Governor Andrew Cuomo is tackling New York state’s spending by limiting public employee pensions and cutting almost 10,000 jobs.
According to the New York Times, Cuomo says the state can no longer afford to provide the “generous” benefits given to public workers in the past. The governor also targets the rampant benefit padding where workers step up their overtime the final year of employment to beef up their pensions.
The same day he made this announcement, Cuomo also moved ahead on his plan to lay off up to 9,800 state employees. The Albany Times Union obtained a copy of the memo announcing state employees will start getting laid off in waves on July 15.
Overall 30,000 employees will be affected by the layoffs as jobs are shifted from agency-to-agency.
He joins New Jersey Governor Chris Christie in targeting public pensions to help relieve his state’s fiscal woes. Christie reached his deal with the senate this week, cutting pension benefits and health coverage for New Jersey state employees.
Cuomo’s Tier VI pension proposal includes:
- Raising the retirement age from 62 to 65
- Ending early retirement
- Requiring employees to contribute six per cent of their salary for the duration of their career
- Providing a 1.67 per cent annual pension multiplier
- Vesting after 12 years instead of 10 years
- Excluding overtime from final average salary
- Using a five year final average salary calculation with an 8 per cent anti-spiking cap
- Excluding wages above the Governor’s salary of $179,000 from the final average salary calculation
- Eliminating lump sum payouts for unused vacation leave from the final average salary calculation
- Prohibiting the use of unused sick leave for additional service credit at retirement.
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