Public pensions work by setting aside money during a worker’s career so it can grow through investments and cover promised benefits later. New York City has five main pension funds with assets around 300 billion dollars. These funds are funded at about 83 percent overall, which is better than the national average for public plans. There remains a gap of roughly 27 billion dollars between the money already set aside and the total needed to meet all past promises. This gap is called the unfunded liability. It built up over time due to earlier changes in investment assumptions and market events.
Before the new plan, the city followed a schedule set after 2010 reforms to pay off this gap by 2032. Payments under that schedule were set to rise each year and then drop sharply, creating what some call a contribution cliff followed by refunds to the city in later years. Mamdani’s executive budget proposes extending the payoff period by five years to 2037. It also shifts toward more even annual payments instead of the rising ones. This adjustment is expected to cut the city’s required contributions by 1.64 billion dollars in fiscal year 2027 and around 2.3 billion dollars over two years.
What could go wrong, right?
https://1hebrutaltruth1.substack.com/p/city-pension-payment-changes-shift
https://www.youtube.com/shorts/OJPzUGnRFSY?feature=share
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