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Cuomo Walks Back a Step From Pension 401k Proposal

 

Governor Andrew Cuomo walked back a step from his proposal to give new state workers the option of a 401k style pension plan Monday, but the governor says without major pension reform, local governments and the state of  New York could end up “bankrupt”.

 

Cuomo told a receptive audience of mayors from around the state, gathered at their annual conference, that New York’s current pension system is unsustainable and must be changed.

 

“If we do not do this, we could literally bankrupt the state of New York,” Cuomo said. “Or we will force tax increases that will just drive people from this state in droves.”

 

The governor, in his budget proposal, wants a new benefit tier that offers the choice of a reduced public pension or a 401k style plan, but he says he’s open to discussions.

 

“I’m not saying that ‘this is my plan, you know, it’s my way or the highway’,” Cuomo said.  

 

The governor, who’s become known for his hard line stance on numerous issues, says he’s “flexible”, comparing himself to the 1960’s popular rubber toy “Gumby”.

 

Cuomo says the legislature, though, has to offer an alternative plan that saves as much money as his own proposal, which he estimates will save $113 billion dollars in future decades.

 

The governor received enthusiastic support from the mayors. Executive Director Peter Baynes praised Cuomo for presenting what he says is “true pension reform”.

 

“NYCOM stands shoulder to shoulder with you,” said Baynes, to applause.

 

Cuomo, in his speech, emphasized that the new, reduced benefits would only apply to newly hired workers. He derided opposition from state employee unions, who say they need to protect their members, calling the arguments  “absurd”.  

 

The state’s two largest public workers union, the Civil Service Employees Association, and the Public Employees Federation, say even without the 401k option, Cuomo’s proposed Tier VI benefit plan is too meager, and unacceptable.

 

The CSEA’s Steven Madarasz, in a statement, says theTier VI plan still offers a “40 percent reduction in benefits”, with or without the 401k option.  He equated the fight to class warfare, saying it’s  about “corporate CEO’s” and their agenda versus  “future nurses, school bus drivers, and highway workers”, who he says are being asked to  give up any hope of financial security in the future.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Karen DeWitt is Capitol Bureau chief for the New York Public News Network, composed of a dozen newsrooms across the state. She has covered state government and politics for the network since 1990.