New York Teachers Pension Lowers School Contribution Rate

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The New York Teachers Retirement System (TRS) informed schools this month that their contribution rates would be lowered for the first time in five years.

Contribution rates will fall from 17.53 percent of payroll to 13 percent.

The change applies to schools, not to employees of the schools.

From the Democrat and Chronicle:

The drop, which will be as much as 26 percent, will be a major help to school districts that have faced higher bills for retirement costs in recent years, school officials said.

The Teachers Retirement System quietly told school districts late this month that their pension costs for the 2015-16 school year, which starts July 1, will fall from 17.53 percent of payroll to as low as 13 percent of payroll.

It will be the first drop since the 2009-10 school year. In the current fiscal year, the contribution rates are up 7.8 percent after rising 37 percent the year prior.

The retirement system will finalize its rate for the 2015-16 school year in February. The rate will be between 13 percent and 13.5 percent, and the bill is due in the fall 2016.

“Favorable investment returns over the last several years are the primary reason for the decrease in the rate,” the Teachers Retirement System said in a bulletin to school districts.

Pension costs are easing for schools and governments after they skyrocketed amid the recession — the result of major declines on Wall Street.

New York TRS manages $108 billion in assets and returned 18.2 percent last fiscal year.

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