Employer contribution rates for the New York State and Local Retirement System (NYSLRS) will decline in Fiscal Year 2015-16, New York State Comptroller Thomas P. DiNapoli announced today.
The average contribution rate for the Employees Retirement System (ERS) will decrease by about nine percent from 20.1 percent of payroll to 18.2 percent of payroll. The average contribution rate for the Police and Fire Retirement System (PFRS) will decrease by about 11 percent from 27.6 percent of payroll to 24.7 percent of payroll.
“The state pension fund’s solid investment performance has delivered another decline in employer contribution rates,” DiNapoli said. “The effects of the 2008 financial market collapse are still being felt around the country, but New York’s pension fund is well-funded, is steadily recovering and will continue to meet its obligation to our more than one million Retirement System members and retirees.”
DiNapoli also announced that the funded ratio for NYSLRS (the actuarial value of assets divided by the actuarially accrued liabilities) increased from 88.7 percent to 92.2 percent.
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.
The actuary for NYSLRS recommended a change in the mortality improvement assumption from Society of Actuaries Scale AA to MP-2014. The recommendation was supported by a report from Buck Consultants, LLC, as part of an independent actuarial review which is performed every five years.
In 2012, DiNapoli directed NYSLRS to begin giving employers access to a full projection of their annual pension bill six weeks earlier than in previous years. Employers use this projection for preparation of their local budgets and calculation of tax levies.
Projections of required contributions will vary by employer depending on factors such as retirement plans, salaries and the distribution of their employees among the six retirement tiers. The employer contribution rates announced today will apply to each employer’s salary base during the period of April 1, 2015 through March 31, 2016. Payments based on those rates are due by February 1, 2016, but may be pre-paid by December 15, 2015.
To see a chart of historical employer contribution rates, click here.
To see a chart of historical funded ratio, click here.
For a copy of the actuary’s report, click here.