For the first time since taking office, Mayor Michael Bloomberg has managed to squeeze major pension concessions out of a union. Under the new agreement with the city's teachers union, the mayor estimates that the city will save $2 billion over the next 20 years.
"This, I think, is a very good deal for the city," said Bloomberg in announcing the new deal late yesterday. "It will save us a lot of money over the long term - not as much right away. But we have to address the long-term problems now."
Under the new deal, teachers will contribute 4.85 percent of the salary to their pensions for the first 27 years on the job and 1.85 percent thereafter. Previously, payments dropped to 1.85 percent after just 10 years.
Retiree health benefits would require 15 years on the job, rather than the current 10, and pension vesting would require 10 years, twice the current stint.
And finally the city's guarantee on returns from pension investments would fall from 8.25 to 7 percent.
Of course, the teachers got a little something in return: yet another two days off. Starting this September, teachers will no longer be required to report for two days of "professional development," and the retirement age will remain 55, but not before 27 years of service.
"This agreement is a win for everyone," said outgoing union president Randi Weingarten.
