New York State taxpayers' contributions to the Teachers Retirement Fund could quadruple by 2016, perhaps rising to as high as $4.5 billion statewide, according to a new report released Tuesday by the Empire Center for New York State Policy, a conservative think tank.
Experts said Long Island could be particularly hard- hit, because of the region's high salaries for teachers and police officers.
Calling the public pension system in New York State an "exploding" fiscal time bomb, the report states that contributions to the state's Local Retirement Systems could more than double in the same time period, to another $4 billion. That's in part due to the combination of recent significant fund losses with the increase in the number of retirees, the report said.
Experts and pension fund representatives cautioned that the report was making predictions based on assumptions about payrolls and market performances that might not end up being accurate.
John Cardillo, a spokesman for the Teachers Retirement System, cautioned against projections beyond 2012. "Going out any further . . . is difficult," he said. "You can't predict the future."
The report attempts to do just that. "There is no financially responsible way to avoid the coming increases in pensions costs," the report said. Its author, E.J. McMahon, said Long Island could bear the brunt of the costs.
"Long Island, in particular, is going to get clobbered by this," he said, citing the higher payrolls of school districts and police departments. Pension contributions are based on a percentage of payroll.
The state's constitution guarantees pension payouts to public employees. Local governments, schools and other entities are required to make their pension contributions to keep the plan fully funded.
"Even over the near term, schools and, I presume, local governments, are going to face just horrendous choices," said Robert Lowry, the deputy director of the New York State Council of School Superintendents in Albany.
A spokesman for state Comptroller Tom DiNapoli did not return calls for comment.
Nassau County Comptroller George Maragos called the report "scary," saying such cost increases are "unsustainable." And Suffolk County Executive Steve Levy said: "It's mind-boggling. It can cause the entire system to implode if realistic reforms are not implemented."
Maragos and Levy both suggested relying only on base salary, instead of overtime and additional compensation, to keep pensions lower.
The Empire Center said the state should consider wage freezes and other moves, while also shifting to a defined contribution plan similar to most 401(k) accounts, or hybrid plans that contain features of both.
But Frank Mauro, who heads the Fiscal Policy Institute, a liberal think tank based in Albany, said those suggestions won't hold down employer costs. "I don't think their solution fits their problem," Mauro said.
LI's contributions to the state pension systems, fiscal year 2010
$296.4 million: Teachers' Retirement System
**Employee Retirement System and Police and Fire Retirement System
$96.9 million: Nassau County
$97.4 million: Suffolk County:
132.2 million**: Other Local Entities
Expected Contribution Rate, as percentage of payroll, fiscal year 2012
11 to 11.5 percent: Teachers' Retirement System
16.3 percent: Employee Retirement System
21.6 percent: Police and Fire Retirement System
Empire Center's predictions for contribution rate, fiscal year 2016
25 percent: Teachers' Retirement System
20 percent: Employee Retirement System
25 percent: Police and Fire Retirement System
** Includes towns, villages, special districts and other local entities
Sources: New York State Comptrollers' Office, New York State Teachers' Retirement System, Nassau County, Suffolk County