Mayor Bloomberg, who has shown a lot of backbone in his dealings with public employees unions lately, was to have spoken on the subject of pension reform at a forum sponsored by the Manhattan Institute today.

The event was canceled late yesterday, leaving us on tenterhooks as to what Mr. Bloomberg might have said. We like to think his remarks would have included the words “tier five” and “defined contribution.”

Under New York state’s constitution, state and local governments may not diminish the retirement benefits of any employee once they have been granted. But the Legislature may choose to create a new, reduced pension package for employees hired from this day forward. The state Legislature took this option during previous fiscal crises in 1973, 1976, and 1983,creating a total of four categories, or “tiers,” in the public pension system. The time is ripe for a new one, in which public-sector workers would receive retirement benefits more like what is available to most of the rest of us.

The changes of yesteryear, though still a sore subject for the unions, were relatively modest, asking that employees contribute a small percentage of their salary to the pension fund, for example, or asking them to retire at 65 instead of 55. These nips and tucks have undoubtedly saved money, but they did not get at the fundamental problem of the current system, which becomes most expensive precisely when taxpayers can afford it least.

This “defined benefit” system guarantees retirees a monthly check, based on their salary history and years of service, regardless of how much money is in the pension fund. Thus when the economy is strong and investments by the fund gain value, the cost to taxpayers goes down, as it did in the latter half of the 1990s. However, when stocks plunge — as they did so dramatically beginning in 2001 — state and local government must dramatically ratchet up their contributions to make up for investment losses.

Governor Pataki, the Legislature, and Comptroller Hevesi agreed to stopgap measures this year that postponed the worst of the pain. Still, New York City’s pension bill is set to leap 25%, to $3.2 billion, and New York State’s will soar 139%, to $1.2 billion.

Switching to a “defined contribution” retirement system, in which the employer pays a fixed amount into a retirement account for each employee, would take away much of the pressure on elected officials to either cut programs or raise taxes when times are bad.

Such a reform would not save the city or the state much money for years to come, since the vast majority of employees would remain in the old system, but perhaps the present crisis will prompt our leaders to think of the future.

Pushing such a change through Albany will undoubtedly set off a war with labor unions, which use their numbers and financial might to wield an unhealthy power over the elected officials who are, after all, their managers. But Mr. Bloomberg — a billionaire who is presumably invulnerable to such blandishments — is just the man to lead the charge.