IT BEGINS: Bloomberg Unveils His Plans To Slash Benefits, And Raise The Retirement Age

Gus Lubin
Feb. 3, 2011, 7:52 AM
comment 24

New York City's pension was on track to run out of money in ten years. Thus no one is surprised that Bloomberg has proposed for major reform.

The key changes include raising the retirement age from 57 to 65.

He also wants to up the minimum term of employment from 5 to 10 years.

Additionally he would proscribe practices like adding accumulated overtime to final year pay to boost pension benefits.

The first two changes are constitutionally protected and require support from the state. Normally this would be unlikely, but in 2011 there's a pension crisis everywhere from Albany to Greece.

Here are the full details from the Mayor's press office, via the NYT:

CIVILIANS AND TEACHERS

Retirement Age/Vesting

· New Tier: Newly hired civilians and teachers will vest after 10 years of city employment and will be eligible to receive pension checks at age 65.

· Current: Most employees can vest after five years. Retirement ages vary, but are generally age 57 for civilians and as low as 55 for teachers with 27 years’ experience.

Employee Contributions

· New Tier: Civilian employees and teachers will contribute 5 percent of their salary in all years of employment.

· Current: Civilians contribute 4.85 percent for the first 10 years, dropping to 1.85 percent for the next 20 years. Teachers contribute 4.85 percent for the first 27 years, dropping to 1.85 percent thereafter.

Final Salary Calculation

· New Tier: Overtime does not count toward final salary calculation.

· Current: Overtime does count toward final salary calculation.

Teachers Tax-Deferred Annuity

· New Tier: Elimination of fixed-return option for Teachers’ Tax-Deferred Annuity (will be fixed at 0 percent going forward, immediately, for all participating members).

· Current: 7 percent guaranteed rate of return.


UNIFORMED WORKERS

New uniformed employees of the Correction and Sanitation Departments, along with new members of the Police and Fire Departments, will be covered by the “Tier 3â€