New York’s pension system is a ticking time bomb ready to explode, a report warned Tuesday.
State and city taxpayers face billions of dollars in added pension payments over the next few years because of the Wall Street meltdown and the generous benefits offered to public employees, the Empire Center report found.
“This could bankrupt us if we don’t have the most roaring stock market recovery in the next 20 years,” said Empire Senior Fellow E.J. McMahon.
State pension funds covering government workers and teachers outside of the city have combined shortfalls of about $120 million, according to the report.
City pension funds, meanwhile, have unfunded liabilities of $76 million.
The shortfall could cost state taxpayers an extra $4.5 billion a year by 2016, while the city estimates its pension contributions will jump from $7.1 billion to $8.4 billion by 2014. The report echoes warnings made repeatedly by Mayor Bloomberg about the city’s rising pension cots.
McMahon said pension systems need to be revamped in favor of defined contribution plans like 401(k)s – a move public employee unions bitterly oppose.
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