The State of the Street

Monday, November 24, 2008

New York State Comptroller Tom DiNapoli discusses the release of this year's "Wall Street Report."


Tom DiNapoli

Comments [2]

Mark from Baldwin, NY

This is a fairly basic question but here it goes.

Isn't there some way to establish an economic policy that both encourages and benefits from Americans saving money?

Nov. 24 2008 11:38 AM
Alex from brooklyn

There was something a little wrong with the Comptroller's news that pensions contributions are going down.

He said that they use a five-year average to calculate this, which usually makes sense. After all, you don't want the kind of fluctuations that we often see in the market to cause pension contribution rates to jump around. You want employers to better be able to forecast their contributions so they can budget for them. You also don't want to mistake short term shift in the market to be mistaken for long term predictors. OK. This makes sense.

But have an extraordinary fall here, a huge quick fall.

The problem here is that we just fell to a 5-year low. Heck, it was an 11-year low. Unless you expect a quick recovery, the 5-year average used to set pension contributions has little to do with future performance.

What this is working to do --perhaps fortunately -- is the pension fund giving a little aid to local and state governments in New York. At a time when they expect less revenue, the state fund is keeping their contributions down. But the bill WILL come due -- hopefully in better economic times.

Is it good that they are using this 5-year average? Not for the fund, but perhaps for the state.

Nov. 24 2008 10:52 AM

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