Pension benefits for New York’s public employees are provided through state and city retirement systems that are funded by both employer contributions and employee payroll deductions. This page covers CBC’s work on Tier 6 pension reforms, legislative proposals to expand benefits, the fiscal impact of benefit sweeteners, disability and death benefit enhancements, and the management of public pension fund assets.
This page was created with AICBC Insights uses AI to group, analyze and present data and recommendations from CBC's publications. Always reference the cited sources to verify important details..
The State should reject shifting New York City pension contributions to the future to avoid deferring necessary fiscal obligations.
The State should reject pension sweeteners that increase costs without providing service enhancements.
The State should eliminate reimbursement of the Medicare Income Related Monthly Adjustment Amounts (IRMAA) to high-income retirees to reduce unnecessary benefit expenditures.
Key Data
In March 2026, the CBC reported that Tier 6 pension enhancements enacted in 2022 and 2024 cost State and local governments $438 million annually, while a 2022 estimate to reduce progressive employee contributions exceeded $700 million annually..
In October 2025, the CBC identified eight bills expanding public employee pension eligibility, including one reducing service requirements for Tier 3 Sanitation and Correction members that would cost an additional $5.9 million annually.
In January 2021, the CBC analyzed a proposed early retirement incentive (ERI) for New York City employees, estimating it would cost approximately $110,000 per participant over five years, offsetting 19% of the City's savings from avoided salaries and benefits.
In April 2019, the CBC reported that the MTA contributed $1.4 billion to its six associated pension systems in fiscal year 2016, which was approximately nine times the estimated aggregate contributions of members.
In September 2018, the CBC reported that New York City's cumulative pension liability was estimated at $195.1 billion in fiscal year 2017, which was 71.2% funded, leaving an unfunded liability of $56.2 billion.
New York State should avoid enacting costly Tier 6 pension enhancements, as these changes would increase state and local costs and likely lead to property tax hikes without providing necessary recruitment benefits. These benefit sweeteners should be excluded from the budget to prevent placing an unfunded mandate on local governments and school districts.
Recommendations related to Pension Benefits
The State should reject all benefit sweeteners including enhancements to Tier 6.
Legislators should reject costly, unnecessary Tier 6 pension enhancements that may drive property tax increases or service cuts.
Proposed enhancements to Tier 6 pension benefits threaten to cost the State, local governments, and school districts billions of dollars annually, potentially driving property tax increases or service reductions. Previous enhancements in 2022 and 2024 already cost $438 million annually, while reducing progressive employee contributions could add over $700 million in annual costs.
Recommendations related to Pension Benefits
New York State should not enhance Tier 6 pension benefits.
State leaders should address lower pay and challenging work conditions in hard-to-fill jobs instead of enhancing pension benefits.
Key Data
$438 million
— Annual cost of Tier 6 enhancements from 2022 and 2024 to State and local governments.
$700 million
— Annual cost of a 2022 estimate for just one of the additional proposed changes to reduce progressive employee contributions.
2 percentage points
— Growth in pension contribution rates that triggers an exemption to the State's property tax levy cap.
New York State is urged to veto 17 bills that would increase public costs by expanding pension, disability, and death benefits without providing offsetting savings or enhanced services. These legislative proposals, which include 8 pension-related bills, threaten to increase fiscal burdens on the state and local governments outside of the established budget process.
Recommendations related to Pension Benefits
The Governor should veto the 17 bills because they increase costs to New York State and local governments outside of the budget process without enhancing public services.
The Governor should reject the eight bills that would expand eligibility and/or pension benefits for public employees, as these create additional financial burdens.
The Governor should veto the nine bills that would enhance disability and/or death benefits for public employees, as these also increase public costs without providing offsetting savings.
Policymakers should avoid granting targeted benefit enhancements, as this increases costs and may encourage further expansions that also increase costs to the public.
Key Data
$30.0 million
— Immediate cost of 12 bills with complete fiscal notes.
$18.1 million
— Annual cost thereafter for 12 bills with complete fiscal notes.
$5.9 million
— Annual cost of S6486/A6942, which reduces the length of service requirement for Tier 3 members of the Unformed Sanitation Force and Uniformed Correction Service.
$5.5 million
— First-year cost of S6671/A7360 for past service costs for certain Nassau County corrections officers.
$4.9 million
— First-year cost of S5083/A5898 for an in-service death benefit for retirement-eligible members of NYSLRS employed as State-paid judges.
$4.2 million
— Annual cost of S6640/A6784, which extends the 'death gamble' benefit to Tier 4 and Tier 6 Special Plan transit members of NYCERS.
The 2025 New York City mayoral candidate questionnaire includes inquiries regarding potential reforms to uniformed overtime and pension calculations, such as the exclusion of overtime earnings from pension benefits. The document serves as a solicitation of candidate positions rather than an analysis or recommendation regarding pension policy.
$280 billion is the total number of dollars held by New York City’s five pension funds over which the City Comptroller is custodian and investment adviser. The Comptroller plays a critical role in the City’s fiscal health, integrity, and accountability. In June, New Yorkers will head to the polls to…
New York State's proposed budget includes costly pension sweeteners and proposals to defer New York City pension contributions, which threaten long-term fiscal stability. These measures should be rejected in favor of fiscal discipline, alongside the elimination of benefit reimbursements for high-income retirees.
Recommendations related to Pension Benefits
The State should reject shifting New York City pension contributions to the future to avoid deferring necessary fiscal obligations.
The State should reject pension sweeteners that increase costs without providing service enhancements.
The State should eliminate reimbursement of the Medicare Income Related Monthly Adjustment Amounts (IRMAA) to high-income retirees to reduce unnecessary benefit expenditures.
This year, voters will choose the next New York City Comptroller, who will play a critical role holding the City Administration accountable, managing five pension funds with $280 billion in assets, and partnering in the issuance of billions of dollars of City debt. The Comptroller is important to New York City's fiscal…
New York State is urged to veto 12 bills that would expand pension, disability, and death benefits for public employees, as these measures increase costs outside the established budget process. These legislative proposals carry significant fiscal impacts, with at least $90.1 million in immediate costs and $16.9 million in recurring annual expenses for just eight of the bills.
Recommendations related to Pension Benefits
The Governor should veto S8472-A/A8918-A, which would establish a 20-year retirement plan for regional state park police, environmental conservation officers, forest rangers, and university police officers at a cost of $70.3 million in its first year.
The Governor should veto S6141-B/A6508-B, which would provide additional retirement benefits for Suffolk County correction officers of 1/50th their final average salary each year of creditable service.
The Governor should veto S8408/A9084, which would extend the “death gamble” benefit to retirement-eligible members of the NYSLRS who are employed as correction officers and security hospital treatment assistants.
The Governor should veto S8855/A9646, which would allow current and future employees represented by the United Federation of Teachers (UFT) serving in NYCBERS titles to join or transfer into the New York City Teachers' Retirement System.
The Governor should veto S7567-A/A9143, which would provide an in-service death benefit for retirement-eligible members of the NYSLERS who are employed as State-paid judges or justices of the Unified Court System.
Key Data
$90.1 million
— Estimated immediate cost for eight of the 12 bills.
$16.9 million
— Estimated annual cost for eight of the 12 bills.
$70.3 million
— First-year cost for the bill establishing a 20-year retirement plan for specific police and rangers.
$10.4 million
— First-year cost for the bill extending the "death gamble" benefit to NYSLRS correction officers.
$5.5 million
— First-year cost for the bill providing additional retirement benefits for Suffolk County correction officers.
$4.1 million
— Annual cost for the bill extending the death gamble benefit to transit Tier 4 and Tier 6 Special Plan members.
The proposed change to Tier 6 pension benefits would impose a massive, unfunded mandate on New York City and other localities, costing the state and local governments nearly $400 million annually. This increase in pension contributions for public employees, totaling $320 million in the next year alone, is unnecessary given that current plans are already more generous than most private-sector alternatives.
Recommendations related to Pension Benefits
The proposed change to Tier 6 pension benefits should be rejected.
Key Data
$400 million
— Annual cost to the State and local governments in New York for the proposed Tier 6 pension benefit change.
$320 million
— Increase in pension contributions for public employees next year alone due to the proposed change.
New York State should veto 20 proposed bills that would expand pension, disability, and death benefits for public employees outside of the formal budget process, as these measures lack offsetting savings and increase public costs. These legislative proposals, which include 10 pension-related enhancements, would impose significant immediate and long-term financial burdens on the state and local governments.
Recommendations related to Pension Benefits
The Governor should veto S5027/A5208 and 19 other bills because they enhance benefits and increase costs to New York State and local governments outside of the budget process, without enhancing services or finding offsetting savings.
Policymakers should avoid granting targeted benefit enhancements that not only increase costs but also may encourage further expansions that increase the public’s costs.
Key Data
$50.7 million
— Estimated immediate costs for 14 of the 20 bills.
$30.3 million
— Estimated annual costs for 14 of the 20 bills.
$1 million
— Estimated immediate cost for 6 sweeteners included in the Fiscal Year 2024 Enacted Budget.
$12.2 million
— Estimated annual cost for 6 sweeteners included in the Fiscal Year 2024 Enacted Budget.
$23.4 million
— Estimated immediate past service costs for bill S4972/A5136.
$17.4 million to $22.6 million
— Annual cost increase for bill S6861/A7156.
New York State is urged to veto 20 legislative bills that would increase public costs by expanding pension, disability, and death benefits outside of the formal budget process. These measures, which include 12 pension-related enhancements, often lack complete fiscal notes and threaten to create long-term financial liabilities for the state and local governments.
Recommendations related to Pension Benefits
The Governor should veto the 20 bills that enhance benefits and increase costs to New York State and local governments outside of the budget process.
The Governor should veto the five bills that lack a complete fiscal note, as this is a sufficient basis for rejection regardless of other grounds.
Key Data
$78.6 million
— Immediate estimated costs for 15 of the proposed bills.
$21.0 million
— Annual estimated costs for 15 of the proposed bills.
12
— Number of bills that would enhance pension benefits.
6
— Number of bills that would expand disability or death benefits.
20
— Total number of benefit sweetener bills passed by the Legislature in 2022.
12
— Number of benefit sweetener bills passed by the Legislature in 2018.
New York State should veto 21 bills that would expand pension and disability benefits for public employees, as these measures would increase costs by at least $64.1 million immediately and $7.8 million annually. These legislative proposals bypass standard budget negotiations and collective bargaining processes, creating fiscal burdens without providing additional services to the public.
Recommendations related to Pension Benefits
The Governor should veto S4719A/A1414A, as well as 20 other bills that would enhance pension or disability benefits.
The state should reject these bills because they enhance benefits and increase costs to New York State and local governments outside of budget negotiations and collective bargaining processes.
Policymakers should avoid granting targeted benefit enhancements, as this not only increases costs, but also may encourage further expansions.
Key Data
$64.1 million
— The estimated immediate cost of the 15 bills that have fiscal notes attached.
$7.8 million
— The estimated annual cost thereafter for the 15 bills that have fiscal notes attached.
$48.2 million
— The estimated first-year cost of establishing a 20-year retirement plan for certain State law enforcement positions (S4523/A6457).
$1,270,000
— The one-time past service cost of allowing sheriffs, undersheriffs, deputy sheriffs, and correction officers to be eligible for performance of duty disability benefits due to the intentional or reckless act of a civilian (S6710/A7342).
$930,000
— The one-time past service cost of increasing the in-service death benefit for Suffolk County correction officers in Tiers 3 through 6 (S4441/A7905).
$778,000
— The one-time past service cost of increasing the in-service death benefit for Nassau County correction officers in Tiers 3 through 6 (S4440/A6936).
$250 billion—the assets held by the five pensions funds for which the New York City Comptroller is custodian, administrator, and investment advisor. But that's not the Comptroller's only responsibility. On today's special episode of "What's the [DATA] Point?" with an introduction from Ben and Andrew, listeners will hear CBC's "Comptroller…
The next New York City Comptroller will play a critical role not only in holding the next Administration and agencies accountable, investing and managing five pension funds with $248 billion in assets, and partnering in $13 billion City debt issuance, but also in spotlighting and promoting New York City’s fiscal…
Implementing an early retirement incentive for city employees is a costly strategy that yields lower net savings than relying on natural workforce attrition. The proposed incentive would increase pension costs and provide less financial benefit to the city than allowing employees to leave voluntarily.
Recommendations related to Pension Benefits
In light of the City’s fiscal stress and the availability of other options to balance the budget, the City should reduce its workforce through attrition and not pursue the ERI.
Key Data
$110,000
— Estimated cost to the City per participant over five years for the proposed early retirement incentive.
$1.1 billion
— Estimated cost of the early retirement incentive if 10,000 employees participate and the City follows its current hiring practice.
$3.3 billion
— Projected net savings over five years if 10,000 employees take the early retirement incentive and the City fills one of every three vacancies.
$4.3 billion
— Projected net savings over five years if 10,000 employees leave through normal attrition and one-third of vacancies are filled.
$92,400
— Additional average pension contribution per retiree under Part A of the proposed incentive over five years.
$128,800
— Additional average pension contribution per retiree under Part B of the proposed incentive over five years.
CBC hosted a special panel discussion of prominent fiscal experts who helped New York overcome some of the most dire crises of the past. They provided insights and lessons from past experiences to help us understand and navigate the looming crisis. Stephen Berger Chairman, Odyssey Investment Partners; Former Executive Director,…
The New York State Legislature has passed 18 bills that would expand pension and disability benefits for public employees, carrying a projected first-year cost of at least $71 million. These measures threaten to undermine previous fiscal reforms, and officials are urged to veto the legislation to prevent unnecessary increases in personnel costs.
Recommendations related to Pension Benefits
The Governor should veto all 18 bills passed by the Legislature to enhance pension or disability benefits, as they provide additional benefits without offsetting savings.
The Governor should veto A7620-A/S5903-A, which would cost $5.6 million annually to allow New York City police officers to receive retirement credit for time spent as cadets.
The Governor should veto all 18 bills to send a strong message that past reforms will not be overturned.
Key Data
$71 million
— Projected first-year cost of the 18 bills passed by the Legislature to enhance pension or disability benefits.
$5.6 million
— Annual cost to allow New York City police officers to receive retirement credit for time spent as cadets under bill A7620-A/S5903-A.
$41 million
— First-year cost of bill A4431/S5207, which would establish a 20-year retirement plan for certain state law enforcement positions.
$15.7 million
— First-year cost of bill A7874-A/S5905-A, which would require New York City paraprofessionals to join the Teachers Retirement System.
$2.1 million
— First-year cost to Nassau County of bill A5324/S5133, which would grant enhanced disability benefits to ambulance medical technicians.
$1.5 million
— First-year cost to Nassau County of bill A5021/S3946, which would expand performance of duty disability eligibility for sheriffs and correction officers.
Governor Cuomo should veto 19 proposed bills that would expand pension and disability benefits, as these measures would impose significant long-term costs on taxpayers. These benefit sweeteners include various enhancements to retirement plans and disability payouts that lack adequate funding and fiscal justification.
Recommendations related to Pension Benefits
Governor Cuomo should veto the 19 bills listed in the scorecard because they represent unfunded or costly benefit sweeteners that increase taxpayer burdens.
The state should reject legislation that enhances accidental and performance of duty disability pensions without addressing the long-term fiscal impact.
Policymakers should oppose bills that establish 20-year retirement plans or other pension enhancements that create significant immediate past service costs.
The state should decline to pass legislation that allows retirement credit for New York City Police Department Cadet Program time, as it increases annual costs and net present value liabilities.
The state should reject bills that reduce the normal retirement age or otherwise lower the age requirements for uniformed court officers and peace officers, as these changes increase state-borne costs.
Key Data
$41.100 Million
— Past services and first year costs for establishing a 20-year retirement plan for law enforcement members.
$15.700 Million
— Past services and first year costs for requiring New York City paraprofessionals to join the Teachers' Retirement System.
$5.600 Million
— Past services and first year costs for allowing retirement credit for New York City Police Department Cadet Program time.
$2.760 Million
— Past services and first year costs for allowing Tier 6 uniformed court officers to retire without early age reduction.
$1.520 Million
— Past services and first year costs for allowing Nassau County sheriff and correction officers to receive performance of duty benefits.
$1.400 Million
— Past services and first year costs for enhancing accidental and performance of duty disability pensions for DEC and park police.
The 2019 Benefit Sweetener Scorecard tracks 189 legislative bills, many of which propose costly enhancements to public employee pension benefits, including significant increases in retirement allowances and service credits. These proposed legislative changes carry substantial fiscal implications, with individual bills potentially costing the state and local governments hundreds of millions of dollars in past service and first-year expenses.
Key Data
$942.6 million
— Estimated cost of increasing the base retirement allowance computation for New York State Teachers, State and local police and fire, and New York City retirement systems.
$59.3 million
— Past service and first-year cost of calculating final average salary for elected or appointed judges as the last year's salary.
$57.6 million
— Annual cost of establishing an age 55/25 temporary retirement incentive for certain public employees.
$41.1 million
— Past service and first-year cost of establishing a 20-year retirement plan for members or officers of law enforcement, including DEC and university police officers.
$24.9 million
— Annual cost of calculating pensions for New York City police officers serving 25 or 30 years as if they were detectives or sergeants.
$13.7 million
— First-year cost of increasing spousal retirement benefits cost of living adjustment from 50 percent to 100 percent.
The 2019 Benefit Sweetener Scorecard tracks 189 legislative bills, many of which propose costly enhancements to public employee pension benefits, including significant cost-of-living adjustments and service credit expansions. These proposed pension sweeteners carry substantial fiscal implications, with individual bills reaching costs as high as $942.6 million in present value.
Key Data
$942.6 Million
— The estimated cost for increasing the base retirement allowance for cost of living adjustments for New York State Teachers, State and local police and fire, and New York City retirement systems.
$149 Million
— The immediate past service cost associated with increasing Tier 6 pension benefits from 35% to 40% for service in excess of 20 years.
$30.312 Million
— The total potential present value cost to the State for paying past, present, and future New York City Off-Track Betting Corporation employer contributions.
$30.1 Million
— The present value of benefits for increasing the defined benefit cost of living adjustment for New York State public retirement systems.
The New York State Legislature introduced 189 benefit sweetener bills in 2019, many of which significantly increase pension costs for public employees. These proposed changes include various enhancements to retirement plans, service credits, and benefit calculations that would impose substantial long-term fiscal burdens on the state and participating employers.
Key Data
$942.6 Million
— Estimated cost for increasing the base of computation for retirement allowances for New York State Teachers, police, fire, and New York City retirement systems.
$149 Million
— Immediate past service cost associated with increasing Tier 6 pension benefits from 35% to 40% for service in excess of 20 years.
$59.3 Million
— Annual increase and immediate past service cost for calculating the final average salary for elected or appointed judges as their last year's salary.
The Metropolitan Transportation Authority contributes $1.4 billion annually to its six pension systems, which is nine times the amount contributed by members. To reduce long-term costs, the state should pass legislation to increase new member contribution rates or modify benefit calculations, as these changes cannot be achieved through collective bargaining.
Recommendations related to Pension Benefits
State legislation should be passed to increase new member contribution rates to reduce long-term costs.
State lawmakers should enact changes to benefit calculations for future employees to lower long-term financial obligations.
Management and labor should discuss potential pension reforms as part of the collective bargaining process to secure support for necessary state legislation.
Key Data
$1.4 billion
— Annual contribution by the MTA to its six associated pension systems.
9:1
— Ratio of employer contributions to member contributions across all MTA pension systems.
$161 million
— Total member contributions to MTA pension systems for the fiscal year ending 2016.
$1,407 million
— Total employer contributions to MTA pension systems for the fiscal year ending 2016.
Governor Cuomo vetoed several pieces of legislation that would have increased costs for employee and retiree benefits, including pension enhancements and disability provisions. These vetoed bills represented significant potential financial liabilities for the state and local governments, with some individual measures costing millions of dollars.
Recommendations related to Pension Benefits
The Governor should veto legislation that increases costly employee and retiree benefits to protect the state's fiscal health.
Policymakers should reject bills that expand accidental disability benefits to avoid significant, long-term financial liabilities for taxpayers.
The state should avoid removing limits on overtime pay used for calculating final average salaries in pension plans to prevent escalating retirement costs.
Legislators should refrain from creating new early retirement plans that impose additional past service costs on local governments.
The state should oppose measures that retroactively increase pension benefits for specific employee groups, as these create substantial one-time and ongoing fiscal burdens.
Key Data
$13.20
— One-time past service cost of $13.2 million for enhancing in-service death benefits for State correction officers.
$2.42
— Increased annual contributions of $350,000 and an immediate past service cost of $2.17 million for accidental disability retirement benefits.
$4.70
— Annual costs increasing by approximately $850,000 for removing the limit on overtime pay for calculating final average salary for Tier 6 New York City Transit Authority employees.
$1.50
— Annual costs of $363,000 and a one-time retroactive cost of $1.12 million for allowing uniformed court officers to retire without early age reduction.
New York City's pension funds face a $56.2 billion unfunded liability, requiring significant annual budget contributions that are projected to reach $10.4 billion by fiscal year 2022. To ensure long-term fiscal stability, the city must maintain its current funding schedule while opposing benefit enhancements and reforming costly provisions like overtime inclusion and teacher annuity programs.
Recommendations related to Pension Benefits
The City is on a path to fully funding the pension liability by 2034 and should maintain that commitment.
Enhancements to pension benefits, considered by the State Legislature annually, should be opposed.
The City should advocate for legislative changes that focus on reducing the greatest cost drivers of benefits and risk factors to the funds.
The inclusion of all overtime hours worked in pension calculations for uniformed employees should be amended for new employees.
The City should seek legislation to change the Tax Deferred Annuity provided to teachers and school personnel for all TRS members.
Key Data
$56.2 billion
— Unfunded pension liability at the end of fiscal year 2017.
$195.1 billion
— Cumulative pension liability estimated by the Chief Actuary in fiscal year 2017.
71.2 percent
— Funded portion of the City's pension liability in fiscal year 2017.
$9.9 billion
— Pension contributions in the fiscal year 2019 operating budget.
$10.4 billion
— Projected pension contributions for fiscal year 2022.
In late 2018, the Governor vetoed a series of legislative bills that would have expanded pension and disability benefits for various public employees, preventing millions of dollars in additional taxpayer costs. These vetoed measures included proposals to lower retirement ages, increase accidental disability payouts, and alter the calculation of final average salaries for pension purposes.
Key Data
$13.20 Million
— One-time past service cost associated with the vetoed bill to enhance in-service death benefits for state correction officers.
$2.42 Million
— Increased annual contributions and past service costs associated with the vetoed bill to provide accidental disability retirement for certain law enforcement and environmental conservation staff.
$4.70 Million
— Annual cost increase associated with the vetoed bill to remove the limit on overtime pay when calculating final average salary for certain New York City Transit Authority employees.
$1.50 Million
— Annual and one-time retroactive costs associated with the vetoed bill to allow certain uniformed court officers to retire without early age reduction.
Numerous legislative bills aimed at enhancing pension and disability benefits for various public sector employees were vetoed, including proposals that would have cost the state millions, such as a $13.20 Million one-time past service cost for correction officer death benefits. These proposed enhancements included changes to accidental disability calculations and retirement age requirements for groups such as court officers and police.
Key Data
$13.20 Million
— One-time past service cost for enhancing in-service death benefits for State correction officers.
$2.42 Million
— Increased annual contributions and past service cost for accidental disability retirement for law enforcement and park police.
$4.70 Million
— Annual cost increase for removing the overtime pay limit for Tier 6 New York City Transit Authority employees.
$1.50 Million
— Annual and one-time retroactive costs for allowing Tier 6 court and peace officers to retire without early age reduction.
In 2018, New York State vetoed a series of legislative proposals that would have expanded pension and retirement benefits for various public employees, which would have incurred significant past service and annual costs. These proposed benefit sweeteners included enhancements to disability benefits, death benefits, and early retirement options for groups such as correction officers, police, and court personnel.
Key Data
$13.20 Million
— Past service cost for enhancing the in-service death benefit for State correction officers.
$4.70 Million
— Past service and first-year costs for removing the limit on overtime pay inclusion for Tier 6 New York City Transit Authority employees.
$2.42 Million
— Past service and first-year costs for providing three-quarters accidental disability retirement to law enforcement members in the department of environmental conservation and other agencies.
$1.50 Million
— Past service and first-year costs for allowing Tier 6 uniformed court or peace officers to retire without early age reduction after 30 years of service.
A 2018 scorecard details several legislative bills that were vetoed, which would have expanded pension and disability benefits for various public sector employees, including police, correction officers, and court staff. These proposed benefit enhancements would have incurred significant one-time and recurring costs for state and local governments.
Key Data
$13.2 Million
— One-time past service cost for enhancing the **in-service death benefit** for state correction officers.
$2.42 Million
— Increased annual contributions and past service costs for providing **accidental disability retirement** to law enforcement and forest rangers.
$4.70 Million
— Annual cost increase for removing the limit on **overtime pay** used to calculate final average salary for Tier 6 NYC Transit Authority employees.
$1.50 Million
— Annual and one-time retroactive costs for allowing Tier 6 court officers to retire without **early age reduction**.
17% is the increase in the average bonus paid by Wall Street in 2017, bringing the average bonus to more than $161,000. NYS Comptroller Tom DiNapoli discusses Wall Street, the State and City budgets, State pension funds and more in remarks to CBC and a Q & A with Ben…
The New York City Teachers' Retirement System's Tax Deferred Annuity plan guarantees a 7% investment return, a policy that costs taxpayers $1.2 billion annually and creates significant financial risk by leveraging pension assets. This arrangement should be reformed to align with standard market-based investment options used by other municipal employees to protect the long-term viability of the pension system.
Recommendations related to Pension Benefits
The unique, and uniquely expensive, arrangement for the teachers’ TDA plan should be reformed.
The most direct way to make the change would be to eliminate the TDA and transfer its assets and participants to OLR’s plan.
A more gradual change would be to require only newly hired teachers to use the OLR plan, but to reform the TDA plan serving current teachers and retirees.
The fixed income option should be converted to choices comparable to those offered in the OLR plan – a government bond fund and a corporate bond fund with returns based on prevailing interest rates.
If the city’s elected leaders and taxpayers want to provide teachers, and other municipal employees, with a more secure investment option for their deferred compensation than is available in the OLR plans, they should consider the approach used by the federal government.
Key Data
$1.2 billion
— Annual cost to New York City taxpayers for the guaranteed 7% return on the TDA fixed fund.
$18.7 billion
— Amount of money in the fixed fund in 2015.
$7.4 billion
— Amount of money in the fixed fund in 2007.
36 percent
— Taxpayer subsidy in 2015 as a percentage of the total taxpayer contribution to the TRS QPP.
42 percent
— Leveraging of TDA funds in 2015.
$4.5 billion
— Potential loss on investments on behalf of TDA plan participants if the market declined by 24.3 percent.
New York City taxpayers contribute over $1 billion annually to union-administered benefit funds, which often suffer from excessive administrative costs, unnecessary reserves, and mismanagement. Consolidating these supplemental benefits and strengthening oversight could save the City more than $160 million while improving the quality of benefits provided to members.
Recommendations related to Pension Benefits
The Office of the Comptroller should give higher priority to auditing benefit funds based on risk factors including excessive administrative expenses, unnecessary reserves, or inadequate reserves.
The City should develop benchmarks and indicators for benefit funds that can trigger enforcement powers.
The Office of Labor Relations, in negotiation with labor unions, should expand the Comptroller’s oversight and enforcement authority over union-administered benefit funds, including the ability to sanction funds and remove officials.
The City should consolidate the provision of supplemental health benefits (prescription drug, dental, and optical) within the City’s health insurance program.
The City should provide non-health related benefits through a centralized cafeteria plan to allow benefits to be tailored to an individual rather than an entire union.
Key Data
$1.1 billion
— Projected taxpayer contribution to 108 union-administered benefit funds in fiscal year 2018.
$160 million
— Potential annual savings for the City from restructuring how supplemental benefits are provided.
$9.6 billion
— Projected City contribution to five defined-benefit pension funds in fiscal year 2018.
$109.3 million
— Administrative expenses spent by 91 benefit funds in fiscal year 2014.
$7.2 billion
— Total net assets of 27 annuity funds in fiscal year 2014.
The 2017 Benefit Sweetener Scorecard tracks numerous legislative proposals that would expand pension and disability benefits for various public sector employees, often resulting in significant long-term costs for the state and local governments. These proposed benefit enhancements, ranging from retirement age adjustments to changes in final average salary calculations, carry substantial fiscal implications, with some individual bills projected to cost tens of millions of dollars.
Key Data
$48.9 Million
— The estimated cost for a bill increasing the final average salary calculation for justices and judges within the New York State unified court system.
$36.5 Million
— The projected cost for a special 20-year retirement plan for Department of Environmental Conservation officers, forest rangers, and university police officers.
$29 Million
— The annual cost for a temporary retirement incentive that waives early retirement reductions for enrollees with 25 years of service.
$28.1 Million
— The annual cost increase associated with modifying the member contribution rate for Tier 6 Transit Authority members.
$16.8 Million
— The projected cost for a bill allowing NYPD officers with 25 years of service to have their pensions calculated as if they were third-grade detectives.
$14.7 Million
— The recurring annual cost associated with automating enrollment for the New York City Teachers Retirement System.
New York State is considering numerous legislative bills that would expand retirement, disability, and death benefits for various public employees, which would erode the fiscal savings achieved by the Tier 6 pension reforms. These proposed benefit enhancements, many lacking fiscal notes, would impose significant past service and annual costs on state and local governments.
Recommendations related to Pension Benefits
The Governor should veto A711B/S1411B, which provides an expensive enhancement to volunteer firefighter benefits.
The Governor should veto the 15 other bills passed by the legislature that provide expensive enhancements to government employee and retiree benefits.
The Governor should veto all proposed benefit expansions to preserve the fiscal restraint sought over the last six and a half years.
The Governor should veto these bills to avoid eroding the savings that New York State and its localities experience from the implementation of Tier 6.
Key Data
$13.7 million
— Past service costs associated with enhancing death benefits for State correction officers who are retirement eligible but die before retiring.
$8.9 million
— Immediate past-service cost for providing a special accidental death benefit for uniformed New York City sanitation employees.
$6.8 million
— Annual cost to New York City for providing a special accidental death benefit for uniformed New York City sanitation employees.
$1.75 million
— Immediate past service cost for increasing disability benefits for various ambulance medical technician titles within Nassau County.
$1.15 million
— Past-service costs for increasing disability payments for Nassau County sheriffs, deputy sheriffs, under sheriffs, and correction officers injured by a civilian.
$394,000
— Past service costs for allowing Tier 6 uniformed court officers and peace officers to retire early.
Uniformed overtime spending in New York City has risen sharply, with fringe benefits like pensions exceeding 65% of base pay for uniformed workers. To address these fiscal challenges, policy changes such as capping or eliminating overtime earnings in final average salary calculations for pensions have been proposed.
Recommendations related to Pension Benefits
Capping or eliminating overtime earnings in calculating final average salary for pensions.
Key Data
65%
— Fringe benefits, including pensions, exceed 65% of base pay for uniformed workers.
The 2016 Benefit Sweetener Scorecard identifies over 60 active legislative bills that could impose significant annual costs on state and local governments. Because approximately half of these proposals lack a specified fiscal impact, the total financial burden on taxpayers could be substantially higher than currently estimated.
Key Data
60
— bills active this session identified in the 2016 Benefit Sweetener Scorecard
New York State should veto ten proposed legislative bills that would expand government employee and retiree benefits, as these measures threaten fiscal restraint and erode savings from recent pension reforms. These benefit enhancements, which include early retirement plans and increased disability payments, would impose significant additional costs on state and local taxpayers.
Recommendations related to Pension Benefits
The Governor should veto A9702/S7023, which would eliminate required employee contributions in the New York State Retirement System and the Local Police and Fire Retirement System.
The Governor should veto A6612b/S4001b, which would allow counties to offer correction officers and deputy sheriffs a pension equal to 50 percent of salary after 20 years of service.
The Governor should veto A9440/S6936, which would allow State Court peace officers to retire after 30 years of service if they are at least 55 years old.
The Governor should veto A5133c/S1000d, which would increase payments for total disability benefits to $600 from $400 per week for volunteer firefighters and ambulance drivers.
The Governor should veto A7146a/S5012a, which would extend the deadline to file for accidental disability retirement benefits from two to five years for firefighters.
The Governor should veto A7784/S5762, which would provide cash and medical benefits for State parole officers injured in the line of duty equal to full salary.
The Governor should veto A10030/S7216a, which would expand the presumption that a medical condition was caused by public sector employment to include heart disease for certain officers.
The Governor should veto A10614/S8071, which would expand the presumption that a medical condition was caused by public sector employment to include heart disease, lung disease, and cancer for uniformed officers.
The Governor should veto A10003/S7386, which would eliminate restrictions on transferring between New York City public retirement systems.
The Governor should veto A10369a/S7174b, which would allow certain members of the New York State Retirement System to opt out of Tier 3 and into Tier 5.
Key Data
6.6%
— The amount of salaries shifted from employees to state and local taxpayers under A9702/S7023.
7%
— The maximum cost to counties in salaries for the enriched benefits proposed in A6612b/S4001b.
$100,000
— The first-year cost of A9440/S6936 allowing State Court peace officers to retire after 30 years of service.
$600
— The proposed increased weekly payment for total disability benefits for volunteer firefighters and ambulance drivers under A5133c/S1000d.
$244,000
— The cost for the individual known to be impacted by A7146a/S5012a, which extends the disability filing deadline.
$25,000
— The annual cost of A10614/S8071, which expands medical condition presumptions for uniformed officers.
The State Legislature has passed ten bills that provide expensive benefit enhancements to public sector workers and retirees without improving services for taxpayers. The Governor should veto this legislation to avoid the associated costs and lack of service improvements.
Recommendations related to Pension Benefits
The Governor should veto the legislation that provides expensive benefit enhancements to public sector workers and retirees.
Key Data
$6.1 million
— The 2017 cost of the bill increasing disability payments for New York City firefighters.
$12.6 million
— The annual cost by 2021 of the bill increasing disability payments for New York City firefighters.
75%
— The current maximum disability benefit percentage for state police and correction officers.
20-year
— The special retirement plan offered to correction officers and deputy sheriffs.
30 years
— The amount of creditable service required for uniformed court or peace officers to retire without early age pension reduction.
63 to 62
— The reduction in the normal retirement age for uniformed court or peace officers.
The State Legislature has introduced eight new bills aimed at enhancing public employee and retiree benefits, adding to a list of over 60 similar proposals. These specific legislative efforts include significant increases in disability benefit calculations and associated costs for the City of New York, potentially adding millions to annual pension contributions.
Key Data
8
— new bills introduced by the State Legislature to enhance the benefits of State and local public employees and retirees.
60
— additional bills introduced to date regarding benefit sweeteners.
$4.7 million
— cost to the City in 2017 for the proposed firefighter disability benefit plan.
$8.3 million
— cost to the City in 2021 for the proposed firefighter disability benefit plan.
$27 million
— increase in New York City pension contributions in 2017 for the proposed police officer disability benefit proposal.
$40 million
— increase in New York City pension contributions in 2021 for the proposed police officer disability benefit proposal.
Numerous legislative proposals in New York aim to expand public employee benefits, including pension enhancements, disability payments, and early retirement plans, which could cost state and local governments hundreds of millions of dollars annually. These measures threaten to reverse previous fiscal reforms and impose significant financial burdens on taxpayers without providing improved public services.
Recommendations related to Pension Benefits
The legislature should reject the bills detailed in the scorecard because they would impose expensive mandates on New York State and local governments without improving services for taxpayers.
Policymakers should maintain hard-fought reforms that yield significant savings rather than adopting proposals to enhance expensive employee benefits.
Key Data
$21 billion
— Projected savings from reforms to New York City police and fire employee disability benefits over 30 years.
$46 million
— First-year cost of a bill allowing judges to use their most recent annual salary rather than a 36-month average to calculate pension amounts.
$21 million
— Annual cost to the New York City Transit Authority of a bill reducing employee contribution rates for the 25-year/55-age early retirement plan.
$36 million
— First-year cost of a bill enhancing in-service death benefits for retirement-eligible State correction officers.
$16 million
— Annual cost to New York City of providing variable supplement fund payments to law enforcement and fire officers who retired between 1968 and 1987.
$3 million
— Retroactive payment cost of a bill allowing certain State Department of Corrections and Community Service superintendents to return to the traditional pension plan.
Proposed legislation regarding disability benefits for uniformed employees in New York City would significantly increase pension costs, with some bills requiring hundreds of millions of dollars in additional actuarial contributions. These legislative changes aim to restore prior benefit levels and add new injury presumptions for police, fire, sanitation, and correction personnel.
Key Data
$39.1 Million
— FY2015 budget increase associated with the disability benefit provisions in bill S5656.
$889.3 Million
— Actuarial present value of NYC contributions through FY2019 for the disability benefit provisions in bill S5656.
$35.7 Million
— FY2015 budget increase associated with the disability benefit provisions in bill A5295 for police uniformed employees.
$622.9 Million
— Actuarial present value of NYC contributions through FY2019 for the disability benefit provisions in bill A5295.
$37.8 Million
— FY2015 budget increase associated with the disability benefit provisions in bill A6046/S4269.
$850.2 Million
— Actuarial present value of NYC contributions through FY2019 for the disability benefit provisions in bill A6046/S4269.
New York school districts face significant budget constraints as the cost of instructional employee benefits, including pensions, has grown at an annual rate of 9.4 percent, far outpacing salary growth. These rising benefit costs consume an increasing share of school budgets, limiting the funds available for investments in student learning and educational quality.
Recommendations related to Pension Benefits
The State Legislature should include employee benefits in the conversation regarding its role in public education.
High growth rates of benefits must be curbed so that schools can fund investments essential to improving quality and outcomes for students.
Key Data
22 percent
— New York schools on average allocated 22 percent of their 2013 budgets to instructional staff fringe benefits, compared to a national average of 15 percent.
$4,412
— Instructional staff fringe benefits totaled $4,412 per student for the average New York school district in 2013, nearly triple the national average of $1,609.
9.4 percent
— Instructional employee benefits increased 9.4 percent annually from 2003 to 2013.
$8,359
— New York schools spent an average of $8,359 per student on instructional salaries and wages, nearly double the national average of $4,305.
The recent state legislative agreement successfully avoided misguided proposals that would have rolled back sensible reforms to pension benefits for New York City's uniformed workforce. This outcome preserves existing pension structures, preventing a potential reversal of established fiscal policies regarding public employee retirement benefits.
New York State legislators have introduced over 50 bills that would expand public employee benefits, potentially increasing taxpayer costs by at least $140 million annually. These proposals, which include enhancements to disability, death, and retirement benefits, threaten to undermine the fiscal stability achieved by pension reforms enacted in 2012.
Recommendations related to Pension Benefits
The legislative proposals detailed in the scorecard should be rejected because they would add to already costly pension expenses for the State and for local governments and would erode the landmark reforms enacted in 2012.
It is important that the bills enhancing pension benefits do not advance to the Governor’s desk.
Key Data
$140 million
— The collective increase in annual costs to New York taxpayers if the proposed benefit bills are enacted.
$40 million
— The first-year cost of proposal A.8032/S.5656, which improves disability benefits for recently hired employees.
$11.5 million
— The first-year cost of the revised disability pension proposal for New York City’s uniformed employees, A. 7854B/S. 5705B.
$13.9 million
— The cost of bill A. 7801A/S. 5936, which would enhance death benefits for State correction officers.
$14 million
— The cost of bill A.5596/S.4644, which would allow certain retirees to be reinstated in earlier pension tiers.
3.2% to 6.8%
— The increase in employer costs resulting from the enhancement of retirement plans for certain State and local police and firefighters under A. 7490/S. 3010.
Proposed legislation in New York aims to expand disability benefits for uniformed employees by restoring previous cost-of-living adjustments and altering how final average salaries are calculated. These changes would result in significant long-term costs, with some individual bills projected to increase the actuarial present value of city contributions by hundreds of millions of dollars.
Key Data
$39.1 Million
— The FY2015 budget increase associated with bill S5656, which includes improved disability benefit provisions for sanitation and correction uniformed employees.
$889.3 Million
— The actuarial present value of NYC contributions through FY2019 for bill S5656.
$37.8 Million
— The FY2015 budget increase associated with bill A6046/S4269, which grants disability benefits to Tier 3/6 police and fire uniformed employees.
$850.2 Million
— The actuarial present value of NYC contributions through FY2019 for bill A6046/S4269.
$35.7 Million
— The FY2015 budget increase associated with bill A5295, which modifies disability benefit calculations for Tier 3/6 police uniformed employees.
$622.9 Million
— The actuarial present value of NYC contributions through FY2019 for bill A5295.
NY1 When it comes to police and firefighters, Governor Andrew Cuomo wants to roll back part of the pension reform he helped push through the state legislature in 2012.
New York State's practice of borrowing from public employee pension funds to cover budget gaps creates long-term fiscal risks and interest costs, despite the state's current strong financial position. Instead of continuing these deferrals, the state should utilize its recent $5.4 billion windfall from bank settlements to pay down existing pension debt and restore the funds' full health.
Recommendations related to Pension Benefits
The State should end the practice of borrowing from pension funds and use available bank settlement funds to reduce the outstanding liability from $2.5 billion in past borrowings.
The State’s first commitment should be to do no more harm and reverse the planned $713 million pension borrowing for this year and the proposed $395 million deferral next year.
A portion of the State’s $5.4 billion windfall from bank settlements should be allocated to early repayment of prior-year amortizations.
Key Data
$1.8 billion
— The amount of additional borrowing from public employee pension funds proposed in the Executive Budget.
$713 million
— The amount of pension payments the State will defer in the current fiscal year.
$1.6 billion
— The projected reduction in total pension fund assets by fiscal year 2030 due to lower investment returns from deferred payments.
$5.4 billion
— The amount of unexpected revenue received from bank settlements with financial firms.
$780 million
— The total interest costs the State will incur under the Executive Budget proposal for pension borrowing.
$2.5 billion
— The outstanding liability from past pension borrowings that the State should reduce.
The fiscal year 2016 Executive Budget proposes an additional $395 million in pension payment deferrals, compounding the $3.2 billion in required contributions already deferred since the recession. These deferrals, which must be repaid with interest over a 10-year period, are criticized as unwise, and the state is urged to cease further borrowing and repay all outstanding pension liabilities.
Recommendations related to Pension Benefits
The State should cease the practice of deferring required contributions to state employee pension funds, as further deferral of pension payments is unwise and unwarranted.
The State should prioritize fiscal responsibility by ensuring that all outstanding pension liabilities are repaid.
Key Data
$3.2 billion
— Amount of required contributions to state employee pension funds that the State will have deferred by the end of the current fiscal year.
$395 million
— Amount of additional borrowing in required pension payments proposed in the fiscal year 2016 Executive Budget.
10-year
— Period over which deferred pension payments must be repaid with interest.
New York City's Variable Supplement Fund payments, often called "Christmas bonuses," provide $12,000 annual checks to thousands of retired uniformed officers, costing the city $500 million in 2014 alone. These payments, which are not constitutionally protected, drain investment returns from the city's pension funds and hinder efforts to fully fund the system, prompting calls for their elimination to reduce taxpayer burdens.
Recommendations related to Pension Benefits
Phasing out or eliminating the VSF should be part of the Mayor and City Council’s agenda in Albany next year.
Gradually eliminating these unusual pension bonuses for retirees would enhance the fiscal condition of the pension funds and reduce the needed contributions from taxpayers.
Key Data
$500 million
— Total cost of Variable Supplement Fund payments made to eligible retirees in 2014.
$12,000
— Annual check amount provided to retired New York City police, fire, and correction officers.
$2.9 billion
— Transfer from the pension funds to the Variable Supplement Funds in fiscal year 2014.
17.5 percent
— Combined return on the pension system's $150.3 billion in investments in fiscal year 2014.
$2.5 billion
— Amount transferred from the police pension fund to the police officers’ and police superiors’ Variable Supplement Funds in fiscal year 2014.
11.3 percent
— Portion of the fiscal year 2015 budget dedicated to pension contributions.
Five legislative bills currently awaiting action would reverse significant 2012 pension reforms by expanding benefits and increasing costs for state and local governments. These measures include proposals to transfer police officers to more expensive retirement systems, automatically enroll members in costlier plans, and increase disability pension payouts.
Recommendations related to Pension Benefits
The Governor should veto A7862/S5644, which would transfer SUNY police officers from the New York State and Local Employees Retirement System to the Police and Fire Retirement System, generating a one-time cost of $10 million and new annual obligations of $1 million for the State.
The Governor should veto A9162/S7716, which would allow Tier III and V police and firefighters to join an optional 20-year retirement plan without any employee contributions.
The Governor should veto A9392/S7120, which would automatically enroll members of the Police and Fire Retirement System in the more expensive, optional 20-year plan.
The Governor should veto A8160/S5153, which would increase disability pensions for Suffolk County probation officers from one-third to one-half of final average salary.
The Governor should veto A9051/S6810, which would provide new disability pensions of 75% for certain classes of ambulance personnel in Nassau County.
Key Data
$10 million
— One-time cost for the State generated by transferring SUNY police officers to the Police and Fire Retirement System.
$1 million
— New annual obligations for the State generated by transferring SUNY police officers to the Police and Fire Retirement System.
$218,000
— Annual cost to Suffolk County for increasing disability pensions for probation officers.
$1 million
— Upfront cost to Suffolk County for increasing disability pensions for probation officers.
$170,000
— Annual cost for providing new disability pensions of 75% for certain classes of ambulance personnel in Nassau County.
A widespread fraud scheme involving Long Island Rail Road retirees and false disability claims cost the Railroad Retirement Board over $1 billion, with systemic issues in the approval process persisting even after the fraud was uncovered. Despite these revelations, federal audits indicate that the Railroad Retirement Board has failed to implement sufficient oversight, with 96 percent of reviewed claims still being approved.
Recommendations related to Pension Benefits
The Railroad Retirement Board should use better earnings data to monitor the income of disability beneficiaries.
The Railroad Retirement Board must conduct a supervisory review of all disability claims to ensure sufficient supporting documentation.
The Railroad Retirement Board should develop a quality assurance review for the disability determination process to improve oversight.
The Railroad Retirement Board needs to develop performance goals to better manage the disability program.
The Railroad Retirement Board should establish procedures to identify and to address potential fraud within the disability program.
Key Data
1,500
— Number of retirees involved in the conspiracy to submit false disability claims from the late 1990s through 2008.
$1 billion
— Estimated total cost to the Railroad Retirement Board if all false disability claims were paid in full.
$400 million
— Amount those found guilty of fraud have been ordered to pay in restitution and forfeiture.
96 percent
— Percentage of reviewed claims from LIRR employees that were approved in March 2013, indicating systemic problems.
$10,500
— Maximum amount disabled beneficiaries are legally permitted to earn annually.
New York should use a portion of its $4 billion in legal settlements to address its long-term financial liabilities, specifically by fully funding its pension obligations. By investing $2.8 billion to restore pension funds, the state could save approximately $500 million in interest expenses over the next decade.
Recommendations related to Pension Benefits
The state should prioritize making the funds whole for the borrowed amount regarding its pension obligations to improve its record of adequate funding.
New York should consider establishing a retiree health insurance trust fund similar to the one maintained by New York City to help improve the looming fiscal crunch represented by the state's estimated $66.5 billion OPEB liability.
Key Data
$2.8 billion
— The amount required to make the state's pension funds whole for the borrowed amount.
$500 million
— The amount of interest expense the state would save over the next 10 years by making pension funds whole.
$66.5 billion
— New York's estimated other-post-employment-benefit (OPEB) liability for retirees' future health insurance.
The 2014 legislative session saw numerous proposals for pension benefit enhancements, which would have imposed significant long-term fiscal burdens on the state and local governments. These 'sweetener' bills, ranging from disability pension increases to service credit expansions, carried estimated costs totaling over $1.8 billion.
Key Data
$1,699 million
— Total estimated costs to the State for the 2014 benefit sweetener bills.
$116 million
— Total estimated costs to local governments for the 2014 benefit sweetener bills.
$1.1 billion
— Past service cost associated with Bill 4890, which would replace the current benefit of 1.5% of final average salary with 2.0% for certain members.
$617.9 million
— Increase in the Actuarial Present Value of benefits in fiscal year 2019 for Bill 9594, which conforms disability retirement benefits for New York City Tier III police members.
$374 million
— One-time costs for Bill 5324, which allows members of Tiers III and IV one month of additional service credit for each year of service after 10 years.
$110 million
— One-time cost for Bill 4920, which allows Tier I and II employees to include up to 30 days of unused accumulated vacation time in the calculation of their final average salaries.
The 2014 legislative session featured numerous proposals for benefit sweeteners that would increase pension and disability costs for state and local governments, with total estimated state costs reaching $1.699 billion. These legislative efforts included significant enhancements to retirement formulas and disability benefits for various public employee groups, creating substantial long-term financial obligations.
Key Data
$1.1 Billion
— Past service cost associated with the proposal to replace the current benefit of 1.5% of final average salary for each year of service credit in excess of 30 years with 2.0% benefit for Tier III, IV and V members.
$617.9 Million
— Increase in the Actuarial Present Value of benefits in fiscal year 2019 resulting from the proposal to conform Ordinary Disability Retirement and Accidental Disability Retirement benefits for New York City Tier III police members.
$374 Million
— One-time costs for NYSERS associated with the proposal to allow members of Tiers III and IV one month of additional service credit for each year of service credit after 10 years.
$1,699 Million
— Total estimated state costs for the various benefit sweetener bills listed in the 2014 scorecard.
$116 Million
— Total estimated local costs for the various benefit sweetener bills listed in the 2014 scorecard.
$708,000
— One-time cost for the proposal to create a new alternative plan for peace officers in the State Department of Motor Vehicles, allowing them to retire upon completion of 25 years of creditable service.
Proposed legislation, A9594/S7326, threatens to reverse 2012 pension reforms by enriching disability benefits for police officers, potentially costing the City $266.4 million in fiscal year 2015 alone. These changes would undermine efforts to manage the City's pension obligations, which grew by 235 percent between fiscal years 2004 and 2013.
Recommendations related to Pension Benefits
The Mayor should oppose the supporting home rule message under consideration in the City Council regarding the bill that would reverse pension reforms.
The Mayor should oppose the bill itself (A9594/S7326) which would reverse recent pension reforms.
The Mayor should affirm his commitment to fiscal responsibility by opposing the legislation that would increase pension costs.
Key Data
$8.2 billion
— Total pension costs in fiscal year 2013.
235 percent
— Increase in pension costs from fiscal year 2004 to fiscal year 2013.
$31 billion
— Estimated savings to the City over 30 years from the 2012 pension reforms.
$35 million
— Increased City costs in fiscal year 2015 resulting from the proposed changes.
$266.4 million
— Actuarial value of contributions required by the City to fund the new benefit in fiscal year 2015.
$617.9 million
— Actuarial value of contributions required by the City to fund the new benefit in fiscal year 2019.
The 2014 benefit sweetener scorecard tracks various legislative bills aimed at enhancing public employee pension benefits, which collectively impose significant fiscal burdens on state and local governments. These proposed enhancements, ranging from disability pension increases to service credit expansions, carry substantial long-term costs that often lack dedicated funding sources.
Key Data
$1.1 billion
— Past service cost associated with replacing the current benefit formula for Tier III, IV, and V members with a 2.0% benefit.
$617.9 million
— Increase in the Actuarial Present Value of benefits for New York City Tier III police members in fiscal year 2019.
$374 million
— One-time costs associated with allowing members of Tiers III and IV one month of additional service credit for each year of service.
$87.1 million
— One-time cost for allowing Tier II, III, IV, V, and VI members of NYSLERS to retire without a benefit reduction upon completion of 35 years of service.
$34.9 million
— Annual contribution required in fiscal year 2015 for conforming Ordinary Disability Retirement and Accidental Disability Retirement benefits for New York City Tier III police members.
Legislative proposals introduced in 2014 to enhance public employee pension benefits would impose substantial fiscal burdens on New York State and local governments, with total estimated state costs reaching $1.699 billion. These "benefit sweeteners" include various adjustments to disability and retirement formulas that carry significant long-term financial implications for taxpayers.
Key Data
$1.1 Billion
— Past service cost associated with the proposal to replace the current benefit of 1.5% of final average salary with a 2.0% benefit for certain Tier III, IV, and V members.
$617.9 Million
— Increase in the Actuarial Present Value of benefits in fiscal year 2019 resulting from the proposal to conform Ordinary and Accidental Disability Retirement benefits for New York City Tier III police members.
$374 Million
— One-time costs for New York State and Local Retirement Systems associated with the proposal to allow members of Tiers III and IV one month of additional service credit for each year of service after 10 years.
$1,699 Million
— Total estimated state costs for the various pension benefit sweetener bills tracked in the 2014 scorecard.
New York City's municipal workforce is aging, with over one-third of experienced employees eligible to retire within five years, necessitating a shift in compensation and hiring strategies to attract younger talent. To address this, the city should implement more flexible retirement options, such as defined contribution plans, and modernize civil service rules to better align with contemporary workforce expectations.
Recommendations related to Pension Benefits
City employees need more flexible retirement options.
A defined contribution retirement plan, which allows for quick vesting and portability of benefits, would be attractive to many younger workers.
Updating civil service rules and collective bargaining agreements to reflect modern expectations about work will be necessary to attract young talent.
Key Data
19%
— of the City’s municipal workforce were eligible for retirement with full benefits at the end of fiscal year 2012.
15%
— of the City’s municipal workforce will be eligible for retirement within five years.
23%
— of the City’s municipal workforce was over age 55 at the end of fiscal year 2012.
7,500
— employees retired in fiscal year 2012.
$65,299
— was the median salary of a City employee in fiscal year 2012.
$34,019
— was the median salary of the average New Yorker in fiscal year 2012.
New York City's fiscal year 2014 budget relies on $2.8 billion in prior-year surplus funds and a $1 billion withdrawal from the Retiree Health Benefits Trust Fund to achieve balance. This depletion of the trust fund leaves the city without reserves to address its $85 billion unfunded liability for retiree health benefits.
Key Data
$2.8 billion
— surplus funds from fiscal year 2013 used to balance the 2014 budget
$1 billion
— withdrawn from the Retiree Health Benefits Trust Fund
$85 billion
— unfunded OPEB liability for retiree health benefits
2006
— fiscal year the Retiree Health Benefits Trust Fund was established
2010
— fiscal year the Retiree Health Benefits Trust Fund began to be depleted
A proposal to implement a fixed-rate pension contribution plan for local governments threatens the long-term financial stability of New York's retirement systems by decoupling contribution rates from actual investment performance. Maintaining the state's historic practice of fully funding pension obligations as they come due remains the most reliable method for ensuring the viability of these benefit systems.
Recommendations related to Pension Benefits
We believe this proposal would endanger the future financial viability of the pension plans and recommend you reject it.
The safest bet for meeting the benefit obligations is to pay what is due when it is due.
We urge you to reject the proposal.
Key Data
12%
— Proposed fixed pension contribution rate for members of the Employees’ Retirement System.
12.5%
— Proposed fixed pension contribution rate for members of the Teachers’ Retirement System.
18.5%
— Proposed fixed pension contribution rate for members of the Police and Fire Retirement System.
94%
— New York's pension system funding ratio in 2010, with assets covering liabilities.
6.6%
— Ten-year earnings average for pension investments.
1.1%
— Five-year returns average for pension investments.
The Governor's proposal to implement a 'fixed rate' pension contribution plan for local governments threatens the long-term financial stability of the state's pension funds by delaying necessary payments. Instead of adopting this risky strategy, the state should maintain its commitment to fully funding pension obligations as they come due to ensure future taxpayers are not left to cover significant shortfalls.
Recommendations related to Pension Benefits
The Comptroller should reject the Governor's proposal to allow local governments to opt into a 'fixed rate' contribution plan to fund their public employee pension obligations.
Local governments should pay what is due when it is due as the safest bet for meeting benefit obligations.
Key Data
12 percent
— Pension payment equivalent to payroll for members of the Employees' Retirement System under the proposed fixed rate plan.
12.5 percent
— Pension payment equivalent to payroll for members of the Teachers' Retirement System under the proposed fixed rate plan.
18.5 percent
— Pension payment equivalent to payroll for members of the Police and Fire Retirement System under the proposed fixed rate plan.
94 percent
— Assets covering liabilities in New York's pension systems in 2010, ranking the state 5th among states for its healthy funding ratio.
7.5 percent
— Assumed rate of return for the state's pension plans.
2.9 percent
— Five-year returns average for the state's pension plans.
The New York State Assembly introduced eight bills that would increase public employee and retiree pension benefits, adding at least $1.35 billion in costs to state and local employers. These measures threaten to erode the savings achieved by the recently enacted pension tier for new employees, which was designed to control rising costs.
Key Data
$1.35 billion
— Estimated costs added to State and local employers by the eight bills enhancing pension benefits.
1.5% to 2%
— Proposed increase in the benefit multiplier for service rendered after 30 years under bill A4890.
$1.1 billion
— One-time cost on the State for bill A4890.
0.2%
— Additional annual contribution required to cover members of Tiers 2, 3, and 4 pension plans under bill A4890.
New York's Tier VI pension reform legislation introduces significant changes, including increasing employee contributions to between 3% and 6% and extending the final average salary calculation period to five years. While these reforms provide long-term taxpayer relief, the legislation includes less desirable outcomes such as only increasing the retirement age to 63 and failing to eliminate unlimited overtime in pension calculations for uniformed employees.
Recommendations related to Pension Benefits
The state should increase member contributions to a range of 3% to 6% to align with national norms.
Policymakers should implement changes in the benefit calculation by moving from a three-year to a five-year final average salary and reducing benefit multipliers.
The government should enact further curbs on pension padding by reducing credit for accumulated leave time and limiting the inclusion of overtime, severance, and salary spiking.
The legislature should uphold the provision to discourage the practice of “sweetening” pension benefits to prevent passing costs on to local governments.
The state should eliminate the continued allowance of unlimited amounts of overtime in pension calculations for New York City uniformed employees.
Key Data
3% to 6%
— Range of employee contributions required under the new pension legislation.
63
— The new retirement age for employees under the Tier VI pension reforms.
one year
— The total increase in the retirement age mandated by the new legislation.
The proposed Tier VI pension reform does not force police and fire personnel to work until age 65, as they remain eligible for full retirement benefits after 20 or 22 years of service regardless of age. While other states have implemented stricter retirement requirements for uniformed employees following the recession, New York's existing plans continue to offer relatively generous terms.
Key Data
22 years
— Service requirement for newly hired New York City Police Officers and Firefighters to be eligible to retire.
20 years
— Service requirement for '20 and out' provisions for future State and local members of the New York State Police and Fire Retirement System.
62 to 65
— Increase in the age at which members who leave for reasons other than retirement or death can claim a partial pension benefit.
12
— Number of states that made changes to retirement benefits for uniformed personnel between 2010 and 2011.
New York's public pension system currently places a disproportionate financial burden on taxpayers, with employees contributing significantly less than the national average. Implementing the proposed "Tier VI" reforms, including increased employee contributions and a risk-sharing model, would align the state more closely with national standards and improve long-term fiscal sustainability.
Recommendations related to Pension Benefits
Raise pension contributions by new employees to between 4 percent and 6 percent of wages, depending on pay level, to move New York closer to the middle of the US pack.
Implement a “risk-reward” approach that shares the downside risk and the upside potential with employees.
Require future employees to contribute up to 6 percent of salary to make pension costs more sustainable and provide needed relief for taxpayers.
Key Data
22%
— In 2009, only 22% of state and local pension plans required employee contributions of less than 3.9% of wages.
55%
— In 2009, employee contributions of 6% or more were required in 55% of US public plans.
66%
— In 2010, employers in US state-run public-pension funds paid on average 66% of the total, while employees paid 33%.
89%
— New York state and participating local governments paid 89% of pension costs, while employees paid 11%, resulting in a ratio of 8:1.
87%
— In 2009, 87% of the amount paid to New York’s local plans came from taxpayers, while just 13% came from employees.
7:1
— The ratio of taxpayer to employee contributions for New York's local plans is 7:1, compared to a national average of 4:1.
New York's public pension systems currently rely heavily on taxpayer funding, with employer contributions significantly outpacing employee contributions compared to national averages. Adopting the proposed Tier VI reforms, which include a sliding scale for employee contributions and a risk-sharing mechanism, would better align the state with national norms and reduce the burden on taxpayers.
Recommendations related to Pension Benefits
New York State should increase the employee contribution rate for public pensions to a range of 4 to 6 percent to align with nationwide norms.
The state should adopt the 'risk-reward' approach contained in the Governor’s Tier VI proposal to share market volatility risks with employees.
Key Data
78%
— Percentage of state and local pension plans in 2009 that required employee contributions greater than 3.9%.
$97.7 Billion
— Total employer and employee contributions to state-run public pension funds in 2010.
89%
— Share of total contributions made by New York State and its local government entities to state-run pension systems, compared to 11% from employees.
$27.6 Billion
— Total employer and employee contributions to local public pension funds in the U.S. in 2009.
$8.3 Billion
— Total amount contributed to New York’s local pension plans in 2009.
87%
— Share of contributions to New York's local pension plans that came from local taxpayers in 2009.
Transit workers currently benefit from a defined benefit pension plan that allows retirement at age 55 with 50 percent of their final average salary, a structure significantly more generous than those available to most private sector workers or new state employees. To align with broader public sector reforms, proposals suggest moving new employees to a "Tier VI" plan that would increase the retirement age to 65, extend the vesting period to 12 years, and eliminate the ability to count overtime toward pension calculations.
Recommendations related to Pension Benefits
The MTA should adopt the "Tier VI" proposal, which includes increasing the vesting period to 12 years for new employees.
The MTA should adopt the "Tier VI" proposal, which includes increasing the retirement age to 65 for new employees.
The MTA should adopt the "Tier VI" proposal, which includes increasing mandatory pension contributions for new employees.
The MTA should adopt the "Tier VI" proposal, which includes changing overtime pay to non-pensionable status for new employees.
Key Data
20%
— Percentage of private sector employees who have access to a defined benefit pension plan.
3%
— Annual salary contribution TWU members make toward the cost of their pensions.
50%
— Percentage of final average salary received by employees with 25 years of service who retire at age 55.
12 years
— Proposed vesting period for new State, City, and MTA employees under the "Tier VI" pension reform proposal.
Governor Cuomo’s "Tier VI" proposal introduces an optional 401(k)-style defined contribution plan for public employees to increase flexibility and portability in retirement benefits. This approach aligns with broader trends in the private sector, where defined contribution plans have largely replaced traditional defined benefit pensions, and reflects various models currently utilized by other states.
Key Data
76% to 24%
— The share of full-time workers in private industry participating in defined benefit pension plans declined from 76% to 24% between 1986 and 2008.
58%
— Data from 2011 show that 58% of private sector employees have access to defined contribution plans.
70%
— Fully 70% of private sector employees with access to defined contribution plans participate in them.
30%
— Just 30% of state and local government employees have access to a defined contribution plan.
56%
— The take-up rate for defined contribution plans among state and local government employees is 56%.
4%
— Under the proposed optional defined contribution plan, state and local employers would contribute 4% of an employee’s salary.
New York's pension system relies heavily on state funding, with employee contributions accounting for only 11.5% of combined contributions compared to the 33% national average. To address this disparity, a proposed modernization plan would require public employees to contribute between 3% and 6% of their salaries toward pension costs, while introducing a risk/reward mechanism to adjust contributions based on investment performance.
Recommendations related to Pension Benefits
The Governor's proposal to modernize the system would increase the contributions required of public employees, who would be required to contribute between 3% to 6%, rising according to salary, toward the cost of their pensions.
The proposal includes a “risk/reward” provision that would reduce employee contributions if investment earnings are flush and increase the required contributions if the level of contribution required by employers exceeds a certain rate.
The change would bring New York’s revenues closer to that of other state pension systems and is an important part of the pension reform proposal.
Key Data
11.5%
— Employee contributions as a share of combined employee and employer contributions to New York State’s pension systems.
33%
— The U.S. average for employee contributions as a share of combined employee and employer contributions.
1%
— Public employee contributions as a share of total revenues (contributions plus investment earnings) in 2010 for New York State’s pension systems.
8.5%
— The U.S. average for public employee contributions as a share of total revenues.
47th
— New York’s ranking among states for public employee contributions as a share of total revenues.
New York's public pension costs are significantly higher than the national average, with New York City and MTA expenses projected to reach $8.6 billion and $1 billion respectively by fiscal year 2014. Implementing a new package of pension benefits for new employees could align the state with national norms and generate $123 billion in savings over the next 30 years.
Recommendations related to Pension Benefits
The governor should use his strong hand in the budget process to bring about more affordable pension benefits at all levels of government.
A pension reform proposal should be included in the governor's budget, and the Legislature should swiftly adopt it.
New York should implement a new package of pension benefits for new employees to bring the state more closely in line with national norms.
Key Data
$123 billion
— Estimated savings for New York state and local governments over the next 30 years from a new package of pension benefits for new employees.
$8.6 billion
— Projected New York City pension costs by FY 2014, up from $2.4 billion in FY 2004.
$1 billion
— Projected MTA pension costs for subways, buses, bridges, and tunnels by FY 2014, up from $314 million in FY 2004.
$2 billion
— Expected state government pension costs by FY 2014, growing from $455 million in FY 2004.
$574
— Annual amount per person that New Yorkers pay in taxes for public employee pensions, which is more than twice the national average.
$12
— New York's pension costs per $1,000 of personal income, which is more than 70% above the national average.
New York's public employee pension system faces rapidly rising costs that threaten the state's competitive position and strain local budgets. Implementing the proposed Tier VI reforms, which include increasing employee contributions and raising the retirement age, would align the system with national norms and generate significant long-term savings.
Recommendations related to Pension Benefits
The Governor should include the Tier VI pension reform plan in the Executive Budget, and the Legislature should adopt it in a timely manner.
The Tier VI proposal would require new participants in the three State pension funds and in three of the City pension funds to contribute 6 percent of their pay during their entire period of employment.
The Tier VI proposal seeks to establish a “normal” retirement age of 65 for new workers.
The Tier VI proposal would create a common vesting period of 12 years for all the pension plans.
The Tier VI proposal would eliminate overtime from the final average salary (FAS) calculation for new employees.
Key Data
$123 billion
— Total projected savings from the implementation of Tier VI pension reforms.
$93 billion
— Estimated savings for New York State and local governments over 30 years from Tier VI reforms.
$30 billion
— Estimated savings for New York City pension systems over 30 years from Tier VI reforms.
$574 per capita
— Combined state and local pension cost in New York, which is more than twice the national average.
$1.5 billion
— Required payment by the State to its two major pension funds in fiscal year 2011.
$7.0 billion
— New York City's pension payments in fiscal year 2011.
Reducing the Actuarial Interest Rate from 8 percent to 7.5 percent or 7.0 percent is a necessary step to ensure the long-term solvency of New York City's pension funds, despite the resulting annual cost increase of up to $1.4 billion. This adjustment aligns the city with other major public pension systems that have already lowered their investment return assumptions to reflect market realities.
Recommendations related to Pension Benefits
The City should reduce the Actuarial Interest Rate from 8 percent to 7.5 percent or 7.0 percent to keep the City’s pension funds fully funded.
Key Data
$1.4 billion
— Maximum estimated increase in the City’s annual pension costs if the Actuarial Interest Rate is reduced.
8 percent
— Current Actuarial Interest Rate for New York City pension funds.
30 percent
— Share of public pension funds with an Actuarial Interest Rate below 8 percent as of 2009.
7.5 percent
— Rate to which New York State pension funds lowered their Actuarial Interest Rate in 2010.
13
— Number of the 25 largest public pension funds that revised their Actuarial Interest Rate downward between 2001 and 2011.
85 percent
— Share of all U.S. state and local government pension assets and membership represented by the 126 funds in the Public Pension Funds Database.
New York's 2010 Early Retirement Incentive program generated $681 million in net savings over two years by reducing payroll costs, though this came at the expense of $755 million in added pension benefit costs and the loss of over 9,000 experienced workers. Future fiscal challenges should be addressed through structural reforms to fringe benefits, such as adjusting health insurance premium sharing and eliminating Medicare Part B reimbursements, rather than relying solely on early retirement incentives.
Recommendations related to Pension Benefits
The next time an early retirement incentive is proposed, more options should be explored.
School districts outside New York City should align their health insurance premium sharing plan with New York State government to achieve significant savings.
The state should eliminate the practice of reimbursing Medicare Part B premiums to reduce long-term costs.
Government employers should increase health insurance premium sharing for retirees to 50 percent to generate budgetary savings.
Key Data
$681 million
— The net savings generated by the 2010 Early Retirement Incentive over two years, calculated as $1.4 billion in payroll reductions minus $755 million in pension benefit costs.
$755 million
— The total added pension benefit costs incurred by the state and participating employers due to the 2010 Early Retirement Incentive.
8.3 percent
— The increase in the annual pension for a 62-year-old worker with 25 years of service and a final average salary of $60,000 under the incentive program.
14,371
— The estimated number of New York State and local employees who accepted the Early Retirement Incentive.
$220 million
— Potential savings if school districts outside New York City aligned their health insurance premium sharing plans with the New York State government.
7.5 percent
— The interest rate set by the State Comptroller for the five-year repayment period of pension benefit costs.
New York City's fiscal health is threatened by the rapid growth of health insurance, pension contributions, and debt service, which are projected to consume an increasing share of total revenues. To address these structural deficits and avoid future service cuts, the City must implement reforms to these major expenses, including adjusting pension eligibility and benefits for future employees.
Recommendations related to Pension Benefits
The City Council should join the Mayor in backing the pension reform bill that has been introduced by the Governor.
The City should adjust pension eligibility and benefits for future employees, including increasing vesting to 12 years and raising the retirement age to 65.
The City should require greater contributions from employees and eliminate overtime from the final salary calculation upon which benefits are based.
Key Data
$11 billion
— Spending on health insurance, pension contributions, and debt service in 2005.
$23.1 billion
— Spending on health insurance, pension contributions, and debt service expected in 2015.
22 percent
— Share of the budget for the 'big three' expenses in 2005.
33 percent
— Share of the budget for the 'big three' expenses in 2015.
$30 billion
— Total savings from pension reform over the next 30 years.
New York's pension costs have surged, with New York City's expenses quadrupling from $1.5 billion in 2002 to $7 billion, threatening other municipal services. Proposed reforms, including raising the retirement age to 65 and capping eligible wages at $179,000, aim to create a more sustainable system that could save the state and city a combined $123 billion over 30 years.
Recommendations related to Pension Benefits
The state should increase the retirement age to 65 to align with Medicare eligibility and reduce the length and cost of benefit payouts.
The plan should require a 6 percent contribution from all employees for their entire length of service to bring contributions closer to national norms.
Policymakers should calculate pension benefits based on the highest five years of earnings rather than the highest three to eliminate "pension padding."
The state should cap maximum eligible wages at $179,000 for the purpose of calculating pension benefits.
The reform should exclude overtime pay from the earnings used to calculate benefits to prevent artificial inflation of pension payouts.
The proposal should implement an "anti-spiking cap" to exclude extraordinary increases in income in any single year.
Key Data
$1.5 billion to $7 billion
— The increase in New York City pension costs between 2002 and 2011.
$8.7 billion
— The projected cost of New York City pension contributions in 2015.
$93 billion
— The projected savings for state and local governments over 30 years under the proposed reforms.
$30 billion
— The projected savings for New York City over 30 years under the proposed reforms.
$179,000
— The proposed cap on maximum eligible wages for pension benefit calculations.
9 to 1
— The current ratio of employer contributions to employee contributions in New York pension funds.
The 2011 scorecard identifies numerous legislative proposals that would increase public employee pension and benefit costs, with several bills carrying multi-million dollar price tags for state and local governments. These proposed "sweeteners" include changes to final average salary calculations, benefit multipliers, and service credit rules that collectively threaten to expand taxpayer-funded liabilities.
Key Data
$130.0 million
— Estimated local cost for bill A5093, which changes how the final average salary is determined for state and local employees.
$99.3 million
— Estimated local cost for bill A6848, which allows state and local teachers to receive additional service credit for unused sick days.
$97.0 million
— Estimated local cost for bill A3904, which permits retirement at any age over 55 for certain employees.
$95.0 million
— Estimated state cost for bill A5093, which changes how the final average salary is determined for state and local employees.
$86.0 million
— Estimated local cost for bill A5086, which changes the benefit multiplier for state and local employees.
$70.0 million
— Estimated state cost for bill A3904, which permits retirement at any age over 55 for certain employees.
New York State and City provide a rare and costly fringe benefit by reimbursing retirees for Medicare Part B premiums, which cost $140 million for the State and $213 million for the City in fiscal year 2010. Eliminating these reimbursements, which are projected to rise to $312 million for the City by 2014, would provide significant budget savings without harming the competitiveness of the public workforce.
Recommendations related to Pension Benefits
One such opportunity is to eliminate a public employee fringe benefit rarely offered anywhere else: reimbursement for Medicare Part B premiums.
The State and the City should increase premiums for retiree health insurance to 50 percent of the cost to relieve the burdens of rampant cost escalations.
For New York City, full elimination of all reimbursements would close more than 10 percent of the current budget gap.
Key Data
$312 million
— Projected cost of Medicare Part B reimbursements for New York City by 2014.
$213 million
— Total Medicare Part B reimbursements in New York City in fiscal year 2010.
$140 million
— Total costs of Medicare Part B reimbursements for New York State in fiscal year 2010.
$20 million
— Budget relief provided by limiting reimbursements to 90 percent for individual coverage and 75 percent for family coverage.
$96.40
— Base monthly premium for Medicare Part B.
$350
— Maximum monthly premium for Medicare Part B for retirees with greater incomes.
New York's public employee retirement costs have surged, with annual state pension contributions rising from $100 million to nearly $1.5 billion over the last decade. This financial strain is exacerbated by unfunded health benefit liabilities totaling $56 billion for the state and the inclusion of overtime in pension calculations, which significantly inflates payouts for certain retirees.
Key Data
$1.5 billion
— Annual state pension contributions, which have grown from $100 million ten years ago.
$61,295
— Average pension received by police and firefighters who retired in 2009.
$25,440
— Average pension received by regular civilian employees who retired in 2009.
$56 billion
— Unfunded liability for state retiree health benefits.
44 percent
— Portion of retirees who were under age 60 in 2009.
6 percent
— Portion of full-time state and local employees who can include overtime in final average salary calculations for pension benefits.
Rising pension costs for city workers are forcing significant budget cuts to essential youth services, as pension contributions have grown from $4.9 billion in 2007 to a projected $8.1 billion in fiscal year 2012. To address this, the state should reform the pension system for future uniformed workers and increase cost-sharing for retiree health benefits to align with private sector standards.
Recommendations related to Pension Benefits
The Legislature must enact a new pension system for future uniformed workers: they should have a minimum age for retirement, have the pension based on salaries without overtime and be obliged to contribute more during their working years.
Union leaders must agree to more cost-sharing for health insurance premiums, and retirees should be paying for a share of their benefits similar to arrangements in the private and nonprofit sectors.
Key Data
$6.6 billion
— Total pension contributions cost New York's taxpayers last year.
$1.2 billion
— Retiree health insurance cost New York taxpayers last year.
$4.9 billion
— Annual pension fund contributions in 2007.
$8.1 billion
— Projected annual pension fund contributions in fiscal year 2012.
$69,884
— Annual city-funded pension fund contributions for each firefighter.
$51,829
— Annual city-funded pension fund contributions for each police officer.
New York's public pension systems face rising costs due to investment losses, generous benefits, and the inclusion of overtime in salary calculations, with employer contributions significantly outpacing employee contributions. Additionally, the state faces massive unfunded liabilities for retiree health insurance, which is paid on a pay-as-you-go basis rather than being actuarially funded.
Key Data
1.4 million
— Number of people enrolled in the three state pension systems.
88 percent
— Share of total pension contributions made by State and local employers in 2009.
$33,270
— Average annual pension received by employees retiring in 2010.
6 percent
— Share of all full-time State and local employees across the country eligible to include overtime in the calculation of final average salary used to determine pension benefits.
$55.9 billion
— Total State liability for retiree health insurance and other benefits.
$2.1 billion
— Projected cost of State pension fund contributions by fiscal year 2014.
The New York State Legislature has advanced numerous bills that would increase pension and retirement benefits for public employees, despite the state's already unaffordable pension system. These measures, which include retroactive membership transfers and more generous salary calculations, should be vetoed to maintain fiscal responsibility.
Recommendations related to Pension Benefits
The Governor should veto the bills enhancing benefits for State and local employees and retirees.
The Governor should veto A8664-A/S5748A, which would make the final average salary calculation for New York City teachers who have taken a leave of absence more generous.
The Governor should veto A8509A/S5633A, which enhances pension packages for uniformed employees by allowing members of the State Department of Corrections to defer five vacation days per year.
The Governor should veto A10068/S7078, which allows certain employees in nursing titles in the State University of New York’s optional retirement program to retroactively transfer their membership to the New York State and Local Employees Retirement System.
The Governor should veto A10753/S7544, which would set a precedent for State police officers to receive death benefits for longer periods of service than their records reflect.
Key Data
25
— Number of bills tracked on the annual Sweetener Scorecard that enhance benefits for State and local employees and retirees.
$1.1 million
— Estimated annual cost in added contributions for the bill A8664-A/S5748A regarding final average salary calculations for New York City teachers.
5
— Number of vacation days per year that members of the State Department of Corrections would be allowed to defer under bill A8509A/S5633A.
New York faces rising public employee pension costs, yet the Legislature is considering numerous bills that would expand benefits and increase the financial burden on taxpayers. These proposed "sweetener" bills threaten to undermine recent pension reforms and exacerbate the state's existing fiscal challenges.
Recommendations related to Pension Benefits
The Legislature should refrain from passing bills that "sweeten" already generous pension and health-insurance benefits for public employees.
Lawmakers should stop undermining the recently created Tier V pension system by introducing legislation that rolls back retirement age requirements.
The state should avoid restricting health-insurance options by prohibiting reductions in retiree benefits, which hampers the ability to manage labor costs.
The Legislature should reject proposals that extend the automatic assumption of work-related illness to ailments like staph infections for public employees.
Policymakers should not accelerate the vesting of lifetime health-insurance benefits for employees, particularly during periods of severe financial crisis.
Key Data
$1.7 billion
— Cost of state government pension contributions in fiscal year 2010-11.
85 percent
— Projected growth of state pension costs by 2014.
$3.2 billion
— Projected cost of state government pension contributions by 2014.
50
— Number of bills introduced in the Assembly and Senate to sweeten pension and health-insurance benefits as of June 15.
$7.7 million
— Annual cost to the state for eliminating the minimum retirement age for state employees with 35 years of service.
$12,000
— Annual Variable Supplement Fund payment per retiree as of fiscal year 2009.
The 2010 scorecard details numerous legislative bills that provide additional pension and retirement benefits, known as 'sweeteners,' to various public employee groups in New York. These measures include granting service credits, reducing vesting periods, and expanding eligibility for disability and health benefits, often without corresponding funding mechanisms.
Key Data
10 years
— The vesting period for DC37 employees of the Metropolitan Transportation Authority was reduced from 25 years to 10 years.
20 years
— An optional retirement plan was provided for county correction officers or deputy sheriffs after 20 years of service.
30 years
— Tier II and Tier V members of the Police and Fire Retirement System were permitted to retire at age 55 with 30 years of service without benefit reduction.
25 years
— Department of Law Investigators were permitted to retire upon completion of 25 years of creditable service, regardless of age.
8 hours
— State and local employees were granted 8 hours of paid leave to undertake screenings for colon cancer.
New York City and State pension systems are significantly more generous than those of other public and private employers, contributing to rapidly rising fiscal burdens. To ensure long-term sustainability, the current defined benefit plans should be converted to defined contribution plans, and existing benefits should be reformed to align with standard practices.
Recommendations related to Pension Benefits
The long-run goal of pension reform should be to convert from defined benefit to defined contribution plans.
The New York systems should require a higher percentage contribution, and not limit it to ten years.
The New York system should adopt similar age thresholds, perhaps with a lower minimum (but some minimum) for police officers and firefighters.
The FAS should be based on five years’ experience and should take into account only base salary, excluding overtime and other supplements subject to manipulation.
These provisions regarding work-related disabilities should be revised to set more rigorous standards.
Eliminate the variable supplements available to some retired New York City uniformed workers.
Key Data
$615 million
— Required contributions to New York City pension funds in fiscal year 2000.
$2.3 billion
— Required contributions to New York City pension funds in fiscal year 2004.
$4.7 billion
— Projected required contributions to New York City pension funds by fiscal year 2008.
43%
— Percentage of retired firefighters receiving additional benefits due to a disability deemed to be job related.
28%
— Percentage of retired police officers receiving additional benefits due to a disability deemed to be job related.
$12,000
— The amount of annual variable supplement payments, or 'Christmas bonuses,' for some retired New York City uniformed workers.
City pension contributions have risen from $3.9 billion in 2006 to $6.3 billion in 2009, with projections exceeding $7.9 billion by 2014, necessitating reforms like a new Tier 5 pension system for future workers. Furthermore, the city should stop using the Retiree Health Benefits Trust to balance operating budgets and require retirees to contribute to their health insurance premiums to address the $65 billion actuarial value of future premiums.
Recommendations related to Pension Benefits
The city must make pension benefits less lavish to avoid an unaffordable burden in coming years' budgets.
While current benefits are protected, pension benefits can and should be reduced for future workers.
Taxpayers should support a campaign to enact Tier 5 pension reform in the current legislative session.
The imprudent diversion of funds from the Retiree Health Benefits Trust should be eliminated from the Executive Budget.
The city should require retirees to pay a substantial share of their health insurance premiums.
Key Data
$3.9 billion
— City pension contributions in fiscal year 2006.
$6.3 billion
— City pension contributions in fiscal year 2009.
$7.9 billion
— Projected city pension contributions in fiscal year 2014.
$65 billion
— Actuarial value of future health insurance premiums for retirees and their dependents.
$2.5 billion
— Amount deposited into the Retiree Health Benefits Trust from surplus revenue over two years starting in 2006.
$1.2 billion
— Amount from the Retiree Health Benefits Trust used to balance the budget in fiscal years 2011 to 2013.
New York State maintains a surplus in its pension funds, unlike states such as Illinois and California which face significant unfunded liabilities. However, the state faces a substantial burden regarding other post-employment benefits, with over $50.8 billion in unfunded liabilities ranking it second highest in the nation.
Key Data
$2.4 trillion
— Estimated total future pension liability of state and local pension plans in 2008.
$600 billion to $1.6 trillion
— Estimated range of total OPEB liability for state and local pension plans.
$9.2 billion
— Unfunded pension liability for Illinois.
$7.8 billion
— Unfunded pension liability for California.
$50.8 billion
— Unfunded OPEB liability in New York, which ranks second highest in the nation.
Retired police and firefighters in New York City receive annual 'Christmas bonuses' known as Variable Supplement Fund (VSF) payments, which are separate from their regular pension checks and totaled $405 million in fiscal year 2010. While these funds are managed separately, any shortfalls must be covered by the City's pension systems, potentially requiring increased taxpayer contributions to fund pension benefits.
Key Data
$12,000
— Annual Christmas bonus (Variable Supplement Fund payment) provided to retired police and firefighters.
$405 million
— Total benefits paid from Variable Supplement Funds in fiscal year 2010.
$1.7 billion
— Assets held in Variable Supplement Funds in fiscal year 2010.
150%
— Increase in benefits paid from fiscal year 2001 to fiscal year 2010.
New York City's public sector benefits, including pensions and health insurance, are significantly more generous than those offered by private firms, which have largely shifted toward defined contribution plans. Aligning these benefits with private sector standards could yield substantial taxpayer savings, though constitutional protections limit changes for current employees.
Recommendations related to Pension Benefits
The City should convert to defined contribution plans for its workers to remain competitive with the private sector.
New pension policies should be applicable only to future hires because the State Constitution prohibits changes in benefits for current workers.
The City should pursue increased employee contributions to pension funds and increased vesting periods for retirement benefits.
Key Data
90 percent
— Percentage of 52 surveyed private firms that offered a defined contribution plan.
$10.4 billion
— Total amount New York City taxpayers will pay for pension and health insurance benefits in the current fiscal year.
$6.7 billion
— Amount of contributions to pension funds on behalf of current workers.
26
— Number of firms that made changes to their retirement plans since January 1, 2008.
The state recently established a new, less costly tier of pension benefits for new government employees, marking the first such adjustment in nearly three decades. However, the legislation also included a permanent provision that restricts local school districts from modifying retiree health insurance benefits without union bargaining, potentially limiting future cost-containment efforts.
Recommendations related to Pension Benefits
The Legislature should refrain from the past practice of passing various 'sweetener' bills that raise pension costs.
Future Governors must stand firm against demands from other employee groups for the same retiree health insurance benefits granted to teachers' unions.
Key Data
30 years
— The approximate time since pension benefits were last adjusted to meet fiscal realities before the recent creation of a new, less costly tier.
1994
— The year the provision prohibiting the diminution of health insurance benefits for retired teachers was first enacted, which has now been made permanent.
The 2009 scorecard tracks various legislative bills that expand pension benefits for public employees, characterizing these additions as 'sweeteners' to already generous retirement plans. The document details specific proposals affecting groups ranging from police officers and firefighters to correction officers and teachers.
New York's government pension costs have skyrocketed, with required employer contributions growing nearly ten-fold since 1999 to $2.6 billion, while benefit payments reached $5.6 billion in 2008. To address the fiscal strain and high tax burdens, policymakers are urged to reject new pension sweeteners and instead support legislation creating a new, more affordable pension tier for future workers.
Recommendations related to Pension Benefits
Legislators should refrain from introducing or supporting any pension sweetener legislation during the remainder of the legislative session.
Policymakers should support the legislation endorsed by Governor David Paterson and New York City Mayor Michael Bloomberg that would create a new pension tier for future workers to provide more reasonable and affordable pension benefits.
Key Data
$292 million to $2.6 billion
— Growth in required employer contributions to pension funds since 1999.
$5.6 billion
— Total pension benefit payments reached in 2008.
78 percent
— Amount by which New York's local tax burden exceeds the U.S. average in dollars per $1,000 in personal income.
35 percent
— Amount by which the combined state and local tax burden in New York exceeds the U.S. average.
9 to 1
— Ratio of employer to employee contributions in New York’s State and Local Retirement Systems last year.
86 percent
— Portion of uniformed employees who retired under age 60 in 2008.
Extending Tier II pension provisions to new police and firefighters would undermine efforts to control rising costs by exempting them from the proposed Tier V legislation. Uniformed employees already receive significantly more generous retirement benefits than civilian counterparts, with employers contributing nearly double the percentage of salary to fund their pensions.
Recommendations related to Pension Benefits
The Governor should veto A3426/S1409, which would extend Tier II provisions to all police officers and firefighters who join a public retirement system on or after July 1, 2009.
New uniformed employees must be eligible for Tier V benefits along with civilian employees to ensure the effectiveness of the new tier in curbing rising state and local pension costs.
Any effort to exempt new uniformed employees from Tier V benefits, even on a temporary basis, should be rejected.
The Governor should resist any effort to exempt certain classes of employees from the provisions of the proposed Tier V legislation.
Key Data
86 percent
— Percentage of uniformed employees who retired from the New York State Police and Fire Retirement System last year who were under the age of 60.
$48,900 to $66,586
— Range of annual lifetime pension payments for uniformed employees who retired from the New York State Police and Fire Retirement System last year.
20 percent
— Percentage of salary that public employers are expected to contribute to fund the pension of a uniformed employee.
11 percent
— Percentage of salary that public employers are expected to contribute to fund the pension of a civilian employee.
New York City's annual retirement benefit payouts exceed $10.2 billion, with pension fund contributions projected to rise from $5.7 billion in 2008 to $7.6 billion by 2013. To address these skyrocketing costs, officials are proposing new, less expensive benefit tiers for future workers, requiring retiree contributions to health premiums, and eliminating supplemental "Christmas bonuses" for police and firefighters.
Recommendations related to Pension Benefits
The city should implement legislative changes to create a new "tier" for future workers that would provide less costly benefits.
The city should apply the concept of employee contributions to health premiums to retirees.
The city should work to lower or end the police and firefighter "Christmas bonuses", which are unusually generous but not protected by the state Constitution.
Key Data
$10.2 billion
— Annual benefits paid to New York City's retirees.
$5.7 billion
— City pension-fund contributions in fiscal year 2008.
$7.6 billion
— Projected city pension-fund contributions by fiscal year 2013.
$42,100
— Average pension for a new retiree in 2006.
$1.1 billion
— Total city spending on health care for retirees in fiscal year 2008.
$1.9 billion
— Projected city spending on health care for retirees in fiscal year 2013.
New York City faces a significant financial challenge regarding the rapid growth of employee retirement benefit costs. This analysis examines the factors driving the explosion in pension expenditures and their impact on the city's fiscal landscape.
New York's local government pension arrangements are exceptionally generous, often allowing for retirement at younger ages and including overtime in benefit calculations, which is not standard practice elsewhere. These pension plans are no longer necessary for recruiting and retaining a quality workforce and should be redesigned to include higher employee contributions and increased retirement ages.
Recommendations related to Pension Benefits
Redesign the State-mandated pension benefits for future state and local government workers by raising the minimum retirement ages.
Redesign the State-mandated pension benefits for future state and local government workers by increasing the required employee contributions.
Redesign the State-mandated pension benefits for future state and local government workers by eliminating the inclusion of overtime in benefit calculations.
Redesign the State-mandated pension benefits for future state and local government workers by eliminating variable supplements for uniformed workers.
Key Data
6 percent
— Nationally, only 6 percent of full-time state and local government employees can count overtime in their pension formula.
74 percent
— About 74 percent of state and local government employees in other systems are required to contribute more than 3 percent of their earnings.
$12,000
— Variable supplements for retired uniformed workers in New York City will equal $12,000 per retiree in 2007.
1.5 million
— Local governments and school districts in New York employ about 1.5 million people.
New York's public employee benefit packages are significantly more generous than private sector norms, with the state uniquely paying nearly the entire cost of Medicare Part B premiums for retirees. To address fiscal challenges, the state should align public employee contributions and pension structures with broader public sector standards, including increasing employee healthcare contributions and reforming pension calculations.
Recommendations related to Pension Benefits
The Legislature should support the creation of a Tier V in the pension system, which will increase the retirement age, increase employee contributions and scale back final salary calculations.
The Legislature should require a 50 percent contribution to retiree health insurance premium costs and eliminate reimbursement for Medicare Part B premiums.
The Legislature should increase contributions to family healthcare plans for current employees from 18 percent to 22 percent.
Key Data
94 percent
— of public pension systems require greater employee contributions than New York's average.
1 to 3 percent
— is New York's average employee contribution to pension systems.
$430 million
— in annual savings from requiring retirees to pay a 50 percent contribution to their health insurance premium costs.
$200 million
— in annual savings from eliminating reimbursement for Medicare Part B premiums for retirees.
$75 million
— in annual savings from increasing current employee contributions to family healthcare plans from 18 percent to 22 percent.
New York State faces significant fiscal pressure from rising employee compensation costs, prompting proposals to reform pension and health benefit structures for public workers. These measures include increasing the retirement age, eliminating overtime from pension calculations, and requiring retirees to contribute more toward their health insurance premiums.
Recommendations related to Pension Benefits
Eliminate one annual pay increase, which currently averages 3 percent, for state employees.
Require retired state employees to pay a larger share of their health insurance premiums.
Eliminate the inclusion of overtime pay in calculating the worker's salary base for pension benefits.
Increase the minimum age requirement for most workers from 55 to 62.
Extend the employees' mandatory contribution beyond the first 10 years of service.
Key Data
$250 million
— Short-term savings in fiscal year 2010-11 from proposed pension and benefit measures.
$25 million to $500 million
— Projected annual savings for new police officers and firefighters.
3 percent
— Average annual pay increase for state employees.
90 percent
— Portion of individual health insurance premiums currently paid by the state for retired workers.
75 percent
— Portion of family health insurance premiums currently paid by the state for retired workers.
New York state faces significant budget gaps and should address its fiscal challenges by restructuring overly generous public employee pension benefits. Creating a new tier of pension benefits for future employees would help reduce the $1.1 billion annual cost of state-required contributions.
Recommendations related to Pension Benefits
The state should restructure pensions because employees and retirees have unusually generous pension benefits compared to other public and private-sector workers.
The state should change the pension benefits for future employees by creating a new tier for them.
Key Data
$1.1 billion
— Annual cost of state-required pension contributions.
New York State's pension system for public employees has become increasingly expensive, with required contributions rising from $274 million in fiscal year 2001-02 to over $1 billion by 2005-06. To address these growing costs, the state should consider structural reforms such as excluding overtime from pension calculations, tightening disability eligibility, increasing employee contributions, and transitioning to a defined contribution model for new hires.
Recommendations related to Pension Benefits
Pension benefits could be based on a more standard definition of final average salary (FAS) that includes base salary only, excluding overtime and other supplements subject to manipulation.
Work-related disability could be defined more rigorously, and the State legislature’s role in pension benefit expansions should be curtailed.
The minimum retirement age could be raised to more closely align with that of other employers, perhaps with a lower minimum age for uniformed workers.
Required employee contributions could be increased and expanded beyond 10 years.
The State could move to a defined contribution Tier V where employees would participate in a 401k-type fund and rely more on the accumulation of their own contributions.
Key Data
$274 million
— State required pension contributions in fiscal year 2001-02.
$1.1 billion
— State required pension contributions in fiscal year 2005-06.
$1.3 billion
— Expected pension costs in fiscal year 2010-11.
$424 million
— Estimated future savings when the change to a 7.0 percent contribution rate is fully implemented.
9.3 percent
— The State's current pension contribution rate as a percentage of payroll.
7.0 percent
— The reduced pension contribution rate the State could aim for to achieve savings.
Taxpayers currently contribute $4 billion annually to municipal pension funds, with costs projected to rise to $5.7 billion by 2010 if the current system remains unchanged. To address these spiraling expenses, the city should consider trimming benefits for new hires, increasing employee contributions, and adjusting retirement ages to align with Social Security standards.
Recommendations related to Pension Benefits
The city should trim the pension benefits of newly hired workers to address the spiraling cost to taxpayers.
The city should reform the benefit formula to exclude overtime earnings, as this is a practice rare in other systems.
The city should increase the retirement age for employees, as most are currently eligible to retire at 55, which is well below the age for full Social Security benefits.
The city should increase the share that city workers contribute to the pension fund.
Key Data
$4 billion
— Taxpayer contribution to the pension funds of municipal workers in the current fiscal year.
$900 million
— Cost for retiree health insurance in the current fiscal year.
$5.7 billion
— Projected pension contributions in 2010 if no changes are made to the current system.
15%
— Average hourly wage advantage for public employees over private firms found in a 2004 survey.
30%
— Hourly wage advantage for blue collar public employees over private firms found in a 2004 survey.
New York City's pension system is significantly more generous than those of other large employers, featuring defined benefit plans and low employee contributions that drive up city spending. Establishing a new, more affordable pension plan for future workers through state legislation could save the city $549 million by fiscal year 2009.
Recommendations related to Pension Benefits
A new and more affordable pension plan could be established for new workers through State legislation.
Employer contributions under the new plan should be held to 10 percent of payroll to generate savings.
Key Data
$549 million
— Estimated savings for the City by fiscal year 2009 if employer contributions under the new pension plan are held to 10 percent of payroll.
20 percent
— Percentage of private sector employees who have defined benefit plans, compared to the more generous plans offered by New York City.
$12,000
— Amount of the December holiday bonus paid to retired New York City police officers on top of their monthly pension checks.
74 percent
— Percentage of state and local government employees in other systems required to contribute more than 3 percent of earnings into their pension plans.
New York City and State public employee retirement benefits are significantly more generous than those provided by other large public and private employers, contributing to rapidly growing fiscal burdens. To ensure long-term sustainability, the system should transition to defined contribution plans and implement reforms such as increasing employee contributions, raising retirement ages, and tightening disability definitions.
Recommendations related to Pension Benefits
The long-run goal of pension reform should be to convert from defined benefit to defined contribution plans.
The New York systems should require a higher percentage contribution, and not limit it to ten years.
The New York system should adopt similar age thresholds to the federal Social Security system, perhaps with a lower minimum for police officers and firefighters.
The final average salary should be based on five years’ experience and should take into account only base salary, excluding overtime and other supplements subject to manipulation.
The City should eliminate the variable supplements available to some retired New York City uniformed workers, as these payments contradict the principle that pension payments should be a regular and predictable source of income.
Key Data
$615 million
— City required contributions to pension funds in fiscal year 2000.
$2.3 billion
— City required contributions to pension funds in fiscal year 2004.
$4.7 billion
— Projected City required contributions to pension funds by fiscal year 2008.
43%
— Percentage of retired firefighters receiving additional benefits due to a disability deemed to be job related.
28%
— Percentage of retired police officers receiving additional benefits due to a disability deemed to be job related.
$10,500
— Variable supplement payment made to some retired New York City uniformed workers in 2004.
No results for your current filters. Manually edit your filters, or
clear the filters.
Share Feedback
Give a star rating, write a comment of at least 10 words, or both.
