DiNapoli: Pension Contribution Rates Remain Stable
(Press release from Comptroller Thomas P. DiNapoli's Office)
Employer contribution rates for the New York State and Local Retirement System (NYSLRS) will stay virtually the same in Fiscal Year 2017-18 compared to Fiscal Year 2016-17, New York State Comptroller Thomas P. DiNapoli announced today.
The average contribution rate for the Employees’ Retirement System (ERS) will decrease from 15.5 percent of payroll to 15.3 percent of payroll. The average contribution rate for the Police and Fire Retirement System (PFRS) will increase to 24.4 percent from 24.3 percent of payroll.
“After three years of rate reductions, pension contribution rates will remain stable for our participating employers in the near-term,” DiNapoli said. “While the financial markets have been volatile, our pension fund remains one of the strongest and best funded in the country, allowing New York’s public workforce to retire with the knowledge that their pensions are secure.”
Employer rates are determined based on actuarial assumptions recommended by the Retirement System’s Actuary and approved by DiNapoli. A copy of the Actuary’s report can be found here.
In 2015, the Actuary conducted a review of the systems’ economic and demographic experience for the prior five years. The Actuary proposed assumptions and methods for the actuarial valuations, which were adopted by DiNapoli. Based on that report, DiNapoli lowered the long-term assumed rate of return in 2015 from 7.5 percent to 7 percent. The median assumed rate of return for public pension funds is 7.62, according to a February 2016 brief issued by the National Association of State Retirement Administrators.
In 2012, DiNapoli began providing employers with access to a two-year projection of their annual pension bill six weeks earlier than in previous years. Employers use this projection for preparation of their local budgets.
Required contributions vary by employer depending on factors such as retirement plans, salaries and the distribution of their employees among the six retirement tiers. There are 3,040 participating employers in ERS and PFRS, and 349 different plan combinations.
The employer contribution rates announced today will apply to the salaries paid by each employer during the prior fiscal year, April 1, 2016 through March 31, 2017. Payments based on those rates are due by Feb. 1, 2018, but may be pre-paid by Dec. 15, 2017.
Read the report,or go to: http://osc.state.ny.us/reports/pension/2016actuarialassumptions.pdf
See a chart of historical employer contribution rates, visit: http://osc.state.ny.us/pension/images/emplyr_contribution_rates.pdf