An overwhelming majority of respondents to this week’s RBJ Daily Report Snap Poll favor overhauling New York’s pension system.
Ninety-five percent of readers support public pension system reform. And nearly 90 percent back Gov. Andrew Cuomo’s Tier VI pension reform plan, which would apply to future state and local government employees. Among other provisions, it would hike employee pension contributions, raise the retirement age from 62 to 65, and provide the option of a defined-contribution retirement plan.
Labor unions and Comptroller Thomas DiNapoli have criticized the plan. DiNapoli says 401(k)-style defined-contribution plans are more expensive to deliver and could have a destabilizing effect on New York’s economy. He also has attacked the “myth” of bloated pensions, saying that “less than one‐half of 1 percent of our 385,000 retirees receive pensions exceeding $100,000.”
Roughly 750 readers participated in this week’s poll, which was conducted Feb. 27 and 28.
In your view, should New York reform its public pension system?
Specifically, do you support or oppose Gov. Andrew Cuomo’s Tier VI pension reform plan?
There should be no public pensions. Most working people have to save for their own retirement. Why not everyone?
DiNapoli is basically saying that the retirement plans, such as 401(k), that the rest of the public is relying on are not good enough for New York State workers. He invests the New York pension money in the stock market, so what is the difference? The difference is that when the stock market tanks, the pension fund has to find other ways of paying its retirees—namely raise our taxes! Let their pensions rise and fall with the stock market just like the rest of us. DiNapoli’s double standard shows his true colors.
Why are we still giving government employees more money? Let them use their hard-earned money to build for their future, not mine. Time for a change; government employees double-dipping (our lieutenant governor) and plenty of others raking in two incomes from the government. Enough is enough.
Any business leader or local government official who supported wasting $40 million of taxpayers’ money on a fast ferry should be embarrassed to advocate for taking pensions away from nurses and firefighters.
Many New York State jobs can take employees away from home. Additionally, many jobs are not during “normal” working hours or during holidays. As New York cuts benefits and downgrades the pensions, how will they attract a qualified workforce? Do we want the best workers, or merely those who are in an immediate need of work? New York should be creating an atmosphere that nurtures a lifelong career of public service.
—Michael E. Pollock
Heard on NPR today a comment that went something like this: New York State public employees will have no guarantee of financial security. Welcome to the club.
The Tier VI pension reform plan does not go far enough, but at least it is a start. Be interesting to see if Cuomo folds on this one when the unions start beating him up with negative ads. If you are going to make a change, then make one that also changes the current program for those employed but not yet retired. That would be a real start on addressing the terrible financial mess past administrations have gotten us into.
It is unthinkable the number of self-entitled state employees who receive a pension with no investment beyond years of service. As a small-business owner, who by all counts is self-financing my own retirement and that of my employees, it is outrageous to think that state employees do not have to invest any of their own money to fund their own retirement.
—John J. Lucia DDS
I, like many, lost a huge sum from my 401(k) in the 2008 economic crash, from which I have not recovered. I don’t want others to suffer like that, so I say no to changing the state employee plans along the lines of Cuomo’s proposals.
—Cecile Lawrence, Artcalight Inc.
The New York State and local retirement system is among the best in the country; 80 to 85 percent of benefits paid come from investment results, leaving only 15 to 20 percent to be paid for by contributions of employers and employees. We should be using these systems as models for improvement, not dismantling them. A New York State Corporate Retirement System should be created and made available to every business in New York, so all state employees could benefit from a well-run and cost-efficient plan. The governor is headed the wrong way on this issue. The New York State retirement system should be the model for Social Security reform. It is something that our state does better than most. Why is the governor putting a negative spin on one of the most positive things our state does?
—Rich Marflak, retired teacher, self-employed
“Public employees” is a misnomer—it should read “public employers.” The private sector works for them. As a business owner, I take all the risk so that many “public employees” can retire at 50 to 55 years of age with a $50,000 pension and free health care—and absolutely no risk. Do the math—many of these “employees” are guaranteed millionaires. I have a friend who recently left a state position. He was a corrections officer and retired at 48 with a $50,000 pension (he braggingly padded it with overtime). If he only lives until 68, he has taken home a million plus in pension and benefits. Most of my family are New York State employees; I could tell you stories. Bottom line: The state has become a piggybank-shaped god, and we are simple slaves making their bricks.
There are more reforms to the system needed. Eliminate overtime to boost final year incomes. Eliminate double-dipping (retired workers receiving pensions and then hiring onto New York State payroll). Cap pensions and provide options for 401(k) type of employee contributions for maxed out salary ranges. Etc., Etc.
—Dennis Kiriazides, retired
He also has attacked the "myth" of bloated pensions, saying that "less than one‐half of 1 percent of our 385,000 retirees receive pensions exceeding $100,000."' Ha-ha-ha-ha. Oh, they aren't making over $100,000 per year in retirement, Tom? Plus no health care costs and they still have the ability to get another job. Often in the same field. But let's not bother talking about that. Try socking away enough money in your 401(k) to accomplish that. Pensions on the whole should go away. Look at the track record: Kodak, Xerox (just wait), Detroit, New York State (etc., etc., etc.). Good work. Take your money in your salary and in your personal retirement fund. That way your company (or your state) can't steal from you when they go belly up because they over promised and under delivered. Sad part is that all the hardworking people that have thought they were socking it away for years will be the one to get stabbed in the back in the process. Might sound good on paper people, but if it ain't your account, it ain't yours. Better have a backup retirement plan when New York State tells you that they don't have the money.
—Devon Michaels, Chili
The NYS pension plans and those of school districts, if they are not included, should now face realistic reforms that bring them face to face with today's realities. Raising the retirement age is a good idea, as well as forcing employees to contribute more to their defined benefit plans prior to and after retirement. In addition the accumulating of unreasonable vacation and sick time, to be used in retirement salary calculations, should be terminated. The retirement plans should all be based on their normal annual income and NOT include ANY overtime or leaves or absences of any kind. Health and medical plans should be scaled back to offer additional coverage, such as dentistry and ophthalmology, only at the employees expense. If the state is to get back on track these plans must be looked at critically at ALL levels and be brought into reasonable equality with industry and today's economy. Salaries should also be renegotiated with teachers and administrators to make them comparable with industry on an hourly calculated basis. Perks and benefits must be reduced and this all should be done retroactively to include current retirees also.
Pension reform should go even farther than what the governor has proposed. But that would require contracts to be renegotiated. And we can't do that because of the Triborough Amendment, which leaves any expiring public union contract in force until both sides agree on any new contract. Whose great idea was that anyway? Just look at how hard it is to fire a bad teacher once tenured! I think if Governor Cuomo is truly a serious reform minded leader then he must redesign the entire public employment structure. We must start with a clean sheet of paper. The good old days are gone. It's a whole new world now where workers, wages and benefits are concerned. Sad, but true. Taxpayers will go broke trying to support the awful "Ponzi scheme" Pension system from the past!
—George Thomas, Ogden
Key New York State union leaders, the governor, and other appropriate participants must work together to develop a sustainable and appropriate pension plan system. The system must include justifiable returns for the pension investments, employee participation in paying for the annual pension fee, and appropriate tax payer expenses to hire and keep good employees on a sustainable basis.
—Mike Bleeg, Strategic Results
Yes. It should also reform its hiring practices, its firing practices, its employee review practices, its raise practices, its drug test practices and its comp time practices. Lt. Gov. Duffy should forfeit his police pension package while drawing his current salary—on principle alone. And when he ultimately leaves the workplace, he should be able to pick one of them, not draw both concurrently. That would show real leadership and serious intent to fix a major fault in the New York State pension system. Do away with pension-based on the last couple of years' service. Retirement should be structured on base pay, not padded overtime hours that have become the norm with a pat on the back and the wink of an eye. DiNapoli says that "less than 1/2 of 1 percent of our 385,000 retirees receive pensions exceeding $100,000.” Let's do the math—1 percent of 385,000 is 3,850. Half of that (rounding up, because he says less than half of 1 percent) is 1,925. Times $100,000 (rounding down because he says "exceeds" $100,000.00) = $192,500,000.00. That's right, 192.5 MILLION DOLLARS a year! For only 1,925 people a year! So now I wonder what the figures are for the REST of the 383,075 of our pension receivers. Please RBJ, find and publish ALL those numbers for us! God bless the taxpayer! Talk about taxation without representation. Makes me want to join OWS, but I'm too busy working. Wonder what our union buddies will have to say—cry me a river.
Even more needs to be done than Tier VI, but it is a step.
—Carolyn Phinney Rankin, president, Phinney Rankin Inc.
The current pension system is one of only a few, if not the only system, that is fully funded and financially stable. Whatever the changes, do not, under any circumstances, let the Legislature get control of it or the stability and the money will be gone.
—Ed Jackson, retired
A 401(k) match of 7 percent is unheard of in the private sector, which is what Gov. Cuomo is proposing. The Tier VI proposal lacks private sector reality but is politically expedient for the unions affected.
New York should create better equity between the public pension system and the private sector. The Tier VI proposal should apply to all public employees who have not yet retired and in addition, all of the plans should now include a "reservation of rights" clause to permit the state to modify the benefits in the future with legislative action as economic factors dictate.
—Dave Coriale, Webster
I agree with Gov. Cuomo and most New York State mayors (excluding the mayor of Binghamton, Matt Ryan) that the current public pension system, with its defined-benefit structure is unsustainable. While Comptroller DiNapoli is correct that a defined-contribution pension plan does not provide public employees a guaranteed constant level of benefits, and is therefore more risky, the free-enterprise, market-based system which the rest of us (non-public employees) must navigate is inherently risky. It is unfair to expect the taxpayers of New York, whose economic fortunes rise and fall with the vagaries of the stock market and economic conditions, to not only pay the salaries of public employees but also subsidize them and provide them with guaranteed pension benefits which they themselves do not enjoy.
—Kenneth S. Kamlet, Esq., Hinman Howard & Kattell LLP, Binghamton
I oppose Gov. Cuomo's plan only because it doesn't go far enough. The pension plans for all existing government employees should be converted to defined contribution plans. The retirement age should be raised and the minimum period of employment should be increased also.
Would someone ask Mr. DiNapoli why 401(k)s are great for us private sector guys, but too costly for the unions? Furthermore, if we are taxing the "1 percent" crowd, how about a nice tax on that group?
I support Cuomo's reform plan, but it doesn't go far enough. The current plan should be frozen for all below age 50 and all future contributions should be into a defined contribution plan. Employees should contribute to it at the same average rates experienced in the private sector.
—Mike Kaser, Penfield
The Tier VI plan is a baby step in the right direction, but it's not enough. In addition to the problem of all tiers milking the defined benefit system (e.g.; with overtime calculations), the root problem is that the system is set up to make it easy as pie to make promises that can't be kept. Those ever-increasing bills from the comptroller for pension shortfalls make it clear that all participating governments have been incurring unbudgeted unauthorized debt. The true reform would be to let the pension fund stand on its own, can't send out bills for shortfalls, if it doesn't have the assets then payouts will have to be managed.
Only in government is a particular pension guaranteed. RG&E changed pensions from an annuity to a lump sum in 1999. New York State should at least remove overtime from the pension calculation.
—Paul Kimball, supervisor, Town of Clarkson
Reform? What a joke. Comptroller DiNapoli is just a corrupt public employee stooge. Super Mario Jr. has no clothes. This is just a show. At best it’s a Band-Aid and they can’t even agree on that. Not enough. Still a Cadillac plan. Pretty soon Greece will look more fiscally responsible then New York State. The times are passing this state by. The rest of the world and the rest of the states get it. The people of New York, its governor, and its Caesarian Legislature will have to get wise or we will soon be insolvent. We are already a national laughing stock.
While the pension system needs to be reviewed, three other areas ripe for reform in New York State include: a) benefits accruing to New York State elected officials; b) lack of comprehensive welfare reform combined with generous benefits that tied people into a multi-generational dependency cycle; c) pork-member items. All need serious reform and cutbacks.
The flow of jobs, companies and young people out of New York State can be simply explained by one word, taxes. The main driver of our state’s high taxes is the public pension costs that every government organization; schools, libraries, villages, towns, counties, state, in New York State struggles with every minute. Strong reform in the pension system must be swift and correct many of the giveaways of the past. There are multitude of articles written on this subject, so take the time to educate yourself. If New York State was a company and Cuomo was CEO, he would fire DiNapoli. How can we (have) a state comptroller that puts politics ahead of fiscal responsibility? Let the state’s public unions hire him for their main spokesman.
—Tony Schmitt, self-employed
I support a thorough and objective review of EVERY segment of New York State's financials. Unfortunately, we have politicians, not economists, taking on this project. "Reform" is a political concept. This leads to "discourse and divide" —a political line is drawn, and you are either on one side or the other. Of course the labor unions are unhappy—they are the ones who will "suffer" if Cuomo's plan passes. As for 401(k) and defined-contribution plans, they are not more expensive to deliver. They do, however, place the responsibility of funding one's retirement, squarely on that one individual. If you have a 401(k), you have to use your own money to fund your retirement. Pensions allow people to fund their retirement, using other people's money. Who wouldn't want that? Save your money, people. You're going to need it.
—Vinny Dallo, New York Life
Gov Cuomo's plan is a windfall for Wall Street with few possible "benefits" for public employees. What few new public employees there will be over the next several years will be persuaded to opt for the 401(k)-like plan, translating into huge fees for Wall Street providers. Cuomo's plan would put the current retirement systems—which are fully funded—at great risk. The state recently (2010) created Tier V which was promoted as providing relief for other levels of government. It's reasonable to look at variations on the existing retirement tiers, but the proposed Tier VI has not had complete analysis—State Comptroller DiNapoli, in fact, projects an additional cost to localities if Tier VI is implemented.
—Tom Gillett, NYSUT
When pensions were introduced as a benefit decades ago, life expectancy was substantially lower than it is today. Current costs are NOT sustainable. If people are living longer, than the retirement age, to get full benefits, should go up as well.
We HAVE to. We simply cannot afford not to. This change is for FUTURE employees. The rules are NOT being changed for current employees. There is another option for those who apply for employment to State and Local governments in the future: See if there is a better deal in the private sector and work where the better situation is.
I strongly support the pension reform plan. State employees get better pay, work fewer hours, and get much better benefits than the rest of us who foot the bill. The present system is unsustainable. The governor needs to eliminate the inclusion of overtime and one-time payments from the calculation of retirement pay immediately, not just for future employees. Too many people are gaming the system!
—Karen Zilora, Creative Scanning Solutions Inc.
Due to the artificially low interest rates, Defined Benefit Pension Plans have become too expensive to plan for and budget. Most private employers have frozen their DB Plans and substituted Defined Contribution plans such as 401(k)s. I recommend that the public sector should do likewise.
—Ray Hutch, CEO Synergy Global Solutions
I would replace the current pension plan (defined benefit plan) with a defined contribution plan effective on the first day of the fiscal year. The new plan should be mandatory, not optional, and apply to current employees as well as new hires.
New York should reform its public pension system—from THE TOP down.
Defined benefit pension plans such as provided by governments are dinosaurs that will eventually go bankrupt or bankrupt the provider. Promises were made including continuing increasing benefits based on economic growth factors that have not materialized in the past 10 years and are not sustainable in the future. Unfortunately the unions only care about their own welfare and the people who pay their salaries and benefits be damned. It is either change or go broke.
—Jim Weisbeck, Bloomfield
It's easy for politicians to give out generous pensions and benefits to public labor unions as they know that they only have to raise taxes to cover costs. It is true that public employees did get paid less than private worker in large corporations but those days are over. I have never known a government worker to really have to work hard and what they do can be a service to the public but I have no sympathy for them getting laid off or having benefit reduced.
It is not all that complex. Be comparable to the private sector and the taxpayers who finance government. End defined benefit pension and begin/convert to defined contribution plans. Employers and employees contribute. Employer contributions vary among agencies, municipalities, etc. Employees make personal decisions on when and where they choose to work, in part based on employer pensions—no longer one pension taxes all. Shift the risk of return on invested pension assets from taxpayer to the beneficiary.
—D. Kennedy, Webster
Like so many compensation issues, the Public Pension System is a relic from a time when public employees were paid much less than private sector workers, so they got better benefits and more days off. It has to be reformed to cut costs and do its part to make New York more competitive with other states. One of the worst abuses is padding employee salaries with overtime to inflate pensions and allowing "double-dipping" by some. These things are unethical.
Already the labor unions representing public employees are spreading propaganda regarding budget cuts and changes in public employee pension plans. Unfortunately too many voters and non-voters hear the propaganda and take it as the truth. For starters, if you don't vote—shut up! You have no right to complain since you do not participate in the elections. If you want to complain then get up off your bloated behinds and start participating in the process. The only way to fix problems in government is by voting. It is my belief that only by voting does it show that you have an interest in managing your government and a right to complain when government does not do as you would like. Now to the point; the public employee unions representing their members have an obligation to do what they can to protect their members. Unfortunately unions that represent public employees believe their members should not experience the economic challenges that private sector employees experience, even unionized workers. It is reprehensible that they use member dues to misinform and mislead the public of what the governor and members of the senate and assembly are trying to do; simply have public employees contribute more towards their pensions and to have them participate more fully in 401k plans as do most private sector workers. As hard as it is for me to support governor Cuomo, any efforts he takes to control spending and thus limit my costs as a taxpayer are welcome. As we conservatives say; “Spending is the problem.” It's time that public employees take over a greater portion of their responsibility towards their retirement just as we workers in the private sector. Finally, as a voter you understand that you are the “boss” and only by voting can you extend an elected official's ‘employment’ or fire one for their failure to produce to your expectations. Most important as an educated voter you should not rely upon sound bites and “commercials” as your sole source of information as to how to cast your vote. If you hear something that concerns you dig deeper and actually educate yourself before you vote or—complain. It makes your vote count even more if you get the full story first. As in this issue and in many others the unions have a vested interest in misinforming and misleading you.
—Michael F. Kloppel, chairman, The Ontario County Conservative Party, Canandaigua
The plan has $146 billion plus, pays out between $5 billion to $8 billion per year, but takes in more than that in most years. The payments being put on local governments do not add up. The average pension is about $19,000 per year and the system is currently over 100 percent funded. Any reform should be to high end non-civil servants. The literally thousands of part time local legislators, political appointees, and appointees for different boards and authorities, most part time, get vested and skew the average pension upward. Whenever a part time legislator is term limited or loses an election they seem to end up with a newly created six figure job under the public domain. These pensions are agreed to deferred compensation, period. It is another attack on the middle class pushed by the 1 percent. Furthermore; Tier 5 was passed a little more than a year ago. Was that reform or just public relations? Also, I remember. I remember to follow the money as to who funded the Governor's campaign. I remember who followed the "Sheriff of Wall St." into the Attorney General's office and under whose nose the fraud of the 1 percent on Wall Street tanked the Global economy. In spite of all that New York’s pension fund is one of the best funded, if not the best in the country.
—Jim Bertolone, president, Rochester Labor Council, AFL-CIO
I applaud Governor Cuomo's effort. However, the Governor's Tier VI pension reform plan doesn't even come close to going far enough. What Governor Cuomo should be doing is to grant pension amnesty to workers already in the system. However, with any new workers entering the system all pension/health care benefits should reflect the average plans in the private sector. The public unions should effectively be phased out for the new workers. Also, New York should become a "right to work" state. There are very strict local, state and federal labor laws which protect all workers today. Therefore, public sector workers like most private sector workers would be sufficiently protected and compensated. Given the financial problems of the state and the country, this is the responsible thing to do.
—John Rynne, president, Rynne, Murphy & Associates, Inc.
No public employee is more important or more deserving than the average New York State taxpayer. All compensation and benefits must be tied to what is offered to the average New York State taxpayer. All public employees’ pensions—especially all elected officials and staff—should be converted to a 401(k) type system. The taxpayers—both working and retired—have had to adjust and expect less. Public employees cannot expect immunity from the current economic problems and state mismanagement. The governor's compensation is the highest in the U.S. The legislators are also among the highest compensated in the U.S. The average public employee in New York State is compensated far above the average taxpayer. With $70+ billion in underfunded pension liabilities in NYS, it would be irresponsible not to reform the pension system. Union employees should direct their anger toward union leadership (will their pensions be affected?) who have contributed the members’ union dues to their favorite politicians. These politicians are the same ones who have FAILED to properly fund the public employee pensions and have written legislation that allows gaming of the pension system with excessive overtime public employees and pre-retirement promotion abuse for state execs.
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