Cuomo: We Can't Afford The Public Pension System We Have In NY

ALBANY, N.Y. (CBSNewYork/AP)Gov. Andrew Cuomo traveled Monday to the property tax capitol of the nation –Nassau County — and was cheered for pushing a property tax cap.

Raw Audio: Cuomo Details Pension Reform Plan

At a speech given at Hofstra University, Cuomo announced a proposal for a new, less generous pension system for future state, local and school employees that is designed to save taxpayers $93 billion over 30 years, according to two officials briefed on the plan.

“We can’t afford the public pension system that we have in this state. Period. We just can’t afford it,” Cuomo said at Hofstra. “The increase in public pensions has been astronomical [and] what has been driving the taxes…one of the things is the public pensions.”

WCBS 880’s Rich Lamb With Reaction From Mayor Bloomberg

If approved by the Legislature, the proposal would increase the retirement age to 65 for all public employees hired after the law was passed. It would also end early retirement, force employees to pay twice as much toward their pension, and end the “padding” of pensions through overtime pay, sick time and other means.

“There’s a lot of mythology that there are gold-plated retirements out there,” Stephen Madarasz, spokesman for the Civil Service Employees Association union, said Friday. He said the average pension for a CSEA retiree is $14,000 a year.

Madarasz said the governor’s task force that broadly recommended a new tier in March ignores “the shared sacrifice already shouldered by public employees.”

Given already implemented pension-reform plans, “there are no immediate savings to be gained” though another set of reforms, CSEA stated in March.

A set of reforms, known as Tier V, was passed by the Legislature in 2009 under Gov. David Paterson with union leaders’ support. The plan is projected to save $38 billion over the next 30 years.

Cuomo’s Tier VI for public workers outside New York City would:

— Raise the minimum age of retirement to 65. Retirement age is now 62 for most employees and 57 for teachers. Early retirement, now allowed at 55 years old with a 38 percent penalty, would end.

— Require workers to put in 12 years before they qualify for a pension. Employees are now “vested” after 10 years.

— Require new employees to pay twice as much toward their pension plan.

— End the practice of “padding” a pension using overtime pay late in service, unused vacation and certain sick leave.

— Cap pensions for the highest paid state employees — physicians at state teaching hospitals, CEOs of public authorities and utilities among them — based on the governor’s $179,000 salary. Many of those employees earn far more.

— Eliminate a “multiplier” that boosts a pension after 20 years and 25 years of service.

The proposal doesn’t replace the traditional public pension with a 401(k) retirement plan common in the private sector, where employees pay far more or all of the contributions.

The Cuomo administration said government contributions to pensions rose as many as 20 times since 2001 for teachers, government workers, police and firefighters.

Suffolk County Executive Steven Levy, who has led the fight for pension reform among counties, recently said now is the time for governments to trade in pensions for 401(k) plans. He has said generous public pensions are unaffordable to taxpayers.

What do you think of these possible pension changes? Leave a comment below…

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