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Cuomo dismisses DiNapoli's views on changes to state pension plan; Comptroller is openly critical of governor's idea

Gov. Andrew M. Cuomo, likening himself to the once-popular TV character "Gumby," said he can be flexible in talks with legislators about his plan to boost pension costs for future government employees.

But when it comes to listening to the opinions about the plan by the state's chief fiscal watchdog and the sole leader of the giant state and local government pension system, Cuomo said, he's not interested.

The governor called State Comptroller Thomas DiNapoli "irrelevant from a voting point of view," because the fellow Democrat does not have a vote in the matter in the talks between the administration and Legislature. He said he has not talked about the plan with DiNapoli, whose job also makes him the sole trustee of the $140 billion state and local retirement system.

"I understand the comptroller's political position, and I understand his politics," Cuomo told reporters Monday in Albany after a pension stump speech before a group of mayors from around the state.

But Cuomo said he has kept his discussions on the matter with state lawmakers, and not DiNapoli, because "the comptroller really doesn't have the vote on this."

"He has a political position, but no vote," the governor said.

While Cuomo isn't listening, a group of mayors from cities and villages across the state spent nearly a half-hour Monday hearing from DiNapoli about why Cuomo's plan -- which the mayors generally support -- is dangerous both for future retirees and the state's economy.

"I may not have a vote in it, but I do have a voice," said DiNapoli, who has been openly critical of the Cuomo pension plan.

The comptroller warned that Cuomo's plan to let some future state and local public employees join 401(k)-like systems instead of the current defined-benefit pension plan could, depending upon Wall Street whims, gut the savings of government retirees -- forcing them to rely more on public services such as Medicaid.

The comptroller called for "an intelligent" solution "based on facts" that includes the state, localities and unions sitting down at the table. Cuomo earlier in the day rejected the idea of involving unions in the talks, saying the matter is between himself and lawmakers and that unions would only serve to block a deal.

The governor sent mixed signals on the issue Monday. Before the same mayors group, the governor said rising pension costs "could bankrupt" the state and localities. But afterward, Cuomo told reporters he would be open to more generous pension perks in the future for state workers.

"Fine, then reduce it to the level you can afford it today, and if the economy turns around, and if you have the money, and if you want to raise the pension benefits down the road, raise the pension benefits, and that's fine," he said.

How much a government employer pays for the pensions of its workers is based not just on the employer's own payroll levels, but also on the performance -- lagged and "smoothed out" over five years -- of the pension system on everything from its stock holdings around the world to investments in apartment buildings and shopping malls.

DiNapoli has noted that the once-heady days on Wall Street led to years without any hikes in employer-paid pension costs. And he held out hope Monday for lower pension rates because of improving pension investment performances.

Cuomo lashed out at "special interests" -- read: public employee unions -- for opposing his plan to increase what future employees would pay to belong to the pension system or opt out to enroll in a 401(k)-like plan. "This is a company town, and they are the company," Cuomo said of the labor groups fighting his plan. He said state lawmakers are trying to give unions "veto power" over the issue.

But the comptroller warned local mayors not to think of the Cuomo plan as helping with any current budget issues, since it would apply only to new employees hired in the years to come and not affect current pension obligations based, in part, on salary labor contracts that localities make with their public employees.

The comptroller said Cuomo's 401(k)-like plan offers a "false choice" for workers who might opt into the 401(k) plan when they are young and less likely to contribute to their retirement. Years later -- as witnessed by slams on retirement accounts in recent years -- savings hit by market downturns could end up end up hitting taxpayers. He said the defined contribution plan "just doesn't make sense."