New York State Comptroller Thomas P. DiNapoli announced the New York State and Local Retirement System (NYSLRS) employer contribution rates will decrease for fiscal year 2016-17 and the assumed rate of return for NYSLRS will be lowered from 7.5 percent to 7 percent.
The average contribution rate for the Employees' Retirement System (ERS) will decrease from 18.2 percent of payroll to 15.5 percent, or about 15 percent. While the average contribution rate for the Police and Fire Retirement System (PFRS) will decrease from 24.7 percent of payroll to 24.3 percent, or about 2 percent.
"For the third year in a row, there will be a decline in pension contribution rates as a result of solid investment returns," DiNapoli said. "Lowering the assumed rate of return is fiscally prudent and will better position the state pension fund for the future. This strategic decision is consistent with the tougher investment climate ahead."
Employer rates are determined based on actuarial assumptions recommended by NYSLRS' actuary in the Annual Report to the Comptroller on Actuarial Assumptions.
The announced rates will apply to each employer's salary base during the period April 1, 2015 through March 31, 2016. Payments based on those rates are due by Feb. 1, 2017, but may be pre-paid by Dec. 15, 2016. Projections of required contribution rates will vary by employer depending on factors such as retirement plans, salaries and the distribution of employees among the six retirement tiers.
This is the second time since becoming State Comptroller in 2007 that DiNapoli has lowered the assumed rate of return. In 2010, he lowered the assumed rate of return from 8 percent to 7.5 percent. According the National Association of State Retirement Administrators, the median assumed rate of return for public pension funds is 7.75 percent.
The audited value of the New York State Common Retirement Fund as of March 31, 2015 was $184.5 billion.