Public Employee Press

NYC Comptoller Liu:
What crisis?

Mayor Michael R. Bloomberg cites high costs as he demands a new pension tier to make future employees work longer for a poorer benefit, but a recent report based on the findings of independent auditors shows that the costs of existing plans will steadily decline.

The report from city Comptroller John C. Liu shows that pension costs will peak in 2016 and then decline.

Beginning in 2016, pensions will grow more slowly than the local economy, so the city won't have to use as much of its budget for employees' retirement security. As a percentage of the budget, pension costs will drop from 10.6 percent in fiscal year 2010 to 9.4 percent in 2020 and 3.3 percent in 2060.

"Poor market performance over the past decade means that we still have a few tough years ahead," Liu said. "However, significant reforms implemented in recent years will drive down costs for decades to come."

As new, less costly plans are phased in and veteran employees retire, the city's pension obligations will decline. The Tier 4, 57/5 Plan for employees hired since June 29, 1996, requires higher contributions from workers, and the Tier 3 Plan for Police Officers and Firefighters saves money by extending the years needed to earn a 50 percent pension benefit.

"The current pressure on the pension system largely reflects the impact of the 2008 stock market debacle, and that pressure will be relieved as investment returns improve and city costs fall," said DC 37 Retirees Association President Stuart Leibowitz.

Independent actuaries and the Hay Group, a global management company, conducted the study for the Comptroller's Office.

"The comptroller's report shows the mayor has been using scare tactics that are unjustified by the facts," said DC 37 Executive Director Lillian Roberts.

— Gregory N. Heires