New York Governor Andrew Cuomo introduces pension reform legislation
Source: Office of the Governor
On June 9, 2011 Governor Andrew M. Cuomo introduced pension reform legislation that would impose a new Tier VI for future employees of the State and its political subdivisions other than New York City. Estimated savings of $93 billion over the next 30 years.
On June 9, 2011 Governor Andrew M. Cuomo introduced pension reform legislation that would impose a new Tier VI for future employees of the State and its political subdivisions other than New York City. Estimated savings of $93 billion over the next 30 years.
The bill also includes, at the request of Mayor Michael R. Bloomberg, a separate pension reform proposal for New York City and the uniformed services.
The new pension tier will increase the retirement age for new employees from 62 to 65, increase employee pension contributions and end so-called pension padding where employees accumulate substantial amounts of overtime in their final years of service to increase their pension.
Key elements of the proposed legislation:*
The new pension tier will increase the retirement age for new employees from 62 to 65, increase employee pension contributions and end so-called pension padding where employees accumulate substantial amounts of overtime in their final years of service to increase their pension.
Key elements of the proposed legislation:*
1. Raises the retirement age from 62 to 65
2. Ends early retirement
3. Requires employees to contribute six percent of their salary for the duration of their career
4. Provides 1.67 percent annual pension multiplier
5. Vests after 12 years instead of 10 years
6. Excludes overtime from final average salary
7. Uses a five-year final average salary calculation with an 8 percent anti-spiking cap
8. Excludes wages above the Governor's salary of $179,000 from the final average salary calculation
9. Eliminates lump sum payouts for unused vacation leave from the final average salary calculation
10. Prohibits the use of unused sick leave for additional service credit at retirement
The proposed reform of the state pension system would impact new hires by the state and local governments, including school districts.
The text of the proposed bill is available here.
The text of the proposed bill memo is available here.
* Changes applicable to individuals eligible to elect to participate in the several optional retirement plans available to certain employees of the State Department of Education, the State University of New York and its community colleges and other entities are set out in Sections 25, 26 and 27 of the proposed legislation.