As the state legislative session continues in Albany, a coalition of labor unions, lawmakers, and public sector employees are intensifying their push to reform New York’s Tier 6 retirement system, arguing that the current pension plan is unfair and detrimental to worker retention. Advocates claim the system, enacted in 2012, forces employees to contribute more while receiving fewer benefits, making public service jobs less attractive and unsustainable for workers long term.
Under Tier 6, public employees must work until age 63 to receive full retirement benefits, whereas earlier tiers allowed workers to retire as early as 55. Pension calculations are also less favorable, using an employee’s top five earning years rather than three, which reduces overall payouts. Additionally, workers contribute between 3% and 6% of their salaries for their entire careers—placing a heavier financial burden on lower-earning employees compared to previous retirement tiers.
Union leaders argue that these disparities have created a two-tier system that unfairly penalizes those hired after 2012. The Civil Service Employees Association (CSEA) recently celebrated reforms that changed pension calculations from five years of earnings to three. Still, its president, Mary E. Sullivan, insists more must be done. “The reforms in this budget will make the pension more valuable and appealing to New Yorkers considering a career in the public sector,” she said.
Labor leaders and policymakers say that Tier 6 is a significant factor behind New York’s struggles to recruit and retain public employees, particularly teachers, police officers, and firefighters. Unions warn that the state is losing talent to neighboring states that offer more competitive pension plans. High employee turnover also drives up training costs, putting additional strain on state and local budgets, they say.
“Tier 6 is unfair, unsustainable for workers, and detrimental to public sector recruitment and retention,” said Assemblyman Joe DeStefano. “Requiring employees to work longer and contribute more while receiving less in retirement makes for a difficult work environment. The state should be more supportive of public employees.”
The United Federation of Teachers is among the groups demanding further reforms. President Michael Mulgrew stressed the importance of incremental changes, saying, “We’re not going to get it all fixed in one year, but we have to keep making significant steps to get us where we need to be.”
Advocates are urging lawmakers to pass measures to make Tier 6 pensions more equitable. Key proposals include:
- Lowering the full retirement age from 63 to 55 or 57.
- Calculating pensions based on an employee’s three highest-earning years instead of five.
- Capping employee contributions at 3%.
- Restoring a fair cost-of-living adjustment to protect retirees from inflation.
The movement to overhaul Tier 6 is gaining traction, with the United Teachers leading the charge through its “Fix Tier 6” campaign. It has already secured a reduction in the vesting period from ten years to five, benefiting over 85,000 members.
The legislature has missed the April 1 deadline to pass a state budget, putting issues such as reforming Tier 6 on the back burner.