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State lowers pension contribution rates

State Comptroller Thomas DiNapoli Thursday announced that employer contribution rates for the Employees’ Retirement System and the Police and Fire Retirement System would decrease again in 2010, but he added a dose of caution.
The strength of the $153.9 billion Common Retirement Fund has enabled DiNapoli to lower the average ERS rate to 7.4 percent from 8.5 percent of payroll, while the average employer contribution rate for the PFRS will fall to 15.1 percent from 15.7 percent.
“The fund continues to be one of the strongest public pension funds in the United States,” DiNapoli said in a statement. “Last year, we were able to lower the employer rates, and this year, we’re lowering them even more. The lower rates are good news for state and local governments, and good news for taxpayers.”
The comptroller, however, cautioned about next year. “If the economy continues to drag,” he said, “we will not be able to avoid rate increases in the future. I’ve got some advice for the state and for local governments: plan carefully for the future.”
DiNapoli estimated this year’s rate reductions will save state and local government taxpayers roughly $300 million combined. The state will save $120 million, while local governments will save a combined $180 million.
“The reduction in pension rates announced today is much-needed good news for cities and villages,” said Peter Baynes, New York State Conference of Mayors executive director.
“Since pension costs are one of the largest components of municipal budgets—and, on average, equal to 20 percent of a city’s property tax levy—these lower rates will help alleviate pressure on the overburdened property tax,” Baynes said.
DiNapoli noted that the fund posted a 2.56 percent return for the fiscal year ended March 31, 2008. Contributions from the 3,021 state and local government employers in the fiscal year ended March 31, 2008 totaled nearly $2.7 billion, and contributions from the system’s members totaled roughly $265.7 million.
He said the system paid out more than $6.8 billion in benefits during that period.

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State lowers pension contribution rates

State Comptroller Thomas DiNapoli Thursday announced that employer contribution rates for the Employees’ Retirement System and the Police and Fire Retirement System would decrease again in 2010, but he added a dose of caution.

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