New York's deepening fiscal crisis should refocus public attention on the need to reform the city's unsustainably costly package of generous retirement benefits for municipal workers.
With prosecutors in vestigating possible criminal misconduct in former state Comptroller Alan Hevesi's management of New York's $155 billion state pension fund, there's talk in Albany about making fundamental changes in the powers of the comptroller's office.
Eliot Spitzer's first legislative session as governor ended last week with gridlock on some of his top priorities. But while they couldn't agree on campaign-finance and public-construction reform, Assembly Democrats and Senate Republicans were firmly united in their willingness to pander to New York's public-employee unions.
Attacking Albany's complicity in "the unchecked growth of pensions" for New York employees, Mayor Bloomberg last week said it was high time the city gained more direct control of its own retirement benefits.
The soaring cost of New York State's public pension systems can be permanently controlled by shifting to the sort of employer-subsidized individual retirement plans now popular in the private sector, according to an updated study of the state's pension structure by the Empire Center for Public Policy.
The recent enactment of sweeping changes in federal laws governing private pension plans, the issuance of a scathing auditors' report on the collapse of San Diego's pension fund, and the disclosure of potential shortfalls in New York City's pension funds all point to what should be the nation's next big target for financial reform.
Mayor Bloomberg has opened negotiations with the city's largest union by asking for pension concessions like those rejected by transit workers before their walkout in December.
This study shows how greater fairness for New York taxpayers and competitive retirement benefits for government employees can be achieved by switching from the current defined benefit (DB) pension plan to the savings-based defined contribution (DC) model used by the vast majority of private companies.