| Date of Action |
Assembly Actions -
Lowercase Senate Actions - UPPERCASE |
|---|---|
| Jun 21, 2012 |
recommitted to rules ordered to third reading cal.1509 |
| Jun 19, 2012 |
referred to rules |
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Senate Bill S7804
2011-2012 Legislative Session
Relates to the rate of regular interest used in the actuarial valuation of liabilities for the purpose of calculating contributions to certain retirement funds
download bill text pdfSponsored By
(R, C, IP) Senate District
Archive: Last Bill Status - In Senate Committee Rules Committee
- Introduced
-
- In Committee Assembly
- In Committee Senate
-
- On Floor Calendar Assembly
- On Floor Calendar Senate
-
- Passed Assembly
- Passed Senate
- Delivered to Governor
- Signed By Governor
Actions
Votes
2011-S7804 (ACTIVE) - Details
- See Assembly Version of this Bill:
- A10681
- Current Committee:
- Senate Rules
- Law Section:
- New York City Administrative Code
- Laws Affected:
- Amd NYC Ad Cd, generally; amd ยง2575, Ed L
2011-S7804 (ACTIVE) - Summary
Relates 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; establishes the entry age actuarial cost method of determining employer contributions to such retirement systems; makes contributions to such retirement systems by such public employers and such other obligors; credits special interest and additional interest to members of such retirement systems
2011-S7804 (ACTIVE) - Sponsor Memo
BILL NUMBER:S7804
TITLE OF BILL:
An act to amend the administrative code of 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 establishment of the entry age actuarial cost method of
determining employer contributions to such retirement systems, the
making of contributions to such retirement systems by such public
employers and such other obligors, and the crediting of special
interest and additional interest to members of such retirement
systems, and the allowance of interest on the funds of such retirement
systems; and to amend the education law, in relation to employer
contributions to the board of education retirement system of such city
SUMMARY OF PROVISIONS:
This bill would establish at 7% per annum the statutory rate of
interest used by 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
calculating employer contributions to those systems. The proposed 7% valuation rate, which would be applicable to employer contributions due for fiscal years 2011-12 through 2015-16, would replace the current 8% valuation rate which is scheduled to expire on June 30, 2012. Only tier 1 and tier 2 members may participate in the increased-take-home-pay (ITHP) program. Under the bill, tier 1 and tier 2 members of the City retirement systems would continue to have their member contribution and ITHP accounts credited with interest at the current rate of 8 1/4% per annum through fiscal year 2015-16. The bill also would provide for the calculation of employer contributions to the City retirement systems in accordance with the entry age actuarial cost method, beginning with the calculation of contributions payable to the systems in fiscal year 2011-12. The proposed method would replace the frozen initial liability method currently used to calculate employer contributions. Under the proposed funding method, the benefits to which individual members are expected to become entitled would be funded, in general, on a level basis over their expected working lifetimes through annual employer contributions known as employer entry age normal contributions, which would be calculated using relatively constant entry age employer contribution rates applicable to individual members. The Actuary for the City retirement systems, in addition to calculating the employer entry age normal contributions each year as of the second June thirtieth preceding the fiscal year in which employer contributions are payable, also would calculate and specifically identify unfunded accrued liabilities for each retirement system as of each such June thirtieth. The initial unfunded accrued liability for each retirement system, calculated as of June 30, 2010, would be amortized over a period of 22 fiscal years following its establishment, with the first of 21 annual installments becoming payable in fiscal year 2011-12. Subsequent unfunded accrued liabilities would be amortized over the number of years specified by statute, depending upon the nature of each such unfunded accrued liability. Most employers participating in the City retirement systems are covered by current statutory provisions which specify the timing of their contribution payments to the retirement system within the fiscal year. For example, the City is required to pay its contributions for the fiscal year in 12 equal monthly installments. The bill would require any participating employer which is not covered by a time of payment provision to make its employer contribution payments, beginning with parents due in fiscal year 2012-13, either (1) in total by January first of the fiscal year, or (2) in 12 monthly installments, with each monthly installment to be paid by the last day of each month. The bill also would require participating employers to pay interest on overdue employer contribution payments beginning with fiscal year 2012-13. As will be discussed more fully below, the bill would provide a method of funding variable supplements benefits payable by the City's police and uniformed correction variable supplements funds to eligible beneficiaries where such payments are statutorily guaranteed by the City under current law, and the assets of the variable supplements fund are insufficient to make such payments to all eligible beneficiaries in any calendar year. REASONS FOR SUPPORT: The boards of trustees of the New York City Employees' Retirement System, Teachers' Retirement System, Board of Education Retirement System and police Pension Fund have adopted resolutions recommending enactment of the funding provisions set forth in this bill, and the board of trustees of the New York City Fire Department Pension Fund is expected to adopt a similar resolution. In general, the Actuary for the retirement systems has recommended such funding provisions based upon his evaluation of the experience of the retirement systems and their financial situation, and experience studies of the systems prepared by firms of actuarial consultants in 2006 and 2011. Specifically, the Actuary recommends a valuation interest rate of 7% through June 30, 2016 as reasonable and justified based upon (1) the recent actual investment performances of the retirement systems; (2) a study of the long-term performance of the United States capital markets; (3) likely expectations for future investment performance of the assets; and (4) the relationships among economic assumptions used for actuarial valuation purposes. The Actuary intends the recommended 7% valuation rate for each of the systems to be net of investment expenses paid by the retirement systems from their investment earnings. Under current law, the valuation rate is not net of investment expenses because participating employers are required to repay such investment expenses during the second fiscal year after the fiscal year in which retirement system assets were drawn upon. The bill would eliminate that specific repayment requirement. The proposed entry age actuarial cost method of determining employer contributions to the retirement systems has certain advantages over the current frozen initial liability method. Under the current method, the Actuary calculates separately for each retirement system an employer normal contribution each year as of the second June thirtieth preceding the fiscal year in which the normal contribution is payable. That normal contribution calculation provides for the total actuarial present value of future employer contributions to be funded over the remaining working lifetimes of members. Additional unfunded liabilities that may arise each year are not specifically identified and amortized over a pre-determined number of years, but rather are generally included as part of the calculation of the normal contribution. This causes the normal contribution rate, and hence the normal contribution, to fluctuate each year, depending on the investment return on retirement system assets, the addition of newly enacted benefits and certain other factors. Under the proposed entry age actuarial cost method, employer contributions would tend to fluctuate less than under the current method. This is because the entry age normal contributions for each fiscal year would be calculated under the proposed method using relatively constant employer rates of contribution applicable to individual members which are necessary to fund their expected benefits on a level basis over their expected working lifetimes. Additional unfunded accrued liabilities would be specifically identified and amortized over appropriate periods as provided by statute. The bill would cancel any remaining installments of unfunded accrued liability calculated under current law, and would provide for the calculation, as of June 30, 2010, of an initial unfunded accrued liability under the proposed method that would be amortized over a period of 22 fiscal years following its establishment, with the first of 21 annual installments becoming payable in fiscal year 2011-12. The 21 annual installments would be developed using the increasing dollar payment method so that each installment after the first would be increased by 3% over the immediately preceding installment. The Actuary believes it is appropriate to use a slightly longer amortization period for the initial unfunded accrued liability calculated under the proposed method, in light of the significant actuarial losses incurred by the retirement systems over the last 10 years,. including those attributable to poor investment performance. Unfunded accrued liabilities established in subsequent years would be amortized in equal installments over periods which vary according to the basis of such liabilities. Unfunded accrued liabilities attributable to the following causes would be amortized over the following periods: (1) benefit changes would be amortized over the remaining working lifetimes of affected members, unless the amortization period is otherwise established by statute, (2) changes in the valuation rate of interest, actuarial tables and actuarial methods would be amortized over 20 fiscal years and (3) actuarial gains and losses would be amortized over 15 fiscal years. Overall, the proposed entry age actuarial cost method and the proposed amortization of the initial unfunded accrued liabilities develop employer contributions that reasonably follow the objective of intergenerational equity whereby the retirement benefits of plan participants are financed over the time period during which those participants provide services to the citizens and taxpayers they serve. Moreover, the Actuary has stated that the proposed entry age actuarial cost method is used by more public employee retirement systems in the United States than any other funding method. Finally, as noted above, the bill would remedy a problem in the mechanism for funding the City police and uniformed correction variable supplements funds. The police Officer's Variable Supplements Fund (POVSF) and the police Superior Officers' Variable supplements Fund (PSOVSF) provide annual non-pension payments to eligible beneficiaries of those funds which are statutorily guaranteed by the City. As the result of poor investment returns on equity investments of the main police Pension Fund over the past decade, there have been no transfers of assets from the main fund to the variable supplements funds in accordance with the existing statutory mechanism for a number of years. The Actuary has estimated that the POVSF currently has sufficient assets to pay benefits for a few more years. The PSOVSF, however, may no longer have sufficient assets to cover the annual payments to eligible retirees due in December 2012. Absent sufficient funds, the benefits due from the PSOVSF that are not covered by existing PSOVSF assets would require funding directly from the City of New York. This bill would provide for the transfer of assets from the main police Pension Fund to the POVSF and the PSOVSF in any year in which the assets of such variable supplements fund are insufficient to pay variable supplements benefits. This approach is consistent with the financing mechanics currently employed by the Actuary whereby portions of the employer contributions to the main police Pension Fund each year represent amounts that are expected, at some point, to be transferred to the related variable supplements funds. The Correction Officers' Variable Supplements Fund (COVSF) has not made variable supplements payments to eligible beneficiaries in recent years because its assets are insufficient, and such payments are not yet guaranteed by the City. The Actuary has stated that the COVSF may not be obligated to pay benefits until current law requires the City to guarantee such benefits in 2019. The bill, however, in a manner similar to the approach proposed for the Police Pension Fund and its variable supplements funds, would provide for the transfer of assets from NYCERS to the COVSF in any year in which the City guarantees the payment of variable supplements benefits, and the assets of the COVSF are insufficient to pay such benefits. This bill would implement a sound, well-conceived plan for funding the retirement systems through fiscal year 2015-16. Accordingly, the Mayor urges the earliest possible favorable consideration of this proposal by the Legislature. EFFECTIVE DATE: This act shall take effect immediately and shall be deemed to have been in full force and effect on and after July 1, 2011.
2011-S7804 (ACTIVE) - Bill Text download pdf
S T A T E O F N E W Y O R K
________________________________________________________________________
7804
I N S E N A T E
June 19, 2012
___________
Introduced by Sen. GOLDEN -- read twice and ordered printed, and when
printed to be committed to the Committee on Rules
AN ACT to amend the administrative code of 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 establishment of the entry age actuarial cost method of determin-
ing employer contributions to such retirement systems, the making of
contributions to such retirement systems by such public employers and
such other obligors, and the crediting of special interest and addi-
tional interest to members of such retirement systems, and the allow-
ance of interest on the funds of such retirement systems; and to amend
the education law, in relation to employer contributions to the board
of education retirement system of such city
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subparagraph (a) of paragraph 1 of subdivision b of section
13-127 of the administrative code of the city of New York is amended by
adding two new items (i-a) and (i-b) to read as follows:
(I-A) ALL UNFUNDED ACCRUED LIABILITY INSTALLMENTS AS REQUIRED BY
SECTION 13-638.2 OF THIS TITLE OR ANY OTHER PROVISION OF LAW; AND
(I-B) ANY OTHER PAYMENTS TO THE CONTINGENT RESERVE FUND AS REQUIRED BY
APPLICABLE LAW; AND
S 2. Subparagraph (c) of paragraph 1 of subdivision b of section
13-127 of the administrative code of the city of New York is amended by
adding a new item (iv) to read as follows:
(IV) THE CITY AND ALL OTHER RESPONSIBLE OBLIGORS (AS DEFINED IN PARA-
GRAPH TEN OF SUBDIVISION A OF SECTION 13-638.2 OF THIS TITLE) SHALL MAKE
ALL PAYMENTS TO THE RETIREMENT SYSTEM REQUIRED BY APPLICABLE LAW IN
ACCORDANCE WITH THE TIME OF PAYMENT REQUIREMENTS SET FORTH IN SUBDIVI-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD16264-03-2
S. 7804 2
SION C OF SECTION 13-133 OF THIS CHAPTER. ANY RESPONSIBLE OBLIGOR WHICH
DOES NOT MAKE ALL OR ANY PORTION OF SUCH REQUIRED PAYMENTS TO THE
RETIREMENT SYSTEM IN A TIMELY MANNER IN FISCAL YEAR TWO THOUSAND
TWELVE--TWO THOUSAND THIRTEEN, OR IN ANY FISCAL YEAR THEREAFTER, SHALL
BE REQUIRED TO PAY INTEREST TO THE RETIREMENT SYSTEM ON SUCH OVERDUE
AMOUNTS, AS DETERMINED BY THE ACTUARY. THE ACTUARY SHALL DETERMINE, AT
SUCH TIME AS HE OR SHE DEEMS APPROPRIATE, INTEREST PAYMENTS ON SUCH
OVERDUE AMOUNTS USING A RATE OF INTEREST EQUIVALENT TO THE VALUATION
RATE OF INTEREST (AS DEFINED IN PARAGRAPH ELEVEN OF SUBDIVISION A OF
SECTION 13-638.2 OF THIS TITLE). RESPONSIBLE OBLIGORS SHALL MAKE SUCH
INTEREST PAYMENTS ON OVERDUE AMOUNTS TO THE RETIREMENT SYSTEM IN THE
MANNER AND AT SUCH TIME AS THE ACTUARY DEEMS APPROPRIATE.
S 3. Item (i) of subparagraph (a) of paragraph 2 of subdivision b of
section 13-127 of the administrative code of the city of New York, as
amended by chapter 85 of the laws of 2000, is amended to read as
follows:
(i) NOTWITHSTANDING THE SUCCEEDING PROVISIONS OF THIS SUBPARAGRAPH OR
THE PROVISIONS OF SUBPARAGRAPH (A-ONE), (B) OR (C) OF THIS PARAGRAPH,
FOR FISCAL YEAR TWO THOUSAND ELEVEN--TWO THOUSAND TWELVE, AND FOR EACH
FISCAL YEAR THEREAFTER, THE AMOUNT OF THE NORMAL CONTRIBUTION PAYABLE TO
THE CONTINGENT RESERVE FUND SHALL BE DETERMINED PURSUANT TO THE
PROVISIONS OF SUBPARAGRAPH (D) OF THIS PARAGRAPH. Upon the basis of the
latest mortality and other tables herein authorized and regular inter-
est, the actuary shall determine as of June thirtieth, nineteen hundred
eighty and as of each succeeding June thirtieth, the amount of the total
liability for all benefits provided in this title, in articles eleven
and fourteen of the retirement and social security law and in any other
law prescribing benefits payable by the retirement system on account of
all members and beneficiaries, excluding the liability on account of
future increased-take-home-pay contributions, if any, and the liability
for benefits attributable to the annuity savings fund, provided, howev-
er, that in determining such total liability as of June thirtieth, nine-
teen hundred ninety-five and as of each succeeding June thirtieth, the
actuary shall include (A) the liability on account of future increased-
take-home-pay contributions, if any, (B) the liability on account of
future public employer obligations under the provisions of subdivision
twenty of section two hundred forty-three of the military law, to pay in
behalf of members qualifying for such benefit, member contributions with
respect to certain periods of the military service of such members and
(C) the liability for benefits attributable to the annuity savings fund.
S 4. Paragraph 2 of subdivision b of section 13-127 of the administra-
tive code of the city of New York is amended by adding a new subpara-
graph (d) to read as follows:
(D) (I) NOTWITHSTANDING THE PRECEDING SUBPARAGRAPHS OF THIS PARAGRAPH
OR ANY OTHER PROVISION OF LAW TO THE CONTRARY, THE NORMAL CONTRIBUTION
PAYABLE TO THE CONTINGENT RESERVE FUND IN FISCAL YEAR TWO THOUSAND
ELEVEN--TWO THOUSAND TWELVE, AND IN EACH FISCAL YEAR THEREAFTER, SHALL
BE THE ENTRY AGE NORMAL CONTRIBUTION, AS DETERMINED BY THE ACTUARY
PURSUANT TO THIS SUBPARAGRAPH IN A MANNER CONSISTENT WITH THE ENTRY AGE
ACTUARIAL COST METHOD. THE ACTUARY SHALL DETERMINE THE ENTRY AGE NORMAL
CONTRIBUTION FOR EACH SUCH FISCAL YEAR AS OF JUNE THIRTIETH OF THE
SECOND FISCAL YEAR PRECEDING THE FISCAL YEAR IN WHICH SUCH NORMAL
CONTRIBUTION IS PAYABLE, BASED ON THE LATEST MORTALITY AND OTHER TABLES
APPLICABLE AT THE TIME HE OR SHE PERFORMS SUCH CALCULATIONS, AND THE
VALUATION RATE OF INTEREST AS PROVIDED FOR THE RETIREMENT SYSTEM IN
PARAGRAPH TWO OF SUBDIVISION B OF SECTION 13-638.2 OF THIS TITLE.
S. 7804 3
(II) IN CALCULATING THE ENTRY AGE NORMAL CONTRIBUTION PAYABLE IN ANY
SUCH FISCAL YEAR PURSUANT TO THIS SUBPARAGRAPH, THE ACTUARY, IN HIS OR
HER DISCRETION, MAY MAKE CERTAIN ADJUSTMENTS IN THE CALCULATION METHOD-
OLOGY, PROVIDED THAT SUCH ADJUSTMENTS ARE GENERALLY ACCEPTED AS CONSIST-
ENT WITH THE ENTRY AGE ACTUARIAL COST METHOD, AND ARE DESIGNED, IN
GENERAL, TO FUND, ON A LEVEL BASIS OVER THE WORKING LIFETIMES OF MEMBERS
FROM THEIR AGES AT ENTRY, THE ACTUARIAL PRESENT VALUE OF BENEFITS TO
WHICH SUCH MEMBERS ARE EXPECTED TO BECOME ENTITLED, AS DETERMINED BY THE
ACTUARY. SUCH GENERALLY ACCEPTED ADJUSTMENTS IN THE CALCULATION METHOD-
OLOGY, IN THE DISCRETION OF THE ACTUARY, MAY INCLUDE, BUT ARE NOT LIMIT-
ED TO, THE CALCULATION OF THE ENTRY AGE NORMAL CONTRIBUTION (A) ON AN
INDIVIDUAL MEMBER BASIS BY CALCULATING THE AMOUNT OF THE ENTRY AGE
NORMAL CONTRIBUTION ATTRIBUTABLE TO EACH INDIVIDUAL MEMBER, AND THEN
ADDING TOGETHER SUCH INDIVIDUAL MEMBER AMOUNTS, (B) ON AN AGGREGATE
BASIS FOR ALL MEMBERS OR (C) ON ANY COMBINATION OF AN INDIVIDUAL MEMBER
BASIS AND AN AGGREGATE BASIS WHICH IS CONSISTENT WITH THE ENTRY AGE
ACTUARIAL COST METHOD, AND THE PRECEDING PROVISIONS OF THIS ITEM.
(III) FOR EACH SUCH FISCAL YEAR, THE ACTUARY, IN HIS OR HER
DISCRETION, SHALL DETERMINE, IN ACCORDANCE WITH THE PROVISIONS OF ITEM
(II) OF THIS SUBPARAGRAPH, THE METHODOLOGY FOR CALCULATING THE ENTRY AGE
NORMAL CONTRIBUTION PAYABLE FOR THAT PARTICULAR FISCAL YEAR.
(IV) THE METHODOLOGY DETERMINED BY THE ACTUARY IN ACCORDANCE WITH ITEM
(III) OF THIS SUBPARAGRAPH MAY PROVIDE FOR THE ACTUARY TO CALCULATE THE
ENTRY AGE NORMAL CONTRIBUTION ON AN INDIVIDUAL MEMBER BASIS BY (A)
MULTIPLYING THE ENTRY AGE NORMAL CONTRIBUTION RATE FOR EACH INDIVIDUAL
MEMBER, AS DETERMINED BY THE ACTUARY, BY THE SALARY EXPECTED TO BE PAID
TO THAT MEMBER DURING THE FISCAL YEAR IN WHICH SUCH NORMAL CONTRIBUTION
IS PAYABLE, AND (B) CALCULATING THE SUM OF THE INDIVIDUAL ENTRY AGE
NORMAL CONTRIBUTIONS ATTRIBUTABLE TO ALL SUCH MEMBERS. THE ACTUARY, IN
HIS OR HER DISCRETION, MAY MAKE ANY ADJUSTMENTS TO SUCH METHODOLOGY FOR
DETERMINING THE ENTRY AGE NORMAL CONTRIBUTION ON AN INDIVIDUAL BASIS
WHICH HE OR SHE DEEMS APPROPRIATE, AND WHICH ARE CONSISTENT WITH THE
PROVISIONS OF ITEM (II) OF THIS SUBPARAGRAPH.
(V) IN THE ALTERNATIVE, THE METHODOLOGY DETERMINED BY THE ACTUARY IN
ACCORDANCE WITH ITEM (III) OF THIS SUBPARAGRAPH MAY PROVIDE FOR THE
ACTUARY TO CALCULATE THE ENTRY AGE NORMAL CONTRIBUTION ON AN AGGREGATE
BASIS BY MULTIPLYING THE ENTRY AGE NORMAL CONTRIBUTION RATE FOR ALL
MEMBERS IN THE AGGREGATE, AS DETERMINED BY THE ACTUARY, BY THE AGGREGATE
AMOUNT OF THE SALARIES EXPECTED TO BE PAID TO ALL MEMBERS DURING THE
FISCAL YEAR IN WHICH THE NORMAL CONTRIBUTION IS PAYABLE. THE ACTUARY, IN
HIS OR HER DISCRETION, MAY MAKE ANY ADJUSTMENTS TO SUCH METHODOLOGY FOR
DETERMINING THE ENTRY AGE NORMAL CONTRIBUTION ON AN AGGREGATE BASIS
WHICH HE OR SHE DEEMS APPROPRIATE, AND WHICH ARE CONSISTENT WITH THE
PROVISIONS OF ITEM (II) OF THIS SUBPARAGRAPH.
(VI) IN THE ALTERNATIVE, THE METHODOLOGY DETERMINED BY THE ACTUARY IN
ACCORDANCE WITH ITEM (III) OF THIS SUBPARAGRAPH MAY PROVIDE FOR THE
CALCULATION OF THE ENTRY AGE NORMAL CONTRIBUTION ON ANY OTHER BASIS
WHICH THE ACTUARY DEEMS APPROPRIATE, AND WHICH IS CONSISTENT WITH THE
ENTRY AGE ACTUARIAL COST METHOD AND THE PROVISIONS OF ITEM (II) OF THIS
SUBPARAGRAPH.
(VII) (A) WHERE THE METHODOLOGY DETERMINED BY THE ACTUARY IN ACCORD-
ANCE WITH ITEM (III) OF THIS SUBPARAGRAPH REQUIRES THE DETERMINATION OF
AN ENTRY AGE NORMAL CONTRIBUTION RATE FOR EACH INDIVIDUAL MEMBER IN
ORDER TO CALCULATE THE ENTRY AGE NORMAL CONTRIBUTION FOR EACH INDIVIDUAL
MEMBER, THE ACTUARY SHALL DETERMINE SUCH RATE FOR EACH SUCH MEMBER IN
ACCORDANCE WITH THE ENTRY AGE ACTUARIAL COST METHOD, AND SUCH RATE, AS
S. 7804 4
DETERMINED BY THE ACTUARY FOR EACH SUCH MEMBER, SHALL BE CONSISTENT WITH
A METHOD DESIGNED, IN GENERAL, TO FUND, ON A LEVEL BASIS OVER THE WORK-
ING LIFETIME OF THAT PARTICULAR MEMBER FROM HIS OR HER AGE AT ENTRY, THE
ACTUARIAL PRESENT VALUE OF BENEFITS TO WHICH SUCH MEMBER IS EXPECTED TO
BECOME ENTITLED, AS DETERMINED BY THE ACTUARY.
(B) WHERE THE METHODOLOGY DETERMINED BY THE ACTUARY IN ACCORDANCE WITH
ITEM (III) OF THIS SUBPARAGRAPH REQUIRES THE DETERMINATION OF AN ENTRY
AGE NORMAL CONTRIBUTION RATE FOR ALL MEMBERS IN THE AGGREGATE IN ORDER
TO CALCULATE THE ENTRY AGE NORMAL CONTRIBUTION FOR ALL MEMBERS IN THE
AGGREGATE, THE ACTUARY SHALL DETERMINE SUCH RATE IN ACCORDANCE WITH THE
ENTRY AGE ACTUARIAL COST METHOD, AND SUCH RATE, AS DETERMINED BY THE
ACTUARY, SHALL BE CONSISTENT WITH A METHOD DESIGNED, IN GENERAL, TO
FUND, ON A LEVEL BASIS OVER THE WORKING LIFETIMES OF MEMBERS FROM THEIR
AGES AT ENTRY, THE ACTUARIAL PRESENT VALUE OF BENEFITS TO WHICH SUCH
MEMBERS ARE EXPECTED TO BECOME ENTITLED, AS DETERMINED BY THE ACTUARY.
S 5. Paragraph 1 of subdivision c of section 13-133 of the administra-
tive code of the city of New York is amended by adding a new subpara-
graph (G) to read as follows:
(G) WHERE A RESPONSIBLE OBLIGOR (AS DEFINED IN PARAGRAPH TEN OF SUBDI-
VISION A OF SECTION 13-638.2 OF THIS TITLE) IS REQUIRED TO MAKE PAYMENTS
TO THE RETIREMENT SYSTEM PURSUANT TO APPLICABLE PROVISIONS OF LAW IN
FISCAL YEAR TWO THOUSAND TWELVE--TWO THOUSAND THIRTEEN, AND IN ANY
FISCAL YEAR THEREAFTER, AND THE PROVISIONS OF THIS SUBDIVISION OR THE
PROVISIONS OF ANY OTHER APPLICABLE LAW DO NOT OTHERWISE SPECIFICALLY
REQUIRE SUCH RESPONSIBLE OBLIGOR TO MAKE SUCH PAYMENTS BY A PARTICULAR
DATE OR DATES DURING SUCH FISCAL YEAR, SUCH RESPONSIBLE OBLIGOR SHALL
MAKE SUCH PAYMENTS EITHER (I) IN TOTAL ON OR BEFORE JANUARY FIRST OF
SUCH FISCAL YEAR, OR (II) IN TWELVE EQUAL MONTHLY INSTALLMENTS, AS
DETERMINED BY THE ACTUARY, WITH EACH MONTHLY INSTALLMENT TO BE PAID ON
OR BEFORE THE LAST DAY OF EACH MONTH.
S 6. Subparagraph 3 of paragraph (e) of subdivision 4 of section
13-194 of the administrative code of the city of New York, as amended by
chapter 255 of the laws of 2000, is amended to read as follows:
(3) Except as otherwise provided in SUBDIVISION ELEVEN OF THIS SECTION
AND IN sections 13-195 and 13-195.1 of this chapter, nothing contained
in this section shall create or impose any obligation on the part of the
retirement system, or the funds or monies thereof, or authorize such
funds or monies to be appropriated or used for any payment under this
section or for any purpose thereof.
S 7. Section 13-194 of the administrative code of the city of New York
is amended by adding a new subdivision 11 to read as follows:
11. IN THE EVENT THAT, FOR ANY CALENDAR YEAR COVERED BY A PAYMENT
GUARANTEE, THE ASSETS OF THE VARIABLE SUPPLEMENTS FUND ARE NOT SUFFI-
CIENT TO PAY BENEFITS UNDER THIS SECTION FOR SUCH YEAR, AN AMOUNT SUFFI-
CIENT TO PAY SUCH BENEFITS SHALL BE APPROPRIATED FROM THE CONTINGENT
RESERVE FUND OF THE RETIREMENT SYSTEM AND TRANSFERRED TO THE CORRECTION
OFFICERS' VARIABLE SUPPLEMENTS FUND.
S 8. Subparagraph (a) of paragraph 1 of subdivision b of section
13-228 of the administrative code of the city of New York is amended by
adding two new items (i-a) and (i-b) to read as follows:
(I-A) ALL UNFUNDED ACCRUED LIABILITY INSTALLMENTS AS REQUIRED BY
SECTION 13-638.2 OF THIS TITLE OR ANY OTHER PROVISION OF LAW; AND
(I-B) ANY OTHER PAYMENTS TO THE CONTINGENT RESERVE FUND AS REQUIRED BY
APPLICABLE LAW; AND
S. 7804 5
S 9. Subparagraph (c) of paragraph 1 of subdivision b of section
13-228 of the administrative code of the city of New York is amended by
adding a new item (iv) to read as follows:
(IV) THE CITY SHALL MAKE ALL PAYMENTS TO THE PENSION FUND REQUIRED BY
APPLICABLE LAW IN ACCORDANCE WITH THE TIME OF PAYMENT REQUIREMENTS SET
FORTH IN SUBDIVISION C OF SECTION 13-231 OF THIS SUBCHAPTER. COMMENCING
WITH PAYMENTS DUE IN FISCAL YEAR TWO THOUSAND TWELVE--TWO THOUSAND THIR-
TEEN, IN ANY FISCAL YEAR IN WHICH THE CITY DOES NOT MAKE ALL OR ANY
PORTION OF SUCH REQUIRED PAYMENTS TO THE PENSION FUND IN A TIMELY
MANNER, THE CITY SHALL BE REQUIRED TO PAY INTEREST TO THE PENSION FUND
ON SUCH OVERDUE AMOUNTS, AS DETERMINED BY THE ACTUARY. THE ACTUARY SHALL
DETERMINE, AT SUCH TIME AS HE OR SHE DEEMS APPROPRIATE, INTEREST
PAYMENTS ON SUCH OVERDUE AMOUNTS USING A RATE OF INTEREST EQUIVALENT TO
THE VALUATION RATE OF INTEREST (AS DEFINED IN PARAGRAPH ELEVEN OF SUBDI-
VISION A OF SECTION 13-638.2 OF THIS TITLE). THE CITY SHALL MAKE SUCH
INTEREST PAYMENTS ON OVERDUE AMOUNTS TO THE PENSION FUND IN THE MANNER
AND AT SUCH TIME AS THE ACTUARY DEEMS APPROPRIATE.
S 10. Item (i) of subparagraph (a) of paragraph 2 of subdivision b of
section 13-228 of the administrative code of the city of New York, as
amended by chapter 598 of the laws of 1996, is amended to read as
follows:
(i) NOTWITHSTANDING THE SUCCEEDING PROVISIONS OF THIS SUBPARAGRAPH OR
THE PROVISIONS OF SUBPARAGRAPH (A-ONE), (B), (C) OR (D) OF THIS PARA-
GRAPH, FOR FISCAL YEAR TWO THOUSAND ELEVEN--TWO THOUSAND TWELVE, AND FOR
EACH FISCAL YEAR THEREAFTER, THE AMOUNT OF THE NORMAL CONTRIBUTION PAYA-
BLE TO THE CONTINGENT RESERVE FUND SHALL BE DETERMINED PURSUANT TO THE
PROVISIONS OF SUBPARAGRAPH (E) OF THIS PARAGRAPH. Upon the basis of the
latest mortality and other tables herein authorized and regular inter-
est, the actuary shall determine, as of June thirtieth, nineteen hundred
eighty and as of each succeeding June thirtieth, the amount of the total
liability for all benefits provided in this subchapter, in article elev-
en of the retirement and social security law, article fourteen of such
law (if and when applicable) and in any other law prescribing benefits
payable by the pension fund on account of all members and beneficiaries,
excluding the liability on account of future increased-take-home-pay
contributions, if any, and the liability for benefits attributable to
the annuity savings fund, provided, however, that in determining such
total liability for all benefits as of June thirtieth, nineteen hundred
ninety-five and as of each succeeding June thirtieth, the actuary shall
include (A) the liability on account of future increased-take-home-pay
contributions, if any, (B) the liability on account of future public
employer obligations under the provisions of subdivision twenty of
section two hundred forty-three of the military law, to pay in behalf of
members qualifying for such benefit, member contributions with respect
to certain periods of the military service of such members and (C) the
liability for benefits attributable to the annuity savings fund.
S 11. Paragraph 2 of subdivision b of section 13-228 of the adminis-
trative code of the city of New York is amended by adding a new subpara-
graph (e) to read as follows:
(E) (I) NOTWITHSTANDING THE PRECEDING SUBPARAGRAPHS OF THIS PARAGRAPH
OR ANY OTHER PROVISION OF LAW TO THE CONTRARY, THE NORMAL CONTRIBUTION
PAYABLE TO THE CONTINGENT RESERVE FUND IN FISCAL YEAR TWO THOUSAND
ELEVEN--TWO THOUSAND TWELVE, AND IN EACH FISCAL YEAR THEREAFTER, SHALL
BE THE ENTRY AGE NORMAL CONTRIBUTION, AS DETERMINED BY THE ACTUARY
PURSUANT TO THIS SUBPARAGRAPH IN A MANNER CONSISTENT WITH THE ENTRY AGE
ACTUARIAL COST METHOD. THE ACTUARY SHALL DETERMINE THE ENTRY AGE NORMAL
S. 7804 6
CONTRIBUTION FOR EACH SUCH FISCAL YEAR AS OF JUNE THIRTIETH OF THE
SECOND FISCAL YEAR PRECEDING THE FISCAL YEAR IN WHICH SUCH NORMAL
CONTRIBUTION IS PAYABLE, BASED ON THE LATEST MORTALITY AND OTHER TABLES
APPLICABLE AT THE TIME HE OR SHE PERFORMS SUCH CALCULATIONS, AND THE
VALUATION RATE OF INTEREST AS PROVIDED FOR THE PENSION FUND IN PARAGRAPH
TWO OF SUBDIVISION B OF SECTION 13-638.2 OF THIS TITLE.
(II) IN CALCULATING THE ENTRY AGE NORMAL CONTRIBUTION PAYABLE IN ANY
SUCH FISCAL YEAR PURSUANT TO THIS SUBPARAGRAPH, THE ACTUARY, IN HIS OR
HER DISCRETION, MAY MAKE CERTAIN ADJUSTMENTS IN THE CALCULATION METHOD-
OLOGY, PROVIDED THAT SUCH ADJUSTMENTS ARE GENERALLY ACCEPTED AS CONSIST-
ENT WITH THE ENTRY AGE ACTUARIAL COST METHOD, AND ARE DESIGNED, IN
GENERAL, TO FUND, ON A LEVEL BASIS OVER THE WORKING LIFETIMES OF MEMBERS
FROM THEIR AGES AT ENTRY, THE ACTUARIAL PRESENT VALUE OF BENEFITS TO
WHICH SUCH MEMBERS ARE EXPECTED TO BECOME ENTITLED, AS DETERMINED BY THE
ACTUARY. SUCH GENERALLY ACCEPTED ADJUSTMENTS IN THE CALCULATION METHOD-
OLOGY, IN THE DISCRETION OF THE ACTUARY, MAY INCLUDE, BUT ARE NOT LIMIT-
ED TO, THE CALCULATION OF THE ENTRY AGE NORMAL CONTRIBUTION (A) ON AN
INDIVIDUAL MEMBER BASIS BY CALCULATING THE AMOUNT OF THE ENTRY AGE
NORMAL CONTRIBUTION ATTRIBUTABLE TO EACH INDIVIDUAL MEMBER, AND THEN
ADDING TOGETHER SUCH INDIVIDUAL MEMBER AMOUNTS, (B) ON AN AGGREGATE
BASIS FOR ALL MEMBERS OR (C) ON ANY COMBINATION OF AN INDIVIDUAL MEMBER
BASIS AND AN AGGREGATE BASIS WHICH IS CONSISTENT WITH THE ENTRY AGE
ACTUARIAL COST METHOD, AND THE PRECEDING PROVISIONS OF THIS ITEM.
(III) FOR EACH SUCH FISCAL YEAR, THE ACTUARY, IN HIS OR HER
DISCRETION, SHALL DETERMINE, IN ACCORDANCE WITH THE PROVISIONS OF ITEM
(II) OF THIS SUBPARAGRAPH, THE METHODOLOGY FOR CALCULATING THE ENTRY AGE
NORMAL CONTRIBUTION PAYABLE FOR THAT PARTICULAR FISCAL YEAR.
(IV) THE METHODOLOGY DETERMINED BY THE ACTUARY IN ACCORDANCE WITH ITEM
(III) OF THIS SUBPARAGRAPH MAY PROVIDE FOR THE ACTUARY TO CALCULATE THE
ENTRY AGE NORMAL CONTRIBUTION ON AN INDIVIDUAL MEMBER BASIS BY (A)
MULTIPLYING THE ENTRY AGE NORMAL CONTRIBUTION RATE FOR EACH INDIVIDUAL
MEMBER, AS DETERMINED BY THE ACTUARY, BY THE SALARY EXPECTED TO BE PAID
TO THAT MEMBER DURING THE FISCAL YEAR IN WHICH SUCH NORMAL CONTRIBUTION
IS PAYABLE, AND (B) CALCULATING THE SUM OF THE INDIVIDUAL ENTRY AGE
NORMAL CONTRIBUTIONS ATTRIBUTABLE TO ALL SUCH MEMBERS. THE ACTUARY, IN
HIS OR HER DISCRETION, MAY MAKE ANY ADJUSTMENTS TO SUCH METHODOLOGY FOR
DETERMINING THE ENTRY AGE NORMAL CONTRIBUTION ON AN INDIVIDUAL BASIS
WHICH HE OR SHE DEEMS APPROPRIATE, AND WHICH ARE CONSISTENT WITH THE
PROVISIONS OF ITEM (II) OF THIS SUBPARAGRAPH.
(V) IN THE ALTERNATIVE, THE METHODOLOGY DETERMINED BY THE ACTUARY IN
ACCORDANCE WITH ITEM (III) OF THIS SUBPARAGRAPH MAY PROVIDE FOR THE
ACTUARY TO CALCULATE THE ENTRY AGE NORMAL CONTRIBUTION ON AN AGGREGATE
BASIS BY MULTIPLYING THE ENTRY AGE NORMAL CONTRIBUTION RATE FOR ALL
MEMBERS IN THE AGGREGATE, AS DETERMINED BY THE ACTUARY, BY THE AGGREGATE
AMOUNT OF THE SALARIES EXPECTED TO BE PAID TO ALL MEMBERS DURING THE
FISCAL YEAR IN WHICH THE NORMAL CONTRIBUTION IS PAYABLE. THE ACTUARY, IN
HIS OR HER DISCRETION, MAY MAKE ANY ADJUSTMENTS TO SUCH METHODOLOGY FOR
DETERMINING THE ENTRY AGE NORMAL CONTRIBUTION ON AN AGGREGATE BASIS
WHICH HE OR SHE DEEMS APPROPRIATE, AND WHICH ARE CONSISTENT WITH THE
PROVISIONS OF ITEM (II) OF THIS SUBPARAGRAPH.
(VI) IN THE ALTERNATIVE, THE METHODOLOGY DETERMINED BY THE ACTUARY IN
ACCORDANCE WITH ITEM (III) OF THIS SUBPARAGRAPH MAY PROVIDE FOR THE
CALCULATION OF THE ENTRY AGE NORMAL CONTRIBUTION ON ANY OTHER BASIS
WHICH THE ACTUARY DEEMS APPROPRIATE, AND WHICH IS CONSISTENT WITH THE
ENTRY AGE ACTUARIAL COST METHOD AND THE PROVISIONS OF ITEM (II) OF THIS
SUBPARAGRAPH.
S. 7804 7
(VII) (A) WHERE THE METHODOLOGY DETERMINED BY THE ACTUARY IN ACCORD-
ANCE WITH ITEM (III) OF THIS SUBPARAGRAPH REQUIRES THE DETERMINATION OF
AN ENTRY AGE NORMAL CONTRIBUTION RATE FOR EACH INDIVIDUAL MEMBER IN
ORDER TO CALCULATE THE ENTRY AGE NORMAL CONTRIBUTION FOR EACH INDIVIDUAL
MEMBER, THE ACTUARY SHALL DETERMINE SUCH RATE FOR EACH SUCH MEMBER IN
ACCORDANCE WITH THE ENTRY AGE ACTUARIAL COST METHOD, AND SUCH RATE, AS
DETERMINED BY THE ACTUARY FOR EACH SUCH MEMBER, SHALL BE CONSISTENT WITH
A METHOD DESIGNED, IN GENERAL, TO FUND, ON A LEVEL BASIS OVER THE WORK-
ING LIFETIME OF THAT PARTICULAR MEMBER FROM HIS OR HER AGE AT ENTRY, THE
ACTUARIAL PRESENT VALUE OF BENEFITS TO WHICH SUCH MEMBER IS EXPECTED TO
BECOME ENTITLED, AS DETERMINED BY THE ACTUARY.
(B) WHERE THE METHODOLOGY DETERMINED BY THE ACTUARY IN ACCORDANCE WITH
ITEM (III) OF THIS SUBPARAGRAPH REQUIRES THE DETERMINATION OF AN ENTRY
AGE NORMAL CONTRIBUTION RATE FOR ALL MEMBERS IN THE AGGREGATE IN ORDER
TO CALCULATE THE ENTRY AGE NORMAL CONTRIBUTION FOR ALL MEMBERS IN THE
AGGREGATE, THE ACTUARY SHALL DETERMINE SUCH RATE IN ACCORDANCE WITH THE
ENTRY AGE ACTUARIAL COST METHOD, AND SUCH RATE, AS DETERMINED BY THE
ACTUARY, SHALL BE CONSISTENT WITH A METHOD DESIGNED, IN GENERAL, TO
FUND, ON A LEVEL BASIS OVER THE WORKING LIFETIMES OF MEMBERS FROM THEIR
AGES AT ENTRY, THE ACTUARIAL PRESENT VALUE OF BENEFITS TO WHICH SUCH
MEMBERS ARE EXPECTED TO BECOME ENTITLED, AS DETERMINED BY THE ACTUARY.
S 12. Paragraph 3 of subdivision b of section 13-271 of the adminis-
trative code of the city of New York, as amended by chapter 247 of the
laws of 1988, is amended to read as follows:
(3) Except as otherwise provided in SUBDIVISION F OF THIS SECTION AND
IN sections 13-232 and 13-232.1 of this chapter, nothing contained in
this subchapter shall create or impose any obligation on the part of
pension fund, subchapter one or pension fund, subchapter two or the
funds or monies thereof, or authorize such funds or monies to be appro-
priated or used for any payment under this subchapter or for any purpose
thereof.
S 13. Section 13-271 of the administrative code of the city of New
York is amended by adding a new subdivision f to read as follows:
F. IN THE EVENT THAT THE ASSETS OF THE VARIABLE SUPPLEMENTS FUND ARE
NOT SUFFICIENT TO PAY BENEFITS UNDER THIS SECTION FOR ANY CALENDAR YEAR,
AN AMOUNT SUFFICIENT TO PAY SUCH BENEFITS SHALL BE APPROPRIATED FROM THE
CONTINGENT RESERVE FUND OF PENSION FUND, SUBCHAPTER TWO AND TRANSFERRED
TO THE POLICE OFFICER'S VARIABLE SUPPLEMENTS FUND.
S 14. Paragraph 3 of subdivision b of section 13-281 of the adminis-
trative code of the city of New York, as amended by chapter 479 of the
laws of 1993, is amended to read as follows:
(3) Except as otherwise provided in SUBDIVISION F OF THIS SECTION AND
IN sections 13-232, 13-232.2 and 13-232.3 of this chapter, nothing
contained in this subchapter shall create or impose any obligation on
the part of pension fund, subchapter one or pension fund, subchapter two
or the funds or monies thereof, or authorize such funds or monies to be
appropriated or used for any payment under this subchapter or for any
purpose thereof.
S 15. Section 13-281 of the administrative code of the city of New
York is amended by adding a new subdivision f to read as follows:
F. IN THE EVENT THAT THE ASSETS OF THE VARIABLE SUPPLEMENTS FUND ARE
NOT SUFFICIENT TO PAY BENEFITS UNDER THIS SECTION FOR ANY CALENDAR YEAR,
AN AMOUNT SUFFICIENT TO PAY SUCH BENEFITS SHALL BE APPROPRIATED FROM THE
CONTINGENT RESERVE FUND OF PENSION FUND, SUBCHAPTER TWO AND TRANSFERRED
TO THE POLICE SUPERIOR OFFICERS' VARIABLE SUPPLEMENTS FUND.
S. 7804 8
S 16. Subparagraph (a) of paragraph 1 of subdivision b of section
13-331 of the administrative code of the city of New York is amended by
adding two new items (i-a) and (i-b) to read as follows:
(I-A) ALL UNFUNDED ACCRUED LIABILITY INSTALLMENTS AS REQUIRED BY
SECTION 13-638.2 OF THIS TITLE OR ANY OTHER PROVISION OF LAW; AND
(I-B) ANY OTHER PAYMENTS TO THE CONTINGENT RESERVE FUND AS REQUIRED BY
APPLICABLE LAW; AND
S 17. Subparagraph (c) of paragraph 1 of subdivision b of section
13-331 of the administrative code of the city of New York is amended by
adding a new item (iv) to read as follows:
(IV) THE CITY SHALL MAKE ALL PAYMENTS TO THE PENSION FUND REQUIRED BY
APPLICABLE LAW IN ACCORDANCE WITH THE TIME OF PAYMENT REQUIREMENTS SET
FORTH IN SUBDIVISION C OF SECTION 13-334 OF THIS SUBCHAPTER. COMMENCING
WITH PAYMENTS DUE IN FISCAL YEAR TWO THOUSAND TWELVE--TWO THOUSAND THIR-
TEEN, IN ANY FISCAL YEAR IN WHICH THE CITY DOES NOT MAKE ALL OR ANY
PORTION OF SUCH REQUIRED PAYMENTS TO THE PENSION FUND IN A TIMELY
MANNER, THE CITY SHALL BE REQUIRED TO PAY INTEREST TO THE PENSION FUND
ON SUCH OVERDUE AMOUNTS, AS DETERMINED BY THE ACTUARY. THE ACTUARY SHALL
DETERMINE, AT SUCH TIME AS HE OR SHE DEEMS APPROPRIATE, INTEREST
PAYMENTS ON SUCH OVERDUE AMOUNTS USING A RATE OF INTEREST EQUIVALENT TO
THE VALUATION RATE OF INTEREST (AS DEFINED IN PARAGRAPH ELEVEN OF SUBDI-
VISION A OF SECTION 13-638.2 OF THIS TITLE). THE CITY SHALL MAKE SUCH
INTEREST PAYMENTS ON OVERDUE AMOUNTS TO THE PENSION FUND IN THE MANNER
AND AT SUCH TIME AS THE ACTUARY DEEMS APPROPRIATE.
S 18. Item (i) of subparagraph (a) of paragraph 2 of subdivision b of
section 13-331 of the administrative code of the city of New York, as
amended by chapter 249 of the laws of 1996, is amended to read as
follows:
(i) NOTWITHSTANDING THE SUCCEEDING PROVISIONS OF THIS SUBPARAGRAPH OR
THE PROVISIONS OF SUBPARAGRAPH (A-ONE), (B), (C) OR (D) OF THIS PARA-
GRAPH, FOR FISCAL YEAR TWO THOUSAND ELEVEN--TWO THOUSAND TWELVE, AND FOR
EACH FISCAL YEAR THEREAFTER, THE AMOUNT OF THE NORMAL CONTRIBUTION PAYA-
BLE TO THE CONTINGENT RESERVE FUND SHALL BE DETERMINED PURSUANT TO THE
PROVISIONS OF SUBPARAGRAPH (E) OF THIS PARAGRAPH. Upon the basis of the
latest mortality and other tables herein authorized and regular inter-
est, the actuary shall determine, as of June thirtieth, nineteen hundred
eighty and as of each succeeding June thirtieth, the amount of the total
liability for all benefits provided in this subchapter, in article elev-
en of the retirement and social security law and in any other law
prescribing benefits payable by the pension fund, on account of all
members and beneficiaries, excluding the liability on account of future
increased-take-home-pay contributions, if any, and the liability for
benefits attributable to the annuity savings fund, provided, however,
that in determining such total liability for all benefits as of June
thirtieth, nineteen hundred ninety-five and as of each succeeding June
thirtieth, the actuary shall include (A) the liability on account of
future increased-take-home-pay contributions, if any, (B) the liability
on account of future public employer obligations under the provisions of
subdivision twenty of section two hundred forty-three of the military
law, to pay in behalf of members qualifying for such benefit, member
contributions with respect to certain periods of the military service of
such members and (C) the liability for benefits attributable to the
annuity savings fund.
S 19. Paragraph 2 of subdivision b of section 13-331 of the adminis-
trative code of the city of New York is amended by adding a new subpara-
graph (e) to read as follows:
S. 7804 9
(E) (I) NOTWITHSTANDING THE PRECEDING SUBPARAGRAPHS OF THIS PARAGRAPH
OR ANY OTHER PROVISION OF LAW TO THE CONTRARY, THE NORMAL CONTRIBUTION
PAYABLE TO THE CONTINGENT RESERVE FUND IN FISCAL YEAR TWO THOUSAND
ELEVEN--TWO THOUSAND TWELVE, AND IN EACH FISCAL YEAR THEREAFTER, SHALL
BE THE ENTRY AGE NORMAL CONTRIBUTION, AS DETERMINED BY THE ACTUARY
PURSUANT TO THIS SUBPARAGRAPH IN A MANNER CONSISTENT WITH THE ENTRY AGE
ACTUARIAL COST METHOD. THE ACTUARY SHALL DETERMINE THE ENTRY AGE NORMAL
CONTRIBUTION FOR EACH SUCH FISCAL YEAR AS OF JUNE THIRTIETH OF THE
SECOND FISCAL YEAR PRECEDING THE FISCAL YEAR IN WHICH SUCH NORMAL
CONTRIBUTION IS PAYABLE, BASED ON THE LATEST MORTALITY AND OTHER TABLES
APPLICABLE AT THE TIME HE OR SHE PERFORMS SUCH CALCULATIONS, AND THE
VALUATION RATE OF INTEREST AS PROVIDED FOR THE PENSION FUND IN PARAGRAPH
TWO OF SUBDIVISION B OF SECTION 13-638.2 OF THIS TITLE.
(II) IN CALCULATING THE ENTRY AGE NORMAL CONTRIBUTION PAYABLE IN ANY
SUCH FISCAL YEAR PURSUANT TO THIS SUBPARAGRAPH, THE ACTUARY, IN HIS OR
HER DISCRETION, MAY MAKE CERTAIN ADJUSTMENTS IN THE CALCULATION METHOD-
OLOGY, PROVIDED THAT SUCH ADJUSTMENTS ARE GENERALLY ACCEPTED AS CONSIST-
ENT WITH THE ENTRY AGE ACTUARIAL COST METHOD, AND ARE DESIGNED, IN
GENERAL, TO FUND, ON A LEVEL BASIS OVER THE WORKING LIFETIMES OF MEMBERS
FROM THEIR AGES AT ENTRY, THE ACTUARIAL PRESENT VALUE OF BENEFITS TO
WHICH SUCH MEMBERS ARE EXPECTED TO BECOME ENTITLED, AS DETERMINED BY THE
ACTUARY. SUCH GENERALLY ACCEPTED ADJUSTMENTS IN THE CALCULATION METHOD-
OLOGY, IN THE DISCRETION OF THE ACTUARY, MAY INCLUDE, BUT ARE NOT LIMIT-
ED TO, THE CALCULATION OF THE ENTRY AGE NORMAL CONTRIBUTION (A) ON AN
INDIVIDUAL MEMBER BASIS BY CALCULATING THE AMOUNT OF THE ENTRY AGE
NORMAL CONTRIBUTION ATTRIBUTABLE TO EACH INDIVIDUAL MEMBER, AND THEN
ADDING TOGETHER SUCH INDIVIDUAL MEMBER AMOUNTS, (B) ON AN AGGREGATE
BASIS FOR ALL MEMBERS OR (C) ON ANY COMBINATION OF AN INDIVIDUAL MEMBER
BASIS AND AN AGGREGATE BASIS WHICH IS CONSISTENT WITH THE ENTRY AGE
ACTUARIAL COST METHOD, AND THE PRECEDING PROVISIONS OF THIS ITEM.
(III) FOR EACH SUCH FISCAL YEAR, THE ACTUARY, IN HIS OR HER
DISCRETION, SHALL DETERMINE, IN ACCORDANCE WITH THE PROVISIONS OF ITEM
(II) OF THIS SUBPARAGRAPH, THE METHODOLOGY FOR CALCULATING THE ENTRY AGE
NORMAL CONTRIBUTION PAYABLE FOR THAT PARTICULAR FISCAL YEAR.
(IV) THE METHODOLOGY DETERMINED BY THE ACTUARY IN ACCORDANCE WITH ITEM
(III) OF THIS SUBPARAGRAPH MAY PROVIDE FOR THE ACTUARY TO CALCULATE THE
ENTRY AGE NORMAL CONTRIBUTION ON AN INDIVIDUAL MEMBER BASIS BY (A)
MULTIPLYING THE ENTRY AGE NORMAL CONTRIBUTION RATE FOR EACH INDIVIDUAL
MEMBER, AS DETERMINED BY THE ACTUARY, BY THE SALARY EXPECTED TO BE PAID
TO THAT MEMBER DURING THE FISCAL YEAR IN WHICH SUCH NORMAL CONTRIBUTION
IS PAYABLE, AND (B) CALCULATING THE SUM OF THE INDIVIDUAL ENTRY AGE
NORMAL CONTRIBUTIONS ATTRIBUTABLE TO ALL SUCH MEMBERS. THE ACTUARY, IN
HIS OR HER DISCRETION, MAY MAKE ANY ADJUSTMENTS TO SUCH METHODOLOGY FOR
DETERMINING THE ENTRY AGE NORMAL CONTRIBUTION ON AN INDIVIDUAL BASIS
WHICH HE OR SHE DEEMS APPROPRIATE, AND WHICH ARE CONSISTENT WITH THE
PROVISIONS OF ITEM (II) OF THIS SUBPARAGRAPH.
(V) IN THE ALTERNATIVE, THE METHODOLOGY DETERMINED BY THE ACTUARY IN
ACCORDANCE WITH ITEM (III) OF THIS SUBPARAGRAPH MAY PROVIDE FOR THE
ACTUARY TO CALCULATE THE ENTRY AGE NORMAL CONTRIBUTION ON AN AGGREGATE
BASIS BY MULTIPLYING THE ENTRY AGE NORMAL CONTRIBUTION RATE FOR ALL
MEMBERS IN THE AGGREGATE, AS DETERMINED BY THE ACTUARY, BY THE AGGREGATE
AMOUNT OF THE SALARIES EXPECTED TO BE PAID TO ALL MEMBERS DURING THE
FISCAL YEAR IN WHICH THE NORMAL CONTRIBUTION IS PAYABLE. THE ACTUARY, IN
HIS OR HER DISCRETION, MAY MAKE ANY ADJUSTMENTS TO SUCH METHODOLOGY FOR
DETERMINING THE ENTRY AGE NORMAL CONTRIBUTION ON AN AGGREGATE BASIS
S. 7804 10
WHICH HE OR SHE DEEMS APPROPRIATE, AND WHICH ARE CONSISTENT WITH THE
PROVISIONS OF ITEM (II) OF THIS SUBPARAGRAPH.
(VI) IN THE ALTERNATIVE, THE METHODOLOGY DETERMINED BY THE ACTUARY IN
ACCORDANCE WITH ITEM (III) OF THIS SUBPARAGRAPH MAY PROVIDE FOR THE
CALCULATION OF THE ENTRY AGE NORMAL CONTRIBUTION ON ANY OTHER BASIS
WHICH THE ACTUARY DEEMS APPROPRIATE, AND WHICH IS CONSISTENT WITH THE
ENTRY AGE ACTUARIAL COST METHOD AND THE PROVISIONS OF ITEM (II) OF THIS
SUBPARAGRAPH.
(VII) (A) WHERE THE METHODOLOGY DETERMINED BY THE ACTUARY IN ACCORD-
ANCE WITH ITEM (III) OF THIS SUBPARAGRAPH REQUIRES THE DETERMINATION OF
AN ENTRY AGE NORMAL CONTRIBUTION RATE FOR EACH INDIVIDUAL MEMBER IN
ORDER TO CALCULATE THE ENTRY AGE NORMAL CONTRIBUTION FOR EACH INDIVIDUAL
MEMBER, THE ACTUARY SHALL DETERMINE SUCH RATE FOR EACH SUCH MEMBER IN
ACCORDANCE WITH THE ENTRY AGE ACTUARIAL COST METHOD, AND SUCH RATE, AS
DETERMINED BY THE ACTUARY FOR EACH SUCH MEMBER, SHALL BE CONSISTENT WITH
A METHOD DESIGNED, IN GENERAL, TO FUND, ON A LEVEL BASIS OVER THE WORK-
ING LIFETIME OF THAT PARTICULAR MEMBER FROM HIS OR HER AGE AT ENTRY, THE
ACTUARIAL PRESENT VALUE OF BENEFITS TO WHICH SUCH MEMBER IS EXPECTED TO
BECOME ENTITLED, AS DETERMINED BY THE ACTUARY.
(B) WHERE THE METHODOLOGY DETERMINED BY THE ACTUARY IN ACCORDANCE WITH
ITEM (III) OF THIS SUBPARAGRAPH REQUIRES THE DETERMINATION OF AN ENTRY
AGE NORMAL CONTRIBUTION RATE FOR ALL MEMBERS IN THE AGGREGATE IN ORDER
TO CALCULATE THE ENTRY AGE NORMAL CONTRIBUTION FOR ALL MEMBERS IN THE
AGGREGATE, THE ACTUARY SHALL DETERMINE SUCH RATE IN ACCORDANCE WITH THE
ENTRY AGE ACTUARIAL COST METHOD, AND SUCH RATE, AS DETERMINED BY THE
ACTUARY, SHALL BE CONSISTENT WITH A METHOD DESIGNED, IN GENERAL, TO
FUND, ON A LEVEL BASIS OVER THE WORKING LIFETIMES OF MEMBERS FROM THEIR
AGES AT ENTRY, THE ACTUARIAL PRESENT VALUE OF BENEFITS TO WHICH SUCH
MEMBERS ARE EXPECTED TO BECOME ENTITLED, AS DETERMINED BY THE ACTUARY.
S 20. Paragraph 1 of subdivision a of section 13-527 of the adminis-
trative code of the city of New York is amended by adding two new
subparagraphs (a-1) and (a-2) to read as follows:
(A-1) ALL UNFUNDED ACCRUED LIABILITY INSTALLMENTS AS REQUIRED BY
SECTION 13-638.2 OF THIS TITLE OR ANY OTHER PROVISION OF LAW; AND
(A-2) ANY OTHER PAYMENTS TO THE CONTINGENT RESERVE FUND AS REQUIRED BY
APPLICABLE LAW; AND
S 21. Paragraph 3 of subdivision a of section 13-527 of the adminis-
trative code of the city of New York is amended by adding a new subpara-
graph (iv) to read as follows:
(IV) THE CITY AND ALL OTHER RESPONSIBLE OBLIGORS (AS DEFINED IN PARA-
GRAPH TEN OF SUBDIVISION A OF SECTION 13-638.2 OF THIS TITLE) SHALL MAKE
ALL PAYMENTS TO THE RETIREMENT SYSTEM REQUIRED BY APPLICABLE LAW IN
ACCORDANCE WITH THE TIME OF PAYMENT REQUIREMENTS SET FORTH IN SUBDIVI-
SION (C) OF SECTION 13-533 OF THIS CHAPTER. ANY RESPONSIBLE OBLIGOR
WHICH DOES NOT MAKE ALL OR ANY PORTION OF SUCH REQUIRED PAYMENTS TO THE
RETIREMENT SYSTEM IN A TIMELY MANNER IN FISCAL YEAR TWO THOUSAND
TWELVE--TWO THOUSAND THIRTEEN, OR IN ANY FISCAL YEAR THEREAFTER, SHALL
BE REQUIRED TO PAY INTEREST TO THE RETIREMENT SYSTEM ON SUCH OVERDUE
AMOUNTS, AS DETERMINED BY THE ACTUARY. THE ACTUARY SHALL DETERMINE, AT
SUCH TIME AS HE OR SHE DEEMS APPROPRIATE, INTEREST PAYMENTS ON SUCH
OVERDUE AMOUNTS USING A RATE OF INTEREST EQUIVALENT TO THE VALUATION
RATE OF INTEREST (AS DEFINED IN PARAGRAPH ELEVEN OF SUBDIVISION A OF
SECTION 13-638.2 OF THIS TITLE). RESPONSIBLE OBLIGORS SHALL MAKE SUCH
INTEREST PAYMENTS ON OVERDUE AMOUNTS TO THE RETIREMENT SYSTEM IN THE
MANNER AND AT SUCH TIME AS THE ACTUARY DEEMS APPROPRIATE.
S. 7804 11
S 22. Paragraph 1 of subdivision b of section 13-527 of the adminis-
trative code of the city of New York, as amended by chapter 85 of the
laws of 2000, is amended to read as follows:
(1) NOTWITHSTANDING THE SUCCEEDING PROVISIONS OF THIS PARAGRAPH OR THE
PROVISIONS OF PARAGRAPH ONE-A, TWO, THREE OR FOUR OF THIS SUBDIVISION,
FOR FISCAL YEAR TWO THOUSAND ELEVEN--TWO THOUSAND TWELVE, AND FOR EACH
FISCAL YEAR THEREAFTER, THE AMOUNT OF THE NORMAL CONTRIBUTION PAYABLE TO
THE CONTINGENT RESERVE FUND SHALL BE DETERMINED PURSUANT TO THE
PROVISIONS OF PARAGRAPH FIVE OF THIS SUBDIVISION. Upon the basis of the
latest mortality and other tables herein authorized and regular inter-
est, the actuary shall determine as of June thirtieth, nineteen hundred
eighty and as of each succeeding June thirtieth, the amount of the total
liability for all benefits provided in this chapter, in articles eleven
and fourteen of the retirement and social security law and in any other
law prescribing benefits payable by the retirement system on account of
all contributors and beneficiaries, excluding the liability on account
of future increased-take-home-pay contributions, if any, and the liabil-
ity for benefits attributable to the annuity savings fund and to the
variable annuity savings fund, provided, however, that in determining
such total liability as of June thirtieth, nineteen hundred ninety-five
and as of each succeeding June thirtieth, the actuary shall include (a)
the liability on account of future reserve-for-increased-take-home-pay
contributions, if any, (b) the liability on account of future city obli-
gations under the provisions of subdivision twenty of section two
hundred forty-three of the military law, to pay in behalf of contribu-
tors qualifying for such benefit, member contributions with respect to
certain periods of the military service of such contributors, and (c)
the liability for benefits attributable to the annuity savings fund and
to the variable annuity savings fund, and provided further that in
determining such total liability as of June thirtieth, nineteen hundred
ninety-nine and as of each succeeding June thirtieth, the actuary shall
include any other liability, as determined by the actuary, for benefits
attributable to the variable annuity programs, and provided further that
in determining such total liability as of June thirtieth, two thousand
and as of each succeeding June thirtieth, the actuary shall include the
amount, if any, as estimated by the actuary, of the total liability of
the retirement system on account of payments which the retirement system
may be required to make to any other fund without a corresponding offset
in the liabilities of the retirement system.
S 23. Subdivision b of section 13-527 of the administrative code of
the city of New York is amended by adding a new paragraph 5 to read as
follows:
(5) (A) NOTWITHSTANDING THE PRECEDING PARAGRAPHS OF THIS SUBDIVISION
OR ANY OTHER PROVISION OF LAW TO THE CONTRARY, THE NORMAL CONTRIBUTION
PAYABLE TO THE CONTINGENT RESERVE FUND IN FISCAL YEAR TWO THOUSAND
ELEVEN--TWO THOUSAND TWELVE, AND IN EACH FISCAL YEAR THEREAFTER, SHALL
BE THE ENTRY AGE NORMAL CONTRIBUTION, AS DETERMINED BY THE ACTUARY
PURSUANT TO THIS PARAGRAPH IN A MANNER CONSISTENT WITH THE ENTRY AGE
ACTUARIAL COST METHOD. THE ACTUARY SHALL DETERMINE THE ENTRY AGE NORMAL
CONTRIBUTION FOR EACH SUCH FISCAL YEAR AS OF JUNE THIRTIETH OF THE
SECOND FISCAL YEAR PRECEDING THE FISCAL YEAR IN WHICH SUCH NORMAL
CONTRIBUTION IS PAYABLE, BASED ON THE LATEST MORTALITY AND OTHER TABLES
APPLICABLE AT THE TIME HE OR SHE PERFORMS SUCH CALCULATIONS, AND THE
VALUATION RATE OF INTEREST AS PROVIDED FOR THE RETIREMENT SYSTEM IN
PARAGRAPH TWO OF SUBDIVISION B OF SECTION 13-638.2 OF THIS TITLE.
S. 7804 12
(B) IN CALCULATING THE ENTRY AGE NORMAL CONTRIBUTION PAYABLE IN ANY
SUCH FISCAL YEAR PURSUANT TO THIS PARAGRAPH, THE ACTUARY, IN HIS OR HER
DISCRETION, MAY MAKE CERTAIN ADJUSTMENTS IN THE CALCULATION METHODOLOGY,
PROVIDED THAT SUCH ADJUSTMENTS ARE GENERALLY ACCEPTED AS CONSISTENT WITH
THE ENTRY AGE ACTUARIAL COST METHOD, AND ARE DESIGNED, IN GENERAL, TO
FUND, ON A LEVEL BASIS OVER THE WORKING LIFETIMES OF MEMBERS FROM THEIR
AGES AT ENTRY, THE ACTUARIAL PRESENT VALUE OF BENEFITS TO WHICH SUCH
MEMBERS ARE EXPECTED TO BECOME ENTITLED, AS DETERMINED BY THE ACTUARY.
SUCH GENERALLY ACCEPTED ADJUSTMENTS IN THE CALCULATION METHODOLOGY, IN
THE DISCRETION OF THE ACTUARY, MAY INCLUDE, BUT ARE NOT LIMITED TO, THE
CALCULATION OF THE ENTRY AGE NORMAL CONTRIBUTION (I) ON AN INDIVIDUAL
MEMBER BASIS BY CALCULATING THE AMOUNT OF THE ENTRY AGE NORMAL CONTRIB-
UTION ATTRIBUTABLE TO EACH INDIVIDUAL MEMBER, AND THEN ADDING TOGETHER
SUCH INDIVIDUAL MEMBER AMOUNTS, (II) ON AN AGGREGATE BASIS FOR ALL
MEMBERS OR (III) ON ANY COMBINATION OF AN INDIVIDUAL MEMBER BASIS AND AN
AGGREGATE BASIS WHICH IS CONSISTENT WITH THE ENTRY AGE ACTUARIAL COST
METHOD, AND THE PRECEDING PROVISIONS OF THIS SUBPARAGRAPH.
(C) FOR EACH SUCH FISCAL YEAR, THE ACTUARY, IN HIS OR HER DISCRETION,
SHALL DETERMINE, IN ACCORDANCE WITH THE PROVISIONS OF SUBPARAGRAPH (B)
OF THIS PARAGRAPH, THE METHODOLOGY FOR CALCULATING THE ENTRY AGE NORMAL
CONTRIBUTION PAYABLE FOR THAT PARTICULAR FISCAL YEAR.
(D) THE METHODOLOGY DETERMINED BY THE ACTUARY IN ACCORDANCE WITH
SUBPARAGRAPH (C) OF THIS PARAGRAPH MAY PROVIDE FOR THE ACTUARY TO CALCU-
LATE THE ENTRY AGE NORMAL CONTRIBUTION ON AN INDIVIDUAL MEMBER BASIS BY
(I) MULTIPLYING THE ENTRY AGE NORMAL CONTRIBUTION RATE FOR EACH INDIVID-
UAL MEMBER, AS DETERMINED BY THE ACTUARY, BY THE SALARY EXPECTED TO BE
PAID TO THAT MEMBER DURING THE FISCAL YEAR IN WHICH SUCH NORMAL CONTRIB-
UTION IS PAYABLE, AND (II) CALCULATING THE SUM OF THE INDIVIDUAL ENTRY
AGE NORMAL CONTRIBUTIONS ATTRIBUTABLE TO ALL SUCH MEMBERS. THE ACTUARY,
IN HIS OR HER DISCRETION, MAY MAKE ANY ADJUSTMENTS TO SUCH METHODOLOGY
FOR DETERMINING THE ENTRY AGE NORMAL CONTRIBUTION ON AN INDIVIDUAL BASIS
WHICH HE OR SHE DEEMS APPROPRIATE, AND WHICH ARE CONSISTENT WITH THE
PROVISIONS OF SUBPARAGRAPH (B) OF THIS PARAGRAPH.
(E) IN THE ALTERNATIVE, THE METHODOLOGY DETERMINED BY THE ACTUARY IN
ACCORDANCE WITH SUBPARAGRAPH (C) OF THIS PARAGRAPH MAY PROVIDE FOR THE
ACTUARY TO CALCULATE THE ENTRY AGE NORMAL CONTRIBUTION ON AN AGGREGATE
BASIS BY MULTIPLYING THE ENTRY AGE NORMAL CONTRIBUTION RATE FOR ALL
MEMBERS IN THE AGGREGATE, AS DETERMINED BY THE ACTUARY, BY THE AGGREGATE
AMOUNT OF THE SALARIES EXPECTED TO BE PAID TO ALL MEMBERS DURING THE
FISCAL YEAR IN WHICH THE NORMAL CONTRIBUTION IS PAYABLE. THE ACTUARY, IN
HIS OR HER DISCRETION, MAY MAKE ANY ADJUSTMENTS TO SUCH METHODOLOGY FOR
DETERMINING THE ENTRY AGE NORMAL CONTRIBUTION ON AN AGGREGATE BASIS
WHICH HE OR SHE DEEMS APPROPRIATE, AND WHICH ARE CONSISTENT WITH THE
PROVISIONS OF SUBPARAGRAPH (B) OF THIS PARAGRAPH.
(F) IN THE ALTERNATIVE, THE METHODOLOGY DETERMINED BY THE ACTUARY IN
ACCORDANCE WITH SUBPARAGRAPH (C) OF THIS PARAGRAPH MAY PROVIDE FOR THE
CALCULATION OF THE ENTRY AGE NORMAL CONTRIBUTION ON ANY OTHER BASIS
WHICH THE ACTUARY DEEMS APPROPRIATE, AND WHICH IS CONSISTENT WITH THE
ENTRY AGE ACTUARIAL COST METHOD AND THE PROVISIONS OF SUBPARAGRAPH (B)
OF THIS PARAGRAPH.
(G) (I) WHERE THE METHODOLOGY DETERMINED BY THE ACTUARY IN ACCORDANCE
WITH SUBPARAGRAPH (C) OF THIS PARAGRAPH REQUIRES THE DETERMINATION OF AN
ENTRY AGE NORMAL CONTRIBUTION RATE FOR EACH INDIVIDUAL MEMBER IN ORDER
TO CALCULATE THE ENTRY AGE NORMAL CONTRIBUTION FOR EACH INDIVIDUAL
MEMBER, THE ACTUARY SHALL DETERMINE SUCH RATE FOR EACH SUCH MEMBER IN
ACCORDANCE WITH THE ENTRY AGE ACTUARIAL COST METHOD, AND SUCH RATE, AS
S. 7804 13
DETERMINED BY THE ACTUARY FOR EACH SUCH MEMBER, SHALL BE CONSISTENT WITH
A METHOD DESIGNED, IN GENERAL, TO FUND, ON A LEVEL BASIS OVER THE WORK-
ING LIFETIME OF THAT PARTICULAR MEMBER FROM HIS OR HER AGE AT ENTRY, THE
ACTUARIAL PRESENT VALUE OF BENEFITS TO WHICH SUCH MEMBER IS EXPECTED TO
BECOME ENTITLED, AS DETERMINED BY THE ACTUARY.
(II) WHERE THE METHODOLOGY DETERMINED BY THE ACTUARY IN ACCORDANCE
WITH SUBPARAGRAPH (C) OF THIS PARAGRAPH REQUIRES THE DETERMINATION OF AN
ENTRY AGE NORMAL CONTRIBUTION RATE FOR ALL MEMBERS IN THE AGGREGATE IN
ORDER TO CALCULATE THE ENTRY AGE NORMAL CONTRIBUTION FOR ALL MEMBERS IN
THE AGGREGATE, THE ACTUARY SHALL DETERMINE SUCH RATE IN ACCORDANCE WITH
THE ENTRY AGE ACTUARIAL COST METHOD, AND SUCH RATE, AS DETERMINED BY THE
ACTUARY, SHALL BE CONSISTENT WITH A METHOD DESIGNED, IN GENERAL, TO
FUND, ON A LEVEL BASIS OVER THE WORKING LIFETIMES OF MEMBERS FROM THEIR
AGES AT ENTRY, THE ACTUARIAL PRESENT VALUE OF BENEFITS TO WHICH SUCH
MEMBERS ARE EXPECTED TO BECOME ENTITLED, AS DETERMINED BY THE ACTUARY.
S 24. Subdivision (c) of section 13-533 of the administrative code of
the city of New York is amended by adding a new paragraph 2-a to read as
follows:
(2-A) WHERE A RESPONSIBLE OBLIGOR (AS DEFINED IN PARAGRAPH TEN OF
SUBDIVISION A OF SECTION 13-638.2 OF THIS TITLE) IS REQUIRED TO MAKE
PAYMENTS TO THE RETIREMENT SYSTEM PURSUANT TO APPLICABLE PROVISIONS OF
LAW IN FISCAL YEAR TWO THOUSAND TWELVE--TWO THOUSAND THIRTEEN, AND IN
ANY FISCAL YEAR THEREAFTER, AND THE PROVISIONS OF THIS SUBDIVISION OR
THE PROVISIONS OF ANY OTHER APPLICABLE LAW DO NOT OTHERWISE SPECIFICALLY
REQUIRE SUCH RESPONSIBLE OBLIGOR TO MAKE SUCH PAYMENTS BY A PARTICULAR
DATE OR DATES DURING SUCH FISCAL YEAR, SUCH RESPONSIBLE OBLIGOR SHALL
MAKE SUCH PAYMENTS EITHER (A) IN TOTAL ON OR BEFORE JANUARY FIRST OF
SUCH FISCAL YEAR, OR (B) IN TWELVE EQUAL MONTHLY INSTALLMENTS, AS DETER-
MINED BY THE ACTUARY, WITH EACH MONTHLY INSTALLMENT TO BE PAID ON OR
BEFORE THE LAST DAY OF EACH MONTH.
S 25. Paragraph 2 of subdivision b of section 13-638.2 of the adminis-
trative code of city of New York, as amended by chapter 180 of the laws
of 2011, 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] 7% July 1, [2004] 2011 to
June 30, [2012] 2016
NYCTRS [8] 7% July 1, [2004] 2011 to
June 30, [2012] 2016
PPF [8] 7% July 1, [2004] 2011 to
June 30, [2012] 2016
FPF [8] 7% July 1, [2004] 2011 to
June 30, [2012] 2016
BERS [8] 7% July 1, [2004] 2011 to
June 30, [2012] 2016
S. 7804 14
S 26. 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 180 of the
laws of 2011, 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] 2011 to
June 30, [2012] 2016
NYCTRS 1 1/4% July 1, [2004] 2011 to
June 30, [2012] 2016
PPF 1 1/4% July 1, [2004] 2011 to
June 30, [2012] 2016
FPF 1 1/4% July 1, [2004] 2011 to
June 30, [2012] 2016
BERS 1 1/4% July 1, [2004] 2011 to
June 30, [2012] 2016
S 27. 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 180 of the
laws of 2011, 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] 2011 to
June 30, [2012] 2016
NYCTRS 1 1/4% July 1, [2004] 2011 to
June 30, [2012] 2016
PPF 1 1/4% July 1, [2004] 2011 to
June 30, [2012] 2016
FPF 1 1/4% July 1, [2004] 2011 to
June 30, [2012] 2016
BERS 1 1/4% July 1, [2004] 2011 to
June 30, [2012] 2016
S 28. 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 180 of the
laws of 2011, 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
S. 7804 15
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] 0% July 1, [2004] 2011 to
June 30, [2012] 2016
NYCTRS [1] 0% July 1, [2004] 2011 to
June 30, [2012] 2016
PPF [1] 0% July 1, [2004] 2011 to
June 30, [2012] 2016
FPF [1] 0% July 1, [2004] 2011 to
June 30, [2012] 2016
BERS [1] 0% July 1, [2004] 2011 to
June 30, [2012] 2016
S 29. Subparagraph (i) of paragraph 1 of subdivision k of section
13-638.2 of the administrative code of the city of New York, as added by
chapter 85 of the laws of 2000, is amended to read as follows:
(i) Subject to the provisions of subparagraphs (iii) and (iv) of this
paragraph, in any case where the valuation rate of interest for a
retirement system is changed by law for any period beginning on or after
July first, two thousand four, or where the board of trustees of a
retirement system, for any period beginning on or after July first,
nineteen hundred ninety-nine, adopts changed actuarial tables used in
valuing the liabilities of such retirement system, or where a signif-
icant change in an actuarial valuation method (as defined in paragraph
sixteen of subdivision a of this section) is made for any period begin-
ning on or after July first, nineteen hundred ninety-nine in relation to
a retirement system, the actuary thereof shall calculate, as of June
thirtieth next preceding the first day of the fiscal year for which such
changed rate or changed tables or significant change in an actuarial
valuation method first becomes or became effective, an unfunded accrued
liability adjustment applicable to each responsible obligor in relation
to such retirement system, PROVIDED, HOWEVER, THAT NO UNFUNDED ACCRUED
LIABILITY ADJUSTMENT SHALL BE ESTABLISHED UNDER THIS SUBDIVISION FOR ANY
RETIREMENT SYSTEM WITH RESPECT TO ANY CHANGE IN THE VALUATION RATE OF
INTEREST, CHANGE IN ACTUARIAL TABLES OR SIGNIFICANT CHANGE IN AN ACTUAR-
IAL VALUATION METHOD WHERE SUCH CHANGED VALUATION RATE OF INTEREST,
ACTUARIAL TABLES OR ACTUARIAL VALUATION METHOD APPLIES TO SUCH RETIRE-
MENT SYSTEM WITH RESPECT TO ANY ACTUARIAL VALUATION PERFORMED BY THE
ACTUARY AS OF JUNE THIRTIETH, TWO THOUSAND TEN OR AS OF ANY DATE THERE-
AFTER.
S 30. Section 13-638.2 of the administrative code of the city of New
York is amended by adding a new subdivision k-1 to read as follows:
K-1. ALL INSTALLMENTS OF CONTRIBUTION RESULTING FROM ANY UNFUNDED
ACCRUED LIABILITY ESTABLISHED FOR ANY RETIREMENT SYSTEM PRIOR TO THE
ESTABLISHMENT OF THE UNFUNDED ACCRUED LIABILITY AS OF JUNE THIRTIETH,
TWO THOUSAND TEN FOR THE RETIREMENT SYSTEMS PURSUANT TO THE PROVISIONS
OF PARAGRAPH ONE OF SUBDIVISION K-2 OF THIS SECTION WHICH ARE PAYABLE TO
ANY RETIREMENT SYSTEM ON OR AFTER JULY FIRST, TWO THOUSAND ELEVEN ARE
HEREBY CANCELED AND SHALL NOT BE DUE AND PAYABLE ON OR AFTER SUCH JULY
FIRST.
S 31. Section 13-638.2 of the administrative code of the city of New
York is amended by adding a new subdivision k-2 to read as follows:
S. 7804 16
K-2. (1) (I) THE ACTUARY FOR EACH OF THE RETIREMENT SYSTEMS (AS
DEFINED IN PARAGRAPH ONE OF SUBDIVISION A OF THIS SECTION), UPON THE
BASIS OF THE LATEST MORTALITY AND OTHER TABLES APPLICABLE AT THE TIME HE
OR SHE PERFORMS THE CALCULATIONS, AND THE VALUATION RATE OF INTEREST (AS
DEFINED IN PARAGRAPH ELEVEN OF SUBDIVISION A OF THIS SECTION), SHALL
CALCULATE SEPARATELY FOR EACH OF THE RETIREMENT SYSTEMS, AS OF JUNE
THIRTIETH, TWO THOUSAND TEN AND AS OF EACH SUCCEEDING JUNE THIRTIETH, AN
UNFUNDED ACCRUED LIABILITY FOR EACH OF THE RETIREMENT SYSTEMS IN ACCORD-
ANCE WITH THE SUCCEEDING SUBPARAGRAPHS OF THIS PARAGRAPH.
(II) THE ACTUARY SHALL CALCULATE, AS OF THE APPLICABLE JUNE THIRTIETH,
AN AMOUNT EQUAL TO THE SUM OF (A) THE TOTAL ACTUARIAL PRESENT VALUE OF
ALL BENEFITS PAYABLE BY THE RETIREMENT SYSTEM PURSUANT TO APPLICABLE
LAW, AS DETERMINED BY THE ACTUARY, AND (B) THE LIABILITY OF THE RETIRE-
MENT SYSTEM, AS DETERMINED BY THE ACTUARY, FOR AMOUNTS WHICH THE RETIRE-
MENT SYSTEM MAY BE REQUIRED BY APPLICABLE LAW TO PAY TO ANY OTHER FUND
ON ACCOUNT OF RELATED BENEFITS FINANCED THROUGH THE RETIREMENT SYSTEM,
WITHOUT A CORRESPONDING OFFSET IN THE LIABILITIES OF THE RETIREMENT
SYSTEM.
(III) THE UNFUNDED ACCRUED LIABILITY OF THE RETIREMENT SYSTEM AS OF
THE APPLICABLE JUNE THIRTIETH SHALL BE THE AMOUNT OBTAINED BY DEDUCTING
FROM THE AMOUNT OF SUCH TOTAL LIABILITY OF THE RETIREMENT SYSTEM ON
ACCOUNT OF BENEFITS, AS DETERMINED BY THE ACTUARY PURSUANT TO SUBPARA-
GRAPH (II) OF THIS PARAGRAPH, THE SUM OF:
(A) THE ACTUARIAL PRESENT VALUE OF ENTRY AGE NORMAL CONTRIBUTIONS
PAYABLE TO THE RETIREMENT SYSTEM, AS DETERMINED BY THE ACTUARY AS OF THE
APPLICABLE JUNE THIRTIETH IN A MANNER CONSISTENT WITH THE ENTRY AGE
ACTUARIAL COST METHOD, AND WITH THE APPLICABLE METHODOLOGIES SET FORTH
FOR NYCERS IN SUBPARAGRAPH (D) OF PARAGRAPH TWO OF SUBDIVISION B OF
SECTION 13-127 OF THIS TITLE, FOR THE PPF IN SUBPARAGRAPH (E) OF PARA-
GRAPH TWO OF SUBDIVISION B OF SECTION 13-228 OF THIS TITLE, FOR THE FPF
IN SUBPARAGRAPH (E) OF PARAGRAPH TWO OF SUBDIVISION B OF SECTION 13-331
OF THIS TITLE, FOR THE NYCTRS IN PARAGRAPH FIVE OF SUBDIVISION B OF
SECTION 13-527 OF THIS TITLE OR FOR BERS IN ITEM (V) OF SUBPARAGRAPH
FOUR OF PARAGRAPH (C) OF SUBDIVISION SIXTEEN OF SECTION TWENTY-FIVE
HUNDRED SEVENTY-FIVE OF THE EDUCATION LAW;
(B) THE PRESENT VALUE OF FUTURE MEMBER CONTRIBUTIONS OF ALL MEMBERS OF
THE RETIREMENT SYSTEM, AS DETERMINED BY THE ACTUARY AS OF THE APPLICABLE
JUNE THIRTIETH;
(C) THE TOTAL FUNDS ON HAND OF THE RETIREMENT SYSTEM, AS DETERMINED BY
THE ACTUARY AS OF THE APPLICABLE JUNE THIRTIETH; AND
(D) THE PRESENT VALUE OF FUTURE INSTALLMENTS OF UNFUNDED ACCRUED
LIABILITY CONTRIBUTIONS TO THE RETIREMENT SYSTEM.
(IV) THE ACTUARY, IN DETERMINING THE UNFUNDED ACCRUED LIABILITY PURSU-
ANT TO THIS PARAGRAPH, MAY MAKE ANY ADJUSTMENTS WHICH HE OR SHE DEEMS
APPROPRIATE DUE TO THE CALCULATION OF THE UNFUNDED ACCRUED LIABILITY AS
OF THE SECOND JUNE THIRTIETH PRECEDING THE FISCAL YEAR IN WHICH THE
FIRST INSTALLMENT OF SUCH UNFUNDED ACCRUED LIABILITY BECOMES PAYABLE OR
CREDITABLE.
(2) (I) THE UNFUNDED ACCRUED LIABILITY CALCULATED BY THE ACTUARY AS OF
JUNE THIRTIETH, TWO THOUSAND TEN FOR EACH RETIREMENT SYSTEM PURSUANT TO
PARAGRAPH ONE OF THIS SUBDIVISION SHALL BE KNOWN AS THE "2010 UAL" OR,
WITH RESPECT TO NYCERS AS THE "NYCERS 2010 UAL", WITH RESPECT TO NYCTRS
AS THE "NYCTRS 2010 UAL", WITH RESPECT TO THE PPF AS THE "PPF 2010 UAL",
WITH RESPECT TO THE FPF AS THE "FPF 2010 UAL" AND WITH RESPECT TO BERS
AS THE "BERS 2010 UAL".
S. 7804 17
(II) THE 2010 UAL FOR EACH RETIREMENT SYSTEM SHALL BE AMORTIZED IN
TWENTY-ONE ANNUAL INSTALLMENTS, AS DETERMINED BY THE ACTUARY, PAYABLE
OVER A PERIOD OF TWENTY-TWO FISCAL YEARS FOLLOWING ITS ESTABLISHMENT AS
OF JUNE THIRTIETH, TWO THOUSAND TEN, WITH PAYMENTS COMMENCING WITH THE
TWO THOUSAND ELEVEN--TWO THOUSAND TWELVE FISCAL YEAR. THE ACTUARY FOR
EACH OF THE RETIREMENT SYSTEMS SHALL DETERMINE THE SCHEDULE OF CONTRIB-
UTION INSTALLMENTS SO THAT EACH INSTALLMENT AFTER THE FIRST SHALL EQUAL
ONE HUNDRED THREE PER CENTUM OF THE NEXT PRECEDING INSTALLMENT.
(3) (I) THE UNFUNDED ACCRUED LIABILITY CALCULATED PURSUANT TO PARA-
GRAPH ONE OF THIS SUBDIVISION BY THE ACTUARY AS OF JUNE THIRTIETH, TWO
THOUSAND ELEVEN, AND AS OF EACH SUCCEEDING JUNE THIRTIETH, SHALL BE
KNOWN AS A "POST-2010 UAL ADJUSTMENT". WITH RESPECT TO EACH RETIREMENT
SYSTEM, SUCH UNFUNDED ACCRUED LIABILITY SHALL BE KNOWN BY THE NAME
CONSISTING OF THE APPLICABLE ABBREVIATION FOR THE RETIREMENT SYSTEM, AS
DEFINED IN PARAGRAPH THREE, FOUR, FIVE, SIX OR SEVEN OF SUBDIVISION A OF
THIS SECTION, FOLLOWED BY THE CALENDAR YEAR AS OF WHICH THE UNFUNDED
ACCRUED LIABILITY WAS ESTABLISHED, FOLLOWED BY THE TERM "UAL ADJUST-
MENT".
(II) EACH POST-2010 UAL ADJUSTMENT FOR EACH RETIREMENT SYSTEM SHALL BE
AMORTIZED IN EQUAL INSTALLMENTS PAYABLE OR CREDITABLE, AS DETERMINED BY
THE ACTUARY, AS FOLLOWS:
(A) THAT PORTION OF A POST-2010 UAL ADJUSTMENT WHICH IS ATTRIBUTABLE
TO ACTUARIAL GAINS OR LOSSES, AS DETERMINED BY THE ACTUARY, SHALL BE
AMORTIZED IN FOURTEEN ANNUAL INSTALLMENTS, AS DETERMINED BY THE ACTUARY,
PAYABLE OR CREDITABLE OVER A PERIOD OF FIFTEEN FISCAL YEARS FOLLOWING
THE JUNE THIRTIETH AS OF WHICH THE UNFUNDED ACCRUED LIABILITY WAS ESTAB-
LISHED, WITH PAYMENTS OR CREDITS COMMENCING WITH THE SECOND FISCAL YEAR
SUCCEEDING THE JUNE THIRTIETH AS OF WHICH THE UNFUNDED ACCRUED LIABILITY
WAS ESTABLISHED, PROVIDED, HOWEVER, THAT THE PORTION OF A POST-2010 UAL
ADJUSTMENT WHICH IS ATTRIBUTABLE TO ACTUARIAL GAINS AND LOSSES SHALL BE
AN AMOUNT EQUAL TO THE TOTAL AMOUNT OF SUCH POST-2010 UAL ADJUSTMENT
MINUS AN AMOUNT EQUAL TO THE SUM OF THE PORTIONS OF SUCH POST-2010 UAL
ADJUSTMENT, IF ANY, WHICH ARE ATTRIBUTABLE TO (1) CHANGES IN THE VALU-
ATION RATE OF INTEREST, CHANGES IN ACTUARIAL TABLES AND CHANGES IN ACTU-
ARIAL METHODS, AS DETERMINED BY THE ACTUARY PURSUANT TO ITEM (B) OF THIS
SUBPARAGRAPH, AND (2) RECENTLY ENACTED CHANGES IN BENEFITS WHICH WERE
NOT INCORPORATED IN THE UNFUNDED ACCRUED LIABILITY ESTABLISHED AS OF THE
PRECEDING JUNE THIRTIETH, AS DETERMINED BY THE ACTUARY PURSUANT TO ITEM
(C) OF THIS SUBPARAGRAPH;
(B) THAT PORTION OF A POST-2010 UAL ADJUSTMENT WHICH IS ATTRIBUTABLE
TO CHANGES IN THE VALUATION RATE OF INTEREST, CHANGES IN ACTUARIAL
TABLES OR CHANGES IN ACTUARIAL METHODS, AS DETERMINED BY THE ACTUARY,
SHALL BE AMORTIZED IN NINETEEN ANNUAL INSTALLMENTS, AS DETERMINED BY THE
ACTUARY, PAYABLE OR CREDITABLE OVER A PERIOD OF TWENTY FISCAL YEARS
FOLLOWING THE JUNE THIRTIETH AS OF WHICH THE UNFUNDED ACCRUED LIABILITY
WAS ESTABLISHED, WITH PAYMENTS OR CREDITS COMMENCING WITH THE SECOND
FISCAL YEAR SUCCEEDING THE JUNE THIRTIETH AS OF WHICH THE UNFUNDED
ACCRUED LIABILITY WAS ESTABLISHED; OR
(C) THAT PORTION OF A POST-2010 UAL ADJUSTMENT WHICH IS ATTRIBUTABLE
TO RECENTLY ENACTED CHANGES IN BENEFITS WHICH WERE NOT INCORPORATED IN
THE UNFUNDED ACCRUED LIABILITY ESTABLISHED AS OF THE PRECEDING JUNE
THIRTIETH, AS DETERMINED BY THE ACTUARY, SHALL, UNLESS AN AMORTIZATION
PERIOD OF A DIFFERENT LENGTH IS SPECIFIED BY THE LAW ENACTING SUCH BENE-
FIT CHANGES, BE PAYABLE OR CREDITABLE IN ANNUAL INSTALLMENTS OVER A
PERIOD OF FISCAL YEARS COMPARABLE IN LENGTH TO THE NUMBER OF YEARS WHICH
IS ONE LESS THAN THE NUMBER OF YEARS OF THE REMAINING WORKING LIFETIMES
S. 7804 18
OF MEMBERS COVERED BY THE BENEFIT CHANGES, AS DETERMINED BY THE ACTUARY,
WITH THE PAYMENT OR CREDIT OF SUCH ANNUAL INSTALLMENTS COMMENCING WITH
THE SECOND FISCAL YEAR SUCCEEDING THE JUNE THIRTIETH AS OF WHICH THE
UNFUNDED ACCRUED LIABILITY WAS ESTABLISHED, PROVIDED, HOWEVER, THAT
WHERE THE LENGTH OF THE AMORTIZATION PERIOD FOR THE BENEFIT CHANGES IS
NOT SPECIFIED IN THE LAW ENACTING THE BENEFIT CHANGES, THE ACTUARY, IN
HIS OR HER DISCRETION, AND IN LIEU OF AMORTIZING THE PORTION OF THE
UNFUNDED ACCRUED LIABILITY ATTRIBUTABLE TO THE BENEFIT CHANGES OVER A
PERIOD OF FISCAL YEARS COMPARABLE IN LENGTH TO THE NUMBER OF YEARS WHICH
IS ONE LESS THAN THE NUMBER OF YEARS OF THE REMAINING WORKING LIFETIMES
OF MEMBERS COVERED BY THE BENEFIT CHANGES, MAY SELECT AN AMORTIZATION
PERIOD THAT IS REASONABLY CONSISTENT WITH PAST PRACTICE FOR AMORTIZING
UNFUNDED ACCRUED LIABILITY ATTRIBUTABLE TO THE PARTICULAR TYPE OF BENE-
FIT CHANGES.
(4) NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO THE CONTRARY, WITH
RESPECT TO ANY INSTALLMENT OF AN UNFUNDED ACCRUED LIABILITY OR AN
UNFUNDED ACCRUED LIABILITY ADJUSTMENT, IN THE EVENT THAT SUCH RETIREMENT
SYSTEM HAS MORE THAN ONE RESPONSIBLE OBLIGOR, THE ACTUARY FOR THAT
RETIREMENT SYSTEM SHALL DETERMINE AND SHALL ALLOCATE TO EACH SUCH
RESPONSIBLE OBLIGOR ITS SHARE OF THAT INSTALLMENT, AS DETERMINED TO BE
APPROPRIATE BY THE ACTUARY. EACH RESPONSIBLE OBLIGOR'S SHARE OF EACH
SUCH INSTALLMENT SHALL BE EITHER A CHARGE OR A CREDIT WITH RESPECT TO
SUCH RESPONSIBLE OBLIGOR FOR THE APPLICABLE FISCAL YEAR.
(5) FOR EACH FISCAL YEAR, COMMENCING WITH THE TWO THOUSAND ELEVEN--TWO
THOUSAND TWELVE FISCAL YEAR, THE ACTUARY SHALL DETERMINE WHETHER THE SUM
OF THE CHARGES AND CREDITS APPLICABLE TO EACH RESPONSIBLE OBLIGOR FOR
SUCH FISCAL YEAR WITH RESPECT TO THE APPLICABLE RETIREMENT SYSTEM SHALL
CONSTITUTE A TOTAL CHARGE OR A TOTAL CREDIT. WHERE SUCH AMOUNT FOR SUCH
RESPONSIBLE OBLIGOR FOR SUCH FISCAL YEAR WITH RESPECT TO SUCH RETIREMENT
SYSTEM IS A TOTAL CHARGE, THE RESPONSIBLE OBLIGOR SHALL PAY AN AMOUNT
EQUAL TO SUCH TOTAL CHARGE TO THE RETIREMENT SYSTEM IN A TIMELY MANNER,
AS REQUIRED BY PARAGRAPH SIX OF THIS SUBDIVISION. WHERE SUCH AMOUNT FOR
SUCH RESPONSIBLE OBLIGOR FOR SUCH FISCAL YEAR WITH RESPECT TO SUCH
RETIREMENT SYSTEM IS A TOTAL CREDIT, THE AMOUNT OF EMPLOYER CONTRIB-
UTIONS OTHERWISE PAYABLE BY SUCH RESPONSIBLE OBLIGOR TO SUCH RETIREMENT
SYSTEM FOR SUCH FISCAL YEAR PURSUANT TO APPLICABLE PROVISIONS OF LAW, AS
DETERMINED BY THE ACTUARY, SHALL BE REDUCED BY THE AMOUNT OF SUCH TOTAL
CREDIT, PROVIDED, HOWEVER, THAT SUCH TOTAL AMOUNT OF EMPLOYER CONTRIB-
UTIONS OTHERWISE PAYABLE BY SUCH RESPONSIBLE OBLIGOR TO SUCH RETIREMENT
SYSTEM FOR SUCH FISCAL YEAR SHALL NOT BE REDUCED BELOW AN AMOUNT EQUIV-
ALENT TO THE AMOUNT PAYABLE BY SUCH RESPONSIBLE OBLIGOR FOR SUCH FISCAL
YEAR FOR ADMINISTRATIVE EXPENSES, AS DETERMINED BY THE ACTUARY IN
ACCORDANCE WITH THE PROVISIONS OF SUBDIVISION F OF SECTION 13-103 OF
THIS TITLE FOR NYCERS, SUBDIVISION H OF SECTION 13-216 OF THIS TITLE FOR
THE PPF, SUBDIVISION D OF SECTION 13-518 OF THIS TITLE FOR THE NYCTRS OR
PARAGRAPH (E) OF SUBDIVISION TWENTY-THREE OF SECTION TWENTY-FIVE HUNDRED
SEVENTY-FIVE OF THE EDUCATION LAW FOR BERS, AND SHALL NOT BE REDUCED
BELOW ZERO FOR THE FPF, PROVIDED FURTHER, THAT WHERE A TOTAL CREDIT FOR
A RESPONSIBLE OBLIGOR WITH RESPECT TO A RETIREMENT SYSTEM HAS BEEN
OFFSET AGAINST EMPLOYER CONTRIBUTIONS OTHERWISE PAYABLE BY SUCH OBLIGOR
TO SUCH RETIREMENT SYSTEM FOR SUCH FISCAL YEAR BY THE MAXIMUM AMOUNT
PERMISSIBLE PURSUANT TO THE PRECEDING PROVISIONS OF THIS PARAGRAPH, AND
ALL OR A PORTION OF SUCH CREDIT REMAINS AFTER SUCH OFFSET, THE REMAINING
CREDIT SHALL BE CARRIED FORWARD, TOGETHER WITH INTEREST CALCULATED ON
SUCH AMOUNT AT THE VALUATION RATE OF INTEREST, AS A CREDIT FOR SUCH
OBLIGOR FOR THE FOLLOWING FISCAL YEAR, AS DETERMINED BY THE ACTUARY.
S. 7804 19
(6) ALL RESPONSIBLE OBLIGORS SHALL MAKE ALL UNFUNDED ACCRUED LIABILITY
PAYMENTS TO A RETIREMENT SYSTEM REQUIRED PURSUANT TO THE PROVISIONS OF
THIS SUBDIVISION IN ACCORDANCE WITH THE TIME OF PAYMENT REQUIREMENTS SET
FORTH IN SUBDIVISION C OF SECTION 13-133 OF THIS TITLE FOR NYCERS,
SUBDIVISION C OF SECTION 13-231 OF THIS TITLE FOR THE PPF, SUBDIVISION C
OF SECTION 13-334 OF THIS TITLE FOR THE FPF, SUBDIVISION (C) OF SECTION
13-533 OF THIS TITLE FOR THE NYCTRS OR PARAGRAPH (J) OF SUBDIVISION
SIXTEEN OF SECTION TWENTY-FIVE HUNDRED SEVENTY-FIVE OF THE EDUCATION LAW
FOR BERS.
S 32. Subdivision d of section 13-705 of the administrative code of
the city of New York, as amended by chapter 152 of the laws of 2006, is
amended to read as follows:
d. In each city fiscal year, beginning with investment expenses paid
during the nineteen hundred ninety-eight--nineteen hundred ninety-nine
fiscal year, whenever the income, interest or dividends derived from
deposits or investments of the funds of a retirement system are used
pursuant to subdivision b of this section to pay the expenses incurred
by such retirement system in acquiring, managing or protecting invest-
ments of its funds, the monies so paid shall be made a charge to be paid
by each participating employer otherwise required to make contributions
to such retirement system no later than the end of the fiscal year next
succeeding the fiscal year during which such monies were drawn upon,
provided, however, that where such charge is for such investment
expenses paid during fiscal year two thousand four--two thousand five or
during any subsequent fiscal year, such charge shall be paid by each
such participating employer no later than the end of the second fiscal
year succeeding the fiscal year during which such monies were drawn
upon, PROVIDED FURTHER THAT THE PROVISIONS OF THIS SUBDIVISION SHALL NOT
APPLY TO INVESTMENT EXPENSES PAID DURING THE TWO THOUSAND NINE--TWO
THOUSAND TEN FISCAL YEAR OR DURING ANY SUBSEQUENT FISCAL YEAR. In the
event that such retirement system has more than one participating
employer, the actuary shall calculate and allocate to each such partic-
ipating employer its share of such charge. All charges to be paid pursu-
ant to this subdivision shall be paid at the regular rate of interest
utilized by the actuary in determining employer contributions to the
retirement system pursuant to the provisions of paragraph two of subdi-
vision b of section 13-638.2 of this title.
S 33. Subparagraph 2 of paragraph (c) of subdivision 16 of section
2575 of the education law is amended by adding two new items (i-A) and
(i-B) to read as follows:
(I-A) ALL UNFUNDED ACCRUED LIABILITY INSTALLMENTS AS REQUIRED BY
SECTION 13-638.2 OF THE ADMINISTRATIVE CODE OF THE CITY OF NEW YORK OR
ANY OTHER PROVISION OF LAW; AND
(I-B) ANY OTHER PAYMENTS TO THE CONTINGENT RESERVE FUND AS REQUIRED BY
APPLICABLE LAW; AND
S 34. Subparagraph 3 of paragraph (c) of subdivision 16 of section
2575 of the education law is amended by adding a new item (vii) to read
as follows:
(VII) THE BOARD OF EDUCATION AND ALL OTHER RESPONSIBLE OBLIGORS (AS
DEFINED IN PARAGRAPH TEN OF SUBDIVISION A OF SECTION 13-638.2 OF THE
ADMINISTRATIVE CODE OF THE CITY OF NEW YORK) SHALL MAKE ALL PAYMENTS TO
THE RETIREMENT SYSTEM REQUIRED BY APPLICABLE LAW IN ACCORDANCE WITH THE
TIME OF PAYMENT REQUIREMENTS SET FORTH IN PARAGRAPH (J) OF THIS SUBDIVI-
SION. ANY RESPONSIBLE OBLIGOR WHICH DOES NOT MAKE ALL OR ANY PORTION OF
SUCH REQUIRED PAYMENTS TO THE RETIREMENT SYSTEM IN A TIMELY MANNER IN
FISCAL YEAR TWO THOUSAND TWELVE--TWO THOUSAND THIRTEEN, OR IN ANY FISCAL
S. 7804 20
YEAR THEREAFTER, SHALL BE REQUIRED TO PAY INTEREST TO THE RETIREMENT
SYSTEM ON SUCH OVERDUE AMOUNTS, AS DETERMINED BY THE ACTUARY. THE ACTU-
ARY SHALL DETERMINE, AT SUCH TIME AS HE OR SHE DEEMS APPROPRIATE, INTER-
EST PAYMENTS ON SUCH OVERDUE AMOUNTS USING A RATE OF INTEREST EQUIVALENT
TO THE VALUATION RATE OF INTEREST (AS DEFINED IN PARAGRAPH ELEVEN OF
SUBDIVISION A OF SECTION 13-638.2 OF THE ADMINISTRATIVE CODE OF THE CITY
OF NEW YORK). RESPONSIBLE OBLIGORS SHALL MAKE SUCH INTEREST PAYMENTS ON
OVERDUE AMOUNTS TO THE RETIREMENT SYSTEM IN THE MANNER AND AT SUCH TIME
AS THE ACTUARY DEEMS APPROPRIATE.
S 35. Item (i) of subparagraph 4 of paragraph (c) of subdivision 16 of
section 2575 of the education law, as amended by chapter 85 of the laws
of 2000, is amended to read as follows:
(i) NOTWITHSTANDING THE SUCCEEDING PROVISIONS OF THIS ITEM OR THE
PROVISIONS OF ITEM (I-A), (II), (III) OR (IV) OF THIS SUBPARAGRAPH, FOR
FISCAL YEAR TWO THOUSAND ELEVEN--TWO THOUSAND TWELVE, AND FOR EACH
FISCAL YEAR THEREAFTER, THE AMOUNT OF THE NORMAL CONTRIBUTION PAYABLE TO
THE CONTINGENT RESERVE FUND SHALL BE DETERMINED PURSUANT TO THE
PROVISIONS OF ITEM (V) OF THIS SUBPARAGRAPH. Upon the basis of the
latest mortality and other tables authorized by the applicable
provisions of the rules and regulations and regular interest, the actu-
ary shall determine, as of June thirtieth, nineteen hundred eighty and
as of each succeeding June thirtieth, the amount of the total liability
for all benefits provided in the rules and regulations, in articles
eleven and fourteen of the retirement and social security law and in any
other law prescribing benefits payable by the retirement system on
account of all members and beneficiaries, excluding the liability on
account of future increased-take-home-pay contributions, if any, and the
liability for benefits attributable to the annuity savings fund and to
the variable annuity savings fund, provided, however, that in determin-
ing such total liability as of June thirtieth, nineteen hundred ninety-
five and as of each succeeding June thirtieth, the actuary shall include
(A) the liability on account of future increased-take-home-pay contrib-
utions, if any, (B) the liability on account of future public employer
obligations under the provisions of subdivision twenty of section two
hundred forty-three of the military law, to pay in behalf of members
qualifying for such benefit, member contributions with respect to
certain periods of the military service of such members and (C) the
liability for benefits attributable to the annuity savings fund and to
the variable annuity savings fund, and provided further that in deter-
mining such total liability as of June thirtieth, nineteen hundred nine-
ty-nine and as of each succeeding June thirtieth, the actuary shall
include any other liability, as determined by the actuary, for benefits
attributable to the variable annuity programs, and provided further that
in determining such total liability as of June thirtieth, two thousand
and as of each succeeding June thirtieth, the actuary shall include the
amount, if any, as estimated by the actuary, of the total liability of
the retirement system on account of payments which the retirement system
may be required to make to any other fund without a corresponding offset
in the liabilities of the retirement system.
S 36. Subparagraph 4 of paragraph (c) of subdivision 16 of section
2575 of the education law is amended by adding a new item (v) to read as
follows:
(V) (A) NOTWITHSTANDING THE PRECEDING ITEMS OF THIS SUBPARAGRAPH OR
ANY OTHER PROVISION OF LAW TO THE CONTRARY, THE NORMAL CONTRIBUTION
PAYABLE TO THE CONTINGENT RESERVE FUND IN FISCAL YEAR TWO THOUSAND
ELEVEN--TWO THOUSAND TWELVE, AND IN EACH FISCAL YEAR THEREAFTER, SHALL
S. 7804 21
BE THE ENTRY AGE NORMAL CONTRIBUTION, AS DETERMINED BY THE ACTUARY
PURSUANT TO THIS ITEM IN A MANNER CONSISTENT WITH THE ENTRY AGE ACTUARI-
AL COST METHOD. THE ACTUARY SHALL DETERMINE THE ENTRY AGE NORMAL
CONTRIBUTION FOR EACH SUCH FISCAL YEAR AS OF JUNE THIRTIETH OF THE
SECOND FISCAL YEAR PRECEDING THE FISCAL YEAR IN WHICH SUCH NORMAL
CONTRIBUTION IS PAYABLE, BASED ON THE LATEST MORTALITY AND OTHER TABLES
APPLICABLE AT THE TIME HE OR SHE PERFORMS SUCH CALCULATIONS, AND THE
VALUATION RATE OF INTEREST AS PROVIDED FOR THE RETIREMENT SYSTEM IN
PARAGRAPH TWO OF SUBDIVISION B OF SECTION 13-638.2 OF THE ADMINISTRATIVE
CODE OF THE CITY OF NEW YORK.
(B) IN CALCULATING THE ENTRY AGE NORMAL CONTRIBUTION PAYABLE IN ANY
SUCH FISCAL YEAR PURSUANT TO THIS ITEM, THE ACTUARY, IN HIS OR HER
DISCRETION, MAY MAKE CERTAIN ADJUSTMENTS IN THE CALCULATION METHODOLOGY,
PROVIDED THAT SUCH ADJUSTMENTS ARE GENERALLY ACCEPTED AS CONSISTENT WITH
THE ENTRY AGE ACTUARIAL COST METHOD, AND ARE DESIGNED, IN GENERAL, TO
FUND, ON A LEVEL BASIS OVER THE WORKING LIFETIMES OF MEMBERS FROM THEIR
AGES AT ENTRY, THE ACTUARIAL PRESENT VALUE OF BENEFITS TO WHICH SUCH
MEMBERS ARE EXPECTED TO BECOME ENTITLED, AS DETERMINED BY THE ACTUARY.
SUCH GENERALLY ACCEPTED ADJUSTMENTS IN THE CALCULATION METHODOLOGY, IN
THE DISCRETION OF THE ACTUARY, MAY INCLUDE, BUT ARE NOT LIMITED TO, THE
CALCULATION OF THE ENTRY AGE NORMAL CONTRIBUTION (1) ON AN INDIVIDUAL
MEMBER BASIS BY CALCULATING THE AMOUNT OF THE ENTRY AGE NORMAL CONTRIB-
UTION ATTRIBUTABLE TO EACH INDIVIDUAL MEMBER, AND THEN ADDING TOGETHER
SUCH INDIVIDUAL MEMBER AMOUNTS, (2) ON AN AGGREGATE BASIS FOR ALL
MEMBERS OR (3) ON ANY COMBINATION OF AN INDIVIDUAL MEMBER BASIS AND AN
AGGREGATE BASIS WHICH IS CONSISTENT WITH THE ENTRY AGE ACTUARIAL COST
METHOD, AND THE PRECEDING PROVISIONS OF THIS SUB-ITEM.
(C) FOR EACH SUCH FISCAL YEAR, THE ACTUARY, IN HIS OR HER DISCRETION,
SHALL DETERMINE, IN ACCORDANCE WITH THE PROVISIONS OF SUB-ITEM (B) OF
THIS ITEM, THE METHODOLOGY FOR CALCULATING THE ENTRY AGE NORMAL CONTRIB-
UTION PAYABLE FOR THAT PARTICULAR FISCAL YEAR.
(D) THE METHODOLOGY DETERMINED BY THE ACTUARY IN ACCORDANCE WITH SUB-
ITEM (C) OF THIS ITEM MAY PROVIDE FOR THE ACTUARY TO CALCULATE THE ENTRY
AGE NORMAL CONTRIBUTION ON AN INDIVIDUAL MEMBER BASIS BY (1) MULTIPLYING
THE ENTRY AGE NORMAL CONTRIBUTION RATE FOR EACH INDIVIDUAL MEMBER, AS
DETERMINED BY THE ACTUARY, BY THE SALARY EXPECTED TO BE PAID TO THAT
MEMBER DURING THE FISCAL YEAR IN WHICH SUCH NORMAL CONTRIBUTION IS PAYA-
BLE, AND (2) CALCULATING THE SUM OF THE INDIVIDUAL ENTRY AGE NORMAL
CONTRIBUTIONS ATTRIBUTABLE TO ALL SUCH MEMBERS. THE ACTUARY, IN HIS OR
HER DISCRETION, MAY MAKE ANY ADJUSTMENTS TO SUCH METHODOLOGY FOR DETER-
MINING THE ENTRY AGE NORMAL CONTRIBUTION ON AN INDIVIDUAL BASIS WHICH HE
OR SHE DEEMS APPROPRIATE, AND WHICH ARE CONSISTENT WITH THE PROVISIONS
OF SUB-ITEM (B) OF THIS ITEM.
(E) IN THE ALTERNATIVE, THE METHODOLOGY DETERMINED BY THE ACTUARY IN
ACCORDANCE WITH SUB-ITEM (C) OF THIS ITEM MAY PROVIDE FOR THE ACTUARY TO
CALCULATE THE ENTRY AGE NORMAL CONTRIBUTION ON AN AGGREGATE BASIS BY
MULTIPLYING THE ENTRY AGE NORMAL CONTRIBUTION RATE FOR ALL MEMBERS IN
THE AGGREGATE, AS DETERMINED BY THE ACTUARY, BY THE AGGREGATE AMOUNT OF
THE SALARIES EXPECTED TO BE PAID TO ALL MEMBERS DURING THE FISCAL YEAR
IN WHICH THE NORMAL CONTRIBUTION IS PAYABLE. THE ACTUARY, IN HIS OR HER
DISCRETION, MAY MAKE ANY ADJUSTMENTS TO SUCH METHODOLOGY FOR DETERMINING
THE ENTRY AGE NORMAL CONTRIBUTION ON AN AGGREGATE BASIS WHICH HE OR SHE
DEEMS APPROPRIATE, AND WHICH ARE CONSISTENT WITH THE PROVISIONS OF SUB-
ITEM (B) OF THIS ITEM.
(F) IN THE ALTERNATIVE, THE METHODOLOGY DETERMINED BY THE ACTUARY IN
ACCORDANCE WITH SUB-ITEM (C) OF THIS ITEM MAY PROVIDE FOR THE CALCU-
S. 7804 22
LATION OF THE ENTRY AGE NORMAL CONTRIBUTION ON ANY OTHER BASIS WHICH THE
ACTUARY DEEMS APPROPRIATE, AND WHICH IS CONSISTENT WITH THE ENTRY AGE
ACTUARIAL COST METHOD AND THE PROVISIONS OF SUB-ITEM (B) OF THIS ITEM.
(G) (1) WHERE THE METHODOLOGY DETERMINED BY THE ACTUARY IN ACCORDANCE
WITH SUB-ITEM (C) OF THIS ITEM REQUIRES THE DETERMINATION OF AN ENTRY
AGE NORMAL CONTRIBUTION RATE FOR EACH INDIVIDUAL MEMBER IN ORDER TO
CALCULATE THE ENTRY AGE NORMAL CONTRIBUTION FOR EACH INDIVIDUAL MEMBER,
THE ACTUARY SHALL DETERMINE SUCH RATE FOR EACH SUCH MEMBER IN ACCORDANCE
WITH THE ENTRY AGE ACTUARIAL COST METHOD, AND SUCH RATE, AS DETERMINED
BY THE ACTUARY FOR EACH SUCH MEMBER, SHALL BE CONSISTENT WITH A METHOD
DESIGNED, IN GENERAL, TO FUND, ON A LEVEL BASIS OVER THE WORKING LIFE-
TIME OF THAT PARTICULAR MEMBER FROM HIS OR HER AGE AT ENTRY, THE ACTUAR-
IAL PRESENT VALUE OF BENEFITS TO WHICH SUCH MEMBER IS EXPECTED TO BECOME
ENTITLED, AS DETERMINED BY THE ACTUARY.
(2) WHERE THE METHODOLOGY DETERMINED BY THE ACTUARY IN ACCORDANCE WITH
SUB-ITEM (C) OF THIS ITEM REQUIRES THE DETERMINATION OF AN ENTRY AGE
NORMAL CONTRIBUTION RATE FOR ALL MEMBERS IN THE AGGREGATE IN ORDER TO
CALCULATE THE ENTRY AGE NORMAL CONTRIBUTION FOR ALL MEMBERS IN THE
AGGREGATE, THE ACTUARY SHALL DETERMINE SUCH RATE IN ACCORDANCE WITH THE
ENTRY AGE ACTUARIAL COST METHOD, AND SUCH RATE, AS DETERMINED BY THE
ACTUARY, SHALL BE CONSISTENT WITH A METHOD DESIGNED, IN GENERAL, TO
FUND, ON A LEVEL BASIS OVER THE WORKING LIFETIMES OF MEMBERS FROM THEIR
AGES AT ENTRY, THE ACTUARIAL PRESENT VALUE OF BENEFITS TO WHICH SUCH
MEMBERS ARE EXPECTED TO BECOME ENTITLED, AS DETERMINED BY THE ACTUARY.
S 37. Paragraph (j) of subdivision 16 of section 2575 of the education
law is amended by adding a new subparagraph 2-a to read as follows:
(2-A) WHERE A RESPONSIBLE OBLIGOR (AS DEFINED IN PARAGRAPH TEN OF
SUBDIVISION A OF SECTION 13-638.2 OF THE ADMINISTRATIVE CODE OF THE CITY
OF NEW YORK) IS REQUIRED TO MAKE PAYMENTS TO THE RETIREMENT SYSTEM
PURSUANT TO APPLICABLE PROVISIONS OF LAW IN FISCAL YEAR TWO THOUSAND
TWELVE--TWO THOUSAND THIRTEEN, AND IN ANY FISCAL YEAR THEREAFTER, AND
THE PROVISIONS OF THIS PARAGRAPH OR THE PROVISIONS OF ANY OTHER APPLICA-
BLE LAW DO NOT OTHERWISE SPECIFICALLY REQUIRE SUCH RESPONSIBLE OBLIGOR
TO MAKE SUCH PAYMENTS BY A PARTICULAR DATE OR DATES DURING SUCH FISCAL
YEAR, SUCH RESPONSIBLE OBLIGOR SHALL MAKE SUCH PAYMENTS EITHER (I) IN
TOTAL ON OR BEFORE JANUARY FIRST OF SUCH FISCAL YEAR, OR (II) IN TWELVE
EQUAL MONTHLY INSTALLMENTS, AS DETERMINED BY THE ACTUARY, WITH EACH
MONTHLY INSTALLMENT TO BE PAID ON OR BEFORE THE LAST DAY OF EACH MONTH.
S 38. This act shall take effect immediately and shall be deemed to
have been in full force and effect on and after July 1, 2011. Notwith-
standing any other provision of law, for the purposes of calculating an
actuarial reserve pursuant to the provisions of section 13-557 of the
administrative code of the city of New York, the valuation rate of
interest and mortality tables in effect on June 30, 1988 shall be
utilized by the actuary.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50: BACKGROUND: In
reports dated February 10, 2012, the Actuary presented proposed changes
in actuarial assumptions and methods for determining employer contrib-
utions for Fiscal Years beginning on and after July 1, 2011 (i.e., the
"Silver Books") to each of the Boards of Trustees of the following five
actuarially-funded New York City Retirement Systems ("NYCRS"):
* New York City Employees' Retirement System ("NYCERS") New York City
Teachers' Retirement System ("TRS")
* New York City Board of Education Retirement System ("BERS")
* New York City Police Pension Fund ("POLICE")
* New York City Fire Department Pension Fund ("FIRE")
S. 7804 23
These Silver Books were developed by the Actuary after reviewing the
two most recent actuarial experience studies required by the New York
City Charter and prepared by The Segal Company in their Report dated
November 2006 and The Hay Group in their Report dated December 2011.
The principal components of the Actuary's proposed changes in actuari-
al assumptions and methods used to develop employer contributions to the
NYCRS are to:
* Reduce the Actuarial Interest Rate ("AIR") assumption from 8.0% per
annum (gross of expenses) to 7.0% per annum (net of expenses).
* Retain the current economic actuarial assumptions for the Consumer
Price Inflation of 2.5% per year and the General Wage Increase ("GWI")
of 3.0% per year.
* Update demographic actuarial assumptions to reflect the Actuary's
best estimate of future experience.
* Replace the current Actuarial Cost Method ("ACM") (i.e., the Frozen
Initial Liability ("FIL") ACM) with the Entry Age Actuarial Cost Method
("EAACM") and establish certain amortization methods and periods to be
used for financing the Unfunded Actuarial Accrued Liabilities ("UAAL")
developed under this new ACM.
* Retain the current six-year phase-in period for Unexpected Invest-
ment Returns ("UIR") for investment gains and losses for the Actuarial
Asset Valuation Method ("AAVM") for Fiscal Year 2012 and beyond. Use a
Market Value Restart as of June 30, 2011 and set the June 30, 2010 Actu-
arial Asset Value ("AAV") equal to the June 30, 2011 Market Value of
Assets ("MVA") discounted by the AIR assumption (adjusted for cash
flow).
Certain of the proposals developed by the Actuary (e.g., probabilities
of decrement from active service, probabilities of death after retire-
ment) require adoption by the Board of Trustees of each of the NYCRS.
Other proposed changes in actuarial assumptions and methods require
passage of enabling legislation by the New York State Legislature and
enactment by the Governor.
The provisions of this amended proposed legislation, together with the
adoption of actuarial tables by the Boards of Trustees of the NYCRS and
application of the revised AAVM, represent the packages of actuarial
assumptions and methods proposed by the Actuary for financing the NYCRS.
PROVISIONS OF PROPOSED LEGISLATION: This proposed legislation would
amend Administrative Code of the City of New York ("ACNY") Sections
13-127, 13-133, 13-194, 13-228, 13-271, 13-281, 13-331, 13-527, 13-533,
13-638.2 and 13-705 and Education Law Section 2575 by including
provisions that impact the development of employer contributions to the
NYCRS.
Specifically, for each of the NYCRS, this amended proposed legislation
would:
* Reduce the AIR assumption to be used for developing employer
contributions from 8.0% per annum (gross of expenses) to 7.0% per annum
(net of expenses).
* Continue through Fiscal Year 2016 the use of the 8.25% per year
crediting rate on Annuity Savings Fund ("ASF") and Increased-Take-Home-
Pay ("ITHP") Reserves for Tier I and Tier II members.
* Replace the current ACM (i.e., the FIL ACM) with the EAACM.
* Amortize over a 22-year period the Initial UAAL established under
the EAACM with 21 annual payments beginning Fiscal Year 2012 using
Increasing Dollar Payments ("IDP"), where the increase in payments would
be 3.0% per year, consistent with the proposed GWI assumption.
S. 7804 24
Amortize over a 20-year period (19 annual payments) additional UAAL
attributable to future actuarial assumption and/or method changes, over
a 15-year period (14 annual payments) any actuarial gains and losses and
over an approximation of the remaining working lifetimes of those
impacted (unless the amortization period is established by statute) any
benefit changes, using Level Dollar Payments ("LDP").
The Actuary would be provided with the authority to establish UAAL
and/or amortization schedules consistent with the EAACM, where such UAAL
and/or amortization schedules are appropriate but not provided in legis-
lation.
* Retain the One-Year Lag Methodology ("OYLM").
* Retain the repayment of Administrative Expenses, with interest, in
the second fiscal year after occurrence.
* Provide for the transfer of assets directly from NYCERS to the
Correction Officers' Variable Supplements Fund ("COVSF") in the event
that assets of the COVSF are insufficient to meet any legally-required
benefit payments.
* Provide for the transfer of assets directly from POLICE to the
Police Officers' Variable Supplements Fund ("POVSF") and to the Police
Superior Officers' Variable Supplements Fund ("PSOVSF") in the event
that assets of the POVSF or the PSOVSF are insufficient to meet any
legally-required benefit payments.
* Although recommended by the Actuary, due to concerns expressed by
certain FIRE Trustees, not provide for the transfer of assets directly
from FIRE to the Firefighters' Variable Supplements Fund ("FFVSF") and
to the Fire Officers' Variable Supplements Fund ("FOVSF") in the event
that assets of the FFVSF or the FOVSF are insufficient to meet any
legally-required benefit payments.
* Provide for the payment of interest on employer contributions made
after the due dates determined and communicated by the Actuary to the
Boards of Trustees.
ACTUARIAL PRESENT VALUES OF BENEFITS: Enactment of this amended
proposed legislation, together with the other changes in actuarial
assumptions and methods adopted by the Boards of Trustees of the NYCRS,
would result in an increase in the Actuarial Present Value ("APV") of
Benefits ("APVB") (inclusive of the APVB of the Variable Supplements
Funds ("VSFs")) of the NYCRS of approximately $36.0 billion as of June
30, 2010, as shown in the following Table I:
TABLE I
Comparison of Actuarial Present Values of Benefits
Before and After Proposed Changes
in Actuarial Assumptions and Methods
as of June 30, 2010
($ Billions)
Actuarial Present Values of Benefits*
Retirement Before After Difference#
System Changes** Changes*#
NYCERS $ 64.7 $ 78.0 $ 13.3
TRS 58.3 68.2 9.9
BERS 3.7 4.6 .9
S. 7804 25
POLICE 42.3 50.7 8.4
FIRE 17.0 20.5 3.5
Total $186.0 $222.0 $ 36.0
* Amounts include APVB of the VSFs.
** Equals APVB as of June 30, 2010 based on preliminary census data
used for the June 30, 2010 (Lag) actuarial valuations, on preliminary
calculations using actuarial software being replaced and on current
actuarial assumptions and methods.
*# Equals APVB as of June 30, 2010 based on final census data used for
the June 30, 2010 (Lag) actuarial valuations, on final calculations
using new actuarial software and on proposed actuarial assumptions and
methods.
# Equals After Changes minus Before Changes.
ANNUAL EMPLOYER CONTRIBUTIONS: Under the EAACM, the Actuarial Present
Value ("APV") of Projected Benefits ("APVB") of each individual included
in the actuarial valuation is allocated on a level basis over the earn-
ings (or service) of the individual between entry age and assumed exit
age(s).
The portion of this APV allocated to a valuation year is referred to
as the Normal Contribution. The portion of this APV not provided for at
a valuation date by the APV of Future Normal Contributions is the Actu-
arial Accrued Liability ("AAL"). The excess, if any, of the AAL over the
AAV is the UAAL.
Under this method, actuarial gains (losses), as they occur, reduce
(increase) the UAAL and are explicitly identified and amortized.
Increases (decreases) in obligations due to benefit changes, actuarial
assumption and/or method changes are also explicitly identified and
amortized.
The initial UAAL as of June 30, 2010 would be amortized over 22 years
with 21 annual payments beginning Fiscal Year 2012 increasing by 3.0%
per year, recognizing the impact of employer contributions made during
Fiscal Year 2011 under the OYLM.
Furthermore, the Actuary proposes revising the AAVM as of June 30,
2010 for each of the NYCRS. The new method would retain the current
six-year phase-in period for Unexpectedly Investment Returns ("UIR") for
the AAVM of 15%, 15%, 15%, 15%, 20% and 20% for investment gains/losses
for Fiscal Year 2012 and beyond. However, the AAV as of June 30, 2011
would be set equal to the MVA as of that date and the June 30, 2010 AAV
would be set equal to the June 30, 2011 MVA, discounted by the AIR
assumption and adjusted for cash flow.
The One-Year Lag Methodology and the repayment of Administrative
Expenses with interest, in the second fiscal year after occurrence,
would be retained.
EMPLOYER CONTRIBUTIONS - FISCAL YEAR 2012: The following Table II
presents the combined impact of all of the proposed changes in actuarial
assumptions and methods on the Fiscal Year 2012 employer contributions
to the NYCRS.
Specifically, Table II shows a comparison between: (1) estimated
Fiscal Year 2012 employer contributions based upon the actuarial assump-
tions and methods currently in effect ("Before Changes") and (2) final
Fiscal Year 2012 employer contributions computed in accordance with this
proposed legislation and all of the other proposed actuarial assumptions
and methods ("After Changes").
TABLE II
S. 7804 26
Comparison of Fiscal Year 2012 Employer Contributions Calculated
using Current Actuarial Assumptions and Methods with Those
Calculated using Proposed Actuarial Assumptions and Methods
($ Billions)
Retirement Before After Difference#
System Changes* Changes**
NYCERS $ 2.59 $ 3.02 $ .43
TRS 2.62 2.67 .05
BERS .17 .21 .04
POLICE 2.20 2.39 .19
FIRE .95 .98 .03
Total $ 8.53 $ 9.27 $ .74
* Equals estimated employer contributions for Fiscal Year 2012 based
on preliminary census data used for the June 30, 2010 (Lag) actuarial
valuations, on preliminary calculations using actuarial software being
replaced and on current actuarial assumptions and methods.
** Equals final employer contributions for Fiscal Year 2012 based on
final census data used for the June 30, 2010 (Lag) actuarial valuations,
on final calculations using new actuarial software and on proposed actu-
arial assumptions and methods.
# Equals After Changes minus Before Changes.
EMPLOYER CONTRIBUTIONS - FISCAL YEARS 2012 TO 2016: The financial
impact of the proposed changes in actuarial assumptions and methods,
relative to the current actuarial assumptions and methods, is to
increase and to smooth the pattern of employer contributions to the
NYCRS for Fiscal Years 2012 to 2016.
The following Table III compares the estimated employer contributions
for the five actuarially-funded NYCRS combined under the current actuar-
ial assumptions and methods and under the proposed actuarial assumptions
and methods:
TABLE III
Comparison of Employer Contributions
For Fiscal Years 2012 to 2016
Calculated using Current Actuarial Assumptions and Methods with
Those Calculated using Proposed Actuarial Assumptions and Methods*
($ Billions)
Fiscal Before After Difference#
Year Changes** Changes*#
2012 $ 8.53 $ 9.27 $ .74
2013 8.37 9.39 1.02
2014 8.36 9.37 1.01
2015 8.66 9.34 .68
2016 8.87 9.57 .70
* Amounts shown are estimated based on preliminary June 30, 2010
census data and on preliminary calculations using actuarial software
that is being replaced, with adjustments in amounts shown After Changes
to be consistent with final Fiscal Year 2012 amounts.
S. 7804 27
** Equals employer contributions for the respective Fiscal Years based
upon the second prior June 30 actuarial valuations and on current actu-
arial assumptions and methods.
*# Equals employer contributions for the respective Fiscal Years based
upon the second prior June 30 actuarial valuations and on proposed actu-
arial assumptions and methods.
# Equals After Changes minus Before Changes.
CENSUS DATA: The census data used to determine APVB and estimated
Fiscal Year 2012 employer contributions Before Changes and After Changes
are the active and retired members included in the June 30, 2010 (Lag)
actuarial valuations of the NYCRS.
ACTUARIAL ASSUMPTIONS AND METHODS: The actuarial assumptions and meth-
ods used to determine estimated Fiscal Year 2012 employer contributions
Before Changes are generally the same as those utilized in the June 30,
2009 actuarial valuations of the NYCRS to determine Fiscal Year 2011
employer contributions.
The actuarial assumptions and methods used to determine Fiscal Year
2012 employer contributions After Changes are those proposed by the
Actuary to the Boards of Trustees of each of the NYCRS during February
2012.
The actuarial assumptions used to estimate employer contributions for
Fiscal Years 2013 to 2016 include projection assumptions consistent with
those used to develop estimates for the April 2011 New York City Finan-
cial Plan.
APVB and employer contribution amounts shown Before Changes are esti-
mated based on preliminary June 30,2010 census data and on actuarial
software that is being replaced.
APVB and employer contributions After Changes used to determine Fiscal
Year 2012 employer contributions are based on final June 30, 2010 census
data and generally on new actuarial software.
Estimated employer contributions After Changes for Fiscal Years 2013
to 2016 are based on June 30, 2010 census data and projections of APVB
adjusted to be consistent with Fiscal Year 2012 results.
ECONOMIC VALUES OF BENEFITS: The actuarial assumptions used to deter-
mine the financial impact of the proposed legislation discussed in this
Fiscal Note are those appropriate for budgetary models and for determin-
ing annual employer contributions to NYCRS. However, the economic
assumptions (current and proposed) that are used for determining employ-
er contributions do not develop risk-adjusted, economic values of bene-
fits. Such risk-adjusted, economic values of benefits would likely
differ significantly from those developed by the budgetary models.
STATEMENT OF ACTUARIAL OPINION: I, Robert C. North, Jr., am the Chief
Actuary for the New York City Retirement Systems. I am a Fellow of the
Society of Actuaries and a Member of the American Academy of Actuaries.
I meet the Qualification Standards of the American Academy of Actuaries
to render the actuarial opinion contained herein.
FISCAL NOTE IDENTIFICATION: This estimate is intended for use only
during the 2012 Legislative Session. It is Fiscal Note 2012-15, dated
June 13, 2012 prepared by the Chief Actuary for the New York City
Employees' Retirement System, the New York City Teachers' Retirement
System, the New York City Board of Education Retirement System, the New
York City Police Pension Fund and the New York City Fire Department
Pension Fund.
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