I’ve downloaded the public employee pension data for FY 2011, and find that New York City is in the same situation. Which is no surprise, because it will probably be in that situation for years, perhaps decades. The city’s pension funds are in something close to a death spiral, with 13.8% of total assets paid out every year. The national average is 7.7%, the figure for the New York State pension funds, which also cover local government workers in the rest of the state, is 6.3%. The city has 1.30 workers to every retiree receiving benefits, compared with the U.S. average of 1.69 and the 1.57 for the state pension funds. That is one year paid for a permanent vacation in retirement for every one year, four months worked, on average. City taxpayers contributed $24,701 to the pension plan for each public employee in FY 2011, compared with the U.S. average of $6,622 and the average of $6,731 for the rest of the state.

The City Actuary has said that New York City is contributing $1 billion less per year to these pension funds than is needed by his own calculation, which will have to be made up later many times over. This is the City Actuary has been in office, and seems to have felt there was no problem, for the 20-plus years when one retroactive pension increase after another has passed, the city’s pension costs have soared, and taxes have been increased and services cut to pay for it. And it has already been announced that the city will have to contribute an extra half $billion a year from now, because the rate of return was below expectations a couple of years ago. But if one looks at the actual rate of return the city is likely to achieve, and how underfunded the pensions have become under the watch of City Actuary Robert North, two Comptrollers who are running for Mayor, and a former budget director who is running for Mayor, I would say that taxpayers ought to paying into the pension funds 100.0% of benefit payments out, to prevent a death spiral that would bankrupt the city. The actual figure in 2011 was 78.9%. The spreadsheet and additional commentary may be found on “Saying the Unsaid in New York.”

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