Mayor Michael Bloomberg announced during the State of the City address that former Mayor Ed Koch, founder of New York Uprising, would lead the charge for pension reform; an implementation that Bloomberg calls one of the most fundamental changes necessary to fix our state’s government.
“The only way to protect pensions for our city workers … is to reform the systems so we can afford it, and – at the same time – afford the vital services that New Yorkers want and depend on,” said Bloomberg.
The city has five separate pension systems for employees – the New York City Employees’ Retirement System; the Teachers’ Retirement System of the City of New York, the New York City Police Pension Fund; New York City Fire Department Pension Fund; and the New York City Board of Education Retirement System. Each pension fund is financially independent with its own board of trustees.
According the Mayor’s office, Bloomberg is proposing eliminating the smallest system – New York City Board of Education Retirement System – and consolidating it into Retirement System of the City of New York for pedagogical employees and into the New York City Employees’ Retirement System for non-pedagogical employees netting a savings of $8 million a year.
The Mayor also called for the establishment of a higher minimum retirement age for civilian employees to receive a full pension from roughly 57 to 65 years old. Additionally, the Mayor proposed the elimination Variable Supplemental Fund, a $12,000 bonus pension payment that goes to police and fire retirees each year. The elimination would also affect all future retirees saving $200 million a year, according to the Mayor’s office.
Lastly, Bloomberg has proposed that the city should have the authority to negotiate with the unions on pension cost – as opposed to having the costs dictated to the city by the State Legislature, who is not responsible for paying the bills.
The pension reform proposals – which would require the passage of state laws – have caused a stir amongst unions throughout the city. In a statement released by District Council 37 – the city’s largest public employee union – executive director Lillian Roberts said that Mayor Bloomberg chose the low road in his State of the City address by attacking city workers and their $17,000 per year pensions.
“The city’s budget crisis is not the fault of municipal workers and their benefits,” said Roberts. “Rather, the fault lies with the massive fraud and recklessness of Wall Street and the loss of municipal revenue as the financial sector nearly collapsed in 2008-09. While the large banks were made whole dollar for dollar for their losses from the financial crash, taxpayers footed the bill and now, when Wall Street profits are at record highs, municipal budgets are being balanced on the backs of public employees. ”
Also reacting to the proposals was Patrolman Benevolent Association president Patrick J. Lynch, who was not happy about the possibility of losing the Variable Supplement Fund benefit.
“The Variable Supplement Fund benefit – what the Mayor refers to as a holiday bonus – was bought and paid for by New York City Police Officers, having been derived from a collective bargaining agreement that benefited both the city and our members,” said Lynch. “Police officers gave over $75 million up front and in excess of a billion dollars of surplus pension earnings over the years to the city’s coffers while a small portion was shared with our members in a defined benefit. Having realized billions in benefits, the city now wants to renege on the agreement. We intend to hold them to it.”
Through criticism, former Mayor Koch believes that pension reform will be a turning point in the history of New York.
“I see that our government is failing, and we have a once-in-a-generation chance to fix it. With stakes like these, we better get it right – and we won’t get it right unless we enact meaningful pension reform."
