Cuomo Proposes Plan to Slash N.Y. Public Pensions, Labor Furious

New York Governor Andrew Cuomo on June 8 introduced pension reform legislation that aims to tackle what the governor called the state’s “skyrocketing pension burden.” “The numbers speak for themselves – the pension system as we know it is unsustainable,” Governor Cuomo said in a statement.

The proposed reforms aim to raise the retirement age from 62 to 65, end early retirement, require workers to pay more for their pensions, and crack down on the practice of pension “spiking.”

The bill will save $123 billion over the next 30 years, according to its proponents.

New York City Mayor Michael Bloomberg applauded the bill in a statement, saying it “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.” Bloomberg has previously supported major pension reform, aiCIO reported. Cuomo’s June 8 proposal echoed many of the ideas forwarded by Bloomberg during his January 2011 State of the City Address, particularly the move to raise the retirement age to 65.

Organized labor was less receptive. Calling it an “onerous proposal [that] will pick the pockets of front-line public workers,” Civil Service Employees Association president Danny Donohue urged New Yorkers to reject the plan. “The governor’s proposal for a Tier VI pension reform for public employees is more evidence of how out of touch he is with working people and the economic pressures they face every day.”

Cuomo’s plan is decidedly less ambitious than those he had floated in the past, when he spoke of shifting workers from a defined benefit to a defined contribution system.

New York’s state pension system is unique in that it currently enjoys a funding level of 101%, according to a recently released Pew Center on the States report. New York is in a fiscal crisis, however, as pension costs continue to gobble up more and more of the budget. New York’s pension liability is almost $147 billion.