In a recovering economy, every little bit counts.
Local officials reacted positively to the unexpected announcement Tuesday from Comptroller Thomas P. DiNapoli that the average amount municipalities are required to contribute to the states pension fund will decrease by 0.8 percent.
The New York State Common Retirement Funds strong gains over the last four years have mitigated some of the impact of the financial market collapse of 2008-2009, Mr. DiNapoli said in a news release. Strong investment performance, along with a revision in actuarial smoothing, has lowered the employer contribution rate for 2014-2015.
Jefferson County is scheduled to pay $8.96 million to the Employee Retirement System in fiscal year 2013-14, according to county budget analyst Gregory C. Hudson.
For fiscal year 2014-15, the county will save $309,000, paying $8.65 million, Mr. Hudson said.
Its a nice surprise, Deputy County Administrator Michael E. Kaskan said, tempering his statement with the reminder that the county has seen its contribution rate go up consistently during the past 10 years.
Though the decrease comes as welcome relief, challenges in the countys budget remain.
The budgets always difficult, Mr. Kaskan said. We always have our challenges and Im sure therell be challenges this year, but retirement wont be one of them.
Lower pension contributions in fiscal year 2014-15 will help the city of Watertown partly offset salary increases, city Comptroller James E. Mills said. Increases are expected to be mainly due to a renewed employment contract now under negotiation with Civil Service Employees Association Local 823, which represents 143 employees. Additionally, this year the city approved a 2 percent across-the-board salary increase for 35 management positions.
The city is projected to make a slightly larger contribution toward its Early Retirement System fund in fiscal year 2014-15, despite the reduction in state contribution rates. Compared with its estimated pension contribution this year toward the fund, next years payment is expected to increase from $1,732,000 to $1,796,220. Those figures are based on a projected total salary increase in the fund from $8.3 million this year to $9.8 million, according an estimate released by the state comptroller.
Mr. Mills said 181 full-time city employees are now enrolled in the ERS fund, but that figure does not account for part-time and seasonal employees who are also eligible to enroll in the system. The Police and Fire Retirement System fund includes 142 full-time employees.
The total contribution to the citys PFRS fund is projected to decrease in fiscal year 2014-15, because of the 1.3 percent average reduction in the state contribution rate. The estimated fund contribution this year is projected to decrease from $2,885,334 to $2,646,276. The total salary amount in the fund is projected to decrease from $10,331,779 this year to $9,998,444 in fiscal year 2014-15, according to the city comptroller.
Mr. Mills said that decreased pension rates were expected by the city this year, because rates have steadily climbed since 2010 because of the drop in the pension funds value during the recession in 2008 and 2009.
The state had a smoothing technique where that drastic drop in assets was spread over a five-year period, he said. There was a slow plateau going upward over that period, and there should now be a similar downward trend. Were hoping rates come down so that 8 to 9 percent becomes the norm for the ERS fund, and maybe about 15 percent for the PFRS fund. Those were roughly the numbers in 2010.