My article in the Post today suggests an alternative to that pension “amortization” bill rejected by the Senate last week.

It closes with these six steps to achieving fiscally responsible pension relief predicated on pension reform:

1) Create a new “tier” of less generous traditional pension benefits for newly hired employees, as Paterson has proposed.

2) Authorize pension fund borrowing only one year at a time and limit the payback period to between five and seven years, with borrowers required to pay the same 8 percent interest rate that the fund needs to earn on its investments.

3) Extend the pension borrowing option only to those government employers who agree to enroll their newly hired workers in a 401(k)-style defined-contribution plan, which is the only sure way to permanently stabilize future retirement costs at a lower cost to the taxpayers in the long run. There’s a model at hand: the retirement-savings programs that already cover tens of thousands of State University and City University employees.

4) Require current public employees across the state to share in the rising costs of their pensions — by freezing their pay, if necessary. (The Legislature has the power to do this in fiscal emergencies, and a tripling of pension costs would surely qualify.)

5) Imitate the New York City actuary and institute a truth-in-accounting requirement to expose the true market costs of public pensions, which are now obscured by lax government accounting standards.

6) Enact all of the above in the same omnibus bill. No reform — no relief.