Public pension funds from Rhode Island to California are struggling, but New York state found out this week that retirement contributions by governments, school districts and taxpayers would decrease in the coming fiscal year.
New York Comptroller Thomas DiNapoli announced the unexpected decrease, which will be slight, from an average of 20.9 percent of payroll to 20.1 percent for those in the Employment Retirement System and from 28.9 percent to 27.6 percent for those in the Police and Fire Retirement System.
“The New York State Common Retirement Fund’s strong gains over the last four years have mitigated some of the impact of the financial market collapse of 2008-2009,” DiNapoli said in a statement. “Strong investment performance, along with a revision in actuarial smoothing, has lowered the employer contribution rate for 2014-15.”
New York state’s pension funds are among the best funded in the country. Standard & Poor’s reported that that less than 8 percent of its liabilities were uncovered. That stands in sharp contrast with problems in places like Detroit, where pension liabilities are a major part of the city’s bankruptcy filing, and California, where unions are fighting changes to retirement systems negotiated with the state and municipalities.
In New York state, exact contributions will vary by employer depending on retirement plans, salaries and the distribution of employees within the state’s six retirement tiers. The next fiscal year begins April 1, 2014.
The fund, which covers 1 million retirees and workers, reported a return on investment of 0.29 percent in the first quarter of this fiscal year and a value of $158.7 billion. That compared with a drop of 0.92 percent in the comparable quarter a year earlier. The fund’s ROI for 2012-2013 was 10.4 percent.
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