In our last post we reviewed Section 215 of the New York State General Municipal Law (GML), which is entitled "Purpose". We saw that this section of the statute states that a LOSAP is not guaranteed by the State constitution like the retirement system. The benefits provided by the retirement system are constitutionally guaranteed, which is why the tier system had to be implemented. With each new tier of benefits, newly hired employees were eligible for a different set of benefits than were provided under prior tiers. Ultimately, this section of the law is stating that does not apply to LOSAP.
This appears to be further validated when reading Section 216(3)(e) of the GML, which states in part:
Amending a LOSAP is a well-established procedure, and there is no doubt that a sponsor may amend the program. In most cases, the amendment is intended to improve the benefits provided by a program.
However, the statute also gives the sponsor the ability to abolish the program. The term “abolished” is used only in this section of Article 11-A of the GML, with no other reference or definition. Typically, when a term is not defined specifically in a statute, then the generally accepted definition of the term is then used when interpreting the law. The word “abolish” means is to end the effect of a practice or to annul or destroy the practice. Therefore, it would seem this section of the law gives a municipal sponsor the authority to just "cancel" the plan and stop paying current or promised benefits.
To our knowledge, a LOSAP has never been abolished in this way. That would certainly be unpopular! We are aware of programs that have been "terminated", which will be discussed in a future post.
As usual, if you have questions about the interpretation of the General Municipal Law or this article, we suggest forwarding it to your legal counsel for more guidance.