Pension buyout hits NY pensioners
N.Y. pensioners whose retirement savings have been frozen because of the state’s buyout of $1.9 billion in pension funds are about to get another chance to get their money back.
New York Gov.
Andrew Cuomo on Monday announced a $300 million payouts to retiree workers who received the payout, which will be distributed as follows: Pensioners with up to $100,000 will receive $200,000, while pensioners with $250,000 or more will receive a $1,000 pay out.
All other retirees will receive nothing.
Cuomo also announced $30 million in pension payments to workers who were previously excluded from the buyout and who are eligible for a second payout, of $400,000 to $700,000 per worker.
“Our pensioners are hurting,” Cuomo said in a statement.
“We are committed to making sure they receive the help they need.”
The buyout was part of Cuomo’s efforts to reduce the state government’s $16 billion budget deficit.
Cuomo signed a bill Monday that will provide $1 billion in funding for public transit.
The state also announced it will extend the benefits of a $4.7 billion state unemployment benefit that has been extended for two months, a move that will save the state $1 million per day.
“New York will continue to offer those people the assistance they need and deserve, while also providing additional funds to help those who have been impacted by the buyouts,” Cuomo spokesman Joe Reimann said.
The pension buyout came as Cuomo’s administration struggled to deal with a $13 billion state pension shortfall.
Cuomo, a Democrat, made the announcement in a press conference Monday in New York City, where he announced the payouts.
“Today, our state government is taking another big step toward a brighter future for its residents and our state,” Cuomo declared.
“In this very special year, I want to acknowledge that many of our New Yorkers are struggling, and that this means our efforts to help them will continue.”
The state’s pension crisis stems from a 2010 buyout by New York’s former pension system that included $1 in contributions for every $1 paid out.
Cuomo and other officials have blamed the buy-out for pushing workers out of the retirement system and into the job market.
Cuomo has said he is confident that the buy out will result in a sustainable future for pensioners in New England.
Cuomo’s budget has been plagued by cuts and delays, and his administration has struggled to find ways to make up the budget deficit in the face of rising costs.
In addition to the buy outs, Cuomo’s office also announced Tuesday a $400 million grant program for companies that have been affected by the cost of buying pension funds and other funds out of retirement plans.
The money will be given to help companies offset costs and ensure that they can continue to provide pensions and other benefits.
Cuomo said the grant program is a way to provide relief to struggling companies.
“The New York State Pension System is in a unique position to provide an incentive to businesses to reinvest in New Yorkers, and our $400 Million Pension Program is a clear example of that,” Cuomo added.
The buyouts will help make up for what has been a $17.5 billion budget shortfall for the state over the past two years.
New Jersey is among the states with the biggest pension buyouts, with $3.2 billion.
New Hampshire and New York are the states where retirees receive the most money, with nearly $1 trillion in pension payouts in their budgets.