ALBANY, NY -- Creating jobs and strengthening the middle class is the number one priority of the labor movement. Much of the Governor's budget proposal advances that agenda and we look forward to working with him to that end provided appropriate labor protections are in place.
However, on the issue of Tier 6, we disagree with the contention that the current defined benefit pension is unsustainable. What is unsustainable is a society where each generation of middle class worker retires with less financial security than the one before.
Far too many workers have learned the hard way that a 401k is not the answer to long term economic security. After twenty or thirty years of work, the retirement security of nurses, teachers, firefighters, and others, should not be imperiled by the fluctuations of Wall Street.
This is not about whether or not working men and women have the ability to decide how to successfully invest their retirement savings. As we know, even the wealthiest employ a stable of bankers, accountants, and consultants to manage their retirement accounts.
Now, with a 401k, people of limited means will be forced to pay for financial advisors to hopefully sustain their income through retirement. They will have to add that burden to the cost of rent, utilities, and prescriptions.
We must keep in mind that Tier 6 will not create one job; it will simply hinder progress on our shared goal of turning the economy around.
The labor movement will fight to advance the financial security of workers, both active and retired, as an alternative to continuing the race to the bottom.
We will continue to review all aspects of the budget with our affiliates to identify other areas of interest to our 2.5 million members and are committed to working on their behalf with the Governor and the Legislature in the weeks ahead.
Governor Cuomo proposed a new pension tier for incoming state and city employees in his budget message Jan. 17, setting up a major confrontation with public-employee unions that are still reeling from last year’s arm-twisting state contract negotiations. “We can no longer sustain the current pension system,” he said.
Related: Public pensions are not the enemyWe hear all the time about exorbitant public-sector pensions, which leads many to believe mistakenly that retired nurses, firefighters, teachers and others are wealthy. We don’t hear that the average benefit for a member in the largest plan in New York — the New York State and Local Retirement System — is $19,000 a year, or that 76% of these pensions are less than $30,000 a year.