School pension costs in New York are set to increase 7.8 percent in the coming school year—the fifth year in a row of rising retirement costs for school districts.
The state’s Teachers Retirement System quietly posted the rates for the 2014-15 school year on its website this month.
The increase is less than the 37 percent hike that schools are grappling with this year, but it’s another rise in pension costs at a time when schools say they are dealing with growing costs and limited revenue.
Pension costs will increase from 16.25 percent of payroll to 17.53 percent of payroll for the 2014-15 school year, which starts July 1. The bill is paid in the fall of 2015.
The Teachers’ Retirement System, which provides 277,000 active members and nearly 150,000 retirees, said it is still digging itself out from the recession. It estimates that pension costs will drop in future years.
“The phasing-in of the investment return attributable to the Great Recession in ’08-’09 continues to be the reason for the increase in the ECR,” the system’s bulletin states. “This is the last year in which this return will be part of the five-year smoothing.”
The fund posted a return of 13.7 percent in the 2012-13 fiscal year, which ended June 30, but it has missed its rate of return of 8 percent over the past 5 and 10 years.
In the 2008-09 fiscal year, the fund posted a loss of 20.5 percent. And in the 2011-12 fiscal year, it netted only a 2.8 percent gain.