New York’s state and local governments will soon pay less in pension costs.
State Comptroller Thomas DiNapoli announced his office intends to reduce government contribution rates toward New York’s $268 billion main pension fund, which covers retirement payments for most state and local government employees.
The new rates will take place for the fiscal year beginning April 1, 2022.
The contribution rate for the Employees’ Retirement System, which covers most state and local workers, will be lowered from 16.2% to 11.6% of payroll.
The estimated employer contribution rate for the Police and Fire Retirement System will be reduced from 28.3% to 27% of payroll.
DiNapoli’s office adjusts contribution rates based on the performance of the pension fund, which is invested in various stocks, bonds and other assets.
The state comptroller also announced that the assumed rate of return for the retirement funds will be lowered once again for the fourth time since 2010.
Despite being the third largest public pension fund in the US, the state’s retirement funds long-term assumed rate of return will be updated to 5.9% after April 2022.
The updated rate of return is significantly lower than the median assumed rate of return of 7.0% for state public pension funds, according to the National Association of State Retirement Administrators.
DiNapoli’s office lowered the expected long-term assumed rate of return of the funds’ investments in 2019 from 7.0% to 6.8%. The state comptroller’s office also lowered the rate of return for the funds in 2010 to 8.0% and in 2015 to 7.0%.
Leave a Reply