Gov. Kathy Hochul’s administration has agreed to pension changes expected to cost around $557 million annually affecting over 830,000 public employees statewide, that will also change the retirement age for teachers and lower benefit contribution rates for workers, NY1 has learned.
The budget agreement between Hochul and the state legislature would alter pensions for government workers included in a classification known as “tier 6,” or those hired after April 2012, according to a copy of the deal reviewed by NY1.
What You Need To Know
Gov. Kathy Hochul and state lawmakers reached a deal to change “tier 6” pensions for more than 830,000 public employees statewide, NY1 has learned
The agreement is expected to cost about $557 million annually, including roughly $118 million for the state and $440 million for local governments and school districts
Public school teachers with 30 years of service would be able to retire at age 58 instead of 63 under the proposal
The deal would also lower employee contribution rates and increase overtime caps used to calculate retirement benefits for some workers
Hochul’s proposal is slimmed down compared to a previous measure backed by AFL-CIO President Mario Cilento — one of the chief negotiators of the plan — that would’ve cost a total of $1.5 billion each year, including $249 million to the state and a $1.2 billion combined total to schools and localities.
Instead, the governor and legislature are expected to approve a plan that is estimated to cost the state $118 million each year and $440 million to local governments and school districts. The agreement is different depending on job title.
All public school teachers who hit 30 years of service will be able to retire at 58, instead of the current standard at 63 years old.
The deal is also expected to lower employee contributions to a range of 3%-5.75%, amounting to a $244 million total cost.
The deal would increase a cap on overtime calculated in retirement benefit from 15% to 25% of wages for those in the State Police and Fire Retirement System, and change the overtime retirement cap for other public employees from approximately $22,000 to $30,000.
Unions — in particular the United Federation of Teachers — have argued the changes would help attract and retain workers to the municipal workforce that typically boasts lower salaries compared to private employers but maintain generous retirement benefits.
Local government leaders have opposed the change, arguing it could burden localities already strapped by high costs.