for retirees and which retirement date is best for them.
Retiring by June 30th:
For those who retire before July, the retiree will get the full retroactive raises and lump sum payouts upfront. First, the retroactive raises will be included in the pension check and most of these retirees should get it by November of this year. Why the delay? the doubling of expected retirements and the recalculating the "Final Average Savings" (FAS) to account for the retroactive pay and $1,000 bonus will probably delay by a month or two the first pensions checks. All the lump sum payments will be sent in one check but no date when this check will be sent to the retiree is available. Probably sometime in the fall. For teachers on maximum it will amount to approximately $36,000. The UFT health and welfare fund will end for these retirees at the end of August.
Retiring in July:
The retroactive pay and lump sum payments will be paid to the retiree as they will be for active members. Despite the union's claim that the people who retire after June 30th will also get their retroactive raises upfront in their pension check, it appears the union is wrong. The City has decided that TRS will recalculate the retiree's FAS as each retroactive raise comes due and therefore, the pension will be adjusted over the life of the contract. The lump sum payments will also be given to the retiree's at the same time as active m,embers. At the maximum teacher salary, it should add up to $54,000. These retirees will have the UFT's health and welfare fund untill the end of September if they retiree in July. For ATRs, its advisable to take the severance package and retire in July since the severance package ios only good between July 3 to August 3.
Terminal Pay:
All retirees who have unused sick leave and don't take terminal leave will be paid one day's pay for every two days of unused sick leave. The sick day payment will be in three equal payments. The first in September, the second in June of 2015, and the last in June 2016.
Hopefully, this helps clear up some of the differences between retiring in June rather than July.