Bill Text: NY S04488 | 2019-2020 | General Assembly | Amended
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) 2019-07-03 - SIGNED CHAP.76 [S04488 Detail]
Download: New_York-2019-S04488-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 4488--A 2019-2020 Regular Sessions IN SENATE March 13, 2019 ___________ Introduced by Sen. GOUNARDES -- (at request of the NYC Actuary) -- read twice and ordered printed, and when printed to be committed to the Committee on Civil Service and Pensions -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said commit- tee 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 and addi- tional interest to members of such retirement systems, and the allow- ance of supplementary interest 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 100 3 of the laws of 2018, 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 EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD10353-04-9S. 4488--A 2 1 ________________________________________________________________________ 2 NYCERS 7% July 1, 2011 to 3 June 30, [2019] 2021 4 NYCTRS 7% July 1, 2011 to 5 June 30, [2019] 2021 6 PPF 7% July 1, 2011 to 7 June 30, [2019] 2021 8 FPF 7% July 1, 2011 to 9 June 30, [2019] 2021 10 BERS 7% July 1, 2011 to 11 June 30, [2019] 2021 12 § 2. Paragraph 2 of subdivision f of section 13-638.2 of the adminis- 13 trative code of the city of New York, as amended by chapter 100 of the 14 laws of 2018, is amended to read as follows: 15 (2) Such special interest shall be allowed at the rates and for the 16 periods set forth below in this paragraph: 17 First day and 18 last day of 19 Rate of interest fiscal year or 20 per centum per series of fiscal 21 Retirement annum, compounded years for which 22 System annually rate is effective 23 ________________________________________________________________________ 24 NYCERS 1 1/4% July 1, 2011 to 25 June 30, [2019] 2021 26 NYCTRS 1 1/4% July 1, 2011 to 27 June 30, [2019] 2021 28 PPF 1 1/4% July 1, 2011 to 29 June 30, [2019] 2021 30 FPF 1 1/4% July 1, 2011 to 31 June 30, [2019] 2021 32 BERS 1 1/4% July 1, 2011 to 33 June 30, [2019] 2021 34 § 3. Paragraph 2 of subdivision g of section 13-638.2 of the adminis- 35 trative code of the city of New York, as amended by chapter 100 of the 36 laws of 2018, is amended to read as follows: 37 (2) Such additional interest shall be included at the rates and for 38 the periods set forth below in this paragraph: 39 First day and 40 last day of 41 Rate of interest fiscal year or 42 per centum per series of fiscal 43 Retirement annum, compounded years for which 44 System annually rate is effective 45 ________________________________________________________________________ 46 NYCERS 1 1/4% July 1, 2011 to 47 June 30, [2019] 2021 48 NYCTRS 1 1/4% July 1, 2011 to 49 June 30, [2019] 2021 50 PPF 1 1/4% July 1, 2011 to 51 June 30, [2019] 2021 52 FPF 1 1/4% July 1, 2011 toS. 4488--A 3 1 June 30, [2019] 2021 2 BERS 1 1/4% July 1, 2011 to 3 June 30, [2019] 2021 4 § 4. Paragraph 2 of subdivision i of section 13-638.2 of the adminis- 5 trative code of the city of New York, as amended by chapter 100 of the 6 laws of 2018, is amended to read as follows: 7 (2) Such supplementary interest shall be allowed at the rates and for 8 the periods set forth below in this paragraph: 9 First day and 10 last day of 11 Rate of interest fiscal year or 12 per centum per series of fiscal 13 Retirement annum, compounded years for which 14 System annually rate is effective 15 ________________________________________________________________________ 16 NYCERS 0% July 1, 2011 to 17 June 30, [2019] 2021 18 NYCTRS 0% July 1, 2011 to 19 June 30, [2019] 2021 20 PPF 0% July 1, 2011 to 21 June 30, [2019] 2021 22 FPF 0% July 1, 2011 to 23 June 30, [2019] 2021 24 BERS 0% July 1, 2011 to 25 June 30, [2019] 2021 26 § 5. This act shall take effect July 1, 2019, except that if it shall 27 have become a law subsequent to such date, this act shall take effect 28 immediately and be deemed to have been in full force and effect on and 29 after July 1, 2019. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: SUMMARY OF BILL: The enactment of this proposed legislation (the Interest Rate Extender Legislation) would amend Administrative Code of the City of New York (ACCNY) Section 13-638.2, as amended by Chapter 100 of the Laws of 2018, to continue for Fiscal Years 2020 and 2021 the following rates of interest that expire on July 1, 2019 for the five actuarially-funded New York City Retirement Systems and Pension Funds (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. Effective Date: July 1, 2019. FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: The continuation for Fiscal Years 2020 and 2021 of the same 8.25% per annum rate that was used for Fiscal Year 2019 to credit interest on Tier 1 and Tier 2 member contributions and ITHP Reserves would not change the amount or timing of expected employer contributions. The continuation of the AIR assumption of 7.00% per annum that was used to determine preliminary employer contributions to the NYCRS forS. 4488--A 4 Fiscal Year 2019 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. RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend highly on the actuarial assumptions and methods used and are subject to change based on the realization of potential investment, demographic, contribution, and other risks. If actual experience deviates from actu- arial assumptions, the actual costs could differ from those presented herein. Costs are also dependent on the actuarial methods used, and therefore different actuarial methods could produce different results. Quantifying these risks is beyond the scope of this Fiscal Note. STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu- ary for, and independent of, the New York City Retirement Systems and Pension Funds. I am a Fellow of the Society of Actuaries, an Enrolled Actuary under the Employee Retirement Income and Security Act of 1974, a Member of the American Academy of Actuaries, and a Fellow of the Confer- ence of Consulting 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 Fiscal Note 2019-01 dated March 8, 2019 was prepared by the Chief Actuary for the New York City Retirement Systems and Pension Funds. This estimate is intended for use only during the 2019 Legislative Session.