The details aren't clear, but the New York State Legislature passed a pension deal in the middle of the night. (When else? Why should they do something when anybody is actually watching what they do?) The details aren't clear yet, but new workers will pay more for less.
In the interest of disclosure, I am collecting a Tier III pension from New York State. Am I bankrupting the state? No. According to Comptroller DiNapoli, the pension plan for N.Y. State workers is quite solvent. So where is the problem? Apparently local municipalities have offered more than they could afford. Unfortunately, any deal on those also affects all state employees, too, since the state administers all public pensions. I'm not certain I understand this, but apparently it's so.
Actually, I've never been opposed to some pension reform, but it's been my feeling the state and municipal pensions should all have the same rules.
First, the changes I favored:
1.) Increase all pension contributions to 4 percent, no more. It will instead be 3 percent to 6 percent, depending what you make. It will now be possible to get a raise in pay, but a cut in take-home pay.
2.) Collect the contributions during an employee's entire career. For some strange reason the state during the 1990's decided to stop collecting contributions after ten years. This they don't appear to have changed. When I heard this, my response was, "That's nuts!" And it is. However, there's a Yiddish expression that translates, "When they give, take. When they take, scream." So I took. I had no say when they took, so I wasn't going to refuse when they gave.
3.) Raise the retirement age one or two years, at least for white collar workers. This they did.
4.) Limit pensionability of overtime. This they did not do.
What they did that I opposed:
1.) 401(k) pensions. This they didn't impose (hurray), although they made them available to nonunion workers.
2.) Defined contribution plan, whatever that is. I guess that means you know what you're putting in, but don't know what you're getting out. If you sign up for this, I've got a bridge to sell you. It's unclear yet if anyone is getting this.
3.) Different contribution rates for different pay levels. This they did.
So let's look at what they did. Acting like thieves in the night, they raised the contributions for all but the lowest paid employees, but didn't change the length of time of contributions. You can get a raise in pay, and take home less, but they won't, apparently, be collecting after ten years. Someone please explain this.
They raised the retirement age one year, without differentiating between white collar and blue collar (as a court reporter I took expert testimony that the average blue collar worker is not physically able to do his job after age 57 or 58).
They cut what each year of service means, so that the pensions will be smaller, or service noticeably longer.
They did NOT limit pensionability of overtime, allowing people to boost their pensions a lot in their last few years.
But police and fire department pensions are not subject to any part of this deal. While I generally strongly support the police and fire departments, they are among the most expensive pensions, and at least some limitation of pensionability of overtime would have been reasonable.
Lest you think N.Y. State employees are getting wealthy in retirement, according to the New York State Comptroller's office, two-thirds of N.Y. State retirees get less than $20,000 a year in pension. The average New York State pension is $18,000 per year. The average CSEA retiree (the largest state union) gets $14,000 per year. The average figure of $18,000 includes pensions of professionals! You figure what the average grunt is getting!
And what really gripes me about the new figures is that the threshold figures (such as $45,000 for paying more than 3 percent) are set in stone, so that as prices, and salaries rise, those in the lower salaried jobs will pay a higher percentage! This is part of the race to the bottom. And it was done to deal with a problem that's been greatly exaggerated, and without solving some of the structural problems that will still be with us! They have hurt the working class without doing more than nibbling around the edges of the problem.
Governor Cuomo will have to be back asking for more. On this issue, he's wrong, and the legislature is both gutless and stupid! They missed a chance to stand up to him, and yet also have meaningful reform, without shafting the working class. More pain to come.
