New York state Comptroller Thomas DiNapoli on Tuesday continued his criticism of 401(k) plans being offered as options to public employees, calling the DC option “woefully inadequate” for people who rely on them for the primary source of retirement income.
Speaking at the National Conference on Public Employee Retirement Systems conference in New York on Tuesday, Mr. DiNapoli said he's glad the New York state Legislature this year did not approve Gov. Andrew Cuomo's proposal to make a 401(k) plan an option for all new public employees along with the state's defined benefit plan.
A bill signed into law by Mr. Cuomo in March allows only new non-union employees earning $75,000 or more per year to choose a 401(k) plan.
“The good news” was that most of the governor's proposal did not make it into law, said Mr. DiNapoli, sole trustee of the $147.2 billion New York State Common Retirement Fund, Albany. “I made no secret of the fact that I thought moving from our current defined benefit to a 401(k)-style defined contribution plan would be a very bad idea,” he said.
Mr. DiNapoli repeated his criticism of “anti-pension advocates” who try to blame public pension plans for damaging state and local budgets and for handing out allegedly inflated payments.
“Another well-worn line of attack on public pension funds — an argument that particularly disturbs me — is that they are bloated with retirees making six-figure pensions,” he said. “The vast majority of retirees in our system are receiving modest benefits.”