ALBANY \u2014 State lawmakers are looking to roll back pension reforms that cut benefits for public workers hired after 2011 \u2014 adjustments that could help\u00a0attract and retain workers but also increase\u00a0costs for local governments and schools.<\/p>\n
Fast-rising pension costs\u00a0led legislators to create a new, sixth pension tier 14 years ago known as Tier 6, and public workers hired on or after April 1, 2012, as a result receive\u00a0fewer benefits, wait longer to retire and contribute more money.\u00a0<\/p>\n
But now a push is on to turn back some of those changes in an effort to make public sector jobs more attractive, as union leaders say employers struggle to find workers, particularly correction officers, nurses and some teaching positions.\u00a0<\/p>\n
\u201cIt really is a matter of fairness. The Tier 6 people are looking at their future career and wondering if it\u2019s worth it,\u201d said Melinda Person, president of New York State United Teachers, the state\u2019s largest teachers union representing nearly 700,000 members. \u201cPublic service is important\u00a0and pensions should reflect that.\u201d<\/p>\n
WHAT NEWSDAY FOUNDState lawmakers are looking to roll back pension reforms that cut benefits for public workers hired after 2011 \u2014 adjustments that could help\u00a0attract and retain workers but also increase\u00a0costs for local governments and schools.Fast-rising pension costs\u00a0led legislators to create a new\u00a0pension tier 14 years ago known as Tier 6, and public workers hired on or after April 1, 2012, as a result receive\u00a0fewer benefits, wait longer to retire and contribute more money.\u00a0But now a push is on to roll back some of the changes in an effort to make public sector jobs more attractive, as union leaders say employers struggle to find workers, particularly correction\u00a0officers, nurses and some teachers.<\/p>\n
Union leaders said offering more benefits would draw in\u00a0new workers\u00a0and help retain public employees\u00a0including government workers, teachers, firefighters, police and health care workers at public hospitals such as Stony Brook University Hospital and Nassau University Medical Center.\u00a0\u00a0<\/p>\n
Statewide, there are approximately 708,000 members of Tier 6, according to the most recent data from the state comptroller’s office, state Teachers’ Retirement System and the New York City Office of the Actuary. Changes would not generally affect members of the NYPD or FDNY pension funds because new members are generally considered Tier 3, according to the Office of the Actuary.\u00a0<\/p>\n
\u201cFixing Tier 6 is a top priority,\u201d said Mario Cilento, president of the New York State AFL-CIO trade union, which consists of 3,000 local unions from across the state and has 2.5 million members.
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Gov. Kathy Hochul told Newsday conversations about increasing benefits are ongoing. \u201cWe have to do it in a smart way,\u201d she said, acknowledging the cost.<\/p>\n
Possible changes<\/p>\n
What the changes will be is still under discussion but could include reducing employee contribution rates, cutting the number of years workers\u00a0have to pay into the pension system, or lowering the retirement age, according to union leaders and lawmakers.<\/p>\n
Adjustments were not included in Hochul\u2019s $260 billion proposed state budget this year, but could be added as the governor negotiates with Democratic leaders of the State Senate and Assembly who hold a majority in both chambers. The state budget is due by April 1.<\/p>\n
Hochul, members of Congress and all 213 seats in the State Legislature are up for election. Unions historically have been considered valuable allies when it comes to campaign funding and putting boots on the ground.<\/p>\n
“It can’t hurt Democrats at all,”\u00a0said Hank Sheinkopf, a 40-year veteran political strategist.\u00a0<\/p>\n
Fiscal government watchdog groups, however, take issue with a move to add benefits back in, saying adjustments would increase\u00a0employer contribution rates for state and local governments, some health facilities and school districts, and the costs could continue to rise annually.<\/p>\n
\u201cIf the Legislature guts the Tier 6 reforms, the immediate result will be exploding pension costs,\u201d said Ken Girardin, a fellow at the Manhattan Institute, a fiscally conservative think tank. \u201cMost of that cost would hit people in their local taxes. It would be cataclysmic for school districts especially.\u201d<\/p>\n
Girardin estimated that \u201cfixing\u201d Tier 6 would cost taxpayers easily over $100 billion.\u00a0\u201cFrom a financial perspective, this is the single most destructive thing that could hit the governor\u2019s desk,” he said.<\/p>\n
Making jobs attractive<\/p>\n
Historically, there has been a trade-off, with public workers taking maybe a little less in pay than they would in the private sector,\u00a0for better retirement years, Cilento told Newsday. \u201cUnfortunately, Tier 6 kind of peeled that back.\u201d<\/p>\n
Without enough new workers, employees in high-need fields such as nursing\u00a0end up doing significant amounts of overtime, Cilento said, adding that some burn out and leave as a result. And lack of workers impacts the quality of service, union leaders and lawmakers said.<\/p>\n