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State public schools expect to pay make highest pension contribution for teachers in 2014-15

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By KATHERINE CLARK

WATERTOWN — School districts across the state are paying more than ever toward pension contributions for instructional staff and school administrator salaries.

John L. Cardillo, public information officer for the New York Teachers’ Retirement System, said for the 2014-15 school year, school districts are anticipated to make a contribution of 17 percent.

“In good times districts are paying very little,” Mr. Cardillo said. “We should see this peak with 17.5 percent and it should start to decline after that.”

Funding for state teachers and other instructional staff in the public schools are funded with a 3 percent employee contribution and a contribution of varying amounts by their employing school district. For 2013-14, he said the employer contributions were about 16 percent for each eligible employee. He said for 2014-15 employers are projected to have to contribute 17.53 percent.

“Those numbers have been an anomaly since the world economic collapse in 2008-09,” Mr. Cardillo said,

He said for the two decades prior to 2008, the districts’ contributions were in the single digits.

Each employee’s pension is based on salary and years of experience. Mr. Cardillo said the money given to the NYTRS is pooled for all pension recipients and invested.

“It’s really one big pool,” Mr. Cardillo said. “More than 87 percent of all our funds come from investment income.”

He said the Teachers’ Retirement System used to be able to make less money go much further in the market, but as the market changed, more money was needed from the school districts to make up the difference.

He said the system uses information from the school districts about the ages and salaries of employees to make projections about the amount of money that will be needed years in advance.

“We’re ahead of the curve in anticipation for any large-scale retirement,” Mr. Cardillo said. “I expect once the market has leveled out, we will see that number go down. I think the 17.53 percent is the highest it’s going to go.”

Mr. Cardillo said the money is pooled and paid out annually to pension recipients in a set amount based on the years of membership to NYSTRS and their salary. In the 2013-14 school year, Mr. Cardillo said, the system paid out $103.3 million to pension recipients in Jefferson, Lewis and St. Lawrence counties: In Jefferson County, $41.2 million for 1,196 employees, in Lewis County, $10.6 million for 317 employees and in St. Lawrence County $51.5 million for 1,551 recipients.

Stephen J. Todd, superintendent of Jefferson-Lewis Board of Cooperative Educational Services, said when schools break down their budgets, pension costs are one of the fixed expenses such as health care that must be included.

“We estimate about 5 percent of annual budgets go toward teacher pensions and if you look across the state it’s about the same in every district,” Mr. Todd said. “It’s a fixed expense that school districts can’t control.”

Mr. Todd said with state-mandated expenses such as the lowered state aid provided due to the Gap Elimination Adjustment, school districts are forced to work with less funding. Regardless, he said, providing pensions to instructional staff isn’t something anyone begrudges.

“They’ve worked long and hard for that and every year districts find a way to pay that,” Mr. Todd said. He said when investment returns aren’t enough, employers must pay the difference. “School districts are like a family and we need to honor our commitments to our families.”

James R. Koch, business manager at Indian River Central School, said last year the district contributed $3,650,000 toward pensions for about 380 current instructional staff.

“Pay-out is based on salary, then the exact amounts can be properly calculated,” Mr. Koch said. “They know whose employed and we report regular salary and we report every month.”

Watertown Superintendent Terry M. Fralick said for the 2013-14 school year, the district paid $4,125,333 into the NYSTRS and has estimated its contribution will go up $511,478.

The calculations are done to ensure every member who reaches eligible age to receive compensation, age 55 to 57 depending on their position, can be supported.

Mr. Cardillo said even in the worst-case scenario, if a larger-than-expected number of teachers were to seek pension compensation, the pension would still be guaranteed for eligible retirees.

“The state constitution guarantees the funding for the pensions,” he said. “New York state doesn’t pay into the pensions — this would be the only time New York state would come into play.”

Teacher pension records had been public in May for the first time. Pensions can be viewed at http://wdt.me/6Y4JE5.

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