Don’t look for speedy relief for New York’s pension headaches in Albany.
Even though state legislators approved key elements of Governor Cuomo’s pension reform, it will take decades before substantial savings can be achieved.
Trouble is that these reforms only affect newly hired state workers, not those currently on the payroll.
For new workers, the Governor’s pension deal would raise the retirement age to 63, modestly increase employee contributions and offer 401k retirement accounts for higher paid workers. Over 30 years, these reforms could save tens of billions of dollars.
But local governments need relief now.
Local governments have had to increase their pension payments, because investment income earned by pension funds has been so disappointing. Consequently, local governments are using their tax revenues to make pension funds whole.
Suffolk County Presiding Officer Bill Lindsay says pension payments are bankrupting his county. In just two years, these payments could double from $102 million to $192 million.
So while it’s good that pension reforms have been approved in Albany, local governments need more help than the additional borrowing authority they’ve been offered.
Otherwise, these pension headaches surely will become a migraine.