A reduction in teacher retirement costs next year will save millions of dollars for public schools on Long Island and statewide, pension officials announced Thursday.
The New York State Teachers’ Retirement system, enrolling more than 427,000 professional school workers statewide, said that district contributions to its pension fund would drop during 2017-18 for the third consecutive year.
Currently, the retirement system sets charges for districts equivalent to 11.72 percent of salaries for teachers, librarians and other school staffers. That will be lowered to 9.80 percent during the next academic year.
The reduced percentage, when officially adopted in July, will represent the first time in seven years that the figure has hit single digits.
State pension officials, in announcing the reduction, estimated that contributions from districts statewide would be about $300 million less next year than this year. Long Island school officials projected regional savings of at least $36 million.
“While it’s helpful, I don’t think anyone’s jumping up and down,” said Brian Sales, president of the Nassau-Suffolk School Boards Association.
Sales, who also serves as president of his local board in Copiague, noted that districts continue to operate under tight state cap restrictions on annual increases in property taxes. The state’s baseline cap for 2017-18 will be 1.26 percent; caps for individual districts vary.
Pension officials said that the lower district contributions are due to growth in their fund’s investments, assisted by a recovering stock market. They cautioned that they could not guarantee continued reductions after 2017-18 because of economic uncertainties.
John Cardillo, a spokesman for the teachers’ fund, noted that the system ranks “among the best-funded public retirement systems in the nation.”
Outside fiscal experts have made the same point, saying that New York State’s pension funds covering teachers, police and other public employees do not suffer from the same financial strains associated with underfunding that are found in many other states.
However, some conservative analysts have questioned whether such funding is sustainable and have called for a less expensive retirement system similar to private 401(k)s.
The contribution rate hit a high of 17.53 percent in 2014-15, then began declining.