Entries in Tier 6 (4)
The Governor would create a new pension tier – Tier 6 – for state workers and other public employees with dramatically reduced benefits and increased employee costs. Cloaked in the guise of reform, this proposal is about politics and placating big business special interests, not sound public policy. This bill ignores the landmark Tier 5 pension reform enacted by the legislature less than two years ago which is estimated to save the state and local governments $35 billion over 30 years. We don’t need a new tier to cut costs, just let Tier 5 work as intended!
The Governor’s plan would result in much smaller pensions and a loss of security for workers. It is a first step toward ending secure pensions entirely by introducing a 401K plan that is presented as “optional”, but also cutting pension benefits to the point where a traditional pension is no longer a good option. For most state workers this bill would double the amount that they are required to have taken out of their paychecks. And this tax on workers paychecks could go even higher due to a variable rate formula in the bill. If this formula was in effect today, many state workers would be required to contribute more than 10% of their salary to the pension fund.
Despite press reports to the contrary, public employee pensions are not overly generous. The average benefit for a member of the state and local employee retirement system is $19,151. Pensions are not a gift or a special privilege. They are earned by many years of hard work. The pension system is a long term commitment that must not be abandoned for political gain.
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 has proposed a new pension plan –Tier 6 – that drastically reduces the pensions of state and local government workers.
Proponents of Tier 6 are manipulating a short term budget problem in order to inflict permanent damage on middle class workers such as nurses, parole officers, bridge inspectors, and cancer researchers.
The reality is Tier 6 will have little impact on pension costs in the short-term. This is about politics and placating big business special interests, plain and simple, not the budget crisis. If budget problems were the true motivator, the state would not have given a tax cut to the wealthiest NewYorkers, sacrificing billions of dollars in revenue in the process.