Last month, State leaders acted to reduce future costs and create substantial long-term savings for taxpayers by adopting pension benefit reforms for new public employees.  The next challenge is to address the high costs of retiree health insurance.

Part of Governor Andrew Cuomo’s “Tier VI” proposal to make pension benefits for public employees of New York’s State and local government more affordable and sustainable over the long term is an optional 401(k)-style plan.

The Office of the New York City Actuary is expected to recommend changes to the assumptions used to calculate the City’s annual pension costs.  These changed assumptions will have an impact on the amount the City is required to contribute to its employee pension funds.

The Mayor and City Council are discussing ways to avoid the layoffs and service cuts proposed to balance the fiscal year 2012 budget.  They should consider reforming health insurance arrangements for employees and retirees as a way to create meaningful savings and prevent the cuts.  CBC suggests three specific changes that could save the City over $1.5 billion in fiscal year 2012: