www.ny.gov - GOVERNOR PATERSON URGES LEGISLATURE TO PASS TIER V PENSION REFORM LEGISLATION TO PROVIDE RELIEF TO TAXPAYERS

FOR IMMEDIATE RELEASE:
June 3, 2009

GOVERNOR PATERSON URGES LEGISLATURE TO PASS TIER V PENSION REFORM LEGISLATION TO PROVIDE RELIEF TO TAXPAYERS

Vetoes Bill To Provide Temporary Tier II Extension

Governor David A. Paterson today urged the Legislature to enact a new and less costly tier of pension benefits for public employees, which would result in substantial savings of at least $48 billion over the next thirty years for local governments and the State. In addition, the Governor announced today that he has vetoed a bill that has been extended regularly since 1981, which would provide Tier II benefits to all new police officers and firefighters, matching the benefits of current employees at a significant cost to local government.

“We need to change Albany’s culture of ‘business as usual.’ Nothing says ‘business as usual’ like a temporary fix that lasts 28 years,” said Governor Paterson. “Instead of a rubber stamp on a temporary fix, we need to move forward with real reform to the pension system. My Tier V pension reform program bill will substantially reduce costs to local governments and provide much-needed relief to property taxpayers.”

“Police officers and firefighters have earned New York’s gratitude, and they deserve to have strong pension benefits when they retire,” Governor Paterson continued. “That does not mean we should continue enacting legislation that does nothing to fix the present and unaffordable pension system without measures to reduce costs. My proposal addresses the core problems with the pension system in a way that eases the crushing burden of New York’s high property taxes.”

Governor Paterson’s Tier V legislation would:

Give the State and local governments the right to opt into a less costly pension plan for police officers and firefighters. Components of this new optional tier for police officers and firefighters include creating a minimum retirement age of 50 and increasing the minimum years of service required for most individuals to collect a pension from 20 to 25;
Create a new and less costly pension benefit for New York City police and firefighters;
Establish a new, mandatory pension tier for civilian employees that would, among other reforms, reinstate employee contributions after ten years of service, increase the minimum retirement age from 55 to 62, and restrict the use of overtime in pension calculation.

These reforms, in accordance with the New York State Constitution, would only apply to new employees. A Division of the Budget analysis concluded that they will produce savings of at least $48 billion over the next thirty years.

In his veto message for Senate Bill 1409, Governor Paterson indicated that he would be willing to enact legislation similar to the vetoed bill, but only if a lower-cost option for police officer and firefighter pensions, along the lines of his program bill, is provided for the State and localities that choose it. The veto message stated that while this legislation had been routinely extended in the past, “these are not routine times.” In particular, the message noted the recent report of the State Comptroller that the pension system lost 26 percent of its value in the last fiscal year, which will necessitate higher pension costs for the State and localities.