One upstate county comptroller is advising caution on enacting changes to the New York’s Tier 6 public pension plan, which has emerged as a key part of ongoing New York state budget talks.
In a statement released Monday, Ulster County Comptroller March Gallagher urged careful consideration of reforming the state Employee Retirement System, which determines eligibility for service or disability retirement benefits, pensions and other benefits, and its potential financial impact on local governments.
The Democrat’s analysis concludes that “while Tier 6 reforms may strengthen the public workforce, any adjustments to contributions, benefit calculations, or retirement age thresholds will carry fiscal consequences and therefore all possible alternatives should be considered.”
Gallagher said more than half of Ulster County employees are enrolled in Tier 6 and proposed changes could carry significant cost implications without increased state support. She suggested weighing alternatives such as expanding eligibility for the Voluntary Defined Contribution Plan or creating a plan similar to the SUNY Optional Retirement Plan.
“Modernizing Tier 6 has clear benefits for workforce recruitment and retention,” Gallagher said. “However, without a commitment from New York State to absorb the associated costs, these reforms could place substantial financial pressure on counties, municipalities, and school districts. Local governments operate within tight property tax caps and budget constraints. Any enhancement to retirement benefits must be accompanied by a thoughtful funding strategy at the state level to avoid shifting costs onto local taxpayers.”
The state Legislature created the Tier 6 pension plan in 2012 to reduce long-term pension costs to the state. It increased the age at which public New York state employees could retire, as well as the amount that workers, including teachers, needed to contribute to their pensions.
At the time, legislators said the changes would save taxpayers $80 billion for state and local governments over 30 years.
Members of the state’s Employee Retirement System who joined on or after April 1, 2012, are placed in Tier 6.
But union members and elected officials recently rallied in Albany to call for changes to the tier. Proponents of the changes claim the approximately 780,000 workers statewide in Tier 6 are required to work longer and contribute more from their paychecks while receiving reduced benefits compared to previous plans.
They argue the scaled back benefits under the pension tier are discouraging New Yorkers from entering public service and causing recruitment and retention issues.
Gov. Kathy Hochul has indicated general support for reforming the system after making previous changes to Tier 6 in 2022. The state Senate and Assembly have signaled support for reforming it in their one-house budgets.
