Bloomberg Looks to Save Money With New Pension Tier

Michael Bloomberg sent a letter to legislative leaders asking them to create a new tier for pension benefits.

The new tier, Tier 5, was included in a list of budget recommendations Bloomberg hopes Albany will enact to deal with the budget crisis.

The mayor previously said he wouldn’t necessarily advocate a new tier, but didn’t rule it out, either.

According to Bloomberg’s office, the new pension tier would save the state $10 million by the end of 2010, and $30 million by 2011.

For recipients, the new tier would allow retirees to draw benefits at age 62. It would also exclude overtime earned in the final years of service from the calculation used to determine pension allowances.

Bloomberg may run into difficulty with the City Council, which will have to issue a home rule message. Though the speaker, and members, often support the mayor’s initiatives, they may be skittish if unions make a fuss.

Bloomberg Looks to Save Money With New Pension Tier