Based on initial reports of Governor Cuomo’s pension deal with the Legislature –no defined-contribution option,* more marginal changes in other benefit levels for traditional defined-benefit pensions– the union reaction is absurdly (if predictably) over the top.  From the Albany Times Union blog:

“It’s gotta be the biggest slap in the face of labor. It’s incredible,” said NYSUT Executive Vice President Andy Pallotta. “The governor has championed this and he wouldn’t let it go, so this is now something where national labor is focused on the Democratic governor of the state of New York.”

“You don’t have to look further than the New York State Capitol to find a governor who is anti-labor,” he said. “We were at the table until they decided to jam us with this.”

“They chose political protection for themselves over retirement security for thousands of working families across the state,” said Brian McDonnell, legislative and political director for the American Federation of State, County and Municipal Employees in New York.

Offering future workers an ironclad, taxpayer-guaranteed, state tax exempt, partially inflation-indexed pension of about 53 60 percent of final average salary at age 63 after 30 years on the job is a choice against “retirement security for working families”?  On what planet?

* There are also reports that the deal may include some sort of defined-contribution plan for non-union employees earning incomes of more than $70,000 or $80,000.  Without details, this is impossible to evaluate.  If it’s the same DC plan Cuomo offered in his original Tier 6 proposal, it’s a bad model.  If it’s more like the SUNY plan, it will be more attractive to the limited number of eligible employees (of which there will not be many, especially if this report is true).

But it won’t change the fact that Tier 6–or whatever they end up calling it–was a big missed opportunity to begin truly transforming the public retirement system in New York, mainly because Cuomo never seriously pushed the DC option that was the sole significant structural change in the plan. Indeed, he seems to have preemptively surrendered it weeks ago — around the same time he began inviting the Legislature to consider how pension benefits might be increased as soon as the economy improved.

Oh, and … tough luck, teachers.  You still don’t won’t have the same retirement plan choice as college professors.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

You may also like

DiNapoli bolsters pension fund stability—and cuts tax-funded costs

DiNapoli announced today that he's approved a recommendation by the State Retirement System Actuary to reduce, from 6.8 percent to 5.9 percent, the assumed rate of return (RoR) on investments by the $268 billion Common Retirement Fund, which underwrites the New York State and Local Employee Retirement System (NYSLERS) and Police and Fire Retirement System (PFRS), of which the comptroller is the sole trustee. Read More

The Gov’s pension

There are several (dozens? hundreds?) of unanswered questions as the fallout from Andrew Cuomo's resignation earlier today continues. Among those are questions related to his pension, some of which can be answered, sort of. Read More

NYSTRS bill to drop again

The New York State Teachers' Retirement System (NYSTRS) will reduce its pension contribution rates for a third consecutive year in 2017-18, even though the pension fund's investment returns came in well below its target rate in fiscal 2016. Read More

The new (old) normal of NY pensions

The Empire State's largest public pension plan still has not fully recovered from the financial crisis and Great Recession of 2008-09, a new report from the state comptroller's office confirms. Read More

DiNapoli’s “slight gains” in context

New York's largest public pension fund earned 2 percent in its first fiscal quarter—which isn't necessarily good or bad news for taxpayers. Read More

NYC pension costs shooting up

Taxpayer-funded pension contributions in New York City will need to increase by a total of $732 million between fiscal years 2018 and 2020 due to the pension funds' paltry investment earnings in the recently concluded 2016 fiscal year, City Comptroller Scott Stringer has just disclosed. Read More

Skelos pension could exceed $95k

Following his conviction on federal corruption charges, former Senator Dean Skelos apparently will qualify for a public pension of up to $95,590 a year. Read More

A losing quarter for NYS pensions

Still betting far too heavily on the stock market, New York State's main state and local government pension fund lost money in the first half of its current fiscal year. Read More

Empire Center Logo Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!