Here is the latest news on District Council 33’s DROP lawsuit against the City: The Pennsylvania Labor Relations Board has upheld its earlier ruling that the City acted illegally by trying to reduce your benefits under the DROP program.
Once again, our legal actions have safeguarded and preserved this valuable program that we fought so hard to get, the DROP program, as it existed before the City’s illegal attempt to cut it. The DROP program remains in place and continues in full effect for District Council 33 members!
This decision applies directly to employees of the City who, since 2011, have entered the DROP or wish to enroll in DROP in the future. We also filed unfair labor practices charges against the Philadelphia Housing Development Corporation and the Philadelphia Parking Authority, challenging the DROP changes as they affect our members working in these agencies.
The PLRB put those charges on hold, pending the ruling it just issued. We are sure the same protections City employees have gotten through these suits will now apply as well to our PHDC and PPA members.
This is a victory for our union, and I am pleased that our efforts to protect our members’ rights have continued to be vindicated. Your right to go into DROP remains in place without the damaging changes City Council enacted that have affected other City employees.
With the court injunction and two PLRB orders, our members’ rights to the DROP – in its original form – are secure. DROP remains in place as a vital benefit to you. Should the City foolishly appeal this decision to the courts, I will continue this fight to preserve this important benefit for you, as I previously promised.
The Deferred Retirement Option Plan, or DROP, is a benefit for District Council 33 members that was negotiated by this administration at the end of the Rendell Administration.
Then Mayor Rendell wanted this benefit only for the police and firefighters, but President Matthews insisted that it should be a benefit for District Council 33 members as well.
DROP was a way for District Council 33 members to plan for retirement by declaring four years ahead of retirement and then freezing their retirement level and stopping their individual contributions to the pension plan. The City’s contractually mandated pension contributions would be put into an interest-bearing escrow account that the member would then receive as a lump sum at the end of the four years, in addition to their reduced pensions.
This was a way for District Council 33 members to earn average six-figure payouts on retirement that was their own money held in escrow. DROP is not, and never was, an additional cost to the taxpayers because it is based on the City’s pension contributions that the member earned and the City would have paid in any case.
The important thing for District Council 33 members to realize is that DROP is not a “bonus” or a “gift”. It is earned by each member and it is your own money.
You will soon receive in the mail new IRS tax forms: Form 1095-B and Form 1095-C.
These are new tax forms related to Obamacare’s health coverage requirement. They show that you have health coverage under the District Council 33 Health & Welfare Plan.
Some members have been told that these forms must be attached to their tax returns this year. This is incorrect.
You may file your tax return before you receive these forms. You do not need to attach or file the forms with your Federal income tax return. You should keep these forms with your tax records.
If you (and your eligible dependents) were enrolled in a health plan for all of 2015, you should check the full-year coverage box on your tax return. No form is needed to prove this at the present time. (In future years, this may change. But these forms do not have to be attached to your tax returns this year).
You should receive a Form 1095-B from the District Council 33 Health & Welfare Fund and a Form 1095-C from the employer in the coming months. Under the Obamacare regulations, these forms will not be sent to you until the end of March, after most of you have filed your tax returns.
For those of you wishing to learn more about these forms, you can find info on the IRS website at:
https://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/Understanding-Your-Form-1095B and https://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/Understanding-Form-1095C.
If you have questions about how to report your health coverage on your tax return, visit the link below and scroll to “How the Forms Relate to Your Tax Return”: https://www.irs.gov/Affordable-Care-Act/Questions-and-Answers-about-Health-Care-Information-Forms-for-Individuals.
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