The changes made to New York’s Tier 6 pension system through this year’s state budget are an important start for public employees like educator Bethany Hamilton.
Hamilton, who currently teaches 10th and 12th grade English within the Tri-Valley Central School District in Grahamsville, Sullivan County, says members are “really happy with the outcome.” Teachers, specifically, will see lower retirement ages.
“It’s five years, but it’s half a decade of our lives,” Hamilton said, “and knowing we can go after a really humane amount of time, it’s important.”
“I know a lot of us, we’re able to breathe a big sigh of relief about that,” she said, before adding the pension reform push is far from over and will continue to pursue other changes cut out of this year’s deal with Gov. Kathy Hochul and state lawmakers.
What changes have been made to NY’s Tier 6 pension system?
Currently, Tier 6 members, or any full-time, permanent, 12-month employees of New York state or a participating employer who joined the state’s retirement system on or after April 1, 2012, face heavy penalties if they retire before age 63.
The state budget lowers the age of full retirement for state and New York City educators in Tier 5 and Tier 6 to age 58 without any penalty as long as they’ve attained 30 years of service, according to an analysis from the New York State Association of Counties (NYSAC).
Additionally, Tier 6 members’ retirement contributions have been modified for state and most New York City employees beginning on and after Oct. 1, 2026. Here’s what’s changed:
Overtime rates are also changing. The pensionable overtime ceiling for Tier 5 and Tier 6 members is currently at $24,000 and $22,000, respectively. Beginning Jan. 1, 2027, both are increased to $30,000 and will continue to increase by 3% each following year.
NYSAC also says the state isn’t required to pay the full costs for all pension enhancements.
Will property taxes be raised as a result?
Several local government groups warned New York property taxpayers could face tax rate hikes or service cuts due to pension reforms.
It’s unclear, though, whether they actually will. NYSAC says the estimated costs on counties is around half as much as initially expected since not all of the changes were included.
“The original pension change proposals would have cost counties $107 million or more in year one — a 24% increase in employer contributions,” a statement from NYSAC Executive Director Stephen J. Acquario reveals. “The enacted changes are substantially more limited, and are estimated to cost the 57 counties $50 million.”
When asked whether property taxes would be raised as a result, NYSAC didn’t provide a direct response. However, the group did say the annual costs will grow annually as Tier 6 grows.
New York City will be impacted, too, according to NYSAC. Annual costs for the city will be around $151 million and grow each year with a 25-year cost of $6.7 billion.
‘Still a lot of work to be done’
Hamilton, a 41-year-old New York State United Teachers member, also acknowledges there’s “still a lot of work to be done,” but knew it “wasn’t realistic” to think that they would see a complete overhaul all at once.
In addition to an earlier retirement age, public workers across the state were pushing for changes to how much they have to contribute to the system. Currently, those in the Tier 6 system pay 3-6% of their salaries into the pension system the entire length of their career and their contributions go up as their pay increases. Comparatively, the contributions of those in the Tier 4 system are capped at 3% and end after 10 years.
“The way that pensions are calculated for Tier 6 members is deeply inequitable,” Hamilton says. “So what our next fight will be is to get that pension calculation, get parity with Tier 4.”
Hamilton says Tier 4 members went through the same process Tier 6 members are facing now, and she knows it’s going to take some time. The adjustments educators were able to get this year, however, “shows younger teachers there’s power in organizing.”
“It was really awesome to be able to come together across sectors to rally for some change,” Hamilton said. “This was just a really, really amazing and galvanizing moment at a time where we need some hope.”
Emily Barnes covers state government for the USA TODAY Network-New York with a focus on how policy and laws impact New Yorkers’ taxes, communities and jobs. Follow her on Instagram or X @byemilybarnes. Get in touch at ebarnes@usatodayco.com.
This article originally appeared on Rochester Democrat and Chronicle: This is what comes next in New York pension overhaul fight
Reporting by Emily Barnes, New York State Team / Rochester Democrat and Chronicle
USA TODAY Network via Reuters Connect
By Emily Barnes, New York State Team | USA TODAY Network
