• 5 Solutions That Are Better Than Borrowing to Pay for Pensions

  • DECEMBER 12, 2013 | COUNTY GOV'T, MANDATE RELIEF, NYS GOV'T, REGULATORY ISSUES

  • WCA Supports League of Women Voters’ Statement on County Budget

  • Westchester’s League of Women Voters were right to question borrowing for pensions in the 2014 Westchester County budget, passed early Tuesday morning. With paying for pension obligations now an overwhelming pressure, borrowing is a quick fix, but experts say it’s risky—and it’s part of the reason Moody’s Investor Service recently downgraded Westchester County’s credit rating from Aaa to Aa-1...


    The Westchester County Association believes there are better choices that don’t necessarily involve raising taxes and cutting services:

    1. Shift to a Defined Contribution Plan


    149217598 The unfunded liability of pension funds is estimated to be in the trillions of dollars nationwide. Yet some cities and states are saving millions in taxpayer dollars by shifting employees from a defined benefit plan, which guarantees public employees a specific benefit upon retirement—regardless of investment performance—to a defined contribution model, or 401 (k). This model, where retirement benefits are determined by employer and employee contributions and the actual return earned on investments, is a more sustainable retirement system.

    2. Streamline Government

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    Fewer people mean fewer pension payments. The LVW was right to criticize the Astorino administration for adding six new positions to the County Executive’s Office without explanation. County leadership must streamline government and make it more efficient, not add nonessential workers. At the same time, municipalities should look for ways share services across village, town and city borders.

    3. Re-instate Tier 3 Contributions 

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    We think the New York State Legislature got it wrong when it ended the 3 percent pension contribution for Tier 3 employees (those who joined the Retirement System between July 27, 1976 and August 31, 1983) of more than 10 years. This “pension enhancement” requires New York State and other public employers to make up the difference, ultimately costing taxpayers millions.

    4. Promote a Regional Approach to Collective Bargaining 

    78156282 Negotiating complex labor agreements with local bargaining units that are well-supported by statewide unions requires the extensive resources of Westchester County—not to mention its school districts and municipalities. A regional approach to bargaining would level the playing field and could also pave the way for the consolidation of services—and ultimately, hold down taxes. 

    5. Amend Provisions of the Taylor Law

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    It’s almost impossible to rein in spending when expired union contracts with built-in pay increases and other benefits to public sector union employees continue until new agreements are reached, a provision guaranteed by the Triborough Amendment to the Taylor Law. When labor negotiations stall, there's little incentive to return to table when automatic pay increases for step or longevity continue. We can longer afford this unfair system!

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