Decline in stock market will drive up state pension costs
July 30, 2020
A 2.68 percent decline in the state’s pension fund for the past fiscal year means taxpayers will have to shoulder more of the cost of retirement benefits paid out to public employees.
State Comptroller Thomas DiNapoli announced the dip Thursday, and acknowledged on The Capitol Pressroom that it would translate to increases beyond what was projected this spring by the state Division of Budget.
“Certainly in the short run this will put upward pressure on the contribution rate,” DiNapoli said. The actual cost will be announced later this year.
The state financial plan already estimated a $300 million increase next year in costs for the statewide pension system, bringing the total bill to about $2.2 billion (Credit to EJ McMahon of the Empire Center for flagging these numbers.) The cost was projected to go up another $200 million two years from now.
“We need to signal that for our government employers, the state and local governments, they should be prepared for an increased in the next round of contribution rates,” DiNapoli said.
He added that the growth in demand for money to supplement the pension fund won’t likely be as dramatic as during the Great Recession, when the fund’s performance also struggled.◄ Back to News