Cuomo Pension Plan Sparks Fight With New York Unions

New York Gov. Andrew Cuomo's effort to change the pension system for state public employees has sparked a labor union backlash against the first-term Democrat.

Cuomo's "Tier 6" pension plan would reduce benefits for new public employees and give them the option of enrolling in something closer to a 401(k) savings plan -- measures strongly opposed by labor unions. On the heels of union-funded advertisements against the proposal, the AFL-CIO union federation issued a resolution to its affiliates Wednesday "strongly condemning" the Cuomo proposal and urging workers to protest.

"We strongly condemn the Tier 6 plan as it would cut pension benefits for new hires by 40 percent and pull billions of dollars out of the state and city pension systems to turn over to Wall Street financial firms," the AFL-CIO resolution reads. "Tier 6 is simply unfair to public workers who have already made significant sacrifices."

The governor's office could not immediately be reached for comment.

Cuomo has moved pension reform to the top of his political agenda in recent days, declaring Tuesday that "it would be irresponsible of me as governor to accept a budget for this state that doesn’t have pension reform." State lawmakers must present the governor with a budget by the end of the month.

Cuomo and other reform advocates say New York's pension costs give the state no choice but to overhaul retirement plans for government workers. New York Mayor Michael Bloomberg delivered a speech Tuesday on Long Island arguing that local governments can't sustain pension costs, and the mayor's reform group has bought ads to promote the Cuomo measure.

"We want legislators to know that every extra dollar we have to put toward pensions is a dollar we can’t invest in schools, public safety, job creation, roads and bridges and other critical infrastructure," Bloomberg said.

But the state's public-sector unions, which have been protesting in Albany and elsewhere, say that the pension system is stable. Although pension costs for employers have risen since the financial crisis, those costs will soon come down, argued Brian McDonnell, New York legislative director for the American Federation of State, County and Municipal Employees, one of the unions strongly opposing the Cuomo proposal.

The Tier 6 plan, McDonnell said, will leave new state employees without enough to live in retirement. And encouraging employees to invest in an individual savings plan like a 401(k), may end up undermining and destabilizing the more traditional pension plan, he said.

"We will agree that local governments are struggling," McDonnell said. "They're definitely being squeezed. But this is the wrong solution. ... It's a real assault on retirement security. This is the best-funded, best-run pension system in the public sector."

AN AFSCME radio ad attacking the Cuomo plan:

Comments

[Greg34]

12:34 PM on 03/19/2012

Oh snap, the writing is on the wall unionc bosses, your gravey train days are OVER. The taxpayers, your bosses are now demanding reform since it is their money that is used to pay for these benefits. When faced w with the choice of paying ridiculious union benefits or educating children the unions lose. no more tax increases to bail out the unions, let them go bust under their own weight.

[JusdaTruth]

08:11 PM on 03/27/2012

That will never happen. Solidarity forever.

[JusdaTruth]

11:58 PM on 03/16/2012

The 1% has won. We need a real democratic govenor, not a republicrat like Cuomo. It's time that we get rid of the so-called blue dog democrats that are in power and go with the progressives.

[Greg34]

12:35 PM on 03/19/2012

The 33% has won. The real middle class private taxpayer that pays for the public sector, welfare and taxtakers. Your time has come that we demand that your pension be fair to the taxpayer as well.

[JusdaTruth]

08:09 PM on 03/27/2012

So in your logic the police, firefighters, teachers, social workers, prison guards are not real middle class private taxpayers. So it seems to you they are second class citizens. How would the state and the country be without a public employee framework. The people who stole money in Wall Street and in Banking caused a temporary increase in public money to be injected into the pension system. What will be the quality of the future workforce be as a result of this new tier. This race for the bottom and theft of monies in a grand way by the 1% is ignored by people who think like you. It's easy to go after the little guy but the people who caused this are overlooked by people like yourself. Union folks fight for fairness in the workplace. I wish people appreciated that.

[LFox6]

06:59 AM on 03/16/2012

Tier 6 was way overdue. We're all doing our part here in NYS - and the future union workers need to as well. The current workers will not be affected, so it's all good

[Brandon Brandon]

06:12 PM on 03/15/2012

Whats sad is that MOST NYC public workers are severely underpaid ( in comparison to their private counterpart) and now the pension cuts.. Comparing the private sector with the public is an absolute joke.

[Phil-EA]

02:28 PM on 03/15/2012

Well this is definitely a start, but hopefully not the end of dialogues on overhauling the pension system and moving totally over to a defined-contribution option. Despite the claims that the move would be “radical” it’s incredibly important if you want a secure pension system (http://bit.ly/zmbkjo), and 71% of NY teachers want to have the ability to have a defined contribution system (http://bit.ly/zCLuKj).

That said, this is definitely promising, if for no other reason than it should hopefully change the perception that creating sustainable public sector compensation is a partisan issue. Clearly you want to avoid the bleak future facing Rhode Island where the entire state finds itself on the brink of Insolvency due to a mismanaged pension system (http://nyti.ms/wn7HlE), but in order to do that you’re going to have to create bipartisan support. Hopefully Governor Cuomo took New York in that direction today.

[Judane]

12:33 PM on 03/15/2012

Unions would support Cuomo even if he was sacrificing live children in Madison Square Garden.....as long as he supported everything Unions wanted.

But if he gave his entire salary to charity, discovered a cure for cancer, elminated nuclear weapons from the face of the earth and solved "Global Warming" they would still hate him, villify him, and call him a disgrace......just because he didn't support everything Unions wanted.

Sad but true....

[Judane]

12:21 PM on 03/15/2012

Mr. Cuomo is a hardcore Liberal Democrat.

Unions should ask themselves why a person like that would suggest changes like this KNOWING it will cost him union support.

If they were honest they would admit it is because those benefits are actually hurting the state and the tax payers that have to fund it.

Still, I don't know why we would be talking about honesty.
The topic IS unions, after all....

[LFox6]

07:00 AM on 03/16/2012

He's not all that hardcore, he is cut from a different cloth than his father (who in my opinion helped to get us into the state we are in here in NYS). He works well with his legislature, and they with him, and he's not afraid to take a stance on something, the heck with the political costs. So far, it's serving him (and us!) well, he has a hugely high approval rating. Can't please all the people all the time, I guess

[realpolitic]

10:31 AM on 03/15/2012

It may be a necessary step.  After all, government should be in the business of building roads and bridges, repairing other infrastructure, hiring teachers, police, and firemen.  These days there's just no money left.

[DeeWin]

10:24 AM on 03/15/2012

You can't argue with the math, and SOME of the leftist leaders are starting to wake up.

Public sector unions turn government on its head. Rather than the government serving the people, the taxpayers end up footing the bill, and serving at the beck and call of the unions.

*Union dollars enrich Dem election coffers
*Union workers turn out the Dem vote
*Dem "leaders" arrange for lush union contracts
*Taxes go up, up, up
*Public sector workers outearn those who pay them
*Those with money leave the state
*Taxes go up, up, up
*The state faces bankruptcy

It's the math and the corruption. You can't argue with it, and you can't ignore it. Ask the governors of Wisconsin, N.J., N.Y. And watch California as it swirls down the toilet.

[WatcherfrmLeft]

09:56 AM on 03/15/2012

The Governor should explore other areas for investing the money for Pension Funds verses throwng it too Wall Street. One example is Local Bond Issues for development within communities of that State. Every politician drives funding away from their State, reasons are suspect, however; there are ways to fix this. NOBODY wants their Social Security Funds in the hands of Wall Street. It is one thing to destroy your future, another to give it to starngers to do it. The 401K with many rules gave Wall Street a license to capitalize on peoples money, with not great oversight or restrictions. Bond issues throughout communities in any State would be readily available, paying for projects, and providing jobs, however; my viewpoint is if politicians fear doing something like this, there should be concern by their citizens that management and controls is not as solid as projected. I support a requirement for every citizen to vote in this country by law. This would eliminate influence peddling by corporations and debates we're having.

[LFox6]

07:01 AM on 03/16/2012

He's handing the Buffalo area a billion dollars - there's a start - Buffalo, the 3rd poorest city in the nation, right behind Detroit and Cleveland, for all the same reasons.

[WatcherfrmLeft]

11:18 AM on 03/16/2012

Is this part of investing for State employees or is it tax payer dollars which may not be recovered? Thanks.

[jay1975]

09:32 AM on 03/15/2012

We faced a similar problem in my state. The generous retirement packages were helping to drive the state to bankruptcy. The return rate versus the investment rate is, and was, unsustainable.

[NetLoa]

08:37 AM on 03/15/2012

Cuomo is a huge disappointment. Everything he is doing in NY is positioning for a "centrist" (read corporatist) run at the White House, probably in 2016.

[peggysmom]

11:08 AM on 03/15/2012

he overwhelmingly won the election with a mandate to reform the pension system & he is a man of his word & not beholden to the unions. even Shelly Silver the union loving speaker of the house kept the vote open til late in the night to ensure passage (NyTimes).

[LFox6]

07:02 AM on 03/16/2012

That's what's really amazing - with Bruno gone, they are finally getting things DONE in Albany, and I for one applaud them all!

[Patriot86]

08:18 AM on 03/15/2012

401K's are a joke...more money for wall street to play with and lose those of us who have been cheated out of our promised pensions are going to find that retirement will not be possible yet discrimination at the job in terms of age will make working impossible as well...many will watch what they worked for their entire lives disappear...all so the 1% could have bigger tax breaks.

[jackdaniel58]

07:46 AM on 03/15/2012

Call his bluff.

[ricorio]

08:29 AM on 03/15/2012

I agree with Cuomo and will go even a step further in saying they need to pay the major part of their medical until we can a national health plan enacted. Unions definitely have a place in todays world but they really need to revamp their platform. They did a great job in ending child labor and making the work place safe along with 40 hour work weeks but they are killing all of us with outlandish demands that our tax dollars paying for medical and retirement. The majority of government workers do the very same job as secretaries, clerks, constuction workers everywhere only at a much higher rate and with an attitude. With a 401K properly invested, social security and medicare they should make out fine if they quit keeping up with the Jone's and instead live within their means.

[pinetarred]

07:11 AM on 03/15/2012

Never forget this too...Andrew Cuomo was also Secretary of HUD during the give-a-way of America via the housing market..I am amazed how his name kept slipping thru the cracks...AMAZED...