This article was originally published by Politics NY on April 7, 2026: 

As state budget negotiations continue, the Legislature has the opportunity to not only reverse a longtime inequity in public service pensions but also to offer relief to the operating budgets of towns, cities, and the state itself.

Updating the state’s Tier 6 pensions to more closely match the benefits in the older Tier 4 system, particularly by permitting Tier 6 employees to retire earlier with full pensions, would potentially help school districts, cities, and towns save money, since retiring workers are typically replaced by younger employees whose salaries are substantially lower.

In New York City, for example, incoming teachers earn roughly half of what the most senior teachers in the system earn.  The total salary difference between the roughly 2,500 teachers who retire every year and their incoming replacements represents about $200 million in annual savings for the city’s Department of Education.

It’s not just the operating budgets of school systems and other public employers that benefit.  The pension systems themselves can see significant savings.

Take the case of two workers who collect pensions until the age of 85. One who retires at age 55 will collect benefits for 30 years, while one who retires at 63 collects benefits for only 22 years. Yet because of the difference in wages at the time of retirement, the worker who retires at 63 costs the pension funds on average 20 percent more than the one who retires at 55.

Other proposed improvements to Tier 6, including equalizing employee contributions, would address the fact that tens of thousands of Tier 6 employees contribute far more of their salaries to the pension system, take home less money, and still receive smaller pensions than their colleagues in Tier 4.

Budget hawks routinely warn of dire consequences to improvements in public employee pensions, but the truth is that the systems are on sound financial footing. The state’s teacher retirement system is more than 100 percent funded according to strict accounting principles.  New York City’s overall pension funds outperformed their growth assumptions by more than 50 percent in fiscal year 2025.

At the same time, conservative assumptions about both mortality and retirement rates have built fund surpluses in the New York City Teachers' Retirement System and Board of Education Retirement System, according to an independent study published by the consulting firm Milliman, Inc. in 2025.

Tier 6 was created more than a decade ago by then-Gov Andrew Cuomo, relying on the opinions of hedge fund billionaires.  In recent years, the state’s strong economy has produced substantial budget surpluses. Yet at the same time, Tier 6's diminished pension benefits have forced the public to put up with reduced services due to thousands of unfilled public sector jobs in social services, housing, and education in cities and towns across the state.

Because it was the state that created this problem, the state has the primary responsibility to solve it, ensuring that no local government is unfairly burdened.  But it is clear that both the public and the state’s government workers deserve a better deal, bringing the benefits of tens of thousands of workers up to those of their colleagues and making public sector jobs more competitive.

Michael Mulgrew is president of the United Federation of Teachers in New York City.