State Comptroller Tom DiNapoli recently announced – late on a Friday afternoon – that pension costs are set to increase again for both the state and local governments.
Beginning April 1, the state and local governments will contribute an average of 20.9 percent of salaries into the state pension system; an increase of 10.6 percent over the current fiscal year. For fire and police pensions, the increase is 12 percent over the current year.
The comptroller said:
“The Common Retirement Fund has experienced solid gains the last three years and continues to rebuild from the substantial financial market loss of 2008-2009. The rise in the employer contribution rate has slowed this year, but there will continue to be upward pressure on rates through Fiscal Year 2014-2015 reflecting the impact of that loss.”
While the creation of a new pension tier this legislative session was a step in the right direction, unfortunately it will do little to provide relief from the pension costs for current state employees. Since 2010, pension contribution rates have increased dramatically, meaning that the state and local governments will have fewer tax dollars to spend on core services.