Future New York City workers wouldn't receive full retirement benefits until age 65, and couldn't count overtime in calculating retirement pay, under proposals by Mayor Michael Bloomberg.
Mr. Bloomberg offered the plan at a meeting Wednesday with the Municipal Labor Committee, made up of the unions that represent the city's 300,000 workers, according to an e-mail from his press office. The changes, some of which the mayor has suggested in the past, have been opposed by union leaders. While the proposal would require state lawmakers to create a new tier of pensions applicable to future workers, current employees would keep their benefits.
Pension costs will amount to about 12% of New York City's $67.5 billion budget for the year beginning July 1, according to the spending plan. Annual costs, now about $7.5 billion, are expected to increase to around $9 billion by 2016, from $1.4 billion in 2002, the mayor has said.
“This would destroy the city employees,” Harry Nespoli, president of the 6,100-member Uniformed Sanitationmen's Association, told the Associated Press.
“This is just an attack on the middle class,” the AP quoted Mr. Nespoli as saying. He said in October he would oppose reduced benefits and the mayor's efforts to eliminate state legislative oversight.
In New York, most employee benefits vest after five years and workers may retire at 57. Teachers with 27 years of service are eligible at 55. The new rules would require all new workers to reach 65 to collect full benefits, the mayor's office said.
Civilians would also have to contribute 5% of their pay. Current employees pay 4.85% for 10 years, then 1.85% for the next 20. Teachers now contribute 4.85% for 27 years, and 1.85% thereafter.
Public workers in Colorado, South Dakota and Minnesota are already suing their states, which are among 18 trying to reduce pension costs by increasing employee contributions, raising the retirement age or curbing cost-of-living increases.
New York Gov. Andrew Cuomo's administration is reviewing the mayor's proposal, Joshua Vlasto, a spokesman, told the New York Times Wednesday.
“As the governor has said since the beginning of his campaign, he is committed to reforming the pension system in order to reduce costs,” Mr. Vlasto said in an e-mail, according to the newspaper.
The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.