Governor Andrew Cuomo is proposing a new pension “tier” that would raise retirement ages, reduce benefit levels, eliminate overtime spiking and increase employee contributions for state and local workers outside New York City, the Associated Press reports this morning, based on leaks from two unnamed “officials briefed on the plan.”
If the plan is limited to what’s described in the AP story, it’s yet another lost opportunity on the pension reform front in New York. Fifteen months ago, David Paterson gave us Tier 5; the Cuomo proposal, labeled “Tier 6” by AP, sounds more like Tier 5-a, complete with a misleading long-term savings projection.
There’s no mention, for example, of branching into defined-contribution retirement accounts, even at the employee’s option. The problem is that as long as New York sticks with the traditional defined-benefit pension model, it needlessly exposes taxpayers to open-ended financial risk and volatility, with costly consequences.
The reported Tier 6 proposal is the sort of “pension reform” we see from governors (and mayors) who are not really interested in structural, game-changing reform. Which, if that’s the way it turns out with Cuomo’s plan as well, is disappointing.