Assembly Passes Pension Reform to Reduce School Costs for Taxpayers

April 12, 2010

Albany – Assemblymember Kevin Cahill (D-Ulster, Dutchess) announced the passage of a measure designed to give school districts budgeting flexibility for 2010-2011. The bill will also help avert layoffs and may free up positions for younger teachers. Pension reforms passed last year, combined with an early retirement incentive passed today by the Assembly (A.10065A) will reduce school personnel costs and ease the burden on property tax payers

“Payroll and pension benefits make up a large portion of school spending. Today’s vote will help make sure districts have the tools they need to control these costs over the long term,” said Assemblymember Cahill. “It is clearer than ever that simply increasing state school aid will not address the crisis we have in education costs.”

The legislation provides for a temporary early retirement option for teachers who are members of the New York State and Local Employees’ Retirement System or the New York State Teachers’ Retirement System. The bill has passed in the Senate and is expected to be signed by the Governor.

“Voluntary early attrition will allow schools to avoid layoffs off new teachers and save money by removing high salaried long-tenured employees from the payroll,” said Assemblymember Cahill. “This temporary retirement option provides the budgetary flexibility our school districts need to balance their budgets during these tough times.”

The early retirement measure will help school districts stabilize their long and short term finances while protecting vital services. This bill is a continuation of efforts to reform the state’s pension system that started with the enactment of Tier V last year. Tier V is estimated to save the state up to $36 billion over the next thirty years and lower long term pension costs for school districts and all levels of government.

Presently, anyone who retires prior to 30 years of service is subject to a maximum 27 percent penalty. The bill allows educators and support staff to retire at age 55 if they have 25 years of service without penalizing them for early retirement. In order for qualified school employees to take advantage of this option, they must retire within a specific open enrollment period, starting June 1, 2010 and ending on August 31, 2010 for school districts employees and a 90-day period ending on December 31, 2010 for SUNY and community college employees.

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