March 4 (Bloomberg) -- New York City pension costs have risen more than fivefold to $8 billion since 2002 and changes to the system are needed to keep budgets in check, said a bipartisan coalition for pension reform.
The increase in pension costs has squeezed funding for other programs, New York Leaders for Pension Reform said today in an e-mailed statement. The coalition supports a plan by New York Governor Andrew Cuomo to lower pension costs in New York City and state through changes to plans for future employees.
Pensions will account for an estimated 28 percent of all New York City workforce expenses in fiscal year 2013, said the group, composed of mayors from Albany, New York City, Rochester and other cities, as well as county executives. That’s up from 9 percent in 2002. The group backs a plan for future New York state and New York City employees that would “reasonably” raise retirement age and exclude overtime from formulas that use salary to determine pension payments, it said in the statement.
“The data released today details the extremely, extremely generous benefits of the pensions the City provides,” New York City Mayor Michael R. Bloomberg said in the statement. “We will continue to provide those generous packages to all current employees, but the stark reality is we simply cannot afford it for new employees. The reforms we support would save local governments billions, while still providing outstanding benefit packages to our future employees.”
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