Public employee unions are pushing hard for changes to the way pensions for government jobs are funded.

If your social media feed has been flooded with calls for Tier 6 reform, here’s a primer. In 2010 former Gov. David Paterson’s Tier 5 plan rolled back pension benefit sweeteners approved by the state Legislature in the early 2000s, while in 2012 former Gov. Andrew Cuomo pushed through legislation creating Tier 6 in the state pension system. Cuomo further restructured benefits, restored and increased employee shares of pension fund contributions, capped “pensionable” overtime, and curbed some other aspects of the pension system at the behest of local governments whose taxpayers were paying millions of dollars more in pension costs each year.

Different employees pay different contributions toward their pension based on their hiring date. Employees falling under Tier 4 can retire at age 55 with 30 years of service and pay 3% of their salary into the pension system, with contributions ending after 10 years. Tier 5 members pay 3% of their salaries for their entire career and have to work until age 62 to collect their full pension. Tier 6 members pay between 3% and 6% into the pension system for their entire career, with contributions growing as salaries increase, and have to work until age 63 to collect their full pension.

Why does this matter to you?

The answer is easy – Tier 6 has a direct effect on your tax bill. As the Empire Center for Public Policy noted in a 2021 report, the Tier 5 and Tier 6 changes came amidst a severe pension crisis that saw New York’s combined tax-supported employer pension contributions rise from under $1 billion in 2000 to a peak of $17 billion in 2015. The changes took time to begin saving taxpayers money, but as of 2021 the Empire Center estimated Pension costs for the state and for local governments and school districts outside New York City are now about 15 percent lower than they would have been if workers hired since 2010 had all belonged to earlier, more expensive pension plans.

Public employee unions have fought against Tier 6 for ages. What makes this year different is Gov. Kathy Hochul joined a recent rally – a good move for her reelection campaign but a bad move if she gives in to the union requests to end Tier 6. Those in the private sector who would love to retire at 55 but simply can’t afford to count on Hochul to be the adult when the state budget gets down to three government officials in a room. Cuomo performed that role in 2012. We’re sure he wasn’t popular in union halls, but for a while he was popular with taxpayers. Tier 6 reform is one reason why, and taxpayers are still benefitting from Cuomo’s pension reforms more than a decade later.

Hochul is sending money in her budget to help local governments balance their budgets. If Hochul sides with public unions in reforming Tier 6 to be friendlier to union employees, those state checks to local governments had better get a lot bigger and a lot more permanent. If they don’t, your property taxes are going to explode.