In Albany, Lawmakers Approve Pension Cuts and Redistricting

The pension changes were less drastic than those sought by Gov. Andrew M. Cuomo, applying to fewer employees and saving less money than he had hoped. But they reflect a blow to the state’s public-employee unions, which are enormously powerful in Albany and have been frequent sparring partners for Mr. Cuomo as he has sought to rein in costs.

“This bold and transformational pension reform plan is a historic win for New York taxpayers and municipalities,” Mr. Cuomo said in a statement. “Without this critical reform, New Yorkers would have seen significant tax increases, as well as layoffs to teachers, firefighters and police.”

The pension changes were part of a policy package approved overnight that resolved several of the thorniest issues facing lawmakers this year. Working through the night, the Legislature approved a reconfiguration of the state’s Assembly and Senate districts, the language of a proposed constitutional amendment to legalize casino gambling and the creation of one of the most extensive criminal DNA databases in the nation.

The governor and legislative leaders first allowed the public to see the details of the pension legislation at 3 a.m. Thursday. The Republican-controlled Senate approved the measure an hour later, despite the absence of most of the chamber’s Democrats, who had walked out over redistricting. Democrats argued that the pension vote was invalid because there was no quorum present for the vote; Republicans insisted that a quorum had been met for the pension vote.

The Democrat-controlled Assembly approved the pension changes shortly after 7 a.m. The Assembly speaker, Sheldon Silver, a Manhattan Democrat, had kept the voting open for nearly two hours as he called in lawmakers who had gone to sleep in a tense effort to muster the votes for passage. In the end, the Assembly approved the measure by a comfortable margin.

The pension deal comes as state and local governments around the country take similar steps to reduce retirement costs, often prompting pitched battles with labor unions.

From 2009 to 2011, 43 states enacted major changes to retirement plans for public employees and teachers, according to the National Conference of State Legislatures.

“The message is, the traditional package of retirement benefits has become unaffordable,” said Ronald Snell, a senior fellow at the conference.

Mr. Snell said the deal approved in Albany was similar to measures passed in other states, in that it reduced the benefits offered to some public employees instead of overhauling the structure of the pension system itself.

Mr. Cuomo had significantly scaled back the most contentious portion of his pension proposal, which would have given new public workers the option of forgoing a traditional pension and instead choosing a defined contribution plan, similar to a 401(k). He and lawmakers agreed to offer the defined contribution option, but only to new state workers who earn $75,000 or more and are nonunionized.

In another concession by Mr. Cuomo, the deal did not make significant changes to the retirement benefits of New York City police officers and firefighters.

But state and city officials said the measure would still save more than $80 billion for the state and local governments in the next 30 years — including $21 billion for New York City — by reducing the benefits promised to new workers. For example, the legislation raises the minimum retirement age to 63 from 62 for state workers. It will also require most workers to increase the portion of their salaries that they contribute to the pension system from the current 3 percent to as much as 6 percent for the highest earners.

Reining in ballooning pension costs topped the legislative wish-list for a parade of municipal leaders around the state, including Mayor Michael R. Bloomberg, who said Mr. Cuomo “has got to get an A-plus” for persuading lawmakers to resist pressure from labor unions and approve the changes.

“This is real reform, and for the taxpayers of the state gives them a better deal for their money,” Mr. Bloomberg said in a telephone interview. “It does not hurt any of our current employees or any of our current retirees, and down the road, if people don’t want to come to work for the city or the state, they don’t have to. But I think this is still a phenomenally generous plan.”

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