(WBNG Binghamton) Governor Cuomo has proposed a plan that would change New York State's retirement pension system.
Governor Andrew Cuomo says a new Tier 6 pension plan would save local governments $79 billion dollars in the next 30 years.
Under Tier 6, government employees would have a choice; stay with a defined benefit pension, with the promise of a specific monthly payment or, they could opt for a 401K-type of retirement plan.
Public and private sector voices are weighing in.
"So the state helps you out and makes a contribution towards it but if you make bad investments or if the stock market doesn't do well then you don't do well," says Binghamton Mayor Matt Ryan.
Mayor Ryan has concerns about Tier 6, but doesn't fully oppose it.
State Comptroller Thomas DiNapoli also has his doubts saying, "Study after study has shown that defined benefit plans cost less in the long run than 401k style plans and perform better."
The reform would impact new employees in state and local governments, school districts and police and fire departments.
But a local business owner says the 401 K plan his company offers has been successful for it's employees and he supports state pension reform.
"It should have the impact of reducing state taxes and further induce more economic development by inviting more businesses into the state of New York. It should create more jobs it should reduce taxes for everybody," says David Culbertson, President of National Pipe and Plastics Inc. in Vestal.
A local investment broker says there are other concerns about how the new plan would work.
"Who's going to manage this 401K? You're talking a lot of people want to get involved in the management banks, insurance companies, brokerage firms have a lot at stake and they want to be able to get ahold of these pools of money," says Jack Cheevers with Cheevers Hand & Angeline in Endicott.
The new pension plan would have progressive employee contribution rates between 4 and 6 percent of their salaries.
The new pension tier will increase employee pension contributions and end so-called pension padding where employees accumulate substantial amounts of overtime in their final years of service to increase their pension.
Governor Cuomo is pushing for the reform to pass with the budget on April 1st.
The reform plan has support from School Board Members.
According to the New York State School Board Association 60 percent of respondents polled believe 401 K plans would provide a basis for adequate retirement benefits.
Twitter
Facebook