DiNapoli: NYSLRS Announces Employer Contribution Rates For 2025-26

September 3, 2024

State Comptroller Thomas P. DiNapoli today announced employer contributions rates for the New York State and Local Retirement System (NYSLRS) for State Fiscal Year (SFY) 2025-26. Employers' average contribution rates will increase from 15.2% to 16.5% of payroll for the Employees' Retirement System (ERS) and from 31.2% to 33.7% of payroll for the Police and Fire Retirement System (PFRS).

NYSLRS is made up of these two systems, which pay service and disability retirement benefits to state and local public employees and death benefits to their survivors. There are nearly 3,000 participating employers in ERS and PFRS, and more than 300 different retirement plan combinations. In the SFY that ended March 31, 2024, NYSLRS paid out nearly $16.2 billion in benefits.

"Despite global tensions and market volatility, our state's pension fund remains one of the strongest and best funded in the nation," DiNapoli said. "These rates - in addition to our prudent management and long-term strategy - will help ensure public employees and their families receive the benefits that they have earned."

Employer rates for NYSLRS are determined based on investment performance and actuarial assumptions recommended by NYSLRS's actuary, who is required to review the actuarial assumptions and issue an annual report . The recommendations are reviewed by the independent Actuarial Advisory Committee and approved by DiNapoli. In addition to investment performance, other factors that impacted rates included inflation, higher salaries, recent legislative changes (including reforms to tier 6) and member retirement rates.

In 2012, DiNapoli began providing employers with access to a two-year projection of their annual pension bills. Employers can use this projection in the preparation of their budgets. Projections of required contributions vary by employer depending on factors such as the types of retirement benefit plans adopted, salaries paid and the distribution of employees among the six membership tiers.

Payments based on the new rates are due by Feb. 1, 2026, but employers receive a discount if payment is made by Dec. 15, 2025.

The New York State Common Retirement Fund's long-term assumed rate of return will remain at 5.9%. DiNapoli has been a leader in the trend of public pension funds lowering their assumed rates of return to better enable New York to weather volatile markets. The median investment return assumption for public pension funds was 7% in July 2024, according to the National Association of State Retirement Administrators. The Kentucky Employees Retirement System was the only state with an assumed rate of return lower than NYSLRS.

DiNapoli also announced that NYSLRS had a funded ratio of 93.2% as of March 31, 2024. NYSLRS is consistently ranked among the nation's best funded retirement systems. A high funding ratio means NYSLRS has the funds available to pay out retirement benefits to its more than 1.2 million members, which includes over 710,000 current and former state and local government employees and more than 520,000 retirees and their beneficiaries.

Report
Annual Report to the Comptroller on Actuarial Assumptions