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Thread: NY State Boosts Pension Contribution Rates

  1. #1
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    NY State Boosts Pension Contribution Rates

    Where is the fiscal responsibility being exercised here? This type of action is just not sustainable.

    [QUOTE]State boosts pension contribution rates
    Originally published: August 24, 2011 10:31 PM
    Updated: August 25, 2011 12:17 AM
    By YANCEY ROY [email]yancey.roy@newsday.com[/email]


    Photo credit: Newsday/Audrey C. Tiernan | New York State Comptroller Thomas P. DiNapoli. (April 6, 2011)

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    Top 10 state pension receivers ALBANY - State Comptroller Thomas P. DiNapoli Wednesday announced another big increase in employer contribution rates to New York's pension fund, meaning local governments and schools could be paying nearly $400 million more toward their employees' retirements next fiscal year compared with this year.

    The comptroller said stock market losses from 2008 and 2009 are still being felt. The pension fund, which is spread out in numerous investments, lost more than $40 billion during the economic downturn and hasn't fully recovered yet. Employees' retirement funds are effectively held harmless during such downturns, forcing employers to pay more into the fund to make up for the losses.

    "The Common Retirement Fund has had two consecutive years of strong investment returns," DiNapoli said. "However, we are still incorporating the market loss of 2008-09 into our employer contribution rates."

    In addition, the pension payment increases could make it tougher for some communities to deal with the state's newly enacted property-tax cap.

    DiNapoli said local governments will pay on average 18.9 percent of salaries into the state's Employee Retirement System for the 2012-13 fiscal year, up from 16.3 percent the previous year. Contributions to the Police and Fire Retirement System will be 25.8 percent of salaries -- up from 21.6 percent.

    While the increases are almost precisely what analysts predicted, it still marks the highest contribution rate since the early 1980s.

    "It is very difficult to sustain a government when we keep getting buffeted with these types of increases," said Islip Town Supervisor Phil Nolan. "We keep getting handed these blows, yet we are expected to deliver a town government."

    "This is bad news for local governments," said Stephen Acquario, executive director of the New York State Association of Counties.

    The new tax cap limits governments from increasing their tax levy by more than 2 percent annually. It allows a partial exclusion for a rise in pension costs: any contributions above a 2 percent increase won't count against the local levy. But contributions up to 2 percent will count.

    Acquario calculated that pension-fund increases alone would put many counties at the tax-cap limit -- meaning they will have to cut from other areas. Many are already facing increases in labor costs and Medicaid, he said, further limiting the amount of leeway they will have in constructing their budgets.

    During the stock market boom, local governments enjoyed many years during which they paid nothing into the pension fund because the fund's value was growing fast enough to cover any increases.

    DiNapoli tried to point to the bright side: the 2.6 percent jump for the upcoming year wasn't as bad as the year before, when employers saw a 4.4 percent increase. He added: "I remain confident that our long-term investment strategy will help us to weather this volatile economic environment."

    But Hempstead Town spokesman Michael Deery said, "It seems disingenuous for the state to impose tax caps on local governments while at the same time asking municipalities to increase their contribution by an amount greater than the cap. Despite that, Hempstead Town is freezing taxes."

    One analyst said the increased demanded from employers isn't surprising -- and the trend isn't changing.

    "The rate is the highest it's been in 30 years and it's going to keep going up," said Edmund J. McMahon of the Empire Center, which advocates for a "defined contribution" or 401(k)-style pension system for public employees. "Basically, we're still trying to dig ourselves out of the hole."

    The Common Retirement Fund is valued at $146.5 billion, according to a report from DiNapoli last month. It had dipped all the way to $110 billion in March 2009.

    With Yamiche Alcindor

    and Aisha al-Muslim[/QUOTE]

  2. #2
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    This is how it works...losses in the markets generate a need for more infusion. PLAIN and SIMPLE. A defined benefit plan, while apparantluy complex, is actually not. bad markets = you MUST put in more money.

    It's gonna get worse my friend.....

    Someone has to make sure these civil servants live like the bourgeouse while those in the private sector pay for it!

    Meredith Whitney is 100 percent correct. I have looked at the books of many muni's... it is a disaster waiting to happen.



    [url]http://www.youtube.com/watch?v=hI-rIGyLri4[/url]

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    [QUOTE=southparkcpa;4116079]This is how it works...losses in the markets generate a need for more infusion. PLAIN and SIMPLE. A defined benefit plan, while apparantluy complex, is actually not. bad markets = you MUST put in more money.

    It's gonna get worse my friend.....

    Someone has to make sure these civil servants live like the bourgeouse while those in the private sector pay for it!

    Meredith Whitney is 100 percent correct. I have looked at the books of many muni's... it is a disaster waiting to happen.



    [url]http://www.youtube.com/watch?v=hI-rIGyLri4[/url][/QUOTE]

    Have to say you were out in front on this one, Southpark. Between funding these pensions for public employees and the 48% of the country without federal tax liabilities, we are in deep trouble.

  4. #4
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    [QUOTE=southparkcpa;4116079]This is how it works...losses in the markets generate a need for more infusion. PLAIN and SIMPLE. A defined benefit plan, while apparantluy complex, is actually not. bad markets = you MUST put in more money.

    It's gonna get worse my friend.....

    Someone has [B]to make sure these civil servants live like the bourgeouse [/B]while those in the private sector pay for it!

    Meredith Whitney is 100 percent correct. I have looked at the books of many muni's... it is a disaster waiting to happen.



    [URL]http://www.youtube.com/watch?v=hI-rIGyLri4[/URL][/QUOTE]

    Damn civil servants, wanting to live like the middle class :steamin:

  5. #5
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    [QUOTE=doggin94it;4116817]Damn civil servants, wanting to live like the middle class :steamin:[/QUOTE]

    I'd love to see you show me ANY civil service job out there that makes so much less than it's public-sector equivalent, that the civil servant is in the lower class, but the private sector worker in the middle.

    Civil Servants have no place to cry about compensation these days.

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    [QUOTE=doggin94it;4116817]Damn civil servants, wanting to live like the middle class :steamin:[/QUOTE]

    Who is in this middle class you speak of that gets a defined benefits pension? The value of a defined benefit pension paying out $50,000 per year from age 60 to death is over a million dollars. What middle class people do you know that have a million cash in the bank to annuitize at age 60?

    Its hard to have a conversation about policy when people don't understand the basics. You are WAY too smart for that type of answer.

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    [QUOTE=Warfish;4116840]I'd love to see you show me ANY civil service job out there that makes so much less than it's public-sector equivalent, that the civil servant is in the lower class, but the private sector worker in the middle.

    Civil Servants have no place to cry about compensation these days.[/QUOTE]

    Well Public school teachers on average make about twice what private school teachers make so there! Of course that doesnt count the pension benefits that the public workers get. Gotcha! Oh wait that proves that the opposite is true.

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    [QUOTE=chiefst2000;4116851]What middle class people do you know that have a million cash in the bank to annuitize at age 60? [/QUOTE]

    I dunno.

    Republicans/conservative/tea party tried to convince America that people who are in the top 1% were just ordinary freaking plumbers and average Americans.

    Made your bed. Lay in it. lolz...

  9. #9
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    [QUOTE=doggin94it;4116817]Damn civil servants, wanting to live like the middle class :steamin:[/QUOTE]

    Your clue less here.......

    please tell me where a worker can work 25 years and retire at 50 and be paid the rest of their life WITH benefits for them and their spouse. NOT in government of course.

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    [QUOTE=southparkcpa;4117022]Your clue less here.......

    please tell me where a worker can work 25 years and retire at 50 and be paid the rest of their life WITH benefits for them and their spouse. NOT in government of course.[/QUOTE]

    Show me a worker who gets laid off and is paid 2 years salary to go away.

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    How about unemployment insurance. Who is paying for it the taxpayer so someone else can get a nice check and not work.

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    [QUOTE=cr726;4117027]Show me a worker who gets laid off and is paid 2 years salary to go away.[/QUOTE]

    I have heard of things like that but very rare (probably a legal issue involved as well) AND 1/100th the cost of a civil servant pesnion or more common...somply transfer the civil servant around and keep them on payroll. Jam it up the private sector's arse.

  13. #13
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    [QUOTE=southparkcpa;4117242]I have heard of things like that but very rare (probably a legal issue involved as well) AND 1/100th the cost of a civil servant pesnion or more common...somply transfer the civil servant around and keep them on payroll. Jam it up the private sector's arse.[/QUOTE]

    You're kidding right? I know at least 5 people personally who all have gotten incredible packages to walk away and none of them were upper management.

    I guess it is rare to find out all the temporary staffing companies who are making millions providing non-union, non-civil service jobs to gov't. I guess you missed that too?

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