Comptroller Thomas DiNapoli said today that he will support a pension smoothing proposal for local governments and schools, but it will markedly different from the one Gov. Andrew Cuomo proposed Jan 22..
DiNapoli negotiated an agreement with Cuomo’s office that limits the program to 12 years and includes interest payments—instead of a 25-year, interest-free proposal that Cuomo presented.
“The alternative contribution stabilization program will give local governments another option to contend with the spikes in pension costs driven by the market meltdown in 2008 and 2009,” DiNapoli said in a statement.
“The program is a variation of the existing Contribution Stabilization Program enacted in 2010, which has given local governments flexibility while continuing to ensure that the pension fund remains among the strongest in the United States.”
The state Teacher’s Retirement System has yet to sign off on the agreement, but is expected to do so. A spokeswoman declined comment.
“The budget negotiations between the executive and the legislature are still ongoing,” said Heidi Brennan, a spokeswoman for the teacher’s retirement fund said. “We will comment further when the bill is approved by the Legislature.”
Cuomo’s proposal was aimed at letting local government recoup future savings from a new, less generous pension tier now, rather than 25 years from now when new employees retire.
But critics, such as Syracuse Mayor Stephanie Miner, have warned that Cuomo’s plan would leave higher costs for local governments down the road and potentially imperil the $150 billion pension fund. DiNapoli also raised concerns about the proposal, yet said today he’s comfortable with the new proposal—which is set to be approved by the Legislature this weekend.
“As state comptroller, it is my job to protect the one million members of the retirement system, and all New York taxpayers, from irresponsible actions and fiscal gimmicks that have left too many other public pension funds across the nation dangerously under-funded,” DiNapoli said. “First and foremost, I will do everything within my fiduciary responsibility to protect the pension fund.”