2013 Executive Budget Proposal
CSEA Memorandum on PENSIONS
In 2009 public employee pension benefits were reduced by the creation of Tier 5. At that time the public was told taxpayers would save over $35 billion. In 2011, public employee benefits were again reduced and taxpayers were again told they would save over $80 billion. CSEA vigorously opposed the creation of Tier 6 citing the lack of need as it would further punish public employees and would not result in any immediate savings.
New York State has been providing stable reliable pensions for millions of employees at all levels of government. Over those years, both elected leaders and CSEA protected the pension fund from raids and ill-advised schemes that would threaten the integrity of the fund and its ability to provide benefits. This diligence has protected New Yorkers and resulted in having the nation’s best funded pension system.
Comptroller Tom DiNapoli has continually stated that New York’s system is strong, sustainable and remains a rock–solid source of security to one million working and retired members. The Pew Center issued a report two years in a row calling New York one of the best managed pension funds in the country and Governing magazine cited New York as the national pension leader.
Instead of addressing the fact that the 2% tax cap mandated on local governments and school districts was a flawed policy that only yielded political points via the headlines, the executive budget proposes a plan that would allow municipalities and school districts to pay a lower “fixed” rate for pension obligations. This is nothing more than an old school bait and switch. Allowing this type of scheme would jeopardize the integrity of the most secure pension fund in the nation and result in a severe underfunding of pension obligations as happened in Rhode Island, New Jersey, and other states.
Just as Wall Street greed and fraud caused the collapse of the stock market and need for higher employer contributions we can’t allow that same greed to enter the political debate and open the door to a raid on the pension fund.
As our economy recovers, employer contributions will normalize and we will see lower contribution rates. Helping municipalities and school districts reduce costs should not come from dedicated pension funds.