Last Friday, State Comptroller Tom DiNapoli announced that the New York State and Local Retirement System employer contribution rates will decrease for fiscal year 2016-17 from 18.2% of payroll to 15.5%, a reduction of about 15%. He also said that the retirement fund’s anticipated rate of return will be reduced to 7% from the 7.5% rate the pension system has used since 2010.

The reduced contribution rate is a positive development for local governments (and their taxpayers) that pay into the state pension system for their public employees, as contribution rates are an important component of local government budgeting. But lowering the anticipated rate of return means that the state and local governments will have to make up the difference.