Bill Text: NY S04006 | 2015-2016 | General Assembly | Introduced
Bill Title: Relates to applicable interest rate for calculating certain benefits provided by the New York state teachers' retirement system.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2015-11-20 - SIGNED CHAP.479 [S04006 Detail]
Download: New_York-2015-S04006-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
4006
2015-2016 Regular Sessions
I N S E N A T E
February 25, 2015
___________
Introduced by Sen. GOLDEN -- (at request of the New York State Teachers'
Retirement System) -- read twice and ordered printed, and when printed
to be committed to the Committee on Education
AN ACT to amend the education law and the retirement and social security
law, in relation to the applicable interest rate for calculating
certain benefits provided by the New York state teachers' retirement
system
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Section 537 of the education law, as separately amended by
2 chapters 140 and 167 of the laws of 2003, is amended to read as follows:
3 S 537. Lump sum payment of de minimis service retirement benefit.
4 Notwithstanding any other law to the contrary, a member of the retire-
5 ment system who is entitled to receive a retirement allowance, other
6 than for disability, pursuant to this article or pursuant to article
7 eleven or fifteen of the retirement and social security law, which
8 retirement allowance prior to optional modification is twenty-four
9 hundred dollars per annum or less, may elect at retirement to receive,
10 in lieu of such retirement allowance, a lump sum payment which has been
11 certified by the actuary to be of actuarial equivalent value to such
12 retirement allowance and approved by the retirement board. Such lump sum
13 shall be calculated using the interest rate on thirty year United States
14 treasury bonds as of January first of the calendar year in which the
15 retirement becomes effective. Upon payment of such lump sum, any and all
16 obligations of the retirement system to such member shall be totally
17 discharged. Commencing January first, two thousand four, the interest
18 rate on ten year United States treasury obligations as of January first
19 of the calendar year in which the retirement becomes effective shall be
20 used. COMMENCING JANUARY FIRST, TWO THOUSAND SIXTEEN, THE AVERAGE ANNU-
21 AL INTEREST RATE ON TEN YEAR UNITED STATES TREASURY OBLIGATIONS FOR THE
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09196-01-5
S. 4006 2
1 DAYS DURING THE CALENDAR YEAR THAT PRECEDES THE CALENDAR YEAR IN WHICH
2 THE RETIREMENT BECOMES EFFECTIVE SHALL BE USED.
3 S 2. Subdivision h of section 517-b of the retirement and social secu-
4 rity law, as amended by chapter 140 of the laws of 2003, is amended to
5 read as follows:
6 h. Notwithstanding the provisions of section five hundred sixteen of
7 this article, whenever a member of such a retirement system, for whom a
8 loan is outstanding, retires, the retirement allowance payable without
9 optional modification shall be reduced by a life annuity which is actu-
10 arially equivalent to the amount of the outstanding loan (all outstand-
11 ing loans shall continue to accrue interest charges until retirement),
12 such life annuity being calculated utilizing the interest rate on thir-
13 ty-year United States treasury bonds as of January first of the calendar
14 year of the effective date of retirement and the mortality tables for
15 options available under section five hundred fourteen of this article.
16 Notwithstanding the preceding sentence, in the case of the New York
17 state teachers' retirement system, commencing January first, two thou-
18 sand four, the interest rate on ten year United States treasury obli-
19 gations as of January first of the calendar year of the effective date
20 of retirement shall be used. NOTWITHSTANDING THE PRECEDING SENTENCE, IN
21 THE CASE OF THE NEW YORK STATE TEACHERS' RETIREMENT SYSTEM, COMMENCING
22 JANUARY FIRST, TWO THOUSAND SIXTEEN, THE AVERAGE ANNUAL INTEREST RATE ON
23 TEN YEAR UNITED STATES TREASURY OBLIGATIONS FOR THE DAYS DURING THE
24 CALENDAR YEAR THAT PRECEDES THE CALENDAR YEAR IN WHICH THE RETIREMENT
25 BECOMES EFFECTIVE SHALL BE USED.
26 S 3. Subdivision h of section 613-a of the retirement and social secu-
27 rity law, as amended by chapter 140 of the laws of 2003, is amended to
28 read as follows:
29 h. Notwithstanding the provisions of subdivision b of section six
30 hundred twelve of this article, whenever a member of such a retirement
31 system, for whom a loan is outstanding, retires, the retirement allow-
32 ance payable without optional modification shall be reduced by a life
33 annuity which is actuarially equivalent to the amount of the outstanding
34 loan (all outstanding loans shall continue to accrue interest charges
35 until retirement), such life annuity being calculated utilizing the
36 interest rate on thirty-year United States treasury bonds as of January
37 first of the calendar year of the effective date of retirement and the
38 mortality tables for options available under section six hundred ten of
39 this article. Notwithstanding the preceding sentence, in the case of the
40 New York state teachers' retirement system, commencing January first,
41 two thousand four, the interest rate on ten year United States treasury
42 obligations as of January first of the calendar year of the effective
43 date of retirement shall be used. NOTWITHSTANDING THE PRECEDING
44 SENTENCE, IN THE CASE OF THE NEW YORK STATE TEACHERS' RETIREMENT SYSTEM,
45 COMMENCING JANUARY FIRST, TWO THOUSAND SIXTEEN, THE AVERAGE ANNUAL
46 INTEREST RATE ON TEN YEAR UNITED STATES TREASURY OBLIGATIONS FOR THE
47 DAYS DURING THE CALENDAR YEAR THAT PRECEDES THE CALENDAR YEAR IN WHICH
48 THE RETIREMENT BECOMES EFFECTIVE SHALL BE USED.
49 S 4. This act shall take effect June 30, 2015, except that if this act
50 shall have become a law on or after June 30, 2015, this act shall take
51 effect immediately and shall be deemed to have been in full force and
52 effect on and after June 30, 2015.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would amend Section 537 of the Education Law and Sections
517-b and 613-a of the Retirement and Social Security Law to change the
interest rate used in calculating certain benefits provided by the New
S. 4006 3
York State Teachers' Retirement System to the average annual interest
rate on ten year United States treasury obligations for the days during
the calendar year that precedes the calendar year in which retirement
becomes effective. Currently the interest rate on ten year United States
treasury obligations as of January first of the calendar year of the
effective date of retirement is used in calculating such benefits. This
change would be effective January 1, 2016.
The annual cost to the employers of members of the New York State
Teachers' Retirement System is estimated to be negligible if this bill
is enacted.
Employee data is from the System's most recent actuarial valuation
files, consisting of data provided by the employers to the Retirement
System. Data distributions and statistics can be found in the System's
Comprehensive Annual Financial Report (CAFR). System assets are as
reported in the System's financial statements, and can also be found in
the CAFR. Actuarial assumptions and methods are provided in the System's
Actuarial Valuation Report.
The source of this estimate is Fiscal Note 2015-6 dated January 20,
2015 prepared by the Actuary of the New York State Teachers' Retirement
System and is intended for use only during the 2015 Legislative Session.
I, Richard A. Young, am the Actuary for the New York State Teachers'
Retirement System. I am a member of the American Academy of Actuaries
and I meet the Qualification Standards of the American Academy of Actu-
aries to render the actuarial opinion contained herein.
