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Harsh New Pension Law Approved: Tier 6 Slams Future CUNY Employees
The final text of Gov. Andrew Cuomo’s bill to slash public worker pensions was posted online on March 15 – at 3:00 in the morning. Around 5:30 am, the voting began. More than two hours later, after enough arms were twisted, the bill passed by a vote of 93 to 45.
“All of this, of course, happened in the dead of night while most people were fast asleep,” wrote Rick Karlin of the Albany Times Union. “This is, ironically, Sunshine Week, which is supposed to be a celebration of openness in government."
“The passage of Tier 6 had everything to do with political ambition and an ideological agenda of protecting the rich,” said PSC President Barbara Bowen. “It had nothing to do with solving New York State’s immediate budget shortfall.” No significant savings will occur for more than a decade. Like other unions, the PSC pointed out more money could have been raised, and far sooner, through progressive tax reform.
“Women and people of color have long relied on public employment when employment in the private sector was closed to them,” Bowen said. “As an attack on the pay and retirement security of public employees, Tier 6 is racist and sexist.”
“Those who chose this path are requiring the 99% to pay for the sins of the 1%,” said Richard Iannuzzi, president of New York State United Teachers (NYSUT), the PSC’s state affiliate. Danny Donohue, head of the Civil Service Employees Association (CSEA), agreed: “This deal is about politicians standing with...the wealthiest New Yorkers to give them a better break while telling nurses, bus drivers, teachers, secretaries and laborers to put up and shut up.”
Corporate interests, on the other hand, were very pleased. “The business community is encouraged that New York State is acting responsibly,” said Kathryn Wylde, head of the Partnership for New York City, which describes itself as “a select group of 200 CEOs from New York City’s top corporate, investment and entrepreneurial firms.” Multi-million-dollar pensions are common among the Partnership’s members.
IMPACT ON CUNY
“Tier 6 will hit CUNY especially hard,” said Bowen. “It’s disastrous for part-timers, and will make it harder for the University to attract the best full-time faculty and staff in national searches.”
Under New York’s constitution, pension benefits for current retirees or current members of a pension plan cannot be reduced. Full-time employees at CUNY are required to join a pension system within 30 days of being hired, so current full-timers at CUNY will not have their benefits cut. Full-time CUNY employees hired after April 1 will fall under the new, inferior terms of Tier 6.
Cutting pensions for new hires “will hurt CUNY’s ability to rebuild the full-time faculty, a project that was just gaining momentum,” noted Bowen.
For adjuncts, membership in a pension plan is optional. Since many survive on low pay, it’s common for adjuncts to put off joining the Teachers Retirement System (TRS), which is adjuncts’ sole pension option. With Tier 6 set to take effect April 1, the PSC quickly launched a campaign to urge adjunct members to sign up before April 1.
The union first sounded the alarm for adjuncts last fall, with articles on Gov. Cuomo’s proposed pension reductions. “If you are not already a TRS member, sign up immediately so you can lock in current pension terms,” an article in the November Clarion advised adjunct members.
When Tier 6 was approved in mid-March, the PSC spread the word with renewed urgency. By postcard, by e-mail and in person, union staff and adjunct activists put out alerts. The goal was to encourage as many unenrolled members as possible to fill out the necessary forms before April 1, and hand-deliver them to TRS headquarters on Water Street, to ensure timely processing. “It was well worth the trip,” said Shirley Frank, an adjunct assistant professor of English who has worked at CUNY for over a dozen years. “I got my stamped receipt on the spot, proof of the date of my enrollment.”
Perhaps the worst thing about Tier 6 for CUNY adjuncts is that it increases the vesting period – the period needed to qualify for a pension – from five to ten years of total credited service. Since it takes adjuncts longer to build up a full year of credited service, CUNY adjuncts who want to join TRS in the future will not qualify for benefits until they have worked for CUNY for 20 years or more. “This effectively means an end to new pensions for CUNY adjuncts,” said PSC First Vice President Steve London. “To shut down new pensions for the faculty who teach half of all CUNY classes is outrageous – but that’s what Albany has done.”
London noted that few legislators had read the final text of the bill before voting at dawn on March 15. “It’s hard to believe that the governor and legislature would be so heartless that they in-tended this to happen,” he said. “We’ve begun to discuss repairing some of the consequences of this legislation, and we hope that people in Albany will be open to reason.”
Among the other key Tier 6 changes for those who join TRS after April 1, are calculating final average salary over the last five years instead of three, and reducing the “pension multiplier” used to calculate the retirement benefit. The latter change reduces the annual retirement benefit for a 30-year employee by close to 10%.
For those covered by Tier 6 in both TRS and TIAA-CREF (the largest plan under the Optional Retirement Program for CUNY full-timers), the new rules raise the basic retirement age to 63 and increase required employee contributions, which now start at 3% for those earning $45,000 or less, rising to 6% above $100,000. Employee contributions will continue after 10 years of service credit, instead of being taken over by the employer as is the case for employees in earlier pension tiers.
Public-sector unions across New York said that the Tier 6 vote would have a profound effect on the choices they make in the fall elections. “If anyone is unclear where we stand, they’ll get the message on election night,” said the state branch of AFSCME. And there were a few signs that the political impact might extend beyond November. “The PSC’s advocacy of direct action by the labor movement is getting new interest,” commented London.