The surprise move for the 2014-15 fiscal year will be a welcome break for governments and schools that have been bracing for another increase. Those pension costs, along with dwindling populations and tax revenues, are driving some local governments toward insolvency, although none has declared bankruptcy as have some municipalities in other states.

Acting on a recommendation in the latest five-year analysis by Buck Consultants of New York City and on his actuaries' advice, DiNapoli lowered the employee contributions by about 1 percentage point, when governments feared they would have increased by that much or more. The government and school cost of the pension is about 20 percent of payroll. The state pension covers workers in state government and most local governments and schools outside New York City.

The reduction will be about eight-tenths of 1 percent for those workers, and 1.3 percent for the state's Police and Fire Retirement System, a separate pension system.