Why does the City have to sometimes make a big contribution to the pension plans if it, as well as employees, have been contributing regularly to the pension funds?

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Posted 9 years ago

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Official Response
The employer contribution for any year is calculated assuming a certain level of investment returns for future years. Higher than assumed pension investment returns allow the City to reduce its pension contributions. Conversely, lower than assumed investment returns require the City to increase its pension contributions. The employer contributions to the City's pension funds have been increasing steadily since FY 2001, partly due to lower than assumed investment returns for the FY 2001 to FY 2009 period. Benefit increases granted to members are also a significant reason for the increase in employer contributions during this period, added to other less significant factors like actuarial losses, and increases in administrative and investment expenses. For a detailed analysis, please see "The $8 Billion Question: An Analysis of NYC Pension Costs Over the Past Decade" published by the Comptroller's Office in April 2011 and available at http://www.comptroller.nyc.gov/rsnyc/...