New York Gov. Andrew M. Cuomo on Tuesday renewed his call for pension reform, proposing a new tier of coverage for newly hired public employees that includes a higher retirement age, a lower multiplier for calculating pensions and greater participant contributions.
The request was contained in Mr. Cuomo's 2012-2013 fiscal year state budget, which starts April 1. Changes to the pension system require approval by the state Legislature.
Mr. Cuomo unsuccessfully proposed a similar pension bill for state, local government and school employees in June, during the last legislative session.
“Enacting fair and equitable pension reform is critical to providing state and local governments with fiscal relief over the years to come,” according to the budget, which was posted on the governor's website.
“A Tier 6 pension design proposal applicable to new public employees will reduce pension costs by one-half compared to the existing benefit design,” the budget document said. Tier 6 would “save public employers outside of New York City $83 billion over 30 years, while New York City estimates savings of $30 billion over 30 years.”
New York state's pension system has multiple tiers with different benefits and different requirements for employees depending on when they were hired. Tier 5, for example, covers employees hired after Jan. 1, 2010.
Mr. Cuomo also recommended establishing a defined contribution plan “which would be voluntary for new employees and improve financial planning for public employers,” the budget document said. (Mr. Cuomo's pension bill submitted in June 2011 didn't contain a DC option.)
“The new option would provide a minimum employer contribution of 4% of salary (and) provide for additional employer contributions of up to 3% of salary when matched by the employee,” the document said.