Eleanor Finch
New York's public pensions have been constitutionally protected since 1938, with the assurance that pensions 'shall not be diminished or impaired'. However, a 2013 federal bankruptcy court decision in Detroit put the city's constitutionally protected public pension on the table for cuts, which could threaten the pensions of New York's public workers. The New York State Common Retirement Fund is one of the largest public pension plans in the United States, providing retirement security for over one million members.
| Characteristics | Values |
|---|---|
| Are New York pensions constitutionally protected? | Yes, since 1938 |
| What does this mean? | Pensions "shall not be diminished or impaired" |
| Can this change? | Yes, if New York City were to enter bankruptcy |
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What You'll Learn
- The New York State Common Retirement Fund is one of the largest public pension plans in the US
- New York City faced default, threatening the constitutional protection of pensions
- A federal bankruptcy court's decision in Detroit put constitutionally protected public pensions on the table for cuts
- The assurance that New York's public workers have operated under since 1938 is that pensions shall not be diminished or impaired
- The New York State Common Retirement Fund has been constitutionally protected since 1940
The New York State Common Retirement Fund is one of the largest public pension plans in the US
New York pensions are constitutionally protected. Article V, Section 7 of the New York Constitution states that membership in any pension or retirement system of the state or of a civil division thereof shall be a contractual relationship, the benefits of which shall not be diminished or impaired. This was adopted by the Constitutional Convention of 1938 and approved by vote on 8 November 1938.
However, a 2013 federal bankruptcy court decision in Detroit put the city's constitutionally protected public pension on the table for cuts, which could threaten New York's public workers' pensions.
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New York City faced default, threatening the constitutional protection of pensions
The United Federation of Teachers union President Albert Shanker met with Gov. Hugh Carey to negotiate a survival short of bankruptcy, agreeing that pensions would have to be on the table. Richard Ravitch, who later served as lieutenant governor, said the reality that entering bankruptcy would end the constitutional protection of pensions "was critical ... we never would have gotten the unions".
The New York State Common Retirement Fund is one of the largest public pension plans in the United States, providing retirement security for over one million members, retirees and beneficiaries. The Fund's constitutionally protected benefits have provided retirement security for generations of New Yorkers since its establishment in 1921.
Since July 1st, 1940, membership in any pension or retirement system of the state or of a civil division thereof has been a contractual relationship, the benefits of which "shall not be diminished or impaired".
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A federal bankruptcy court's decision in Detroit put constitutionally protected public pensions on the table for cuts
In 2013, a federal bankruptcy court's decision in Detroit put the city's constitutionally protected public pensions on the table for cuts. This opened the door for similar pension reductions in New York, threatening the assurance that New York's public workers have operated under since 1938 that pensions "shall not be diminished or impaired".
The New York State Constitution, adopted in 1938, states that membership in any pension or retirement system of the state shall be a contractual relationship, the benefits of which shall not be diminished or impaired. This constitutional protection has provided retirement security for generations of New Yorkers.
However, with New York City facing default, unions agreed that pensions would have to be on the table to negotiate a survival short of bankruptcy. The reality that entering bankruptcy would end the constitutional protection of pensions was critical in getting the unions on board.
The Detroit ruling also triggered calls for pension cuts across the US, with states and cities citing the legal precedent to attack public employee pensions and initiate a new stage in the assault on workers' rights and living standards. Politicians, media outlets, and financial institutions welcomed the decision, hailing its assertion that federal courts can override state and local guarantees of public workers' pensions. The Obama administration was intimately involved in the conspiracy to use the federal bankruptcy courts to attack pensions and sell off public assets.
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The assurance that New York's public workers have operated under since 1938 is that pensions shall not be diminished or impaired
The assurance that New York's public workers have operated under since 1938 is that pensions "shall not be diminished or impaired". This was established in the New York Constitution in 1938, and it has been a critical protection for unions. However, this assurance has been threatened in recent years as New York City faced default and local governments fought off insolvency. In 2013, a federal bankruptcy court decision in Detroit put that city's constitutionally protected public pension on the table for cuts, which opened the door for potential pension reductions in New York as well. Despite these challenges, the New York State Common Retirement Fund remains one of the largest and best-managed public pension plans in the United States, providing retirement security for over one million members, retirees, and beneficiaries. The Fund's prudent investment management, solid returns, and constitutionally protected benefits have earned it a reputation for being well-managed and well-funded.
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The New York State Common Retirement Fund has been constitutionally protected since 1940
The New York State Common Retirement Fund is one of the largest public pension plans in the United States, providing retirement security for over one million New York State and Local Retirement System (NYSLRS) members, retirees and beneficiaries. The Fund has been constitutionally protected since 1940, when a New York Constitutional Convention approved a measure stating that membership in any pension or retirement system of the state or of a civil division thereof shall be a contractual relationship, the benefits of which shall not be diminished or impaired.
The Fund's mission, values and investment philosophy have earned it the distinction of being one of the best-managed and best-funded plans in the nation. Since its establishment in 1921, the Fund's prudent investment management, solid returns, and constitutionally protected benefits have provided retirement security for generations of hard-working New Yorkers.
However, the constitutional protection of pensions in New York is not absolute. In 2013, a federal bankruptcy court's decision in Detroit put that city's constitutionally protected public pension on the table for cuts, raising concerns among unions in New York that the assurance that New York’s public workers have operated under since 1938 — that pensions “shall not be diminished or impaired” — could now be threatened by local governments fighting off insolvency.
In response to these concerns, the New York State Common Retirement Fund has taken steps to protect the state's pension fund from climate risk and invest in climate solutions. The Fund has been recognised as a leader in addressing climate-related investment risks and pursuing opportunities in the growing low-carbon economy.
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Frequently asked questions
Yes, pensions in New York are constitutionally protected. This has been the case since 1938, when the state's constitution was amended to include the assurance that pensions "shall not be diminished or impaired".
Yes, a federal bankruptcy court's decision in Detroit in 2013 put the city's constitutionally protected public pension on the table for cuts, which could set a precedent for New York.
The New York State Common Retirement Fund is one of the largest public pension plans in the United States, providing retirement security for over one million New York State and Local Retirement System (NYSLRS) members, retirees and beneficiaries.
