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Pension payments to drop, could ease local tax burden
ALBANY -- Taxpayers could get a break next year because of a reduction in the payments governments must pay into the state pension system.
State Comptroller Thomas DiNapoli on Monday reported the average rate paid by government employers will decrease 9 percent. He said the average employer payment to the Police and Fire Retirement System will decrease 11 percent.
The savings will be felt by local and state governments in 2015 and 2016.
The lowered payment by public employers is because of strong returns from the stocks and other investments of the pension fund. In the last five years, the stock market has nearly tripled.
“The state pension fund’s solid investment performance has delivered another decline in employer contribution rates,” DiNapoli said. “The effects of the 2008 financial market collapse are still being felt around the country, but New York’s pension fund is well-funded, is steadily recovering and will continue to meet its obligation to our more than one million retirement system members and retirees.”
County, city, town and village officials have said the mandated pension payments are a major factor in the fiscal crunch of municipalities. They say the rising costs of the public pensions set in Albany are driving up local taxes and forcing layoffs and service cuts.
"For city and village officials faced with capped revenues and the ever-increasing cost of state mandates, today's announcement of reduced pension contribution rates is very welcome news,” said Peter Baynes of the New York Conference of Mayors. “While the new rates remain well above where they were as recently as 2012, the year-to-year reduction will assist local officials as they continue to make extremely difficult budgetary decisions."