senate Bill S5485

Relates to the rate of regular interest used in the actuarial valuation of liabilities for the purpose of calculating contributions to retirement systems

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 25 / May / 2011
    • REFERRED TO CITIES
  • 07 / Jun / 2011
    • 1ST REPORT CAL.1131
  • 13 / Jun / 2011
    • 2ND REPORT CAL.
  • 14 / Jun / 2011
    • ADVANCED TO THIRD READING
  • 16 / Jun / 2011
    • SUBSTITUTED BY A8012

Summary

Relates to the rate of regular interest used in the actuarial valuation of liabilities for the purpose of calculating contributions to retirement systems.

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Bill Details

See Assembly Version of this Bill:
A8012
Versions:
S5485
Legislative Cycle:
2011-2012
Law Section:
New York City Administrative Code
Laws Affected:
Amd ยง13-638.2, NYC Ad Cd

Votes

5
0
5
Aye
0
Nay
1
aye with reservations
0
absent
0
excused
0
abstained
show Cities committee vote details

Sponsor Memo

BILL NUMBER:S5485

TITLE OF BILL:
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 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 interest on the
funds of such retirement systems

SUMMARY OF PROVISIONS:
This bill would extend for the one-year period
ending on June 30, 2012 the current 8% per annum statutory rate of
interest used by the Chief Actuary for the New York City Employees'
Retirement System, Teachers' Retirement System, Board of Education
Retirement System, Police Pension Fund and Fire Department Pension
Fund ("City retirement systems") in valuing retirement system
liabilities for the purpose of computing the amount of employer
contributions to those systems. The bill also would extend for that
same period of time the current rates of supplementary interest,
special interest and additional interest which, in effect, govern the
amount of interest to be paid into certain constituent funds of the
City retirement systems, and the amount of interest to be credited on
accumulated member contributions and increased-takehome-pay reserves
of tier 1 and 2 members of those retirement systems. The current
valuation rate of interest, as well as the current rates of
supplementary, special and additional interest, were enacted by
Chapter 152 of the Laws of 2006 for the five-year period ending on
June 30, 2009, and those current interest rates were extended until
June 30, 2010 by Chapter 211 of the Laws of 2009, an
d until June 30,2011 by Chapter 265 of the Laws of 2010.

REASONS FOR SUPPORT:
The City pension laws currently provide with
respect to the valuation rate of interest that (1) such rate for the
period after June 30, 2011 shall be the rate prescribed by an
enactment of the State Legislature; and (2) the board of trustees of
each of the City retirement systems shall submit to designated New
York State and New York City officials, including the Governor, the
Mayor and
the leaders of the Legislature, its recommendation as to what such
rate should be after June 30, 2011. Similar statutory provisions
apply with respect to the rates of supplementary interest, special
interest and additional interest.

The Chief Actuary of the City retirement systems will be presenting to
the retirement system boards of trustees his recommendations for (1)
the valuation rate of interest for the five-year period ending on
June 30, 2014; and (2) proposed changes in actuarial tables used in
calculating employer contributions. Those recommendations are based


in part on the Chief Actuary's examination of the actuarial
experience and investment experience of the retirement systems, his
study of general inflation trends and an experience study prepared by
a firm of actuarial consultants. The Actuary has advised the boards
of trustees that there will not be sufficient time before the close
of the current session of the State Legislature to formulate
recommendations, and have those recommendations approved and
transmitted to the concerned State and local legislative and
executive officials.

Therefore, the City of New York recommends to the Legislature that
this bill providing for a one-year extension of the current valuation
rate of interest and the accompanying rates of supplementary, special
and additional interest be enacted. Such one-year extension would
give all concerned officials an opportunity to determine the most
suitable rates for a five-year period and arrive at the result which
will best serve the retirement systems and the public interest. It
should be noted that the Legislature enacted similar one-year
extensions of such interest rates for the City retirement systems in
1990, 1995, 2004, 2005, 2009 and 2010. See Chapter 878 of the Laws of
1990, Chapter 642 of the Laws of 1995, Chapter 133 of the Laws of
2004, Chapter 133 of the Laws of 2005, Chapter 211 of the Laws of 2009
and Chapter 265 of the Laws of 2010.

Since this bill would continue the existing valuation rate of interest
and the existing rates of special, additional and supplementary
interest, its enactment would not result in any cost to the City of
New York or other participating employers.

Accordingly, the Mayor urges the earliest possible favorable
consideration of this proposal by the Legislature.

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

                                  5485

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                              May 25, 2011
                               ___________

Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Cities

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.
                                                           LBD11552-01-1

S. 5485                             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

S. 5485                             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.

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