June 22, 2009
$3.8 million retirement payout
A typical New York City firefighter, who retires after 20 years, will collect $3.8 million in pension and other retirement benefits during his or her lifetime, according to Carol Kellermann, president of the Citizens Budget Commission.
In an op-ed in the Daily News, Kellermann writes: Since fiscal year 2003, the taxpayer contribution to municipal workers' pensions has more than tripled--to $6.4 billion in fiscal year 2009. At this rate, in four years, every working-age New Yorker will be putting an average of $1,250 a year into the pension funds of municipal workers.
We cannot keep giving new workers retirement benefits at the current levels. Using 2006 figures, she notes that the average pension benefit for a newly retired firefighter was nearly $73,000.
On top of that, many get another $12,000 every December as a "Christmas bonus" to bring the annual cash total to $85,000-- all of which is exempt from state and local income taxes.
The cash is supplemented by a free comprehensive health insurance policy for the retiree and his or her spouse; that policy is worth about another $10,000, bringing the total tax-free benefits for each recent retiree to $95,000. Benefits for retired firefighters (who outnumber active firefighters) cost city taxpayers $1.1 billion annually. The annual tab for retired police: $2.3 billion.
Arguing the city cannot afford to continue to pay "retirement benefits that are extraordinary generous by any standard," Kellermann calls for creating a new pension tier for all city workers hired in the future.
While Governor David Paterson has proposed creating a Tier 5 pension for all public employees in New York State, the bill is being rewritten. Unions representing police, firefighters, teachers and other workers are trying to weaken the measure.
Kellermann describes one version of Tier 5, which would raise the minimum retirement age for future New York City police and firefighters to 50. Overtime would be not used in pension calculations and annual $12,000 bonus for future firefighters would be eliminated.
"The estimated savings for [New York City] taxpayers would start at $200 million next year and total $16 billion over 30 years," she writes.
« Previous |
Main
| Next »
|
