Think Tank Says NY Pension Costs Could Explode
ALBANY, NY (AP) - Taxpayer-funded contributions to the pension systems for New York’s public employees could balloon by billions of dollars over the next five years, diverting scarce resources in tough times, a fiscally conservative think tank said in a report Tuesday.
The Empire Center for New York State Policy report predicted how state public pension funds could fare based on the performance of investments and other variables, but even the forecasts based on pensions hitting their investment targets are alarming.
The report said taxpayer contributions to the New York State Teachers’ Retirement System could increase from about $900 million this year to about $4.5 billion in five years. State and local employer contributions to the New York State and Local Retirement System could more than double to add almost $4 billion to taxpayer costs, even with a cap that allows governments to defer a portion of higher pension contributions.
The pension report was released at a conference in Albany that featured local officials concerned that high benefit costs could force them to cut services during difficult economic times.
Syracuse Mayor Stephanie Miner said high pension costs could threaten essential services like snow plowing.
Westchester County Executive Robert Astorino said rising personnel costs put local officials in “an impossible place.”
“New York’s pensions are the financial equivalent of the neutron bomb: kill taxpayers right away, but save the bill for future generations,” Astorino said.
Empire Center analysts suggested pension system changes, including introduction of so-called defined-contribution plans for public employees. Such plans, popular in the private sector, specify the amount employers contribute to employees’ pension plans instead of guaranteeing a specified benefit.
Stephen Madarasz, a spokesman for the 300,000-member Civil Service Employees Association, told conference attendees that workers deserve a guaranteed benefit according to what they’ve earned. He also said tales of “gold-plated” pensions for public workers are overblown, with the average CSEA pension about $14,000 per year.
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