A Look at the County’s Pension System

A Look at the County’s Pension System

In mid-December the County’s Retirement Board voted to increase contributions to the retirement system by one percentage point to 8%. This was the second annual increase to the contribution level (it went to 7% effective January 1, 2011), one that had been at 6% since 2003. But this boost does not just affect employees of the County-the County, as the employer-must match the increase and also put in 8% per requirements of state law. "Any increase in employee contributions imposes a statutory requirement upon the County to match the employee contributions".

As pointed out in the most recent audit of the system (for year end 2010) the County put in $20.1 million and employees of the system put in $20.1 million. With investments and other income a total of $116 million was added to the plan while $70.1 million was deducted from the plan.

As of the audit there were 7,479 active employees to 4.602 retirees, beneficiaries, and deferred vested; the County exhibits a trend opposite that of the City and the Port Authority in that there are more "actives" than "non-actives". But there are some troubling trends displayed in the back pages of the audit.

First, the funded ratio of the plan (assets/liabilities) has fallen from where it stood in 2004: it was 92% funded then, and 58% funded as of 2010. Assets have fallen from $718 million to $652 million over the time frame while liabilities rose from $780 million to $1,119 million.

Second, while the County put in more than enough of its annual required contribution (ARC) for 2004 (it was $15,199 and they put in 111%, or $16.8 million) the record of meeting the ARC fell throughout the subsequent years while the ARC rose. In 2010, the ARC was $60.7 million and the County put in 33%, or the $20.1 million mentioned at the outset.