Gov. David Paterson on Thursday signed into law pension reform legislation, saying the measure will save $35 billion over the next 30 years.
The legislation creates a Tier V pension level, which Paterson called the first significant change to state’s pension system in 25 years.
“To get our fiscal house in order, Albany must make fundamental reforms to the way it spends money,” Paterson said in a statement. “The savings this reform achieves will help to lower property taxes by reducing not only state spending but local spending as well.”
The state Division of the Budget estimates the city of Rochester will save $193 million over 30 years, the Rochester City School District will save $313 million and Monroe County will save $164 million.
Rochester and the Finger Lakes region will save $2.5 billion over 30 years, budget officers said.
Tier V components include raising the retirement age without penalty for most civilian public employees to 62 from 55, requiring workers to contribute 3 percent of their salaries toward pension costs, increasing the minimum years of service required to draw a pension to 10 from five, and capping overtime calculated for pension benefits at $15,000 per year for civilian employees and at 15 percent of non-overtime wages for police and firefighters.
Teachers will have a separate Tier V structure that raises minimum retirement to age 57 from 55 and increases salary contributions to the pension plan to 3.5 percent from 3 percent annually.
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