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02/17/2012 10:07 PM

New Tier For State Pensions Rises To Top Of Cuomo's To-Do List

By: Zack Fink

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Now that teacher evaluations have been settled, Governor Andrew Cuomo is expected to undertake the next battle in his budget plan: a new pension tier for state workers. NY1's Zack Fink filed the following report.

Governor Andrew Cuomo is looking to establish a new tier for state pensions. It is something he has been talking about since his budget address, when he said, "We need pension reform. We need it desperately. We propose a new Tier VI."

Like teacher evaluations, Tier VI is part of the governor's budget, which needs to be in place by April 1.

"This is something that is more of an ideological fight than it is a dollars-and-cents or a practical battle," says Robert Ward of the Rockefeller Institute.

The governor has proposed allowing new hires to enroll in a defined contribution plans, which many opponents have described as similar to a 401k.

E.J. McMahon of Empire Center says during this current debate, no one seems to talk about the state's current plan, which is already on the books.

"New York State has sponsored for decades one of the nation's largest voluntary public sector defined contribution plans," says McMahon. "Right now, 30,000 employees of SUNY and CUNY have voluntarily opted into defined contribution plans as their primary pension."

Supporters of defined contribution plans say it is portable. In other words, workers could carry them to other jobs and wouldn't have to wait more than a decade to be vested.

Opponents, including State Comptroller Thomas DiNapoli, say the system does not provide the same level of security as defined benefit plans or pensions.

"I think the legislature wants to make some changes to the pension proposal. I suspect the governor will be willing to negotiate those as long as it remains in the overall outlines of what he has proposed," says Ward.

Observers say what Cuomo has successfully done is shifted the terms of the debate. It used to be about making pensions more generous, and that was done a handful of times when the economy was better. Today, it is just the opposite.