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Legislators introduce legislation to pay back pensions

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A dozen workers in Jefferson County will be able to count on a state retirement plan if local lawmakers can muster the political might to pass legislation introduced this week.

Assemblywoman Addie J. Russell, D-Theresa, and state Sen. Patricia A. Ritchie, R-Heuvelton, have offered in their respective chambers a bill that would allow 12 workers to receive pension benefits that the state comptroller has moved to revoke.

“Promises were made to them,” said Mrs. Russell, whose bill is co-sponsored by Assemblyman Kenneth D. Blankenbush, R-Black River. “They can’t go back and choose a different career.”

The matter stems from a dispute over the legal status of agencies that help foster job-creating projects, giving out loans and providing a network for businesses. And the legislation comes in the wake of a report from Comptroller Thomas P. DiNapoli over whether those types of agencies are even effective in the first place.

More than 20 years ago, the Jefferson County Industrial Development Agency started creating sub-agencies, called local development corporations. Unlike industrial development agencies — which are, strictly speaking, government bodies — LDCs are private nonprofit corporations. Thus they are able to skirt many of the requirements that local governments face, such as competitive bidding restrictions and loan limits.

But unlike employees of IDAs, employees of LDCs are not government employees, so they are not entitled to the state’s generous retirement benefit plan. The people who worked at LDCs in Jefferson County believed they were actually IDA employees, and also believed they were part of the retirement system — they have the pay stubs for their contributions to prove it, they say.

But Mr. DiNapoli, who oversees the state’s pension system, said they were entered into the pension system in error, and the IDA should have known they couldn’t be part of the system.

Right or wrong, advocates for the employees argue, they have been counting on those pension credits. Lawmakers believe they’ve arrived at a reasonable compromise. The employees will receive a state pension plan when they retire — but they will stop accruing years of benefits, which help boost the amount of their pension checks at the end of their careers, at the end of the year.

Mrs. Ritchie said she’ll work to disabuse her colleagues of the notion that the legislation constitutes a “pension sweetener” — a way of boosting current employees’ pension benefits that are politically unpalatable for the Senate.

“This is not a sweetener,” she said. “The purpose of this is fairness.”

Allowing the employees to continue accruing benefits is meant to give the employees time to figure out some sort of private system, perhaps modeled after a 401(k).

Despite the fairness argument, challenges remain. Mr. DiNapoli issued a report questioning whether the tax breaks that IDAs give to companies actually create the jobs they’re promising. The state also passed a bill that changed the state’s pension system earlier this year, presenting a political minefield for a system that some say is in financial trouble.

Mrs. Russell puts the bill’s chance of passing her chamber at 50/50. To help their case, Mrs. Russell notes that the bill won’t cost the state any more money, a conclusion that the retirement system itself has reached.

The LDCs involved are: the Jefferson County Job Development Corp., the Jefferson County Local Development Corp., the Jefferson County Agricultural Development Corp., the Watertown Industrial Center Local Development Corp., the Watertown Local Development Corp., and the Carthage Industrial Development Corp.

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