S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  8012

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                              May 26, 2011
                               ___________

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 regular interest used in the  actuarial  valu-
  ation  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
  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:

  Section 1. Paragraph 2 of subdivision b of  section  13-638.2  of  the
administrative  code  of the city of New York, as amended by chapter 265
of the laws of 2010, is amended to read as follows:
  (2) With respect to each retirement  system,  such  rate  of  interest
shall be as hereinafter set forth in this paragraph:

                                                First day and
                                                last day of
                   Rate of interest             fiscal year or
                   per centum per               series of fiscal
Retirement         annum, compounded            years for which
System             annually                     rate is effective
________________________________________________________________________
NYCERS             8%                           July 1, 2004 to
                                                June 30, [2011] 2012
NYCTRS             8%                           July 1, 2004 to

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11552-02-1
              

A. 8012                             2

                                                June 30, [2011] 2012
PPF                8%                           July 1, 2004 to
                                                June 30, [2011] 2012
FPF                8%                           July 1, 2004 to
                                                June 30, [2011] 2012
BERS               8%                           July 1, 2004 to
                                                June 30, [2011] 2012

  S  2. Paragraph 2 of subdivision f of section 13-638.2 of the adminis-
trative code of the city of New York, as amended by chapter 265  of  the
laws of 2010, is amended to read as follows:
  (2)  Such  special  interest shall be allowed at the rates and for the
periods set forth below in this paragraph:

                                                First day and
                                                last day of
                   Rate of interest             fiscal year or
                   per centum per               series of fiscal
Retirement         annum, compounded            years for which
System             annually                     rate is effective
________________________________________________________________________
NYCERS              1 1/4%                      July 1, 2004 to
                                                June 30, [2011] 2012
NYCTRS              1 1/4%                      July 1, 2004 to
                                                June 30, [2011] 2012
PPF                 1 1/4%                      July 1, 2004 to
                                                June 30, [2011] 2012
FPF                 1 1/4%                      July 1, 2004 to
                                                June 30, [2011] 2012
BERS                1 1/4%                      July 1, 2004 to
                                                June 30, [2011] 2012

  S 3. Paragraph 2 of subdivision g of section 13-638.2 of the  adminis-
trative  code  of the city of New York, as amended by chapter 265 of the
laws of 2010, is amended to read as follows:
  (2) Such additional interest shall be included at the  rates  and  for
the periods set forth below in this paragraph:

                                                First day and
                                                last day of
                   Rate of interest             fiscal year or
                   per centum per               series of fiscal
Retirement         annum, compounded            years for which
System             annually                     rate is effective
________________________________________________________________________
NYCERS              1 1/4%                      July 1, 2004 to
                                                June 30, [2011] 2012
NYCTRS              1 1/4%                      July 1, 2004 to
                                                June 30, [2011] 2012
PPF                 1 1/4%                      July 1, 2004 to
                                                June 30, [2011] 2012
FPF                 1 1/4%                      July 1, 2004 to
                                                June 30, [2011] 2012
BERS                1 1/4%                      July 1, 2004 to
                                                June 30, [2011] 2012

A. 8012                             3

  S  4. Paragraph 2 of subdivision i of section 13-638.2 of the adminis-
trative code of the city of New York, as amended by chapter 265  of  the
laws of 2010, is amended to read as follows:
  (2)  Such supplementary interest shall be allowed at the rates and for
the periods set forth below in this paragraph:

                                                First day and
                                                last day of
                   Rate of interest             fiscal year or
                   per centum per               series of fiscal
Retirement         annum, compounded            years for which
System             annually                     rate is effective
________________________________________________________________________
NYCERS             1%                           July 1, 2004 to
                                                June 30, [2011] 2012
NYCTRS             1%                           July 1, 2004 to
                                                June 30, [2011] 2012
PPF                1%                           July 1, 2004 to
                                                June 30, [2011] 2012
FPF                1%                           July 1, 2004 to
                                                June 30, [2011] 2012
BERS               1%                           July 1, 2004 to
                                                June 30, [2011] 2012

  S 5. This act shall take effect July 1, 2011;  provided,  however,  if
this  act shall become a law after such date, it shall take effect imme-
diately and shall be deemed to have been in full force and effect on and
after July 1, 2011.
  FISCAL NOTE. - Pursuant to Legislative Law, Section 50:
  PROVISIONS OF PROPOSED LEGISLATION -- OVERVIEW: The enactment of  this
proposed  legislation  (referred to hereafter as "Interest Rate Extender
Legislation") would amend Administrative Code of the City  of  New  York
("ACNY")  Section 13-638.2 to continue for Fiscal Year 2012 for the five
actuarially-funded  New  York  City  Retirement  Systems  ("NYCRS")  the
following rates that expire on June 30, 2011:
  *  The 8.25% per annum rate used to credit interest on Tier I and Tier
II  member  account  balances   and   Increased-Take-Home-Pay   ("ITHP")
Reserves, and
  *  The  8.0% 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, 2011.
  FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS: The continuation for Fiscal
Year 2012 of the same 8.25% per annum rate that was used for Fiscal Year
2011  to  credit interest on Tier I and Tier II member contributions and
ITHP Reserves would not change the amount or timing of expected employer
contributions.
  The continuation for Fiscal Year 2012 of the AIR  assumption  of  8.0%
per annum that was used to determine employer contributions to the NYCRS
for  Fiscal  Year 2011 would not change the expected amount or timing of
employer contributions.
  FINANCIAL IMPACT - POTENTIAL  CHANGES  IN  ACTUARIAL  ASSUMPTIONS  AND
METHODS: The impact of enactment of the proposed legislation provided in
this  Fiscal  Note  has  been  based on the continued use of the current
actuarial assumptions and methods.

A. 8012                             4

  However, this set of actuarial assumptions and methods do  not  repre-
sent the only possible approach for funding the NYCRS.
  Historically,  actuarial assumptions and methods have been reviewed on
average every five years in  connection  with  an  actuarial  experience
study mandated by New York City Charter Section 96.
  Following this review, the Actuary generally proposes changes in actu-
arial  assumptions  and methods that he believes appropriate and reason-
ably related to such experience period and future expectations.
  The next such review is anticipated during Fiscal Year 2012  at  which
time  the Actuary is likely to propose new packages of actuarial assump-
tions and methods to  be  effective  for  use  in  determining  employer
contributions beginning Fiscal Year 2012.
  It  is  anticipated that whatever new actuarial assumptions are recom-
mended by the Actuary are likely to result in increased Actuarial  Pres-
ent  Values of Benefits ("APVB") and employer costs as the current actu-
arial assumptions no longer represent the Actuary's best estimates.
  Note: The Actuary has not yet committed to  any  particular  actuarial
assumptions  or  methodology for determining employer costs and employer
contributions in connection with the upcoming review  of  the  actuarial
assumptions and methods.
  OTHER  COSTS:  Enactment  of  this  proposed  legislation would not be
expected to produce any additional costs.
  STATEMENT OF ACTUARIAL OPINION: I, Robert C. North, Jr., am the  Chief
Actuary  for  the New York City Retirement Systems. I am a Fellow of the
Society of 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.
  FISCAL NOTE IDENTIFICATION: This estimate is  intended  for  use  only
during  the  2011  Legislative Session. It is Fiscal Note 2011-10, dated
April 7, 2011, prepared by the Chief  Actuary  for  the  New  York  City
Retirement System.