State: Public employee pension rates decline
ALBANY -- Local governments got a small break Tuesday: For the first time in four years, pension rates for public employees are going down.
The state comptroller's office, which sets the rates, announced that local governments will enjoy a slight decrease in fiscal 2014-15.
Municipalities will have to pay 20.1 percent on every dollar local-government employees earn -- down from 20.9 percent from the current fiscal year -- into the state's Common Retirement Fund, which covers workers in state government and most local governments.
Local governments will pay 27.6 percent on what police and fire employees earn, down from the current 28.9 percent. The state Police and Fire Retirement System is separate from the Common Retirement Fund.
State Comptroller Tom DiNapoli attributed the reduction to improved investment returns and a recently completed actuarial review of five-year trends that allows for moderating the effect -- or "smoothing" -- of any unexpected gains or losses.
"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."
The announcement was hailed by the New York State Association of Counties, which just last week warned about a possible rate increase.
"It means that the impact of the recession that began in 2008 has peaked this year," the association said in a statement.
The New York Conference of Mayors said even a slight decrease is a good sign.
"After four years of exorbitant increases in local government pension bills, any decline in pension contribution rates . . . is welcome news," said Peter Baynes, NYCOM's executive director.
"But make no mistake, despite today's announcement, pension bills will continue to inflict pain at the local level," Baynes continued. "Until there is a steep and sustained drop in pension rates, pension costs will continue to force difficult budgetary choices -- such as tax increases and service reductions -- by local governments throughout New York."