DiNapoli: Pension Rates Scheduled to Drop in 2014-15

5:49 PM, Aug 28, 2013   |    comments
  • Share
  • Print
  • - A A A +
  • FILED UNDER

By Jon Campbell, Albany Bureau

ALBANY For the first time in five years, the state and local governments will see a slight reduction in their pension contributions beginning next April, state Comptroller Thomas DiNapoli announced Tuesday.

Public employers at the state and local level will pay an average of 20.1 percent of their payroll into the $159 billion pension fund during the 2014-15 fiscal year, a slight drop from the 20.9 percent they're paying this year. County and local governments paid about $941 million into the system this year, according to the state Association of Counties.

The scheduled drop in rates came as a surprise, as local governments and school districts had been bracing for another increase as contribution rates continued to recover from the economic recession. But DiNapoli's office said it is changing the way it separates and values its assets based on a recommendation from an actuary, allowing for the slight decrease.

"Strong investment performance, along with a revision in actuarial smoothing, has lowered the employer contribution rate for 2014-15," DiNapoli said in a statement.

The contribution rate applies to all employees registered with the state's main pension fund, which includes most non-federal public employees in the state, excluding teachers. Earlier this month, the teacher's pension fund announced its rate would increase by 37 percent, from 11.8 percent of payroll to 16.3 percent.

The pension rate is higher for police and firefighters, but will also drop, according to DiNapoli's office. For the 2014-15 fiscal year -- which runs from April 1, 2014, through March 31, 2015 -- police and fire employers will pay an average of 27.6 percent of payroll into the fund, a drop of 1.3 percentage points.

Public employers are still paying a rate that hasn't been rivaled since the 1970s, when they paid an average of 21.9 percent in 1972. Those rates dropped to less than 1 percent in the early 1990s and 2000s on the strength of the stock market, before steadily increasing from 7.4 percent during the 2009-10 fiscal year to 20.9 percent this year.

Municipal officials expressed cautious optimism after the expected rates were released, with the state Association of Counties calling it "good news for counties and local governments across the state."

"It is imperative that state and local officials continue to focus on keeping and creating new jobs in New York, reforming other state mandates, and making government more efficient at every level," the county group wrote in a statement.

Pension costs have been a constant point of criticism from local governments and school districts, who have said the precipitous increase over the past several years have crippled their budgets and forced them to cut.

The state's property-tax cap includes an exclusion for pension increases of more than 2 percent, but since the rates for local employees and emergency personnel dropped, the exemption won't apply next year.

Peter Baynes, executive director of the New York Conference of Mayors, said the decrease was "welcome news."

"But make no mistake," Baynes said, "despite today's announcement, pension bills will continue to inflict pain at the local level."

JCAMPBELL1@gannett.com

Twitter.com/JonCampbellGAN

Most Watched Videos