Pension costs for public employees up 11 percent plus





Here are the details

New York State Comptroller Thomas P. DiNapoli today announced the Fiscal
Retirement System.

percent. The average contribution rate for the Police and Fire Retirement
specific plans and tiers are available under “Contribution Rates and
Related Information” on the Comptroller’s website at

“The Common Retirement Fund has experienced solid gains the last three
years and continues to rebuild from the substantial financial market loss
New York continues to responsibly manage its pension system and our funded
difficult economic times, but fulfilling our obligations has meant that New

DiNapoli directed the Retirement System to give employers access to a full
than in previous years. Employers use this projection for preparation of
budgets and calculation of tax levies subject to the property tax cap
effective for fiscal years that begin in 2013.

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

The property tax cap generally limits the amount a government entity can
contribution rate by more than two percentage points is excluded from the
tax cap.

previous year, no portion of an employer’s ERS contribution will be

DiNapoli also certified the employer contribution rates calculated by the
Retirement System’s actuary based on actuarial assumptions. A copy of the
actuary’s report can be found here:

  1. EriK says:

    Oh noes, Rick is reporting on pension costs. I’m sure he will be criticized in 3, 2, 1…

    But seriously 21%! or better yet 29%! Jeebus.

    Much to the chagrin of our hard working civil servants, salaries must flatten out if we are going to maintain the current pension system. Somethings gotta give and the state can’t cut the pension promises it has already made, so it’s likely to be very low salary growth going forward – which just continues the recent trend.

  2. jdunphy says:

    how about the article from a senator himself in the opinion section that states pension contribution formulas are what need to change. It was also one of the first times ive finally seen an elected official admit that there were times municipalities paid as little as nothing into the retirement fund. Balancing those payments would go a long way to protecting municipalities. Unlike some political figures who act as if the public employee and the pension itself is the problem. The real problem is how contributions are determined in the first place and what politicians are doing with that money rather than paying a nominal amount regularly into the pension fund.

  3. Bob says:

    Employer contribution rates have historically bounced around like a yo-yo, from high percentages in the 20′s to lows less than 1 percent for the ERS. Funny how news articles report the higher rates, but rarely, if ever, discuss the years where rates were low. In any event, this just supports the state using long-term actuarial calculations when establishing the employer contribution rates to help smooth out rate fluctuations.

  4. zync says:

    This is directly attributable to the market crash, and the fact that for years in the 90s and 2000s, governments paid 0% due to market returns. Did ANY government put away money in those years they paid zero? Of course not. The fire/police are more lavishly paid due to pension padding via overtime in their last 3 years. Of course, that’s still legal.

  5. Common Sense says:

    The local governments have a 2% tax cap. With pensions going up 11% something else will have to be cut.

    Too bad DiNapoli earned such a poor return on the pension portfolio.

    If you services are cut, blame DiNapoli.

  6. optivity says:

    What to do?

    Should we kick all NYS Public Employee Pensioners to the curb and use those funds in the Employee Retirement System to pay for the Tappan Zee Bridge, Cuomo’s re-election campaign and Sheldon Silver’s sexual harassment hush money?

  7. Chip D says:

    Tell you what… why not make it 8% ever year no matter what? Why does no one in state govt think more than 1 year ahead?

  8. gilhags says:

    bob #2 – That’s because they were never “low”, the burden has been and continues to fall on taxpayers and the costs continue to rise.

    Perhaps if the NYS Legislature (who is obviously completely detatched from powerful labor unions) actually asked NYS employees to pay a very small percentage of income towards pensions during the 70s and 80s, we wouldn’t be in this mess.

    zync #3- What percentage or dollar amount did (ERS) Tiers I and pay towards their pensions during the 1970s, 1980s and 1990s? What do they pay today?

  9. Unsurprising and not unexpected. The pension actuaries calculate ECRs based on a 5 year rolling average. They should begin leveling out in the next year or two and then falling sharply once the 2008-2009 period of the recession drop out of the years used to calculate the average.

    And as Bob noted, contrary to popular belief, we are still far from historical highs.

    Of course, people like Edmund McMahon will point at this and claim that it’s an indicator that pension costs will continue to rise in perpetuity, which of course, is extremely disingenuous. And of course, those predisposed to being motivated by fear mongering will fall for what Edmund implies (but doesn’t actually say), and scream about how this is an outrage to them because they are taxpayers.

    Lets not forget Mittens last night: He basically admitted that the “unsustainable” talking point used by the right on pensions was bunk by disucssing a success church pension fund. The only people who fall for that “unsustainable” bunk are those that have no clue how pensions work and forget history, since pensions have been around and have been successful for well over a century. It is only when they are underfunded, mismanged, or flat out robbed that they fail.

  10. Cognitive dissonance alert on gilhags post – as usual.

    Gilhags, you are aware that ECRs for non-public safety employees hovered around 1% of salaries for about a decade. You’ve been informed of this more times than I care to count.

    Sorry, but the cost actually DO go down. Go read the Cohoes mayors blog where we discuss the cities pension costs. The city paid all of $50k a year towards the turn of the century. Far lower both in ECR percentage and total dollars than it did in the early 90s. Rinse and repeat for every municipality and for the state.

    It’s one thing to argue that in your opinion pensions are too costly overall. You’re entitled to your opinion. You are not, however, entitled to your own facts.

  11. I should also note this gilhags: What employees paid in eariler tiers is irrelevant to the events of today. If you understood how pensions worked, you’d understand that your comment is simply more unrelated deflection.

    Lets explain this to you for the 1 millionth time: Actuaries calculate how much is needed to keep the plan fully funded. They raise and lower ECRs to meet that. Had employee contributions been higher in the past, employer contributions would have been lower – resulting in having the exact same funding levels in the past regardless of where the money came from.

    And again, for the millionth time, a floor was set on ECRs in 2004 of 4%, meaning that after the fund recovers, ECRs will never drop below that floor. That means that in the future, the fund will end up “overfunded” in prosperous times, leaving a cushion during troubled times, which should soften future rate hikes.

    While you won’t do it, you should actuall learn how pensions work and stop thinking they function anything like a 401k. You might just realize they aren’t the “evil” thing you think they are.

  12. mr says:

    The one percenters are already collecting their pensions in the billions via tax cuts and loops holes. Would this be a better topic for discussion? Perhaps some of our tax dollars can be distributed for the betterment of society. Besides how many rolex watches do they really need?

  13. Jimmy says:

    The title for this ‘article’ is w’heird to say the least. Words seem to have been placed out of order to convey a phenomenon that isn’t actually occurring. Intimates ‘costs’ for public employees are going up, when they’re actually most likely going down due to the fact that pensions ‘cost’ less than full pay for public employees.

    And who needs to draw attention to the fact that the American population is graying? Wouldn’t that necessary entail an increase in pension costs? Is this a surprise to anyone? In other words, is this news?

    Kind of intimates an agenda on the part of the author.

  14. hotrod107 says:

    common sense, time to apply some. pension cost is exempt from the tax cap.

  15. hotrod107 says:

    Pensions. The pension exemption is triggered if the annual growth in the average actuarial contribution rate for the Employees’ Retirement System (ERS), the Police and Fire Retirement System (PFRS), or the normal contribution rate for Teachers’ Retirement System (TRS) exceeds two percentage points. Under the exemption, pension costs associated with the annual growth in the employer contribution rate above two percentage points are exempted from the cap.

  16. John Quincy says:

    It is a little deceptive to use a percentage increase in the headline for an expense which is based on a percentage of payroll. I am sure there are some out there screaming that the unions are making them pay an additional 11 percent of payroll to support their pensions.

  17. Rich says:

    Ban public pensions, run it like private business. People are fleeing this state. There is no one left to pay the tab for the state workfare program.

  18. Why Wouldn't The Cost be Up says:

    Why wouldn’t the cost be up? The fed has lowered the interest rate to
    near 0% to stimulate the economy. Like that is working. It use to be that
    CD’s and Money Markets paid enough to assist in keeping pensions afloat
    and also for retirement investments for non-pensioners. All the Fed
    has accomplished with stimulation is to screw the seniors. Perhaps
    the seniors would have stimulated the economy more than the feds if they
    had avaiable some money to spend.

  19. eb says:

    Here is a secret for all you NYS Pension bashers. Does anyone know that all your politicans also pull of of the NYS pension system and they NEVER contributate and collect after 2 yrs at 100% of their HUGE final salery. So before you bash your teachers, public employees and fire, police. Think of THAT!

  20. eb says:

    Rick Karlin…know what your facts before you write them. Every public employee such as school dist, state, local city and town county, and police,fire and politican. Belong to the same Pension system they just contribute and get pension different Its named NYS Employees Retirement System

  21. adkgirl says:

    Have been a public employee since the late 70′s. Paid into my retirement at 3%. There is not a mess with NYS employee pension funds. However, there are problems with funding at the county and local levels. How many times can this be said before it sinks in to those who would like to see all NYS public servants impoverished? Oh. Don’t let facts get in the way. As far as lavish pensions; don’t I wish. If that were so, I would have retired a year ago. One just cannot live on a paltry 14,000 a year.

  22. Lisa De Leeuw says:

    They need to take care of the current workforce, but instill less expensive benefite for new hires.

  23. Reality, What A Concept says:

    How much are welfare cost up? What’s the percentage there? Take from public employees to give to welfare, that’s how this current administration works. And to further matters, the media loves it.

  24. JG says:

    State workers have taken a pay CUT for two years, MC employees have not had a raise since 2008 and have suffered from a pay CUT for the last two years.

    The savings from this will more than make up then what will be expected for the pension pay.

    The pension fund is right and fair. If private sector people are upset, then demand a pension instead of a 401K from your employer. There are plenty of unions in the area that will help you achieve a noble goal.

  25. KBR says:

    I love the way the TU reports the math. When it comes to pension payments (a trigger for all those who love to bludgeon public employees) the headiline is “Pension Costs Rise 11%”. And true enough, the difference between 18.9% of payroll versus 20.9% of payroll is 10.58%, which I suppose can be rounded up to 11%.

    Yet, when family health insurance contributions were raised from 25% to 31%, it was reported that State employees were being asked to contribute 6% more to their health insurance coverage when, to be consistent and fair in the reporting of it, the increase was actually 24%.

    It’s all in how the numbers are reported and, oddly enough, they are always reported to put public employees in the worst possible light. On the other hand, why bother reporting the facts; they would just get in the way of opinions.

  26. Joey Silvera says:

    Listen, the state accepted the current contracts, so the complaints should be directed to the leaders, not the civil service underlings. Moving forward, they should limit the amuont paid oput to all future hires.

  27. New Stateworker says:

    It is not right to criticize DiNapoli for stock market swings and increased cost of servicing the pension. Govt as an employer should have paid into pension fund a reasonable amount every year. With 3 years of zero salary growth, reducing number of tier 1.2 and 3 employees and tier 5 & 6 for new state employees, pension cost is likely to go down substantially in future.
    Pension costs are not high due to higher salary or better pension scheme but it is because of abuse by some people. Padding salaries by overtime before retiring to overtime eligible employees and double dipping has been wide spread. Now overtime has been drastically cut. For every problem we should not be eyeing salary and benefit cuts but state should be vigilant to stop abuses by a few people. To cut govt spending govt should look for cutting waste in their spending which is also widespread and benefits a few who are the people expert in manipulating the system.
    When we talk of cutting salaries and benefits, we should stop and think – Do we want an America where living standard has to go down or we want to build an economy where standard of living goes up in future.

  28. Birmy says:

    Hysterical that we get this sentence in article – “It’s a bit higher for the better-paid and more lavishly-pensioned police and firefighters: their rate will go up about 12 percent from 25.8 to 28.9 percent of payroll going toward retirement costs.”

    But we get no mention of teacher pensions percentage increases? Why? That does not fit into TU editorial’s board’s favor of begging for Triborough without mentioning the Taylor Law and how teachers cannot strike. The absence of teacher pension percentage increases in relation to cops and fireman (who are routinely the top 10 paid city employees year in and year out) shows that the TU wants to craft the message that teacher costs are out of control. They can do a better job of this by omitting essential facts that are worthy of comparison.


  29. New Stateworker says:

    This is a strange argument people on the right keep pointing out that state workers’ benefits are paid for by taxpayers. What is wrong in it ?? When State workers work everyday 8 hrs for taxpayers, their salaries and benefits travel cost, cost of maintaining their office – stationary, drinking water, toilet paper etc are paid for by taxpayers and employees also are taxpayers.
    And state workers are neither paid astronomically high salary nor a dream benefit package. Whatever benefits they got has been drastically cut during last year’s contract. Right wingers still continue to complain. Will they be satisfied when state workers will work for taxpayers and go beg for money somewhere else ??

  30. dick dastardly wonders aloud says:


    You are profoundly correct, however no one cares about us M/C’s. The ignorant masses think we are management, and the media does nothing to dissuade them. My salary and pension have and will suffer because of this, as those of us suffering from the 9 days robbery will see our total salaries down , for figuring retirement benefits. Again , only you and I care, and my more forceful comments on the subject do not get posted. I wonder why (aloud, at that). Regardless, these retirement woe type headlines further embitter the public to all state employees, and as I type this on Labor Day morning, I do not see M/C’s getting a fair shake in the immediate future. I amlooking to transfer to a PEF item. The hell with more responsibility for less pay.

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