Tier 6 pension reforms finalized

Age 58 retirement only for teachers

Reforms to the Tier 6 pension plan that would cost the state $557 million annually have been finalized after weeks of discussions between Governor Kathy Hochul, top state labor officials and other political leaders. The deal included in the Fiscal Year 2027 state budget features reductions in pension contributions for hundreds of thousands of workers within Tier 6, a reduction in the retirement age to 58 for teachers but not for other workers and an increase in the amount of overtime pay that can count towards the final calculation for workers' pension benefits.

The finalized agreement is a fraction of the $1.5 billion in changes labor leaders pushed that would have lowered the retirement age to 55 for all workers within Tier 6 and would have reduced contributions for all Tier 6 workers to between three and five percent. Instead, the retirement age for teachers with 30 years of service will be lowered to 58 and contributions will decrease from between three percent and 5.75 percent, depending on workers’ income level.