PHILADELPHIA (WPVI) — Scores of retired city employees say they are waiting months – in some cases nearly a year – to receive terminal pay and other retirement-related payments, leaving many struggling to cover bills after leaving the workforce.<\/p>\n
Terminal pay includes unused compensatory, sick, vacation and holiday time that is paid out after retirement. For many longtime employees, the payout represents a significant portion of their retirement income. But retirees say the city’s delays have turned what should be a financial cushion into a financial strain.<\/p>\n
Andy Yaletsko, who spent 36 years with the Philadelphia Police Department and rose to sergeant, said both he and his wife, a 33-year veteran who retired from Major Crimes, have faced long waits.<\/p>\n
“We both left the same day, and she’s creeping on 11 months now waiting for her final check,” Yaletsko said.<\/p>\n
Yaletsko said he received his own terminal pay in early May, more than nine months after retiring.<\/p>\n
“When you start getting to that third and fourth month, you start looking at your bills piling up, or the things that you’re just making partial payment on. Then you start making phone calls if you can, if you can get through to somebody,” he said.<\/p>\n
John McGrody, vice president of FOP Lodge 5, said the delays have become a crisis for retirees.<\/p>\n
“It equates to wage theft. It’s nothing short of wage theft,” McGrody said, adding that the union spends about 80 percent of its time helping retirees secure payments. “We’re sick of hearing, ‘We’re working on the issue.'”<\/p>\n
Terminal pay is processed by the Office of the Director of Finance, led by Rob Dubow. He declined a request for an on-camera interview but acknowledged the delays in an email, saying the city’s goal “is to always pay our employees timely and accurately.”<\/p>\n
Dubow said that over the past three years, terminal payments have averaged just over five months, with an average payout of $24,000. He noted that deadlines for issuing payments are governed by individual union contracts, not the city charter.<\/p>\n
Some retirees say those contractual deadlines are not being met.<\/p>\n
“They’re supposed to pay out accrued leave within 30 days. It’s nowhere near 30 days,” McGrody said.<\/p>\n
Dubow said terminal pay is audited by the city, and that the auditing function was recently transferred to his department – a change he said contributed to delays. The department is working to hire staff and create a dedicated three-person unit to handle the more than 1,700 payments issued each year.<\/p>\n
Retired Deputy Fire Chief James Renninger said he also experienced delays with the city’s pension system, including the Deferred Retirement Option Plan, or DROP. The program allows employees to lock in their pension four years before retiring and receive a lump sum payment at the end of that period.<\/p>\n
“My experience was that it took five months to get my DROP. That’s unacceptable,” Renninger said.<\/p>\n
Other retirees, including Yaletsko and his wife, reported similar delays. DROP payments are issued by the Philadelphia Board of Pensions and Retirement, chaired by Dubow.<\/p>\n
“I think employees should be made whole within 30 days. I think that’s reasonable,” Renninger added.<\/p>\n
Some retirees argue that if the city cannot issue payments on time, terminal pay and DROP balances should accrue interest. They say they have lost thousands of dollars they could have earned had the money been invested or placed in interest-bearing accounts.<\/p>\n
“There’s really no remediation at this point. The laws are vague, concerning payouts for pensions,” Renninger said.<\/p>\n
A member of the Pension Board, who asked not to be identified, said some DROP delays stem from former employees not submitting paperwork on time.<\/p>\n
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