Sen. Charles Schumer said Monday he will introduce legislation to end a system that allowed Long Island Rail Road workers to boost their retirement earnings by getting both a regular and a disability pension.
"Allowing LIRR employees to receive both federal occupational disability benefits and their [LIRR] pensions at the same time creates a perverse incentive for fraud," Schumer (D-N.Y.) said in a statement. He referred to the practice as "benefit stacking."
A federal indictment last month lodged criminal charges against 11 people -- including two doctors and seven LIRR workers -- and alleged that the cost to the pension system could reach $1 billion.
The criminal complaint claimed those charged took advantage of an unusual benefit available only to LIRR workers, who are allowed to retire on a partial pension after 20 years at age 50, instead of having to wait until 65 to get a full pension like other workers around the country covered by the U.S. Railroad Retirement Board.
That provision, the complaint said, acted as an incentive for LIRR workers to work heavy overtime before they reach 50 to maximize the pension, and then retire early and try to make up the gap between a partial and full pension with a prearranged disability claim, with help from doctors who provided fake medical narratives.
Schumer said his bill would require that the LIRR pension system offset any benefits a worker got from the federal system.