US - New York City mayor Michael Bloomberg has signed a tentative agreement with the United Federation of Teachers (UFT) to modify the current legislation on pensions, which will see newly-hired UFT members pay higher pension contributions.
All current UFT benefits provisions would continue for existing employees. New hires would still be able to retire with an unreduced pension at age 55 with 27 years of service.
Bloomberg said: "The agreement will reduce the City's pension costs by an average of US$100m a year over the next 20 years, while still providing an attractive package that City teachers deserve."
The plan will also establish increased vesting requirements to 10 years of service for pension benefits, up from the current five year requirement.
In addition, the agreement sets a 7% annual return on fixed tax-deferred annuity accounts for Teachers Retirement System and Board of Education Retirement System members.
The UFT represents approximately 115,000 active members of the Teachers Retirement Systems and Board of Education Retirement Systems.
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