The average contribution rate for the state’s Employee Retirement System will increase from 18.9 percent of salaries to 20.9 percent in the 2013-14 fiscal year, and from 25.8 percent to 28.9 percent for the Police and Fire Retirement System, state Comptroller Thomas DiNapoli has announced. The average increase is 10.6 percent.
“The Common Retirement Fund has experienced solid gains the last three years and continues to rebuild from the substantial financial market loss of 2008-2009,” DiNapoli said. “The rise in the employer contribution rate has slowed this year, but there will continue to be upward pressure on rates through Fiscal Year 2014-2015 reflecting the impact of that loss.
The New York State Association of Counties said the increases are “troubling news” for county governments, which already are struggling to develop balanced budgets for 2013, Stephen Acquario, executive director of the association, said in a statement yesterday. The 10.5 percent hike for the Employee Retirement System will eat up the entire increase permitted under the state’s 2 percent annual cap on property-tax levies, he said.
Pension contributions have grown from $47 milllion in 2000 to more than $900 million in 2013. The state’s fiscal year runs from April 1 to March 31. Roughly one million state and local employees are in the state’s retirement system. Teachers have a separate pension system.
“When State leaders enacted the property tax cap in 2011, they promised mandate relief. Despite that promise, our costs continue to rise at unsustainable rates,” Acquario said. “Our counties need real, immediate and substantial mandate relief. Without it, our communities face a continued loss of county services, programs and staff.”
The cost of pensions above a change in the average contribution rate by more than 2 percentage points is excluded from the cap, according to DiNapoli. The rate for the Employee Retirement System will increase 2 percentage points, so no portion of the employer’s contribution will be excluded from the cap. Since the rate for the Police and Fire Retirement System will go up by 3.1 percentage points, the contribution for 1.1 percent of salaries will be excluded from the cap.
Rates for specific plans and tiers are available under “Contribution Rates and Related Information” on the comptroller’s website. Projections of required contributions varies by employer, depending on retirement plans, salaries and other factors.