S T A T E   O F   N E W   Y O R K
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                                 7331--A
    Cal. No. 995

                            I N  S E N A T E

                              May 13, 2014
                               ___________

Introduced by Sens. DeFRANCISCO, SAVINO -- read twice and ordered print-
  ed, and when printed to be committed to the Committee on Civil Service
  and  Pensions  --  reported  favorably from said committee, ordered to
  first and second report, ordered  to  a  third  reading,  amended  and
  ordered reprinted, retaining its place in the order of third reading

AN  ACT  to amend the retirement and social security law, in relation to
  investments by public pension funds

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

  Section  1.  Paragraph  (a)  of  subdivision  9  of section 177 of the
retirement and social security law, as amended by chapter 22 of the laws
of 2006, is amended to read as follows:
  (a) the investments by a fund made pursuant to this subdivision  shall
not  at any time exceed [twenty-five] THIRTY per centum of the assets of
such fund;
  S 2. This act shall take effect immediately.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  This bill would amend subdivision 9 of Section 177 of  the  Retirement
and  Social  security  Law  to  increase to 30% the percentage of assets
which may be invested by the New York State Teachers' Retirement  System
in  those investments that aren't otherwise specifically permitted under
the other subdivisions of this section. The current limit is 25%.
  If this bill is enacted, any cost  or  savings  to  the  employers  of
members  of  the New York State Teachers' Retirement System would depend
on the investment performance of any  assets  that  are  invested  in  a
different  manner  due  to  this  change in the investment restrictions.
Additional investment income results in lower required employer contrib-
utions, and vice-versa.
  Employee data is from the System's  most  recent  actuarial  valuation
files,  consisting  of  data provided by the employers to the Retirement
System.  Data distributions and statistics can be found in the  System's
Comprehensive  Annual  Financial  Report  (CAFR).  System  assets are as
reported in the System's financial statements, and can also be found  in

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

                                                           LBD14954-08-4

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the CAFR. Actuarial assumptions and methods are provided in the System's
Actuarial Valuation Report.
  The  source of this estimate is Revised Fiscal Note 2014-31 dated June
11, 2014 prepared by the Actuary of the New York State Teachers' Retire-
ment System and is intended for use only  during  the  2014  Legislative
Session.  I,  Richard  A.  Young,  am the Actuary for the New York State
Teachers' Retirement System. I am a member of the  American  Academy  of
Actuaries and I meet the Qualification Standards of the American Academy
of Actuaries to render the actuarial opinion contained herein.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  PROVISIONS  OF PROPOSED LEGISLATION: With respect to the New York City
Retirement Systems ("NYCRS"),  this  proposed  legislation  would  amend
Retirement  and  Social Security Law ("RSSL") Section 177.9(a) to permit
an increase to 30% the percentage of assets that may be held in  "Basket
Clause"  investments  (i.e.,  investments  not  explicitly identified as
permissible elsewhere in New York State law).
  This 30% limit compares with a limit of 25% under current law.
  FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS: With respect to the  NYCRS,
the  enactment of this proposed legislation would not, in and of itself,
result in any change in employer contributions.
  The ultimate cost of a Retirement Program is the benefits it pays. The
financing of that ultimate cost is provided by contributions and invest-
ment income.
  Investment income depends upon the amounts of assets of the  Fund  and
the  rate of return received on those assets. The rate of return depends
primarily upon the asset allocation policy of the Fund.
  To the extent that the NYCRS increase their investments in the securi-
ties authorized  by  this  proposed  legislation  and  those  securities
produce  greater  (lesser) rates of return than the rates of return that
the NYCRS would otherwise have  achieved,  then  employer  contributions
will be lesser (greater).
  FISCAL  NOTE  IDENTIFICATION:  This estimated is intended for use only
during the 2014 Legislative Session. It  is  Fiscal  Note  No.  2014-27,
dated June 11, 2014, prepared by the Chief Actuary for the New York City
Retirement Systems.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  This  bill  will  amend  the  Retirement  and  Social  Security Law to
increase the limit on non-legal  list  investments  for  the  eight  (8)
public  retirement  systems  of  New  York  State.  It would replace the
current 25% limit with a 30% limit.
  If this bill is enacted, insofar as this bill  affects  the  New  York
State  and Local Employees' Retirement System and the New York State and
Local Police and Fire Retirement System, we assume that there  would  be
small investment changes. Any increases or decreases in investment earn-
ings  will  result  in decreases or increases, respectively, in employer
contributions. Annual changes in assets will be shared by all  employers
and will be spread over the future working lifetimes of active members.
  Summary of relevant resources:
  The  membership  data  used  in  measuring  the impact of the proposed
change was the same as that used in the March 31, 2013  actuarial  valu-
ation.    Distributions  and  other  statistics can be found in the 2013
Report of the  Actuary  and  the  2013  Comprehensive  Annual  Financial
Report.
  The  actuarial assumptions and methods used are described in the 2010,
2011, 2012 and 2013  Annual  Report  to  the  Comptroller  on  Actuarial

S. 7331--A                          3

Assumptions,  and  the  Codes  Rules and Regulations of the State of New
York: Audit and Control.
  The Market Assets and GASB Disclosures are found in the March 31, 2013
New  York  State  and  Local  Retirement System Financial Statements and
Supplementary Information.
  I am a member of the American Academy of Actuaries and meet the Quali-
fication Standards to render the actuarial opinion contained herein.
  This estimate, dated June 12, 2014, and intended for use  only  during
the  2014  Legislative Session, is Fiscal Note No. 2014-152, prepared by
the Actuary for the New  York  State  and  Local  Employees'  Retirement
System  and  the  New  York  State  and Local Police and Fire Retirement
System.