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Pension reduction for future city workers
Legislators give another free pass to Wall Street
by Deidre McFadyen | March 22, 2012 New York Teacher issue
Not enrolled in the pension plan?
Join before Tier 6 arrives on April 1
The window of opportunity to enter the current pension plan will close in a few days. The time to act is now.
Any members who are not now pension plan participants must join the pension system before April 1 in order to be eligible for the current level of benefits.
Paraprofessionals covered by the Teachers’ Retirement System as well as school nurses, occupational therapists, physical therapists, day-to-day substitutes and others who are covered by the Board of Education Retirement System are not automatically enrolled in a pension plan. If these members choose not to enroll in a pension plan, they will have no pension or health benefits when they retire, though they will still be eligible for Social Security and Medicare at age 65.
If you have questions, call the Pension Department’s special helpline at 1-212-701-9600. You can also contact your local UFT borough office on weekdays after 4 p.m.
State lawmakers on March 14 approved a measure to cut the retirement benefits for future public employees, including New York City public school educators, in what UFT President Michael Mulgrew denounced as a maneuver to “penalize future public workers around the state for the mistakes made by Wall Street.”
The new bill has no effect on current employees who now participate in a pension plan or on current UFT retirees. Their pensions are protected under the state constitution. UFT members who are not currently enrolled in a retirement system must hand in their applications by March 30 if they want to receive the current levels of benefits [see box at right].
The pension changes were part of a policy package approved at the end of a tense all-night session in which lawmakers agreed to, among other things, the language of a proposed constitutional amendment to legalize casino gambling and a reconfiguration of the state’s Assembly and Senate districts that will favor incumbents.
The pension deal was the product of an intensive campaign by Gov. Cuomo, Mayor Bloomberg and the state’s business elites to pare back public employee pensions to offset the larger contributions to the pension funds that governments have had to make in recent years in the wake of the 2008 collapse of the stock market.
“The new Tier 6 for future public employees is a victory for the 1 percent,” Mulgrew said. “It’s time for Wall Street to be held responsible for its reckless behavior, which got us into this mess in the first place.”
UFT members were among the tens of thousands of public employees who made phone calls to state lawmakers and signed petitions urging them to say no to Tier 6.
In the end, the Senate voted 32 to 5 in favor of the bill, with most Senate Democrats boycotting the vote. In the Assembly, the vote was 93 to 45 in favor.
The union is now in the process of reassessing its support for every lawmaker who voted for the new pension law. Mulgrew praised the lawmakers who stood their ground and voted against the bill in the face of intense pressure from state legislative leaders and the governor.
Under the new plan, the retirement age will increase to 63. If employees choose to leave before that age, their pensions will be reduced by 6.5 percent for each year they are shy of 63. The annual employee contribution rates will range from 3 to 6 percent, depending on the annual salary of the employee, with higher earners paying more.
State and city officials estimated that the measure will save more than $80 billion for the state and local governments — including $21 billion for New York City — in the next 30 years.
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Total votes: 139