Comptroller lists concerns about NY pension bill

By Michael Gormley ALBANY, N.Y. — A new analysis of Gov. Andrew Cuomo's proposal for a less expensive pension system for future government hires concluded it can't be put in place by April 1 as planned and would cost state and local governments millions of dollars to implement.

The analysis by actuaries in the state Comptroller's Office on Feb. 2 analyzed Cuomo's plan for a new lower pension tier that would include an option for a 401 (k)-type retirement plan. But implementing the new system has taken other states more than a year and would cost New York state government alone $7 million to $16 million to start and operate with more costs for local governments, according to the comptroller's report.

For future hires who choose a pension rather than the 401(k) that invests in stocks and bonds, salaries for pension calculations will be capped at the governor's $179,000 salary, according to the report from the staff of Comptroller Thomas DiNapoli. That would reduce the benefit for physicians and some university professors paid more than the governor at a time that Cuomo said raises are needed soon to attract and retain top talent.

It was a rare and detailed critique of the proposal outside of public employee unions for the measure Cuomo said will take an $83 billion burden off taxpayers over 30 years. The taxpayers' cost of public pensions will rise from $2.3 billion in 2009-10 to over $6 billion in 2014-15 if nothing is changed, Cuomo said earlier this week.

Cuomo's proposal also would address abuses such as raising final salaries through extraordinary amounts of overtime in the last years of work to inflate pension checks and other measures to head off what he calls unsustainable costs for taxpayers.

“We can't live with it another year," Cuomo told the New York State Association of Counties, to applause from the local officials.

DiNapoli, by law the sole trustee of the pension system, has been critical of Cuomo's proposal to move from a traditional pension to a 401(k) type of plan that doesn't guarantee a specific payout upon retirement, even if it's voluntary at this point.

DiNapoli also notes some disability insurance protection would be lost for future hires under the proposal. But he said more changes are expected before the proposal reaches a vote in the Legislature.

Any pension change that includes a new 401(k) provision would take time for the state and local governments to put in place.

“Certainly, I think you'd be talking about more than a year, based on past experience," DiNapoli said in an interview.