From Albany, Move to Trim Pension Plans

abuse of taxpayer money to bankroll government workers is absolutely fair! everybody else is susceptible to the economy except the government workers!

It's called parity with the suburbs.

Let's not forget "tenured" kindergarten teachers.

steve, they do not retire with full pay after 20 years - they are eligible to retire after 20 years at 40% of the average of their best three years

lowery, depends on who "they" are. You're discussing the unfireable teachers. Cops can retire after 20 years. My uncle did it.

"Average of their three best years": a little bit of summer school will take care of that, no?

There is no justification for these excessive pensions - they are unsustainable. Nice if you have one, not so nice when everybody else has to pay for it.

State and local pensions are already underfunded and most have a hysterical expected return of 8% or more. When this shoe and the Medicare shoe drops within the next twenty years we are all headed for a much lower standard of living - Retirees from decreased benefits and the rest of us from higher taxes.

"Retirees from decreased benefits"

Not to mention Boomers who just lost their 401k's, investments, and the plummeting value of their real estate.

We are now paying the piper.

You guys are missing a significant point. Government employee pension benefits are currently protected by NY State constitutional provisions. That means that the legislature is required to fund the pensions or change the constitution. In other words, they will find taxes to raise on you and me before they have to start going up against the unions when it comes to reelection. You can already see their maneuvers. They are looking to tax healthcare benefits people get from their employers.

MTA workers get pensions based on their last year of salary only. So those who determine the shifts make sure that maximum overtime is worked. Salaries for the last year regularly exceed $100,000 and often reach towards $200,000. And 30 year pensions are some 75-80% of the last years salaries.

Steve, you can retire after 20 years, but you do not get full pay - check with the Police Benevolent Association today. It's the same retirement system whether you're cop, teacher, sanitation, professor. It has also changed over the years, and was once more generous than it presently is. When your uncle worked for the State he did not contribute out of his salary to the pension plan. Now cops pay 3% of their gross salary for the first 10 years. Now Paterson is proposing 5% and to end the 10-year limit.

AvUWS - 30-year pensions are not 75-80% of the last year's salaries. It's the same system as for the cops and teachers - 2% X number of years of service X average of three best years' earnings, including overtime.

For calculating those best years, workers try to goose it up in their last three years by doing lots of overtime. Certain "benefits" are now structured so that you pay for them yourself, out of your pre-tax, gross "salary," with the State paying nothing, and the "benefit" being that your income taxes are less. This also affects the calculation of your "three best years."

In effect, what people are doing here is pointing to 15 CPW and saying that New York City apartments cost $3,000 per square foot. Well, kind of, sort of, maybe.

"When your uncle worked for the State he did not contribute out of his salary to the pension plan. Now cops pay 3% of their gross salary for the first 10 years. "

"Certain "benefits" are now structured so that you pay for them yourself, out of your pre-tax, gross "salary," with the State paying nothing, and the "benefit" being that your income taxes are less."

Perhaps I'm reading this incorrectly, but are you saying that cops do a 3% contribution for only the first ten years and this is considered the benefit paying for itself?

Lowery - total crap. First of all, different city agencies have different pension systems. And within each pension system there are different classes of employees depending on when the employee started working for that system.

but the last thing i want to see is the preservation of benefits to the already retired and about to retire to the detriment of those that just start working. it's about time the already retired get a cut.

the priority with limited resources should be to attract the best public employees possible, not to make sure that retirees can go golfing... by the way, those on fake disability on the long island railroad, should they return the money received on disability and give up their normal pension from now on?

that type of measures should discourage more corruption and save us some money.

"the average of their best three years"

this is so crazy and so shockingly common. even in poor counties in the midwest they use this stupid rule. there's no way to predict how much useless overtime the old will put up to inflate their pension check. it's just ridiculous. it should be illegal and calculated as average of years worked, like social security. men, this is pissing me off big time.

at the end of the day, is there any county in the country without ridiculous unfunded pensions like "retire after 20 years, best 3 years, ..." to where the ones that can chose where to live can exile to? i'm not too optimistic on the change of constitution as the unions themselves take what they want from albany. what a world! the cash economy is the only defense to this as a taxpayer? my god.

"When your uncle worked for the State he did not contribute out of his salary to the pension plan"

Wrong.

"different city agencies have different pension systems."

Right.

"Government employee pension benefits are currently protected by NY State constitutional provisions."

Also right. And that needs to be changed, and will be. New regulations are taking effect that will force governments to make provisions for retirement benefits on an annual basis, so the cost is seen on the books as occurs with private companies. When this happens, it will be readily apparent that to fund today's pensions would require raising taxes to exorbitant levels to cover the cost. Texas has chosen not to abide by this rule - because they don't like the result!

There's a lot of changing to be done in the way we govern ourselves. In the olden days when health care was affordable, and there were relatively balanced budgets, and public-sector workers weren't paid much but got good benefits, things were different. But now, especially in New York, we can't afford it anymore. The city can't afford to subsidize upstate anymore. Wall Street is NEVER coming back to what it was, and as of today there's nothing to take its place.

interesting steve.

"Texas has chosen not to abide by this rule - because they don't like the result!"

so these are non compulsory regulations? you abide if you want to only? for practical purposes i guess it will do the trick anyway, as only those with horrible stuff to report will not do it. it should impact their muni mkt badly not to report. it's great news that the gov have to report their finances at the same level that the private sector given that they use the credit mkts too.

do you know when this takes effect? i've been reading about this rule without much specifics on articles relating to munis CDS. i would like to know more about it, like whether it could be postpone altogether (due to econ crisis, for ex).

Unlike private corporations, I believe there is no way to enforce the rules against governments, but not doing so will hurt bond ratings. Details are here:

http://www.nctimes.com/articles/2007/01/03/news/top_stories/1_03_421_2_07.txt

Basically, the net present value of accrued benefits will have to be shown as an expense, and unfunded obligations will have to be shown as a liability. I believe NYC already abides by these rules (which is what makes the benefit figures so high in recent years, if I'm not mistaken) but I'm not sure about the state. It's GASB 45.

Here's Texas' response:

http://www.manhattan-institute.org/html/_wsj-accounting_texas_style.htm

For pensions, the rule is GASB 50:

http://www.gasb.org/st/summary/gstsm50.html

The problem is going to be with the precipitous fall in the stock market, there are now enormous unfunded sums. Private corporations are asking for relief so that they don't have to fund their plans in full for a number of years. Don't know what the government will do.

"Private corporations are asking for relief so that they don't have to fund their plans in full for a number of years"

corzine in nj too. very interesting. thanks for the links!!!

The city/state will never change union contracts..their pay raises might be smaller but not the "perks"

julia, they will have no choice.

Steve - it is a very long way between where we are now and "no choice". In the '60's it took NYC a decade to go from inevitable to "no choice". They will only get there kicking and screaming having already cut services, raised taxes, raised usage fees, and then seen people leaving.

At least we're moving in the right direction.

The state and city have been in union pockets for years (try getting elected without them) and they've been collecting payback in terms of these benefits.

Stinks that it had to take a recession to start dealing with this, but this HAS to happen.

steve, here you are assuming that hte feds will not help states that are deeply in red like california and new york? if so, i hope you are right.

there's no need for taxpayers from a cheaper state to have to bail out those on the expensive ones that committed excesses. that's one of the things that bothers me about the bail outs we are witnessing. paid by all but not spread around evenly.

AvUWS and steve - you're right - I was thinking of the State employees' system. Apologies - yep, NYPD and MTA employees have it better than the NYS employees such as peace officers when it comes to the amounts of their pensions, how long they have to work before they can collect it, what it's based on.

I think MTA has bargained into their position via strikes. When we have a transit strike, it gets ugly, though I think the last one didn't put them ahead of where they had been beforehand. I'm not sure the transit workers' and police unions get the City pols elected, though. Many live in the suburbs. And one problem NYPD has had is that their recruits use their Academy to get trained, start at the NYPD's salary, and then move to suburban PDs for higher salaries. That's why they raised the starting salary to a whopping $35,000.

AvUWS - I'm hoping we learned since then.

I would like upstate to learn that upstate is responsible for upstate. Else we should secede: Westchester, Rockland, NYC, Nassau, Suffolk. Declare independence. Rejoin Vermont, which was originally part of New York, and we miss them.

Why stop at from the rest of NYS?

We've been subsidizing the COUNTRY for years. There is no hoover damn, no vegas, no highways, hell, america is pretty much empty between here and California if not for the funds we supplied.