We suspect most people who earn up to $100,000 per year would love to have a pension plan that requires an employee contribution of only between 3 percent and 5.75 percent, allows them to be vested after 10 years and retire at age 63 with full benefits, and lets them receive 55 percent of their average annual salary in retirement after working for 30 years.
Yet, unions throughout New York state have attacked the new Tier VI pension plan, which the governor signed into law last week.
"Make no mistake, Tier 6 is not reform; it is an assault on the long-term economic security of nurses, teachers, firefighters and other workers. When we reduce pension benefits for hard-working men and women, as New Yorkers we diminish our standard of living, we diminish our quality of life and we diminish our expectations for the future. Unfortunately, future retirees will have less economic security as a result of Tier 6," said New York State AFL-CIO President Mario Cilento.
"The state has too few benefits to offer prospective employees now ... this new pension tier means any new hires the state attracts must work harder and longer for a retirement that's significantly less secure than those of their more senior co-workers," said PEF President Ken Brynien.
Naturally, most workers want as much money and benefits as they can get from any employer, especially when taxpayers are footing the bill, so we're not surprised at the unions' responses. The new pension tier, however, takes nothing away from existing public employees and continues to give new employees very competitive benefits.
Gov. Andrew Cuomo says the new tier will save taxpayers more than $80 billion over the next 30 years. His office estimates that over the next 10 years, Fulton County government will save $11 million, Hamilton County will save $1.7 million and Montgomery County will save $8.3 million.
The annual savings may not be huge, but they represent a step forward in getting costs under control. We're sure governments in New York will have no trouble recruiting good, qualified prospective employees under the new pension tier, despite Cilento's assertion they will have "less economic security."