Pension Fund Reforms to Save the State Billions

New York, NY —

The New York legislature has passed a bill that establishes a cheaper pension tier for future state workers.

The public pension reform package is projected to save local, county, and state governments tens of billions of dollars over the next 30 years. Matt Anderson, a spokesman for Gov. David Paterson, says the need to reduce future pension liabilities is essential because of the quickly rising costs for the current pension program.

"The poor performance in the market right now is going to drive significant cost increases for the state as well as for local government because you have to contribute more to the pension system to make up for the losses," Anderson says.

The so-called Tier 5 pension reform package covers only new public employee hires. It raises the retirement age from 55 to 62. And it increases the minimum years of service required to be eligible for a pension from 5 to 10 years.