Tier V, the new public employee retirement plan for most state employees hired after Jan. 1, 2010, is now in place.

Gov. Paterson signed the bill into law in December shortly after its passage by both houses of the Legislature during a special session called to reduce the state’s budget deficit.

Notably, UUP has dodged the bullet—for now. The new tier does not apply to most new UUP members, the majority of whom enroll in an Optional Retirement Plan (ORP), which are not subject to Tier V. As a result, UUP bargaining unit members enrolled in an ORP will continue to contribute 3 percent of their income for the first 10 years of service.

This contrasts with the changes to the state’s two other pension systems. New hires who enroll in the Employees Retirement System (ERS) and the Teachers Retirement System (TRS) are required to contribute toward their pensions for the duration of their employment. ERS participants pay 3 percent; TRS participants pay 3.5 percent.

Additionally, new employees enrolled in ERS cannot retire without penalty until age 62 and after 30 years of service. New TRS enrollees cannot retire without penalty until age 57 and after 30 years of service.

The state’s two largest public employee unions—the Civil Service Employees Association and the Public Employees Federation—agreed to the establishment of Tier V in exchange for the state’s promise not to lay off 8,900 state employees. (Donald Feldstein)