Opinion Editorial on Pensions
Gov. Cuomo must stand his ground in battle to tame retirement costsEditorial Board
As push comes to shove in Albany on taming the government pension beast, Gov. Cuomo must hold fast on three points:
- No pension reform, no budget.
- No substantial savings on traditional retirement benefits, no pension reform.
- And no 401(k) option, no pension reform.
The ballooning pension tab is draining billions from New York State, New York City, the Metropolitan Transportation Authority and every other government entity across the state.
Left unchecked, the expenses will drive ever higher tax hikes, ever more layoffs of teachers, police officers and firefighters and ever more diminished public services.
As Cuomo declared Tuesday: “It would be irresponsible of me as governor to accept a budget for this state that doesn’t have pension reform.”
Contrary to public employee union propaganda, Cuomo’s proposal would not cut a penny from the pensions of any current worker or retiree. Their benefits are constitutionally untouchable.
His reforms would apply only to future workers — and their retirement benefits, while somewhat smaller than what’s offered today, would be very generous compared with the private sector’s.
Nonuniformed personnel would retire at 65 instead of 62 or 55. Workers would contribute more of their own income toward pensions. Overtime pay would no longer count in calculating their payouts. And their monthly benefits would be about 50% of their final salary instead of 60%.
Also — critically — he’d give future hires the option of joining a defined-contribution plan, like private-sector 401(k) accounts, but better.
Many state and city university employees already have this option, and more than half take it — because it’s a better deal for those who don’t intend to spend their entire careers in one job.
The plan would save taxpayers an estimated $113 billion over the next three decades — making pension reform such a no-brainer that the labor interests are resorting to rank misinformation.
Brazenly, Norman Seabrook of the city correction officers union claims in a radio ad that Cuomo’s proposals would “eliminate our pensions” and “force us to accept a 401(k) plan.” False and false, as Seabrook knows.
Terrified to buck labor in an election year, Assembly Speaker Sheldon Silver and his Democrats omitted pension changes of any sort from their budget counterproposal.
And Senate Republicans under Majority Leader Dean Skelos, while claiming to back reform, gave it only vague lip service in their spending plan.
If lawmakers refuse to pass Cuomo’s spending plan in full — with pension fixes included — the governor has a ready fallback: He can insert the pension overhaul into temporary spending bills necessary to keep the state running.
The pols would be forced to choose between giving their okay and shutting down government — with Cuomo fully prepared to bring the debate to the public.
Properly high stakes for a battle about the fiscal future of New York State.