Bill Text: NY A07988 | 2017-2018 | General Assembly | Introduced
Bill Title: Relates to the rate of interest used in the actuarial valuation of liabilities for the purpose of calculating contributions to the New York city employees' retirement system, the New York city teachers' retirement system, the police pension fund, the fire department pension fund and the board of education retirement system of such city by public employers and other obligors required to make employer contributions to such retirement systems, the crediting of special interest and additional interest to members of such retirement systems, and the allowance of supplementary interest on the funds of such retirement systems.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2017-06-29 - signed chap.71 [A07988 Detail]
Download: New_York-2017-A07988-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 7988 2017-2018 Regular Sessions IN ASSEMBLY May 24, 2017 ___________ Introduced by M. of A. ABBATE -- read once and referred to the Committee on Governmental Employees AN ACT to amend the administrative code of the city of New York, in relation to the rate of interest used in the actuarial valuation of liabilities for the purpose of calculating contributions to the New York city employees' retirement system, the New York city teachers' retirement system, the police pension fund, subchapter two, the fire department pension fund, subchapter two and the board of education retirement system of such city by public employers and other obligors required to make employer contributions to such retirement systems, the crediting of special interest and additional interest to members of such retirement systems, and the allowance of supplementary inter- est on the funds of such retirement systems The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraph 2 of subdivision b of section 13-638.2 of the 2 administrative code of the city of New York, as amended by chapter 83 of 3 the laws of 2016, is amended to read as follows: 4 (2) With respect to each retirement system, such rate of interest 5 shall be as hereinafter set forth in this paragraph: 6 First day and 7 last day of 8 Rate of interest fiscal year or 9 per centum per series of fiscal 10 Retirement annum, compounded years for which 11 System annually rate is effective 12 ________________________________________________________________________ 13 NYCERS 7% July 1, 2011 to 14 June 30, [2017] 2018 15 NYCTRS 7% July 1, 2011 to EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD11258-02-7A. 7988 2 1 June 30, [2017] 2018 2 PPF 7% July 1, 2011 to 3 June 30, [2017] 2018 4 FPF 7% July 1, 2011 to 5 June 30, [2017] 2018 6 BERS 7% July 1, 2011 to 7 June 30, [2017] 2018 8 § 2. Paragraph 2 of subdivision f of section 13-638.2 of the adminis- 9 trative code of the city of New York, as amended by chapter 83 of the 10 laws of 2016, is amended to read as follows: 11 (2) Such special interest shall be allowed at the rates and for the 12 periods set forth below in this paragraph: 13 First day and 14 last day of 15 Rate of interest fiscal year or 16 per centum per series of fiscal 17 Retirement annum, compounded years for which 18 System annually rate is effective 19 ________________________________________________________________________ 20 NYCERS 1 1/4% July 1, 2011 to 21 June 30, [2017] 2018 22 NYCTRS 1 1/4% July 1, 2011 to 23 June 30, [2017] 2018 24 PPF 1 1/4% July 1, 2011 to 25 June 30, [2017] 2018 26 FPF 1 1/4% July 1, 2011 to 27 June 30, [2017] 2018 28 BERS 1 1/4% July 1, 2011 to 29 June 30, [2017] 2018 30 § 3. Paragraph 2 of subdivision g of section 13-638.2 of the adminis- 31 trative code of the city of New York, as amended by chapter 83 of the 32 laws of 2016, is amended to read as follows: 33 (2) Such additional interest shall be included at the rates and for 34 the periods set forth below in this paragraph: 35 First day and 36 last day of 37 Rate of interest fiscal year or 38 per centum per series of fiscal 39 Retirement annum, compounded years for which 40 System annually rate is effective 41 ________________________________________________________________________ 42 NYCERS 1 1/4% July 1, 2011 to 43 June 30, [2017] 2018 44 NYCTRS 1 1/4% July 1, 2011 to 45 June 30, [2017] 2018 46 PPF 1 1/4% July 1, 2011 to 47 June 30, [2017] 2018 48 FPF 1 1/4% July 1, 2011 to 49 June 30, [2017] 2018 50 BERS 1 1/4% July 1, 2011 to 51 June 30, [2017] 2018A. 7988 3 1 § 4. Paragraph 2 of subdivision i of section 13-638.2 of the adminis- 2 trative code of the city of New York, as amended by chapter 83 of the 3 laws of 2016, is amended to read as follows: 4 (2) Such supplementary interest shall be allowed at the rates and for 5 the periods set forth below in this paragraph: 6 First day and 7 last day of 8 Rate of interest fiscal year or 9 per centum per series of fiscal 10 Retirement annum, compounded years for which 11 System annually rate is effective 12 ________________________________________________________________________ 13 NYCERS 0% July 1, 2011 to 14 June 30, [2017] 2018 15 NYCTRS 0% July 1, 2011 to 16 June 30, [2017] 2018 17 PPF 0% July 1, 2011 to 18 June 30, [2017] 2018 19 FPF 0% July 1, 2011 to 20 June 30, [2017] 2018 21 BERS 0% July 1, 2011 to 22 June 30, [2017] 2018 23 § 5. This act shall take effect July 1, 2017, except that if it shall 24 have become a law subsequent to such date, this act shall take effect 25 immediately and be deemed to have been in full force and effect on and 26 after July 1, 2017. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: This proposed legislation would continue for Fiscal Year 2018 the interest rate of 8.25% per annum used for Fiscal Years 2012 through 2017 to credit interest on Tier 1 and Tier 2 member contributions (the sum of the 7.00% regular interest rate and the 1.25% special interest rate) and Increased-Take-Home-Pay (ITHP) Reserves (the sum of the 7.00% regular interest rate and the 1.25% additional interest rate). The proposed legislation would also continue for Fiscal Year 2018 the Actuarial Interest Rate (AIR) assumption of 7.00% per annum used to determine employer contributions to the New York City Pension Funds and Retirement Systems (NYCRS). PROVISIONS OF PROPOSED LEGISLATION - OVERVIEW: The enactment of this proposed legislation (the Interest Rate Extender Legislation) would amend Administrative Code of the City of New York (ACNY) Section 13-638.2, as amended by Chapter 83 of the Laws of 2016, to continue for Fiscal Year 2018 the following rates of interest that expire on July 1, 2017 for the five actuarially-funded New York City Pension Funds and Retirement Systems (NYCRS): * The 8.25% per annum rate used to credit interest on Tier 1 and Tier 2 member account balances (the sum of the 7.00% regular interest rate and the 1.25% special interest rate) and Increased-Take-Home-Pay (ITHP) Reserves (the sum of the 7.00% regular interest rate and the 1.25% addi- tional interest rate), and * The 7.00% per annum Actuarial Interest Rate (AIR) assumption used to compute employer contributions. The Effective Date for this proposed Interest Rate Extender Legis- lation would be July 1, 2017.A. 7988 4 FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS: The continuation for Fiscal Year 2018 of the same 8.25% per annum rate that was used for Fiscal Year 2017 to credit interest on Tier 1 and Tier 2 member contributions and ITHP Reserves would not change the amount of timing of expected employer contributions. The continuation for Fiscal Year 2018 of the AIR assumption of 7.00% per annum that was used to determine employer contributions to the NYCRS for Fiscal Year 2017 would not change the expected amount or timing of employer contributions. OTHER COSTS: Enactment of this proposed legislation would not be expected to produce any additional costs. STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu- ary for, and independent of, the New York City Pension Funds and Retire- ment Systems. I am a Fellow of the Society of Actuaries, a Fellow of the Conference of Consulting Actuaries and a Member of the American Academy of Actuaries. I meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained herein. To the best of my knowledge, the results contained herein have been prepared in accordance with generally accepted actuarial principles and procedures and with the Actuarial Standards of Practice issued by the Actuarial Standards Board. FISCAL NOTE IDENTIFICATION: This is Fiscal Note 2017-05 dated April 5, 2017, was prepared by the Chief Actuary for the New York City Pension Funds and Retirement Systems. This estimate is intended for use only during the 2017 Legislative Session.
