US - The return assumption for the New York State Common Retirement Fund (CRF) has been lowered by half a percentage point to 7.5% leading to higher contribution rates for state employers.
Comptroller Thomas DiNapoli said yesterday the average contribution rate for the Employee Retirement System will increase to 16.3% from 11.9% and the Police and Fire Retirement System's contribution is increasing to 21.6% from 18.2%. Both fall under the CRF's umbrella.
"The markets are still recovering from the 2008-09 financial meltdown, and that recovery continues to be volatile. We handled the meltdown better than most pension funds, but we're still feeling the impact, and, as I have consistently cautioned, the employer contribution rates I'm announcing today will reflect the impact of the financial crisis," said DiNapoli.
However, legislation enacted earlier this year will ease the pain for local governments.
The Comptroller's office said: "Earlier this year, a new law was enacted that will allow local governments to opt into a programme that would allow them to budget a portion of their increased pension fund payments over ten years. The employer contribution payment plan will help those localities mitigate the impact the increase in costs could have on local taxpayers."
Localities that chose to participate in the programme will have to build up a reserve fund when contributions are low to protect taxpayers again future increases.
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