Employer contribution rates for the New York State and Local Retirement System will decline slightly in Fiscal Year 2014-15, New York State Comptroller Thomas P. DiNapoli announced today.
The average contribution rate for the Employee Retirement System (ERS) will decrease by 0.8 percent of payroll, from 20.9 percent to 20.1 percent. The average contribution rate for the Police and Fire Retirement System (PFRS) will decrease by 1.3 percent of payroll, from 28.9 percent to 27.6 percent.
"The New York State Common Retirement Fund's strong gains over the last four years have mitigated some of the impact of the financial market collapse of 2008-2009," DiNapoli said. "Strong investment performance, along with a revision in actuarial smoothing, has lowered the employer contribution rate for 2014-15."
Employer rates are determined based on actuarial assumptions recommended by the Retirement System's actuary and approved by DiNapoli.
The Retirement System's actuary recommended a change based on a recommendation from Buck Consultants, LLC, as part of an independent actuarial review which is performed every five years. The previous method separated assets into equities and non-equities, while the new method expects the entire fund to earn the assumed rate of return and smoothes any unexpected gains or losses. According to Buck, the new method is generally used by the majority of public pension systems nationwide.