By LILLIAN ROBERTS
Executive Director
District Council 37, AFSCME, AFL-CIO

Gov. Andrew Cuomo's proposed Tier 6 is an outrageously inadequate plan that would cut members' lifetime retirement benefits by 40 percent while it conceals a time bomb that could cut benefits and even destroy the pension system for current workers and retirees in all tiers as well as newcomers.

Tier 6 is actually a sneaky way to privatize the state and city pension systems - modeled on George W. Bush's defeated plan to privatize Social Security. It would funnel huge profits to the bankers who sent our economy into recession and leave retirees at the mercy of the stock market.

With Mayor Bloomberg as its chief cheerleader, Tier 6 would offer new public employees a choice between two ways of getting retirement benefits - a shriveled defined benefit pension and a risky 401(k)-style investment savings plan.

For more information on the danger of Tier 6, members should read the articles on pages 10 and 11 of this PEP, but it is clear that the traditional pension part of Tier 6 would make new employees pay more and work longer for severely reduced benefits:

• Tier 6 would raise deductions from workers' paychecks from 3 percent to 4, 5 or 6 percent and could even force employees to pay part of the employer's share with deductions of up to 12 percent of pay.
• Tier 6 twists the formula for calculating pensions to cut retirees' benefits.
• Tier 6 would raise the retirement age to 65 and ban early retirement. All these manipulations together would chop pensions by a devastating 40 percent.

The Tier 6 poverty pension is such a bad deal that many new workers would likely feel compelled to choose the 401(k)-style option, which provides no retirement security at all - no guaranteed benefit - just the right to gamble their savings in the stock market.

• Even the Wall Street Journal admits that the average 401(k) provides less than one-fourth of what people need for a dignified retirement.
• Thirty years of experience with 401(k) plans has shown that while they help supplement defined benefit pensions, they totally fail as a substitute for traditional plans.

The big lie of Tier 6 is that no current employees would be affected. By diverting many new employees away from the guaranteed benefit pension, the 401(k) would starve the whole pension system of the income it needs to survive and pay benefits.

This Tier 6 time bomb could destroy the state and city pension systems that hundreds of thousands of current and retired public workers depend on to live in dignity after their working years. Tier 6 is so inadequate that former dedicated public service employees would have to depend on public assistance, Medicaid and food stamps - at a huge cost to the taxpaying public.

Imagine reaching retirement age in a world without Social Security or pensions or health insurance coverage - the kind of world the mayor and governor and right-wing Republicans are trying to force on us.

Our only way to protect our retirement security is to stop schemes like Tier 6 by stepping up our political power. To have an immediate impact, call 1-877-823-4343 to urge your state Senator and Assembly member to reject Tier 6.

To win the battle for the future, be sure you are registered to vote and call our DC 37 Political Action Department at 212-815-1550 to join our Albany Lobby Day on May 1 and volunteer to make a difference.