senate Bill S2592B

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

See Assembly Version of this Bill:
A7104A
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:S2592B

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.
2013 -14 A7104 Abinanti : referred to governmental employees
2013-14; S.2592A Latimer: REFERRED TO CIVIL SERVICE AND PENSIONS

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
not decrease for the fiscal year ending March 31, 2015 and that
estimated employer contributions for the New York State Teachers
Retirement System would decrease by $640 million for contributions
collected in fall 2014 and $170 million for contributions collected in
fall 2015. 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 commencing in the employer's fiscal year ending 2015.

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

                                 2592--B

                       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 -- recommitted to the Committee on
  Civil Service and Pensions in accordance with Senate Rule 6, sec. 8 --
  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.
                                                           LBD03647-11-4

S. 2592--B                          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 [arti-
cle]  TITLE  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 PERCENTAGE SET FORTH IN PARAGRAPH FOUR OF THIS
SUBDIVISION.
  (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 TITLE.
  (4) THE PERCENTAGE REFERRED TO IN PARAGRAPH ONE  OF  THIS  SUBDIVISION
SHALL  BE  DETERMINED  ANNUALLY BY REFERENCE TO THE CONSUMER PRICE INDEX
(ALL URBAN CONSUMERS, CPI-U, U.S. CITY AVERAGE, ALL ITEMS, 1982-84=100),
PUBLISHED BY THE UNITED STATES BUREAU  OF  LABOR  STATISTICS,  FOR  EACH
APPLICABLE  CALENDAR  YEAR.  SAID  PERCENTAGE  SHALL  EQUAL  THE  ANNUAL
INFLATION, AS DETERMINED FROM THE INCREASE IN THE CONSUMER  PRICE  INDEX
IN  THE  ONE YEAR PERIOD ENDING THE THIRTY-FIRST OF MARCH OF THE CURRENT
YEAR'S ACTUARIAL, REQUIRED CONTRIBUTION. SAID PERCENTAGE SHALL  THEN  BE
ROUNDED UP TO THE NEXT HIGHER ONE-TENTH OF ONE PERCENT.
  (5)  FOR  PURPOSES  OF  THIS SUBDIVISION, "ACTUARIAL REQUIRED CONTRIB-
UTION" MEANS THE AMOUNT COMPUTED BY THE COMPTROLLER PRIOR TO THE  DETER-

S. 2592--B                          3

MINATION  OF  THE AMOUNT ELIGIBLE FOR AMORTIZATION, IF ANY, AS SET FORTH
IN SECTION 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 FOURTEEN. 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 FIFTEEN.
  (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] TITLE 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 three hundred sixteen of this [article] TITLE shall commence

S. 2592--B                          4

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 PERCENTAGE SET FORTH IN PARAGRAPH  FOUR  OF  THIS
SUBDIVISION.
  (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)  THE  PERCENTAGE  REFERRED TO IN PARAGRAPH ONE OF THIS SUBDIVISION
SHALL BE DETERMINED ANNUALLY BY REFERENCE TO THE  CONSUMER  PRICE  INDEX
(ALL URBAN CONSUMERS, CPI-U, U.S. CITY AVERAGE, ALL ITEMS, 1982-84=100),
PUBLISHED  BY  THE  UNITED  STATES  BUREAU OF LABOR STATISTICS, FOR EACH
APPLICABLE  CALENDAR  YEAR.  SAID  PERCENTAGE  SHALL  EQUAL  THE  ANNUAL
INFLATION,  AS  DETERMINED FROM THE INCREASE IN THE CONSUMER PRICE INDEX
IN THE ONE YEAR PERIOD ENDING THE THIRTY-FIRST OF MARCH OF  THE  CURRENT
YEAR'S  ACTUARIAL,  REQUIRED CONTRIBUTION. SAID PERCENTAGE SHALL THEN BE
ROUNDED UP TO THE NEXT HIGHER ONE-TENTH OF ONE PERCENT.
  (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 FOURTEEN. 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 FIFTEEN.
  (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:
  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

S. 2592--B                          5

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.
  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

S. 2592--B                          6

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
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

S. 2592--B                          7

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
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

S. 2592--B                          8

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 PERCENTAGE
SET FORTH IN PARAGRAPH D OF THIS SUBDIVISION.
  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
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

S. 2592--B                          9

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.    THE  PERCENTAGE  REFERRED  TO IN PARAGRAPH A OF THIS SUBDIVISION
SHALL BE DETERMINED ANNUALLY BY REFERENCE TO THE  CONSUMER  PRICE  INDEX
(ALL URBAN CONSUMERS, CPI-U, U.S. CITY AVERAGE, ALL ITEMS, 1982-84=100),
PUBLISHED  BY  THE  UNITED  STATES  BUREAU OF LABOR STATISTICS, FOR EACH
APPLICABLE  CALENDAR  YEAR.  SAID  PERCENTAGE  SHALL  EQUAL  THE  ANNUAL
INFLATION,  AS  DETERMINED FROM THE INCREASE IN THE CONSUMER PRICE INDEX
IN THE ONE YEAR PERIOD ENDING THE  THIRTIETH  OF  JUNE  OF  THE  CURRENT
YEAR'S  ACTUARIAL  REQUIRED  CONTRIBUTION. SAID PERCENTAGE SHALL THEN BE
ROUNDED UP TO THE NEXT HIGHER ONE-TENTH OF ONE PERCENT.
  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 FOURTEEN. 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 FIFTEEN.
  S 4. This act shall take effect immediately and shall apply to employ-
er  contributions  made  commencing in the employer's fiscal year ending
2015.
  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  amount  increased  by  the  lesser  of  two  percent, or a
percentage based upon the one year 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, 2015.
  To  the  extent  that  the  actuarially required employer contribution
continues to be paid in full and on time 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, 2015,
which  for  NYSTRS corresponds to contributions collected in the fall of
2014. We estimate the State of New York would  be  required  to  make  a
payment  of approximately $640 million at that time for its share of the
contribution. In the fall  of  2015  we  estimate  the  state  would  be
required  to  make a payment of approximately $170 million for its share
of the contribution. The state's cost in future years  would  depend  on

S. 2592--B                         10

the actuarially required contribution and the rate of inflation in those
years.
  The  source of this estimate is Fiscal Note 2014-20 dated February 27,
2014 prepared by the Actuary of the New York State Teachers'  Retirement
System and is intended for use only during the 2014 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.
  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
would be limited to the lesser of 2% and the increase  in  the  Consumer
Price  Index  (CPI-U),  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 2015.
  If  this  bill  is enacted, insofar as it would affect the NYSLERS and
the NYSLPFRS, it is unlikely that there would be an additional  contrib-
ution  payable by the State of New York on behalf of most of the partic-
ipating employers for the fiscal year ending March  31,  2015.  However,
there  could be costs on behalf of certain participating employers whose
payroll increases were significantly greater than  our  salary  increase
assumptions  or who adopted significant plan improvements. The costs for
future years would depend on each year's actuarially determined contrib-
utions, increases in employer payroll, and CPI.
  There would be no cost to the Systems.
  Summary of relevant resources:
  The membership data used in  measuring  the  impact  of  the  proposed
change  was  the same as that used in the March 31, 2013 actuarial valu-
ation.  Distributions and other statistics can  be  found  in  the  2013
Report  of  the  Actuary  and  the  2013  Comprehensive Annual Financial
Report.
  The actuarial assumptions and methods used are described in the  2010,
2011,  2012  and  2013  Annual  Report  to  the Comptroller on Actuarial
Assumptions, and the Codes Rules and Regulations of  the  State  of  New
York: Audit and Control.
  The Market Assets and GASB Disclosures are found in the March 31, 2013
New  York  State  and Local Retirement System   Financial Statements and
Supplementary Information.
  I am a member of the American Academy of Actuaries and meet the Quali-
fication  Standards  to  render  the  statement  of  actuarial   opinion
contained herein.
  This  estimate,  dated  February  27,  2014, and intended for use only
during the  2014  Legislative  Session,  is  Fiscal  Note  No.  2014-73,
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.

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.