Our View: State pension system still needs changes
Posted: Monday, July 18, 2011 3:30 am: Auburn Pub.
Gov. Andrew Cuomo said last week that public pension reform will be a top priority for his administration in the next legislative session, and despite the misleading protests of union voices, the governor is wise to make this a focus.
Cuomo has proposed a pension reform plan that would establish a new tier in the state retirement system to limit benefits to future new government hires. The need for changes in the way the state’s retirement fund distributes payments to retirees is real. As people live longer, the fund itself will see increased liabilities, and there’s serious questions about whether the fund can sustain itself in the long-term.
The problem with achieving reform is that public unions and their advocates want to downplay the concerns about the fund. They do this by pointing to short-term figures.
Last week, the president of the AFL-CIO, Denis Hughes, tried to spin the news of the annual pension fund’s performance in the stock market as a reason changes to the system are not needed: “It’s interesting to note that on the same day the media is reporting that Governor Cuomo has made limiting retirement benefits for new state and city workers his top priority next year, it has also been announced that the Common Retirement Fund achieved a 14.6 percent rate of return for the 2010-2011 fiscal year. At the very least, this certainly calls into question the need for so-called ‘pension reform.’”
Nice try, Denis. But one year of solid returns from a now-jittery stock market does not fix the long-term pension issues this state is facing. Dismal years on Wall Street created some major pension contribution bills for local governments in recent years, and those bills have been picked up by the taxpayers.
And don’t forget, “so-called pension reform” is something the private sector has been experiencing for years with the economic problems this state and country have been facing. There’s no reason the public sector should be immune to making similar sacrifices.