Wednesday, December 17, 2008

Move in New York to trim state pension plans

New York Governor David Paterson is proposing to reduce benefits for newly hired state and municipal workers, including those in New York City, by placing them in a new pension category.

Under the governor’s proposal, workers in the state pension system would have to work until they were at least 62, instead of 55. The changes would apply to all state workers, many city employees, including teachers, and employees of a number of municipalities outside New York City.

New workers would also have to contribute 3 percent of their pay to the pension system for their entire career; currently the contributions stop after 10 years of service. And workers would no longer be allowed to use overtime in their last year of service to bolster their future pension payments.

Other proposals by the governor call on current state workers to give back a previously negotiated 3 percent salary increase next year and defer a week’s pay until they retire. His budget would also require future retirees to significantly increase their contributions for health care coverage.

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