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The New York State Teachers Retirement System
The Blueprint
Building a secure retirement for members
While fortifying New York's economy.
Building a secure retirement takes careful planning
unwavering focus and discipline.
The New York State Teachers Retirement System supplies these resources and much
more to provide a secure pension for public school educators in the Empire
State.
Just as importantly to New York taxpayers
NYSTRS carries out its core mission cost-effectively.
And with the state feeling the strain of a sluggish economy
the benefits paid to NYSTRS retirees are fortifying New York's economy.
NYSTRS, often cited as one of the top public pension plans in the nation,
administers a fund valued at nearly ninety billion dollars.
For every hundred dollars it manages
expenses and fees account for only about twenty eight cents.
Compare that with the sixty cents to a dollar seventy charged by private
sector pension plans to manage the same hundred dollars.
The lower fees mean more money for investing which means less money needed
in contributions to fund the plan.
While recent increases in the employer contribution rate by brought on by the
Great Recession
have generated headlines the reality is NYSTRS' employer contribution rates
were extremely low for over two decades.
The outstanding investment returns NYSTRS achieved during that time
allowed the system to pass on savings to employers and
the taxpayers who provide the funding.
NYSTRS' employer contribution rates were in the single digits for twenty two
consecutive years beginning in 1989.
In six of those years
the rate was below one point five percent.
For three of those years the contribution rate was below a half a
percent.
If the fixed contribution rate like those associated with 401(k)-style
plans
had been in place during this period
employers would have paid much more than they did.
In reality
over the past thirty years tax dollars have accounted for only ten percent of
NYSTRS income.
The other ninety percent came from investment income with member
contributions accounting for the remainder.
NYSTRS delivers the same level of benefits at nearly half the cost of a
401(k).
We provide death and disability coverage and protection for spouses at no
additional cost to the taxpayer.
In addition to lower administrative costs
NYSTRS offers another advantage to taxpayers by providing a consistent
revenue stream for the state economy.
For the fiscal year ended June 30, 2012
NYSTRS paid out more than five point three billion dollars to retirees
and beneficiaries.
And eighty percent of those dollars were paid to New York state residents.
That money provides a much-needed economic stimulus as one person's spending
becomes another person's income.
According to the National Institute on Retirement Security
pension plans like NYSTRS mean four point seven million fewer poor and
near poor households nationwide
households that won't have to rely on taxpayer funded public assistance.
Critics often say plans like NYSTRS are unsustainable.
Nothing could be further from the truth.
Here's proof:
Between 1992 and 2012 NYSTRS took in
sixteen point five billion dollars in employer and member contributions and
paid out sixty eight point three billion dollars in benefits over that same
period.
Despite paying out fifty two billion dollars
more than it took in
system net assets more than doubled
going from thirty five billion dollars to nearly eighty eight billion dollars.
As a long-term investor
Our fiscal strategies are aimed at returns and for the next generation
not the next quarter.
This also means NYSTRS can pool funds and realize cost efficiencies an
individual investor cannot match.
And by investing money throughout the members career
a process known as advance funding
we generate investment income that lowers costs to school districts and
taxpayers.
Providing retired teachers a secure income for life
Administering a plan at nearly half the cost of a private plan
Funding benefits primarily with investment returns
Paying pensions that remain largely in New York
Serving to stimulate state and local economies
Achieving efficiencies that smaller plans
and individual investors cannot duplicate.
These are attributes of NYSTRS.
We're proud of our success
and will continue to build on it.