March 6 (Bloomberg) -- New York Governor Andrew Cuomo must work out a deal with unions on his proposal to raise the retirement age and offer a 401(k)-type option for new workers before the Assembly will back it, Speaker Sheldon Silver said.
About 2,000 state and local workers descended on Albany today to meet with lawmakers and urge them to vote against the pension changes, which the unions said will cut retirement benefits by 40 percent. Cuomo, a Democrat, has said his plan will save local governments and the state $113 billion over the next 30 years. Democrats control the Assembly, while Republicans hold a majority in the Senate.
“The governor has to work out with the unions a reasonable approach to save the money,” Silver, 68, told reporters after speaking to the crowd of public employees gathered in a convention hall near the Capitol. “I’m not a union leader. I don’t know the ins and outs of the current conditions of employment, but I know there can be a deal.”
Cuomo, 54, said last week he’s willing to meet with union leaders, after he previously said making changes to the pension system is solely the Legislature’s job. Last year, he won furloughs and wage freezes from the state’s two biggest unions by threatening to fire almost 10,000 workers. Those deals, which saved the state $450 million, were made as part of the collective-bargaining process.
Willing to Consider
The unions and Comptroller Thomas DiNapoli, the sole trustee of New York’s $140.3 billion retirement fund, the third largest U.S. public pension, have taken aim at the 401(k) option, saying it will destroy the middle class. Silver said today he’s willing to consider the option.
“Some young, new employees in government might choose that option,” Silver said. “If I started, when I started, if that was an option, chances are I would have taken that option.”
Last week, New York Mayor Michael Bloomberg led a group of local leaders, who collectively represent 15 million residents, to Albany to push lawmakers to approve Cuomo’s pension proposal. The group said that without changes, including raising the retirement age to 65 from 62 for most new workers, they’ll be forced to fire employees.
Cuomo has said pension costs will consume 35 percent of local-government budgets by 2015, up from 3 percent in 2001. New York’s retirement fund had 101.5 percent of the money needed to pay its obligations in 2010, better than any other state, according to an annual study by Bloomberg Rankings.
Cuomo put the pension changes into his budget proposal for the fiscal year that begins April 1. He has said that if lawmakers send him a spending plan without the measure, he’ll force the Legislature to choose between shutting the government or passing his plan by using a so-called budget extender. The process is used to keep the government operating when there’s no agreement on the budget. The governor has the power to put any item in an extender.
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