senate Bill S2592A

Amended

Limits the amount of employer contributions to the state retirement system

download pdf

Sponsor

Bill Status


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

actions

  • 22 / Jan / 2013
    • REFERRED TO CIVIL SERVICE AND PENSIONS
  • 07 / May / 2013
    • AMEND AND RECOMMIT TO CIVIL SERVICE AND PENSIONS
  • 07 / May / 2013
    • PRINT NUMBER 2592A
  • 08 / Jan / 2014
    • REFERRED TO CIVIL SERVICE AND PENSIONS
  • 04 / Mar / 2014
    • AMEND AND RECOMMIT TO CIVIL SERVICE AND PENSIONS
  • 04 / Mar / 2014
    • PRINT NUMBER 2592B

Summary

Limits the amount of employer contributions to the state retirement system; authorizes an annual increase in employer contribution of the lesser of two percent or an inflation factor.

do you support this bill?

Bill Details

Versions:
S2592
S2592A
S2592B
Legislative Cycle:
2013-2014
Current Committee:
Senate Civil Service And Pensions
Law Section:
Retirement and Social Security Law
Laws Affected:
Amd §§17 & 317, R & SS L; amd §521, Ed L
Versions Introduced in 2011-2012 Legislative Cycle:
A8505

Sponsor Memo

BILL NUMBER:S2592A

TITLE OF BILL: An act to amend the retirement and social security law
and the education law, in relation to imposing a cap on the amount of
contributions paid by employers

PURPOSE: OF THE BILL: To limit the growth of pension expenditures by
local governments and school districts (outside New York City) to a
maximum of 2% or the consumer price index, whichever is less. This
bill is designed to assist local governments and school districts
stabilize their budgets.

SUMMARY OF PROVISIONS: This bill amends retirement and social security
law sections 17 and 317 and education law section 521 to:

1. limit the increases that public employers (outside New York City)
shall be required to pay to the retirement system to the lesser of 2%
more than the prior year or the inflation factor;

2. define inflation factor on the basis of the national consumer price
index;

3. require that the sum representing the difference between the
maximum required and the amount computed by the comptroller to be due
from a public employer under existing law be appropriated to the
retirement system out of the state's general fund.

JUSTIFICATION: Significant stock market fluctuations, the downturn in
the economy and increases in the number of municipal retirees has
resulted in a strong upward pressure on municipal and school district
contributions to the state retirement system required by the
comptroller. Double-digit increases in required pension contributions
have severally impacted local and school district budgets diverting
monies needed for day-to-day operations and causing significant
property tax increases. This legislation would level off the pension
contribution increases and relieve local real property taxpayers of
having to face steep property tax increases. This bill would not
diminish the pension benefit retirees are entitled to but would
require the difference between the maximum contribution required and
the amount computed to be due from the public employer under existing
law be paid by the state from its general fund.

PRIOR LEGISLATIVE HISTORY: 2011-12; A.8505 Abinanti: referred to
governmental employees

FISCAL IMPLICATIONS: This proposal could save local governments and
school districts millions of dollars annually. It is estimated that
employer contributions to the New York State and Local Retirement
System would decrease by $400 million for the fiscal year ending March
31, 2014 and that estimated employer contributions for the New York
State Teachers Retirement System would decrease by $75 million for
contributions collected in fall 2013 and $675 million for
contributions collected in fall 2014. The savings for future years
would depend on actuarially determined contributions, employer payroll
and the rate of inflation.

LOCAL FISCAL IMPLICATIONS: To be determined


EFFECTIVE DATE: This act shall take effect immediately and apply to
public employer contributions after January 1, 2012.

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

                                 2592--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 22, 2013
                               ___________

Introduced  by  Sen. LATIMER -- 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 committee

AN ACT to amend the retirement and social security law and the education
  law, in relation to imposing a cap on the amount of contributions paid
  by employers

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1.  Section 17 of the retirement and social security  law,  as
amended  by  chapter 33 of the laws of 1986, subdivision a as amended by
chapter 62 of the laws of 1989, subdivision c as amended by chapter  260
of the laws of 2004, is amended to read as follows:
  S 17. Annual appropriation by participating employers. a. On or before
the  fifteenth day of November, nineteen hundred eighty-nine and of each
succeeding calendar year, the comptroller  shall  determine  the  amount
which  each  participating employer is required to pay to the retirement
system to discharge its obligations thereto for the fiscal year  of  the
retirement  system  which ends on March thirty-first of nineteen hundred
ninety and of each succeeding calendar year on account of its  employees
who  are  members  of  this  system. The comptroller shall submit to the
fiscal officer of each such employer a statement of the amount so  paya-
ble.
  This  amount  shall  consist of the amount deemed necessary to provide
for payment in full of (i) all estimated obligations of each participat-
ing employer for the current fiscal year of the retirement  systems  and
(ii) any additional obligation, plus interest on such amount, for fiscal
years  preceding the current fiscal year. SUCH AMOUNT SHALL, HOWEVER, BE
SUBJECT TO THE LIMITATION SET FORTH IN SUBDIVISION F OF THIS SECTION. If
as a result of the amount determined to be paid for any fiscal  year,  a
participating  employer overpaid its actual obligation to the retirement

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03647-05-3

S. 2592--A                          2

system for that year, the amount to be determined by the comptroller for
the next succeeding November fifteenth shall reflect the amount  of  the
overpayment, plus interest as defined in section sixteen of this article
on  such  amount,  as a reduction in the amount otherwise required to be
paid by such participating employer.
  b. Each participating employer annually shall appropriate a sum suffi-
cient to pay such amount, SUBJECT TO THE LIMITATION SET FORTH IN  SUBDI-
VISION  F  OF THIS SECTION.  In the event the comptroller's statement is
not received before annual appropriations are made by such  employer,  a
sum estimated by the comptroller to be sufficient for such purpose shall
be included with such annual appropriations.
  c.  Payment  of  the  amount specified in the comptroller's statement,
SUBJECT TO THE LIMITATION SET FORTH IN SUBDIVISION F  OF  THIS  SECTION,
shall  be  made  by  a  participating employer within seventy-eight days
after the receipt of such statement; provided, however, that in no  case
shall any participating employer be required to make this payment before
February first of the calendar year next succeeding the calendar year in
which  such  statement  is  received.  The  comptroller is authorized to
provide for and accept pre-payment.
  d. If payment of the [full amount] EMPLOYER'S PORTION  of  such  obli-
gations  is  not  made  by  the  date  required by subdivision c of this
section, interest at a rate determined in accordance with the provisions
of section sixteen of this article shall commence  to  run  against  the
unpaid  balance thereof on the first day after the date required by said
subdivision c.
  e. The comptroller shall have full power and authority to  bring  suit
in  the  supreme court against any participating employer to recover any
sum FOR WHICH THE EMPLOYER IS RESPONSIBLE, payment of which is not  made
as herein required. While any such sum OWED BY THE EMPLOYER shall remain
due  and  unpaid  [he] THE COMPTROLLER may refuse to audit any claim for
funds due to such employer from the state.
  F. (1) OF THE AMOUNT DETERMINED BY THE COMPTROLLER PURSUANT TO  SUBDI-
VISION  A OF THIS SECTION, AN EMPLOYER SHALL NOT BE REQUIRED TO PAY MORE
THAN THE PRIOR YEAR'S ACTUARIAL REQUIRED CONTRIBUTION  PLUS  THE  LESSER
OF: TWO PERCENT OR THE INFLATION FACTOR.
  (2)  ANY  DIFFERENCE  BETWEEN  THE  AMOUNT COMPUTED BY THE COMPTROLLER
PURSUANT TO SUBDIVISION  A  OF  THIS  SECTION  AND  THE  MAXIMUM  AMOUNT
REQUIRED  TO  BE  PAID BY THE EMPLOYER PURSUANT TO PARAGRAPH ONE OF THIS
SUBDIVISION SHALL BE APPROPRIATED TO THE RETIREMENT SYSTEM OUT OF MONEYS
IN THE GENERAL FUND OF THE STATE.
  (3) THE AFOREMENTIONED APPROPRIATED MONEYS SHALL BE PAID BY THE  STATE
ON  OR BEFORE THE FIRST OF FEBRUARY. THE STATE SHALL NOT HAVE THE OPTION
TO AMORTIZE THE PAYMENT REQUIRED IN  THIS  SUBDIVISION  AS  PROVIDED  IN
SECTION NINETEEN-A OF THIS ARTICLE.
  (4) FOR THE PURPOSES OF THIS SUBDIVISION, "INFLATION FACTOR" MEANS THE
QUOTIENT  OF:  (I)  THE  AVERAGE  OF THE NATIONAL CONSUMER PRICE INDEXES
DETERMINED BY THE UNITED STATES DEPARTMENT OF LABOR FOR THE TWELVE-MONTH
PERIOD ENDING SIX MONTHS PRIOR TO THE START OF THE  COMING  FISCAL  YEAR
MINUS  THE  AVERAGE OF THE NATIONAL CONSUMER PRICE INDEXES DETERMINED BY
THE UNITED STATES DEPARTMENT OF LABOR FOR THE TWELVE-MONTH PERIOD ENDING
SIX MONTHS PRIOR TO THE START OF THE PRIOR FISCAL YEAR, DIVIDED BY: (II)
THE AVERAGE OF THE NATIONAL CONSUMER PRICE  INDEXES  DETERMINED  BY  THE
UNITED STATES DEPARTMENT OF LABOR FOR THE TWELVE-MONTH PERIOD ENDING SIX
MONTHS  PRIOR  TO  THE  START  OF THE PRIOR FISCAL YEAR, WITH THE RESULT
EXPRESSED AS A DECIMAL TO FOUR PLACES.

S. 2592--A                          3

  (5) FOR PURPOSES OF THIS  SUBDIVISION,  "ACTUARIAL  REQUIRED  CONTRIB-
UTION"  MEANS THE AMOUNT COMPUTED BY THE COMPTROLLER PRIOR TO THE DETER-
MINATION OF THE AMOUNT ELIGIBLE FOR AMORTIZATION, IF ANY, AS  SET  FORTH
IN SECTION NINETEEN-A OF THIS ARTICLE.
  (6)  FOR  PURPOSES  OF THIS SUBDIVISION, THE BASE YEAR FOR THE INITIAL
CALCULATION OF LIMITED EMPLOYER CONTRIBUTIONS PURSUANT TO PARAGRAPH  ONE
OF  THIS  SUBDIVISION  SHALL  BE  THE AMOUNT PAID BY THE EMPLOYER IN THE
FISCAL YEAR ENDING THE THIRTY-FIRST OF MARCH, TWO THOUSAND THIRTEEN. THE
EMPLOYER PARTICIPATION CAP IMPOSED BY THIS  SUBDIVISION  SHALL  COMMENCE
WITH   EMPLOYER  CONTRIBUTIONS  MADE  IN  THE  FISCAL  YEAR  ENDING  THE
THIRTY-FIRST OF MARCH, TWO THOUSAND FOURTEEN.
  (7) THE PROVISIONS OF THIS SUBDIVISION SHALL NOT APPLY IN CITIES  WITH
A POPULATION OF ONE MILLION OR MORE.
  S  2.    Section  317  of  the  retirement and social security law, as
amended by chapter 33 of the laws of 1986, subdivision a as  amended  by
chapter  62 of the laws of 1989, and subdivision c as amended by chapter
260 of the laws of 2004, is amended to read as follows:
  S 317. Annual appropriation  by  participating  employers.  a.  On  or
before  the  fifteenth day of November, nineteen hundred eighty-nine and
of each succeeding year, the  comptroller  shall  determine  the  amount
which  each  participating employer is required to pay to the police and
fire retirement system to discharge  its  obligations  thereto  for  the
fiscal year of the retirement system which ends on March thirty-first of
nineteen  hundred ninety and of each succeeding calendar year on account
of its employees who are members of this system. The  comptroller  shall
submit to the fiscal officer of each of such employer a statement of the
amount so payable.
  This  amount  shall  consist of the amount deemed necessary to provide
for payment in full of (i) all estimated obligations of each participat-
ing employer for the current fiscal year of the retirement  systems  and
(ii) any additional obligation, plus interest on such amount, for fiscal
years  preceding the current fiscal year. SUCH AMOUNT SHALL, HOWEVER, BE
SUBJECT TO THE LIMITATION SET FORTH IN SUBDIVISION F OF THIS SECTION. If
as a result of the amount determined to be paid for any fiscal  year,  a
participating  employer overpaid its actual obligation to the retirement
system for that year, the amount to be determined by the comptroller for
the next succeeding November fifteenth shall reflect the amount  of  the
overpayment,  plus  interest as defined in section three hundred sixteen
of this article on such amount, as a reduction in the  amount  otherwise
required to be paid by such participating employer.
  b. Each participating employer annually shall appropriate a sum suffi-
cient  to pay such amount, SUBJECT TO THE LIMITATION SET FORTH IN SUBDI-
VISION F OF THIS SECTION.  In the event the comptroller's  statement  is
not  received  before annual appropriations are made by such employer, a
sum estimated by the comptroller to be sufficient for such purpose shall
be included with such annual appropriations.
  c. Payment of the amount specified  in  the  comptroller's  statement,
SUBJECT  TO  THE  LIMITATION SET FORTH IN SUBDIVISION F OF THIS SECTION,
shall be made by a  participating  employer  within  seventy-eight  days
after  the receipt of such statement; provided, however, that in no case
shall any participating employer be required to make this payment before
February first of the calendar year next succeeding the calendar year in
which such statement is  received.  The  comptroller  is  authorized  to
provide for and accept pre-payment.
  d.  If  payment  of the [full amount] EMPLOYER'S PORTION of such obli-
gations is not made by the  date  required  by  subdivision  c  of  this

S. 2592--A                          4

section, interest at a rate determined in accordance with the provisions
of  section  three hundred sixteen of this article shall commence to run
against the unpaid balance thereof on  the  first  day  after  the  date
required by said subdivision c.
  e.  The  comptroller shall have full power and authority to bring suit
in the supreme court against any participating employer to  recover  any
sum  FOR WHICH THE EMPLOYER IS RESPONSIBLE, payment of which is not made
as herein required. While any such sum OWED BY THE EMPLOYER shall remain
due and unpaid [he] THE COMPTROLLER may refuse to audit  any  claim  for
funds due to such employer from the state.
  F.  (1) OF THE AMOUNT DETERMINED BY THE COMPTROLLER PURSUANT TO SUBDI-
VISION A OF THIS SECTION, AN EMPLOYER SHALL NOT BE REQUIRED TO PAY  MORE
THAN  THE  PRIOR  YEAR'S ACTUARIAL REQUIRED CONTRIBUTION PLUS THE LESSER
OF: TWO PERCENT OR THE INFLATION FACTOR.
  (2) ANY DIFFERENCE BETWEEN THE  AMOUNT  COMPUTED  BY  THE  COMPTROLLER
PURSUANT  TO  SUBDIVISION  A  OF  THIS  SECTION  AND  THE MAXIMUM AMOUNT
REQUIRED TO BE PAID BY THE EMPLOYER PURSUANT TO PARAGRAPH  ONE  OF  THIS
SUBDIVISION SHALL BE APPROPRIATED TO THE RETIREMENT SYSTEM OUT OF MONEYS
IN THE GENERAL FUND OF THE STATE.
  (3)  THE AFOREMENTIONED APPROPRIATED MONEYS SHALL BE PAID BY THE STATE
ON OR BEFORE THE FIRST OF FEBRUARY. THE STATE SHALL NOT HAVE THE  OPTION
TO  AMORTIZE  THE  PAYMENT  REQUIRED  IN THIS SUBDIVISION AS PROVIDED IN
SECTION THREE HUNDRED NINETEEN-A OF THIS TITLE.
  (4) FOR THE PURPOSES OF THIS SUBDIVISION, "INFLATION FACTOR" MEANS THE
QUOTIENT OF: (I) THE AVERAGE OF  THE  NATIONAL  CONSUMER  PRICE  INDEXES
DETERMINED BY THE UNITED STATES DEPARTMENT OF LABOR FOR THE TWELVE-MONTH
PERIOD  ENDING  SIX  MONTHS PRIOR TO THE START OF THE COMING FISCAL YEAR
MINUS THE AVERAGE OF THE NATIONAL CONSUMER PRICE INDEXES  DETERMINED  BY
THE UNITED STATES DEPARTMENT OF LABOR FOR THE TWELVE-MONTH PERIOD ENDING
SIX MONTHS PRIOR TO THE START OF THE PRIOR FISCAL YEAR, DIVIDED BY: (II)
THE  AVERAGE  OF  THE  NATIONAL CONSUMER PRICE INDEXES DETERMINED BY THE
UNITED STATES DEPARTMENT OF LABOR FOR THE TWELVE-MONTH PERIOD ENDING SIX
MONTHS PRIOR TO THE START OF THE PRIOR  FISCAL  YEAR,  WITH  THE  RESULT
EXPRESSED AS A DECIMAL TO FOUR PLACES.
  (5) FOR THE PURPOSES OF THIS SUBDIVISION, "ACTUARIAL REQUIRED CONTRIB-
UTION"  MEANS THE AMOUNT COMPUTED BY THE COMPTROLLER PRIOR TO THE DETER-
MINATION OF THE AMOUNT ELIGIBLE FOR AMORTIZATION, IF ANY, AS  SET  FORTH
IN SECTION THREE HUNDRED NINETEEN-A OF THIS TITLE.
  (6)  FOR  PURPOSES  OF THIS SUBDIVISION, THE BASE YEAR FOR THE INITIAL
CALCULATION OF LIMITED EMPLOYER CONTRIBUTIONS PURSUANT TO PARAGRAPH  ONE
OF  THIS  SUBDIVISION  SHALL  BE  THE AMOUNT PAID BY THE EMPLOYER IN THE
FISCAL YEAR ENDING THE THIRTY-FIRST OF MARCH, TWO THOUSAND THIRTEEN. THE
EMPLOYER PARTICIPATION CAP IMPOSED BY THIS  SUBDIVISION  SHALL  COMMENCE
WITH   EMPLOYER  CONTRIBUTIONS  MADE  IN  THE  FISCAL  YEAR  ENDING  THE
THIRTY-FIRST OF MARCH, TWO THOUSAND FOURTEEN.
  (7) THE PROVISIONS OF THIS SUBDIVISION SHALL NOT APPLY IN CITIES  WITH
A POPULATION OF ONE MILLION OR MORE.
  S 3. Subdivision 2 of section 521 of the education law, paragraph a as
amended  by  chapter  553 of the laws of 1997, paragraph b as amended by
chapter 871 of the laws of 1963, paragraphs f and g as added by  chapter
538  of  the  laws of 1984, paragraph h as amended by chapter 830 of the
laws of 1992, paragraphs i, j, k, l, and m as added by  chapter  175  of
the laws of 1990, and paragraph n as added by chapter 482 of the laws of
1996, is amended and a new subdivision 4 is added to read as follows:
  2.  The  collection  of  employers'  contributions  shall  be  made as
follows:

S. 2592--A                          5

  a. Upon the  basis  of  each  actuarial  determination  and  appraisal
provided herein, the retirement board shall annually prepare and certify
to  the  commissioner  [of  education]  a  statement of the total amount
necessary to be paid by all employers for the ensuing fiscal year to the
pension accumulation and expense funds as provided under subdivision two
of  section  five hundred seventeen and under section five hundred nine-
teen of this article. Upon the basis of the  rate  of  contribution  for
supplemental   retirement  allowances,  determined  in  accordance  with
section five hundred thirty-two of this article,  the  retirement  board
shall  certify  to  the  commissioner  [of education] a statement of the
total amount necessary to be paid  by  all  employers  for  the  ensuing
fiscal year to the supplemental retirement allowance fund.  Said certif-
ication  shall  include  interest on amounts necessary to repay advances
made to the supplemental retirement allowance fund pursuant to  subdivi-
sion  f of section five hundred thirty-two of this article computed from
the date of such advances at the  rate  determined  in  accordance  with
paragraph f of this subdivision.
  b.  The  commissioner  [of education] shall include in the certificate
which he files with the state comptroller showing the  amount  of  state
funds  apportioned  to  the  school districts within each county for the
support of common schools, a statement showing the amount to be contrib-
uted by each employer in each of such counties as  required  under  this
article.
  The amount to be contributed by each employer except those who operate
local  district  pension  systems, shall be such percentage of the total
compensation or salaries of all teachers in his employ who  are  members
of the retirement system as the aggregate amount of the normal and defi-
ciency  contributions  for the year shall bear to the total compensation
or salaries paid by  all  employers,  except  those  who  operate  local
district pension systems, to all teachers who are members of the retire-
ment system; PROVIDED, HOWEVER, THAT THE AMOUNT REMITTED BY SUCH EMPLOY-
ER  SHALL  BE SUBJECT TO THE CONTRIBUTION LIMITS ESTABLISHED IN SUBDIVI-
SION FOUR OF THIS SECTION.
  c. The comptroller shall issue his warrant to the  custodian  of  such
fund directing such custodian to credit to the pension accumulation fund
and expense fund respectively, from the appropriation for the support of
common  schools the amounts required to be made as contributions to such
funds by the employers as shown by the certificate of  the  commissioner
[of  education] filed with him as directed in paragraph b of this subdi-
vision, BUT SUBJECT TO THE CONTRIBUTION LIMIT  ESTABLISHED  PURSUANT  TO
SUBDIVISION FOUR OF THIS SECTION.
  d.  The  comptroller,  in  issuing  his  warrant  to the custodian for
payment to each county treasurer of that portion of  the  moneys  appor-
tioned  for  the  support  of  common schools, shall deduct therefrom an
amount equal to the amount required to be contributed  by  employers  of
such  county, as shown by the certificate of the commissioner [of educa-
tion] of this state filed with the comptroller as required by  paragraph
b of this subdivision, BUT SUBJECT TO THE CONTRIBUTION LIMIT ESTABLISHED
PURSUANT TO SUBDIVISION FOUR OF THIS SECTION.
  e.  In  order  to  meet  the  financial  requirements of this article,
employers who obtain funds directly by taxation  are  hereby  authorized
and  directed  to levy annually such additional taxes as are required to
provide the [funds deducted from the amounts apportioned to such employ-
ers from the appropriation of the state for the support  of  the  common
schools] EMPLOYER'S CONTRIBUTION AMOUNT AS DETERMINED PURSUANT TO SUBDI-
VISION FOUR OF THIS SECTION.

S. 2592--A                          6

  f. Employers whose payments from the moneys apportioned from the state
for the support of common schools are insufficient to pay the EMPLOYER'S
PORTION  OF  THE  amount due and owing the system, or who do not receive
such payments, shall pay the system each year  the  amount  of  contrib-
utions  due  and  owing  from  the employer, SUBJECT TO THE CONTRIBUTION
LIMIT ESTABLISHED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION, pursuant
to this article within thirty days from the date a bill is mailed by the
system. Interest, at a rate  equal  to  the  average  yield  payable  on
fifty-two week United States treasury bills on June thirtieth immediate-
ly  preceding  the day the bill is mailed by the system, shall accrue on
the EMPLOYER'S PORTION OF THE outstanding amount due and owing  commenc-
ing with the thirty-first day after the bill is mailed.
  g. Whenever the system determines the contributions made by an employ-
er  are  less  than  the percentage of total compensation or salaries of
members of the system in the employ of such  employer,  as  required  by
this  article, such employer shall pay the system such deficiency within
thirty days from the date a bill is mailed by the system, PROVIDED  SUCH
DEFICIENCY AMOUNT DOES NOT CAUSE THE EMPLOYER TO PAY MORE THAN THE MAXI-
MUM REQUIRED CONTRIBUTION AMOUNT CALCULATED PURSUANT TO SUBDIVISION FOUR
OF  THIS SECTION. Interest, at a rate equal to the average yield payable
on fifty-two week United States treasury bills on June  thirtieth  imme-
diately preceding the day before the bill is mailed by the system, shall
accrue on the EMPLOYER'S PORTION OF THE outstanding amount due and owing
commencing with the thirty-first day after the bill is mailed.
  h.  Notwithstanding  any  provision of law to the contrary, commencing
with the payments made in the fiscal year beginning July first, nineteen
hundred ninety, and each fiscal year thereafter, the  employer  contrib-
utions  due and payable as determined pursuant to the provisions of this
article and the employee contributions due and payable pursuant to  this
article  and  articles fourteen and fifteen of the retirement and social
security law, on account of compensation paid in the fiscal  year  imme-
diately  preceding,  and those employer contributions due and payable in
each fiscal year pursuant to chapter six hundred sixty-five of the  laws
of  nineteen  hundred eighty-four shall be made to the retirement system
and collected in the manner set forth in this section each  fiscal  year
in  three  payments, each equal to thirty-three and one-third percent of
the total amount due for such fiscal year. Such payments shall  be  paid
on  September  fifteenth,  October  fifteenth, and November fifteenth of
each fiscal year. If a participating employer underpaid  its  obligation
to the retirement system, such underpayment as determined by the retire-
ment  system  shall  be  deducted  from  the amounts apportioned to such
employer from the appropriation of the state  for  the  support  of  the
common schools due and payable the next April fifteenth. Employers whose
payments  from such appropriation are insufficient to pay the amount due
and owing the system, or who do not  receive  such  payments,  shall  be
billed  by the system for such underpayment and shall pay the system the
amount due within thirty days from the date a  bill  is  mailed  by  the
system.  The amount of any employer overpayment of its obligation to the
retirement system, as determined by such system shall be a credit to the
employer and shall reduce by an equal amount thereof the initial payment
to be made by such employer  to  such  system  on  the  next  succeeding
September fifteenth.
  i.  Notwithstanding any provision of law to the contrary, the employer
and employee contributions due  and  payable  in  the  nineteen  hundred
eighty-nine--ninety  fiscal  year on account of compensation paid in the
nineteen hundred eighty-eight--eighty-nine fiscal year which  were  paid

S. 2592--A                          7

prior  to  April  first, nineteen hundred ninety shall be deemed (to the
extent such amount is sufficient) to have consisted of all the  employee
contributions  due  and  payable  pursuant  to this article and articles
fourteen  and  fifteen  of the retirement and social security law in the
nineteen hundred eighty-nine--ninety  fiscal  year  and  those  employer
contributions    due and payable in such fiscal year pursuant to chapter
six hundred sixty-five of the laws of nineteen hundred eighty-four;  and
the  remaining employer contributions so paid shall be applied evenly to
the payments due and payable on September  fifteenth,  nineteen  hundred
ninety,   October   fifteenth,  nineteen  hundred  ninety  and  November
fifteenth,  nineteen  hundred  ninety  and  the  employer  contributions
amounting  to  eight  hundred seventy-three million seven hundred eleven
thousand six hundred fifteen dollars  ($873,711,615),  due  and  payable
pursuant  to  the  provisions  of  this  section in the nineteen hundred
eighty-nine--ninety fiscal year on account of compensation paid in nine-
teen hundred eighty-eight--eighty-nine fiscal year, except those employ-
er contributions due and payable in such fiscal year pursuant to chapter
six hundred sixty-five of the  laws  of  nineteen  hundred  eighty-four,
shall  be deferred and payment shall be made to the retirement system in
fifteen equal annual payments of ninety-eight million five hundred thir-
ty-seven thousand five hundred seven dollars  ($98,537,507)  on  October
fifteenth,  commencing  on  October  fifteenth, nineteen hundred ninety.
Such payments are calculated at an interest rate of  eight  percent  per
annum. Provided, however, the retirement board is directed to permit the
pre-payment of the amounts outstanding under this paragraph. The retire-
ment  board  shall:  (1)  On or before September first, nineteen hundred
ninety, in addition to the amount due for the current fiscal year  bill-
ing and for the payment of the amortized annual installment, furnish the
total amount due and be authorized to accept pre-payment in full of said
amount  by  October fifteenth, nineteen hundred ninety. (2) On or before
each September first thereafter, in addition to the amount due  for  the
current  fiscal year billing and for the payment of the annual amortized
installment, furnish the total amount still outstanding and  be  author-
ized  to  accept the pre-payment of any portion of the balance remaining
to be paid by October fifteenth of that year.
  j. Prior to June first, nineteen hundred ninety, the valuation rate of
interest adopted by the retirement board on April twenty-seventh,  nine-
teen  hundred eighty-nine, may be retroactively revised to eight percent
by the retirement board, as recommended by the actuary, as if adopted at
the April twenty-seventh, nineteen hundred  eighty-nine  board  meeting,
and  the  employer contribution rate, adopted by the retirement board at
the April twenty-seventh, nineteen hundred  eighty-nine  board  meeting,
revised  by  the  retirement  board at the July twenty-seventh, nineteen
hundred eighty-nine board meeting, may be retroactively amended  by  the
retirement  board  as  if  adopted  at the July twenty-seventh, nineteen
hundred eighty-nine board meeting and applied to contributions  paid  in
the nineteen hundred ninety--ninety-one fiscal year. Notwithstanding any
provision  of  law  to the contrary, the actions of the retirement board
pursuant to the provisions of this paragraph shall be deemed reasonable,
prudent and proper. No member  of  the  retirement  board,  officer,  or
employee  of  the New York state teachers' retirement system shall incur
or suffer any liability whatsoever by reason of any actions pursuant  to
this  paragraph,  and  such system shall save harmless and indemnify all
members of the retirement board, its officers and employees from  finan-
cial  loss arising out of any claim, demand, suit, action or judgment as
a result of the actions taken pursuant to this paragraph  provided  that

S. 2592--A                          8

such person shall, within five days after the date on which he is served
with any summons, complaint, process, notice, demand, claim or pleading,
deliver the original or a true copy thereof to the legal advisor of such
system.  Upon such delivery, the legal advisor of such system may assume
control of the representation of such person  in  connection  with  such
claim,  demand,  suit, action or proceeding. Such person shall cooperate
fully with the legal advisor of the system or any  other  person  desig-
nated  to  assume  such  defense  in  respect  of such representation or
defense.
  k. The retirement board is authorized to adopt  procedures  and/or  to
promulgate  rules  and  regulations  as it deems necessary to adjust and
reconcile any payments from employers to actual amounts due whether such
payments were received prior or subsequent  to  the  effective  date  of
[the]  chapter  ONE HUNDRED SEVENTY-FIVE of the laws of nineteen hundred
ninety [which added this paragraph to this section].
  l. The provisions of paragraphs h and  i  of  this  subdivision  shall
constitute  a  contract  and  the rights of the New York state teachers'
retirement system thereunder shall not be impaired in any way  whatsoev-
er.
  m.  In  addition to any other payment or collection procedure provided
by this article, if the amounts credited from the appropriation for  the
support of common schools are insufficient to fully cover the amounts to
be  contributed by the employers, SUBJECT TO THE EMPLOYER'S CONTRIBUTION
LIMIT ESTABLISHED PURSUANT TO SUBDIVISION  FOUR  OF  THIS  SECTION,  the
retirement  board  is  authorized  to  certify  the unpaid amount OF THE
EMPLOYER'S CONTRIBUTION to the state comptroller, and  the  state  comp-
troller  shall,  to the extent not otherwise prohibited by law, withhold
such amount from any succeeding payment from any other form of state aid
provided to the employer. If any  employer  fails  to  pay  the  amounts
required  to  be  contributed  pursuant  to this section, the retirement
system shall be entitled to reasonable attorney fees and other  expenses
incurred to collect such amounts due and owing. Fees shall be determined
pursuant  to  prevailing  market  rates  for the kind and quality of the
services furnished.
  n. Notwithstanding any other provision of law  to  the  contrary,  the
board  of  education or trustees of a school district which is a partic-
ipating employer, which has elected to make  payments  of  the  employer
contributions due and payable to the retirement system pursuant to para-
graph  i of this subdivision in amortized annual installments, and which
has determined to make pre-payment of the total amount of such  contrib-
utions outstanding in accordance with said paragraph i, may adopt a bond
resolution  authorizing  the refinancing of such debt by the issuance of
bonds in the amount of such pre-payment without conducting a vote  on  a
tax to be collected in installments, provided that such refinancing will
result  in  savings  to  the  school district, as certified by the state
comptroller, and provided further that the issuance of such  obligations
otherwise  complies  with  the requirements of the local finance law and
this chapter.
  4. A. NOTWITHSTANDING THE PROVISIONS  OF  THIS  SECTION,  AN  EMPLOYER
SHALL  NOT  BE  REQUIRED  TO  CONTRIBUTE MORE THAN THE PRIOR PLAN YEAR'S
EMPLOYER CONTRIBUTION PLUS THE LESSER OF:  TWO PERCENT OR THE  INFLATION
FACTOR.
  B.  ANY  DIFFERENCE BETWEEN THE AMOUNT CONTAINED IN THE WARRANT ISSUED
BY THE COMPTROLLER PURSUANT TO SUBDIVISION TWO OF THIS SECTION  AND  THE
MAXIMUM  AMOUNT  REQUIRED  TO  BE  PAID BY THE EMPLOYER PURSUANT TO THIS

S. 2592--A                          9

SUBDIVISION SHALL BE APPROPRIATED TO THE RETIREMENT SYSTEM OUT OF MONEYS
IN THE GENERAL FUND OF THE STATE.
  C.  THE  MONEYS  APPROPRIATED  BY  THE  STATE FROM THE GENERAL FUND IN
ACCORDANCE WITH THIS SUBDIVISION SHALL BE  PAID  BY  THE  STATE  TO  THE
RETIREMENT  SYSTEM  ON OR BEFORE THE FIFTEENTH OF NOVEMBER IN THE FISCAL
YEAR IN WHICH THE MONEYS  ARE  DUE  AND  PAYABLE  BY  THE  PARTICIPATING
EMPLOYER.
  D.  FOR THE PURPOSES OF THIS SUBDIVISION, "INFLATION FACTOR" MEANS THE
QUOTIENT OF: (I) THE AVERAGE OF  THE  NATIONAL  CONSUMER  PRICE  INDEXES
DETERMINED BY THE UNITED STATES DEPARTMENT OF LABOR FOR THE TWELVE-MONTH
PERIOD  ENDING  SIX MONTHS PRIOR TO THE START OF THE CURRENT FISCAL YEAR
MINUS THE AVERAGE OF THE NATIONAL CONSUMER PRICE INDEXES  DETERMINED  BY
THE UNITED STATES DEPARTMENT OF LABOR FOR THE TWELVE-MONTH PERIOD ENDING
SIX MONTHS PRIOR TO THE START OF THE PRIOR FISCAL YEAR, DIVIDED BY: (II)
THE  AVERAGE  OF  THE  NATIONAL CONSUMER PRICE INDEXES DETERMINED BY THE
UNITED STATES DEPARTMENT OF LABOR FOR THE TWELVE-MONTH PERIOD ENDING SIX
MONTHS PRIOR TO THE START OF THE PRIOR  FISCAL  YEAR,  WITH  THE  RESULT
EXPRESSED AS A DECIMAL TO FOUR PLACES.
  E. FOR PURPOSES OF THIS SUBDIVISION, "ACTUARIAL REQUIRED CONTRIBUTION"
MEANS  THE  AMOUNT COMPUTED BY THE ACTUARY, AS SET FORTH IN SECTION FIVE
HUNDRED SEVENTEEN OF THE EDUCATION LAW.
  F. FOR PURPOSES OF THIS SUBDIVISION, THE BASE  YEAR  FOR  THE  INITIAL
CALCULATION OF LIMITED EMPLOYER CONTRIBUTIONS PURSUANT TO PARAGRAPH A OF
THIS  SUBDIVISION  SHALL  BE THE AMOUNT PAID BY THE EMPLOYER IN THE PLAN
YEAR ENDING THE THIRTIETH OF JUNE, TWO THOUSAND THIRTEEN.  THE  EMPLOYER
CONTRIBUTION CAP IMPOSED BY THIS SUBDIVISION SHALL COMMENCE WITH EMPLOY-
ER  CONTRIBUTIONS DUE IN THE PLAN YEAR ENDING THE THIRTIETH OF JUNE, TWO
THOUSAND FOURTEEN.
  S 4. This act shall take effect immediately and shall apply to employ-
er contributions made commencing in the employer's  fiscal  year  ending
2014.
  FISCAL  NOTE.-- This bill would limit the year to year increase in the
dollar amount of the annual employer contributions to be made by partic-
ipating employers of the New York State and Local Employees'  Retirement
System  (NYSLERS),  the New York State and Local Police and Fire Retire-
ment System (NYSLPFRS) and  the  New  York  State  Teachers'  Retirement
System. Such dollar increase in the actuarially determined contributions
will  be  limited  to  the lesser of 2% and the increase in the Consumer
Price Index (CPI), as determined by  the  United  States  Department  of
Labor.  The  difference between the actuarially determined contributions
and the limited contributions would be paid by the State of New York  on
behalf  of the participating employers. This change shall first apply to
contributions made during the fiscal year ending in the year 2014.
  If this bill is enacted, insofar as it would affect  the  NYSLERS  and
the  NYSLPFRS,  we  estimate that the additional contribution payable by
the State of New York on behalf of the participating employers would  be
approximately  $400  million  for the fiscal year ending March 31, 2014.
The costs for future years  would  depend  on  each  year's  actuarially
determined contributions, increases in employer payroll and CPI.
  There would be no cost to the Systems.
  Summary of relevant resources:
  Data:  March  31,  2012  Actuarial Year End File with distributions of
membership and other statistics displayed in  the  2012  Report  of  the
Actuary and 2012 Comprehensive Annual Financial Report.

S. 2592--A                         10

  Assumptions  and  Methods:  2010,  2011  and 2012 Annual Report to the
Comptroller on Actuarial Assumptions, Codes Rules and Regulations of the
State of New York: Audit and Control.
  Market  Assets and GASB Disclosures: March 31, 2012 New York State and
Local Retirement System Financial Statements and Supplementary  Informa-
tion.
  Valuations  of Benefit Liabilities and Actuarial Assets: summarized in
the 2012 Actuarial Valuations report.
  I am a member of the American Academy of Actuaries and meet the Quali-
fication Standards to render the actuarial opinion contained herein.
  This estimate, dated March 25, 2013 and intended for use  only  during
the  2013  Legislative  Session, is Fiscal Note No. 2013-73, prepared by
the Actuary for the New  York  State  and  Local  Employees'  Retirement
System  and  the  New  York  State  and Local Police and Fire Retirement
System.
  FISCAL NOTE.-- This bill would amend Section 521 of the Education  Law
to limit the amount of year over year increase in employer contributions
required to be made each year to the New York State Teachers' Retirement
System  (NYSTRS)  by participating employers. Participating employers of
NYSTRS would not be required to contribute more than  the  prior  year's
contribution  increased  by  the  lesser of two percent, or an inflation
factor based upon the increase in the Consumer Price  Index  (CPI).  Any
difference  in  the  actuarially  required contribution and this limited
contribution would be paid by the State of New York out of  the  General
Fund of the state. The employer contribution cap imposed under this bill
would  commence  with  employer  contributions  made  in the fiscal year
ending June 30, 2014.
  To the extent that  the  actuarially  required  employer  contribution
continues  to be paid in full to the Retirement System every year, there
will be no cost to the employers of members of NYSTRS if  this  bill  is
enacted.  This bill would make the State of New York into a contributing
partner to NYSTRS.
  The actuarially required contribution is based upon a number of  actu-
arial assumptions, member demographic data, and investment returns.  The
rate  of  increase  in  this  contribution  can be expected to bear very
little relationship to the rate of  inflation.  Therefore  the  required
contribution  due  from  the state could grow substantially in any given
year.
  The first year the employer contribution cap would be applied would be
with respect to contributions due in the plan year ending June 30, 2014,
which for NYSTRS corresponds to contributions collected in the  fall  of
2013.  We  estimate  the  State  of New York would be required to make a
payment of approximately $75 million at that time for its share  of  the
contribution.  In  the  fall  of  2014  we  estimate  the state would be
required to make a payment of approximately $675 million for  its  share
of  the  contribution.  The state's cost in future years would depend on
the actuarially required contribution and the rate of inflation in those
years.
  The source of this estimate is Fiscal Note  2013-19  dated  April  23,
2013  prepared by the Actuary of the New York State Teachers' Retirement
System and is intended for use only during the 2013 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.

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.