Bill Text: NY S05821 | 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 (Republican 1-0)

Status: (Introduced - Dead) 2017-06-19 - SUBSTITUTED BY A7988 [S05821 Detail]

Download: New_York-2017-S05821-Introduced.html


                STATE OF NEW YORK
        ________________________________________________________________________
                                          5821
                               2017-2018 Regular Sessions
                    IN SENATE
                                       May 2, 2017
                                       ___________
        Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
          printed to be committed to the Committee on Civil Service and Pensions
        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.
                                                                   LBD11258-02-7

        S. 5821                             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] 2018

        S. 5821                             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.

        S. 5821                             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.
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