Moratorium on Progress: How New York’s “Moratorium” Statute Has Helped Halt Public Sector Teacher Pension Reform

By Ed Delauter, Albany Government Law Review

We need a government that performs better and costs less . . . . [this] means enacting mandate relief.  By next year, pension costs for schools and state and local governments will have increased one hundred percent since 2009.  We need to reform the pension system and create a Tier VI.  The joint Legislature and Executive Mandate relief Council we created last year will begin its work this month.  I will request that Council hold public hearings.  We need a robust discussion on the pros and cons of the mandates.[1]

Amidst the backdrop of a national recession and record federal and state budget deficits across the nation—including New York[2]—Governor Cuomo stood before the crowd gathered at Empire State Plaza on January 4, 2012 and delivered the 2012 State of the State address.[3]  The Governor emphasized the need to reduce the amount of retiree benefits received by public workers, specifically public pensions.[4]  To achieve this reduction the Governor announced his plans to include a Tier VI pension plan into his budget proposal.[5]  The proposal for a Tier VI pension system was unsurprising considering the Governor’s efforts to get the legislature to pass the Tier VI pension system the previous year as a stand-alone bill,[6] and the skyrocketing cost of retiree benefits in conjunction with a tail spinning economy.[7]

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Free Floating: Understanding ERISA Requirements Regarding Float Income Derived from Plan Assets

By Thomas Lamb, Albany Government Law Review

ERISA’s Standard for Fiduciaries

In December of 1963, the Studebaker-Packard Corporation shut down its plant in South Bend, Indiana, giving rise to one of the most “glorious stor[ies] of failure in business.”[1]  At the time of the plant’s closing, the pension fund for hourly workers was about as broke as the rest of the company.[2]  Participants enrolled in Studebaker-Packard’s retirement plan whose benefits had vested received their full pension; but the plan did not have enough funds to honor what it had promised younger participants whose benefits had not yet vested.  “Some received a lump-sum payment worth a fraction of the pension they expected, and others got nothing at all.”[3]  Thousands of employees were left without compensation for years of contributions, and also without a legal remedy.

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