Billions of dollars are at stake in Gov. Andrew Cuomo’s plan to shift new public workers into 401(k)-like individual retirement plans.

The governor says the change would provide taxpayer savings of about $80 billion in the coming decades by shifting the pension risk from the state to the individual public worker.

It will also change one of the bedrock reasons people enter state service: a secure pension at the end of the road.

The advantage to Cuomo’s proposed change, called a defined-contribution plan, is that state taxpayers pay a pension contribution upfront with today’s dollar, but are not responsible for making sure a benefit is there down the road. That is the responsibility of the individual who sinks or swims with investment choices, which are usually in mutual funds.

Under the present system, which some critics say is a taxpayer time bomb due to exploding future liabilities, the state guarantees a defined-benefit, usually a sum paid monthly for life, regardless of stock market or investment performance.

The very thought of moving away from a defined-benefit pension plan for state workers drew immediate condemnation from two key interests: Comptroller Tom DiNapoli, the sole trustee of the pension fund, and public employee unions.

But offering workers the option of a 401(k)-style account is not a new idea in New York state.

Employees of the State University of New York have had the option to create an individual account since 1964.

Sixty percent of the 64-campus system’s 36,000 employees take advantage of the Optional Retirement Program, or ORP, including 58 percent of eligible faculty members, SUNY spokesman David Henahan said.

Outlining his proposal for the state budget last week, Cuomo said the present defined-benefit system is “devastating” local governments, and the ORP has “operated with a lot of success” and could be a model for the larger workforce….

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