Smith also urged city council to reform investment strategies of the city's largest employee pension fund.

"To put our public employee pensions in the hands of major campaign contributors is just plain wrong."

Employers, meanwhile, seem determined to whittle away at employee pensions and health plans.

Many of the laws governing employee pensions today were enacted decades ago at a time when workers had much less control over their retirement savings.

The Governor paid for her tax cut in large part by decreasing the state's contribution to public employee pensions.

The case has potentially broad implications for employee pension and benefit plans.

In 2000, Chemung sent just $270,000 to the state for employee pensions.

In addition, the state would continue to make regular payments to its $52 billion public employee pension system.

The latest financial problems, a result of sharp rises in employee pension and health insurance costs, are beyond the agency's control, he said.

He considered the employee pensions the most important of his contributions to public affairs.