Update: In April 2024, as part of the New York State budget, one modest improvement to Tier 6 was finally accomplished: Tier 6 pensions will now be calculated based on your best three consecutive years (as has been the case in Tier 4) rather than based upon the average of your five best years (which had the effect of lowering pensions, as your final couple of years tend to be your top earning years).
As most members know, anyone who was hired in the past decade can only become eligible for a Tier 6 pension, which is inferior to a Tier 4 (or earlier) pension in virtually every way. You have to work longer (up to 40 years), pay into the system longer (Tier 4 employee payments stop after 10 years; Tier 6 requires you to keep contributing); pay a higher percentage of your salary (between 3 and 6%, rather than a flat 3%, with the highest percentages being for titles like us that earn higher wages) retire at an older age to receive an unreduced pension (until age 63 vs 62 or younger), and have the pension based on the average of your best five consecutive years (rather than best three consecutive years), hence driving down the average salary.
It’s time to improve Tier 6 pensions. The call to “Equalize Tier 6” is a matter of fairness. Yes, it’s expensive. Former Governor Andrew Cuomo and the State Legislature, during a time when people were attracted to government jobs, created Tier 6 in 2012 to save taxpayers from rapidly escalating pension contributions caused largely by the poorly performing stock market amid a poor economy.
Flash forward to 2024. It is a well-documented fact that New York City and State agencies are having tremendous difficulty in attracting and retaining qualified employees. Don’t take our word for it, ask the City and State Comptroller and/or read the many articles in credible newspapers and online sources.
People with professional degrees and certifications (like us) can readily find better paying jobs elsewhere. Without an attractive pension to serve as an equalizer, trading a lower salary today for the promise of a comfortable, secure retirement, public sector jobs aren’t nearly as appealing as they were to previous generations.
Albany needs to act, and the City must either get aboard or be left behind. Currently there are two bills pending in Albany seeking to make some improvements:
2023-A5487 would limit required member contributions to 3% of annual salary (from the current 3-6% depending on salary).
NY State Assembly Bill 2023-A5487 (nysenate.gov)
2023-S8490; A9133 reduces the final average salary calculation window from 5 years to 3 years, and hence would result in a higher average salary on which to calculate your pension.
NY State Assembly Bill 2023-A9133 (nysenate.gov)
NY State Senate Bill 2023-S8490 (nysenate.gov)
Neither bill goes far enough, and their fate remains unknown. Whatever happens, the fight to further enhance and equalize Tier 6 pensions must continue.
We will activate our system designed to simplify the task for members to contact their State Assemblymember and State Senator very shortly after we determine the status of these two bills and where the sponsors intend to continue the fight.
Reform New York’s Tier 6 pensions (nydailynews.com)
Critics say Tier 6 pension changes are ‘unnecessary’ (ny1.com)
Tier 6 is unfair and has not brought promised savings (buffalonews.com)
FixTier6.org http://FixTier6.org