The annual increases in New York City's contributions to its public pension funds have begun to slow and are projected to level off during the next several fiscal years, according to a review of city finances by New York state Comptroller Thomas DiNapoli.
The projection for city contributions to the $145 billion New York City Retirement Systems — which comprises five funds — is expected to reach $8.16 billion for the fiscal year ending June 30, 2014, up from the $8.02 billion contribution for the most recent fiscal year, according to the report.
For the three fiscal years after FY 2014, the contributions are estimated to be $8.08 billion, $8.2 billion and $8.36 billion, respectively, the report said.
The state comptroller's office issues analyses of city finances quarterly, said Eric Sumberg, a spokesman for Mr. DiNapoli. The pension contribution report is based on data and estimates from New York City as well as the state comptroller's office's analysis. The pension discussion accounts for only a small portion of the comptroller's review of city finances, which was issued Dec. 20.
The projected modest growth in pension contributions stands in contrast to what had been a sharp increase in annual pension contributions, which were just more than $1 billion for the fiscal year ended June 30, 2001, the report said.
The latest pension contribution projections “reflect recent changes in the assumptions and methodologies used to calculate city pension contributions, which were recommended by the city actuary and approved by the boards of trustees of the city's five pension systems as well as by the state,” the report said.
These changes, which took effect last January, include reducing the annual investment earnings assumption to 7% from 8%. They also reflect “a different methodology to determine the projected cost of future pension benefits and a longer amortization period, which will help free up resources during the financial plan period but also will result in higher costs in the longer term,” the report said.
The report added the latest pension projections are aided by a “better-than-expected” aggregate return of 12.1% for the pension system during the fiscal year ended June 30.