Do retirement incentives save money?
Visions of sugar plums dance in the heads of older state workers–amid Albany’s $9 billion budget gap. They dream of fatter pensions should Senate approve Governor Paterson’s early retirement bill as the Assembly did this week. Although a bonanza for aging baby boomers, the pension sweetener might cost taxpayers more than its saves. “Might” is the operative word, because the Paterson administration can’t quantify the net savings of the proposed incentive, which is similar to one offered in 2002. The 2002 plan increased pension costs by $249 million. But eight years later, state officials don’t know if those costs were offset by savings. In fact, although the state has offered 10 pension sweeteners since 1983, state officials have never done a cost-benefit analysis of a single one. Nor has any state comptroller audited them. Paterson’s plan, introduced last week, includes two elements. Under Part A, an employee would be eligible for an additional month of service credit for each year of
