The pension system that provides retirement benefits to many of NYSUT's paraprofessionals is weathering the current economic downturn, the state's chief fiscal officer says, although it may need some financial help in 2011.

The New York State Employees' Retirement System remains safe, "even though the markets have been especially challenged," state Comptroller Thomas DiNapoli told about 100 labor leaders meeting at the United Federation of Teachers headquarters in New York City earlier this month.

While assuring that funding from investments in boom years was more than adequate to pay out benefits today, DiNapoli acknowledged that the ERS, as it's commonly known, will likely require a significant revenue increase in 2011 due to losses in 2008.

As state comptroller, DiNapoli is the sole trustee of the ERS, the pension system for many of NYSUT's more 90,000 School-Related Professionals.

Pension plans are required by law to be fully funded, and when investment revenues drop, school districts and other public employers must make up the difference.

Although worried about "multiple bad years" in which state revenues continue to shrink or flatline, DiNapoli said he saw no need for the governor's plan to seek a Tier 5 pension for new hires.

While calling Gov. David Paterson's proposed budget "difficult," he said the governor was "taking the state in the right path," and termed his proposed sales tax increases "wise."

Nevertheless, DiNapoli warned that while the federal stimulus is good news for New York, "it's not a bailout for all of our budget proposals. It will take the most onerous burdens off the table, but not all," he said.

He defended employer-funded pensions from critics who would shift public employees from traditional defined-benefit plans to defined-contribution plans, such as 401(k)s, which place all the risk on individual account holders.

"We need to vigorously defend defined-benefit plans," DiNapoli said. 

He refuted complaints that state pension payouts — themselves deferred wages due public employees — are overly generous. He noted that the average ERS pension payout the last four years "was just $24,000."

DiNapoli called for overhauling state law to raise the "basket clause" cap, which limits to 25 percent the amount ERS can invest in international stocks, real estate and private equity funds. DiNapoli would elevate that cap to 35 percent.

In introducing DiNapoli, AFT/UFT President Randi Weingarten acknowledged that New York state has one of the strongest pension plans in the nation. "Your leadership," she told DiNapoli, "will assure that it bounces back."

Contact Michael Hirsch at MHirsch@uft.org