(The Center Square) — Taxpayers are slated to pay more toward the public pension plans in New York.
State Comptroller Thomas DiNapoli announced Thursday that the average employer contribution rate for Employees Retirement System will jump from 11.6% to 13.1% of payroll for the 2023-24 fiscal year. The employer contribution rate for the Police and Fire Retirement System will climb from 27% to 27.8% of payroll for the next fiscal year, which starts in April.
ERS and PFRS are parts of the New York State and Local Retirement System, which covers retirement and disability payments to public-sector workers as well as death benefits to their survivors.
In a statement, DiNapoli noted the pension plans have been performing well, citing the 2021-22 fiscal year ended with a funded ratio of 102.9% as proof. However, “recent domestic and global economic volatility demands caution” in the years ahead.
“As we move forward with our prudent investment strategy, we remain focused on long-term stable returns for New York’s public employers and workforce,” he said. “Uncertainty may be a constant in financial markets, but the rates announced today will help ensure that New York’s pension fund will continue to be one of the nation’s strongest and best funded, ready to provide retirement security for generations to come.”
The system’s assumed return will remain the same, at 5.9%. Only Kentucky has a lower assumed rate.
Last month, the state announced the retirement fund posted a return of 9.5% for the 21-22 fiscal year. However, the first quarter of the 22-23 fiscal year saw a return of -8.2%. At the time, DiNapoli pointed to the Russian invasion of Ukraine, historic inflation and problematic supply chain issues as the reason for the decline.
The value of the pension fund at the end of the first quarter was $246.3 billion.
More than 3,000 state and local agencies participate in the pension plans. During the 21-22 fiscal year, the system disbursed $14.7 billion in benefits to retirees and survivors.
As of June 30, New York had 44.7% of its pension fund invested in publicly traded equities. Cash, bonds and mortgages make up 22.4%, while private equity represents a 15% share of the fund. The state has invested 12.1% of the fund in real estate and assets, and the rest is in “credit, absolute return strategies and opportunistic alternatives.”