The state comptroller’s office has confirmed that Schenectady did not make a mistake when it kept Fire Chief Robert Farstad in a less-valuable pension plan.
Mayor Brian U. Stratton had tried to defend his secret deal with Farstad — which would have nearly doubled the chief’s pension — as a matter of fairness to recompense him for the city’s “error.”
But there was no error, according to the state.
“He wasn’t eligible for the E,” said spokesman Mark Johnson, referring to the enhanced pension plan that other firefighters moved into a decade ago.
Every firefighter who had joined the 384-D plan could move to the enhanced plan. In fact, once the city offered the enhanced plan to anyone, it had to offer it to every employee in the D plan, Johnson said.
“The plan had to be offered to all the employees in the 384-D plan. Mr. Farstad never opted into the 384-D plan,” Johnson said.
City Council President Gary McCarthy said the ruling likely will put an end to any talk of paying the state $160,000 to move Farstad into the better pension plan now. Stratton had urged the council to do that on the grounds that the city had made a mistake.
“But if the city didn’t do something [wrong], some of the responsibility shifts back to the chief,” McCarthy said. “This is the consequence of his actions.”
The city was able to move four other ineligible firefighters into the enhanced plan by getting state legislation passed. The legislation had to list them by name and specifically grant special permission for them to switch plans.
Farstad wasn’t included because he didn’t give the city any concessions to cover the cost of moving to the better plan and city officials weren’t willing to cover the cost. The other firefighters were members of the union, which negotiated a series of give-backs to cover the costs of buying into the plan.
Concessions included two years without raises, a reduced schedule of raises for new hires and the elimination of stipends and holiday pay.
Farstad was a member of management and thus not covered by the union.
If he had been in the better plan, he could have retired with at least $8,000 more in his annual pension, getting about $93,000.
But the city would have had to pay the state pension system $160,000 to move Farstad into the better plan just before retirement. City Council members refused on the grounds that it cost too much.
Years later, Stratton agreed to a secret deal in which Farstad could turn in his accumulated vacation and sick leave — which don’t count when calculating a pension — and exchange it for overtime, which enhances pensions. The change would have nearly doubled his pension to $112,000, more than he is getting paid as chief.
Council members were displeased when the deal was uncovered last week and are asking the state pension system to disallow the overtime when it calculates Farstad’s pension. The council may also take the overtime back, since it did not approve the expense.