May 17, 2010
RE: AN ACT to amend the retirement
and social security law, in relation to
establishing a defined contribution plan
A. 6932 (Fitzpatrick)
MEMORANDUM IN SUPPORT
Unshackle Upstate, a bi-partisan coalition of over 80+ business and trade organizations representing a
growing group of 70,000 companies and employing more than 1.5 million people support the enactment
of the aforementioned bill. This legislation would freeze the current retirement tier of all elected officials
and non-civil service appointed employees in New York State, and creates a new defined contribution
plan for those employees.
A longstanding and major legislative agenda item for Unshackle Upstate has included reforms to the state
workforce. Our organization feels strongly that New York State must restructure public employee
benefits to more closely align with comparable private sector benefits. While the newly enacted Tier V
pension system is a good start and will save the state money, it unfortunately does not go far enough.
New York State needs a new program to include a defined contribution plan structure similar to the
SUNY and CUNY models for all state employees, where participants control where their pension
contributions are invested.
Maintaining a pension system places major burdens on taxpayers, especially during periods of declining
investment income. New York's contribution to the state pension system increased from $991 million in
2000 to $10.1 billion in 2009, according to the state comptroller's office. Over the next six years, local
governments outside of New York City will be forced to triple their contributions to public pensions,
according to the comptroller.
Last year, Unshackle Upstate released a report titled, "New York's Double Standard: How public
employee pay and benefits have outpaced the private sector - and unique state laws are widening the gap."
It takes issue with the Taylor Law and Triborough Amendment, which allows employee pay and benefits
to increase indefinitely under the terms of an expired contract. Moreover, the report found that across
Upstate New York, salaries for state and local government employees are 10 percent higher than the
private-sector average and that New York leads the nation in per-capita contributions to public-employee
retirement, at $486 per taxpayer for the 2006-2007 fiscal year.
While we wish that this bill applied to all state employees, not just elected officials and non-civil service
appointees in the State of New York, Unshackle Upstate recognizes that if signed into law, this bill would
generate substantial savings to the state and would benefit the taxpayers of this state. For these reasons,
Unshackle Upstate supports the enactment of this legislation.