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PENSION PADDING: WE ALL PAY THE PRICE
PRELIMINARY REPORT
I. NEW YORK’S ESCALATING PENSION COSTS
 New York State (the “State”) has among the highest pension costs in the nation. In 2008, the State public pension systems paid out more than $20 billion in benefits,
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 and taxpayer-funded employer contributions to the State pension systems exceeded $10 billion.
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 The New York State Common Retirement Fund (“Common Retirement Fund”), which holds the assets of only two of the State’s public retirement systems, is the second largest retirement system in the nation.
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 The Common Retirement Fund specifically includes: (1) New York State and Local Employees’ Retirement System (ERS), and (2) New York State and Local Police and Fire Retirement System (PFRS).
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 ERS provides retirement benefits to most public employees in occupations other than  police officers, firefighters and educators.
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 PFRS provides retirement benefits to police officers and firefighters employed throughout the State.
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 The amount of pension benefits paid to members of the Common Retirement Fund has been increasing dramatically, nearly doubling
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 U.S. Census Bureau, 2010. Revenue of State and Local Public Employee Retirement Systems-Fiscal Year 2008 (listing “Benefits” Expenditures by “State and Local Government” for New York). The Census Bureau reports collective data for the various pension systems in New York, which include the New York State Common Retirement Fund, New York City’s pension funds, and the New York State Teachers’ Retirement System.
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 U.S. Census Bureau, 2010. Revenue of State and Local Public Employee Retirement Systems-Fiscal Year 2008 (listing “Total Government Contributions” by “State and Local Government” for New York).
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 New York State and Local Retirement System, Comprehensive Annual Financial Report for Fiscal Year Ending March 31, 2009, p. 10.
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 Three systems serve public employees in the State, with the exception of New York City employees: (1) ERS, (2) PFRS, and (3) the New York State Teachers’ Retirement System (TRS). New York State and Local Retirement System, Comprehensive Annual Financial Report, Fiscal Year Ending March 31, 2009, p. 10. TRS is not included in the present analysis.
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 E.J. McMahon, Diffusing New York’s Public Pension Bomb: A Fair Approach for Workers and Taxpayers, June 7, 2006, Appendix A.
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 Id.
 
 
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over the past 10 years, from $3.5 billion to $7.3 billion in 2009.
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 Significantly, the Common Retirement Fund projects that average employer contributions, a percentage of payroll, will increase substantially from 2010 to 2011, from 7.4 percent to 11.9 percent for ERS and from 15.1 percent to 18.1 percent for PFRS.
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 For over three years and through a number of different investigations, the Office of the Attorney General of the State of New York (“NYSAG”) has been actively reviewing the operations of  public pension systems in New York from one end to the other: from the Office of the State Comptroller to employee fraud at the Long Island Rail Road. One ongoing investigation has revealed corruption of the investment process at the Common Retirement Fund by high-ranking officials, politically-connected middlemen, and investment managers. In a separate investigation, NYSAG uncovered abuses by independent contractors, including lawyers, throughout the State who defrauded the State retirement systems by holding themselves out as  public employees entitled to pension benefits. We also investigated abuses of occupational disability benefits at the Long Island Rail Road. Given the current economic climate and rising pension costs, curbing all types of pension abuse remains a top priority for this office. NYSAG recognizes the importance of maintaining a public  pension system and safeguarding members’ constitutionally-protected rights to their hard-earned  pensions. NYSAG is pursuing systemic abuses to safeguard the assets of the Common Retirement Fund and protect taxpayers from the growing burden of pension costs. Public
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 New York State and Local Retirement System, Comprehensive Annual Financial Report for Fiscal Year Ending March 31, 2009, p. 21.

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