New York State and unions reached a deal to increase “Tier 6” pensions for more than 830,000 public employees statewide. The agreement would allow teachers with 30 years on-the-job to retire at age 58 rather than 63. The settlement also increases the amount of overtime that can be counted towards every municipal Tier 6 member’s pension throughout NYS.
“Albany heard us and took a major step in correcting the injustice of Tier 6,” Michael Mulgrew, president of the United Federation of Teachers, said in a statement. “Lowering the retirement age for educators from 63 to 58 after 30 years of service will make the pensions better and fairer for current and future employees. It shows that progress is possible when we stand together.”
When the original Tier 6 reforms were first put in place, the retirement age of public workers hired after April 2012 was pushed from 55 to 62 to earn a full pension. The cost-cutting measures also raised the employee contribution and slimmed down benefits for recent hires. The lowered retirement age only applies to teachers and teaching assistants, not other government workers in different retirement systems. The plan is estimated to cost the state $118 million year and $440 million to local governments and school districts. The agreement is different depending on job title. Only educators are expected to have a reduced retirement age. All other workers currently eligible to retire at 63 without penalty will remain at that age. However, pensions for all public employees will increase under the revised Tier 6 program.
The deal included in the Fiscal Year 2027 state budget features reductions in pension contributions for hundreds of thousands of workers within Tier 6 and an increase in the amount of overtime pay that can count towards the final calculation for workers’ pension benefits. The finalized agreement is a fraction of the $1.5 billion in changes labor leaders pushed that would have lowered the retirement age to 55 for all workers within Tier 6 – but the agreement is a substantial pension increase for all municipal workers in New York State.
“This victory is the result of diligent lobbying efforts and member support” said John Chiarello, the president of Transport Workers Union Local 100. “These changes do not happen overnight, but together we will keep fighting for the equity we deserve.”
Starting Jan. 1, 2027, 25 percent of overtime earnings for police and firefighters will count towards their final calculated retirement benefit, up from 15 percent. For all other employees, the amount of overtime included in the retirement benefit calculation will increase from $22,000 to $30,000.
“I am extremely proud of the unity and solidarity displayed by all our affiliated unions in the public and private sectors, as well as in the building trades unions, throughout this campaign,” said NYS AFL-CIO president and a key figure in Tier 6 negotiations. “We were able to build upon previous pension improvements over the past five years, including improvements to vesting and final average salary. This demonstrates what the Union Movement can achieve when we stand together and raise our voices to improve the quality of life for all working people.”
