Common Retirement Fund Strength
Provides Relief to Taxpayers
DiNapoli Lowers 2009 Pension Contribution Rates to 8.5% of Payroll;
New York State Comptroller Thomas P. DiNapoli today announced that the strength of the $154.5 billion Common Retirement Fund (CRF) has allowed him to lower the employer contribution rates for the Employees' Retirement System (ERS) and the Police and Fire Retirement System (PFRS). For 2009, ERS will drop to 8.5 percent from 9.6 percent of payroll. The rate for PFRS will decrease to 15.7 percent in 2009 from 16.6 percent in 2008.
“We have one of the lowest contribution rates in the nation,” DiNapoli said. “This is great news for New York State taxpayers. The strength of the Common Retirement Fund saves taxpayers money because it allows state and local government employers to contribute to the pension fund at a lower rate while making sure the retirement system remains one of the best funded in the nation.”
By comparison, 2009 contribution rates for New York City’s five public pension funds are forecast to range from about 20.3 percent to 77 percent of salary (see charts below).
DiNapoli attributed the lower rates to prudent policies and solid investment returns. Using a diversified, low-risk, low-volatility strategy, the CRF last year posted a 12.58 percent return on its investments. Coupled with employee and employer contributions, the system is now funded at 104 percent of its projected liabilities — the best in New York and one of the best in the nation.
The performance of the CRF directly affects the employer contribution rates. For comparison, if the Fund had earned only the targeted 8 percent, employer rates would have been approximately 11 percent of payroll for ERS and close to 20 percent for PFRS.
In the 2006-2007 fiscal year, 3,010 state and local government employers that participate in the pension system contributed approximately $2.7 billion into the CRF. The CRF will pay out nearly $6.4 billion in benefits this year.
DiNapoli said letters were mailed Friday, August 31, informing employers of the new 2009 rates.
Chart includes: NYS Employees' Retirement Fund; NYC Employees' Retirement System; NYC Teachers' Retirement System; and NYC Board of Education Retirement System.
Chart includes: NYS Police and Fire Retirement System; NYC Police Retirement System; and NYC Fire Retirement System.