Bloomberg Seeks New York City Pension Rules Harming Benefit Rights

Caifornia workers are not alone NY workers under attack by the Mayor!

Bloomberg Seeks a Sweeping Overhaul of City’s Pensions

Published: February 2, 2011Mayor Michael R. Bloomberg proposed sweeping changes on Wednesday to New York’s costly pension system, seeking to save billions of dollars by fundamentally altering long-established rules that have awarded generous retirement benefits to municipal workers and have deepened the city’s financial hole.


In trying to control soaring pension costs, Mr. Bloomberg is taking aim at retirement rules considered sacrosanct by the city’s powerful municipal unions and their political allies.

The mayor wants to require most new municipal workers to work at least 10 years, or double the current amount, to qualify for a pension, and bar them from receiving pension checks until age 65. Now most nonuniformed workers, including teachers, can get pension checks at age 57, and some police officers and firefighters can receive full pension checks after working 20 years, no matter their age.

New employees would also need to contribute more of their own money to their retirement accounts, according to the plan.

And Mr. Bloomberg would forbid all new employees to benefit from a time-honored practice: adding hundreds of hours of overtime at the end of their careers to balloon their final year’s pay and their pensions.

The mayor did not spare current retirees, vowing to eliminate a $12,000 annual stipend that retired police officers and firefighters get on top of their regular pension benefits.

“This reflects the dire fiscal circumstances the city faces, the devastating impact of increasing pension costs and the desperate need for aggressive reforms,” said Marc La Vorgna, a mayoral spokesman.

The mayor’s pension proposal — coming one day after a shrunken state budget from the new governor, Andrew M. Cuomo, with similar tough talk — represents a clear bid to capitalize on growing concerns about pension costs and rising anti-union sentiments, even among traditional labor allies.

Public pensions are being tightened in other states across the country where government employees, as in New York, receive far more generous retirement benefits than most private employees; many companies are eliminating pensions altogether.

But Mr. Bloomberg’s proposal also represents a departure from his own past practices. His administration has been responsible for a significant portion of the growth in city pension costs, offering generous pension sweeteners during contract negotiations and repeatedly missing opportunities to rein in spending.

Indeed, pension costs are now projected to eat up one of every eight city dollars next year, in contrast to 1 in 28 when he took office in 2002.

Mr. Bloomberg’s package could help the city save at least $200 million a year immediately, and billions of dollars more in the future. But his proposal faces a potentially major obstacle because any changes in the city’s pension system must be approved by the Legislature and the governor.

The mayor has potential allies in Mr. Cuomo and the new Senate majority leader, Dean G. Skelos, a Republican. But Sheldon Silver, the Assembly speaker, will most likely be the wild card.

A spokeswoman for Mr. Silver did not respond to an e-mail seeking comment. But one person close to Mr. Silver said it was quite possible that the speaker would support several proposals, if not the entire package, including the move to stop counting overtime for pension payments, and requiring employees to contribute more of their own money.

“Shelly is a realist about this, and clearly there is a movement to do something about the pension system,” said this person, who insisted on anonymity so as not to jeopardize relations with Democratic lawmakers in Albany.

A spokesman for Mr. Cuomo, meanwhile, offered words of encouragement.

“As the governor has said since the beginning of his campaign, he is committed to reforming the pension system in order to reduce costs,” the spokesman, Josh Vlasto, said. “We have discussed the mayor’s pension reform proposal with his staff and are reviewing the details.”

But one union official was irate after listening to Mr. Bloomberg’s proposal.

The official, Harry Nespoli, chairman of the Municipal Labor Committee, an umbrella group of unions, said that Mr. Bloomberg had become “a dictator” and that “the mayor has set back labor relations 40 years.”

Not long ago, Mr. Bloomberg was viewed as a reliable ally of labor. He offered generous salary increases in contract negotiations, and spoke with pride about the city’s municipal work force, which is now about 300,000. In 2008, as part of a merit-pay agreement with the teachers’ union, the Bloomberg administration shepherded a pension package through Albany that allowed teachers to retire five years earlier than before, but with full pension benefits.

And in late 2008, just as the financial crisis began to explode, Mr. Bloomberg granted 4 percent raises for two consecutive years to the city’s largest municipal workers’ union,District Council 37, without extracting support for pension givebacks.

Mr. Bloomberg’s assiduous courting of labor paid political dividends: after getting virtually no labor support in his first campaign in 2001, he picked up dozens of union endorsements in his third-term victory in 2009.

But in recent years, Mr. Bloomberg has talked increasingly about the dangers of rising pension and health care benefits. And in his State of the City address, he vowed to make pension reform his top priority in Albany, and promised not to sign a contract with salary increases unless accompanied by reforms in benefit packages.

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