New York Gov. Andrew Cuomo Wednesday unveiled a pension reform plan that, if enacted, would save the state and localities outside of New York City $93 billion over 30 years.
The initiative would also affect New York City’s retirement system and generate $30 billion for the city over 30 years, according to the Cuomo administration.
The governor’s proposal would create a new benefit tier for new employees that would take effect on July 1.
Changes for new hires include boosting the retirement age to 65 from 62, doubling employee pension contributions to 6% of salaries from 3%, and vesting employees’ pension benefits after 12 years of service rather than 10. In addition, the reform initiative would remove overtime and unused vacation-time payouts when calculating final salaries.
Along with new state employees, the pension changes would affect future school-district and municipal hires. The reforms would also apply to New York City employees, including new teachers, police officers, and firefighters.
“This bill institutes common-sense reforms to bring government benefits more in line with the private sector while still serving our employees and protecting our retirees,” Cuomo said in a statement. “Reducing the skyrocketing pension burden faced by local governments and schools will also help get control of local property taxes that are driving New Yorkers from their homes and from the state.”
In the past decade, retirement contributions for the state and municipalities and school districts outside of New York City have increased to $6.6 billion from $368 million. New York City’s pension payments have increased to $8.4 billion from $1.1 billion during that same period.
“By making sensible pension reforms that won’t impact a single current employee or existing retiree, this legislation will create $30 billion in savings over the next 30 years for the city, which will ensure we can afford the services and workforce that city residents depend on, and provide a secure retirement for municipal employees long into the future,” New York City Michael Bloomberg said in a statement.
