The Explosion in Pension Costs
10 Things New Yorkers Should Know About Retirement Benefits for New York City Employees
In recent years, one of the fastest growing expenses for New York City government has been retirement benefits for municipal workers. The City’s contributions to workers’ pensions grew by $4 billion dollars from fiscal years 2003 to 2008. This growth was driven mainly by investment losses in the pension funds and the enrichment of retirement benefits. The City’s pension fund contributions are based on generous standards that require little contribution from employees, allow for unusually early retirement, have liberal calculations for final average salary and make questionable presumptions on the cause of disability. Retirees also receive health insurance coverage without cost and a reimbursement of Medicare Part B premiums from the City. New York taxpayers have a critical interest in understanding the reasons behind the explosion in retirement benefit costs and what can be done to limit future liabilities.