Senate Bill S6792

2015-2016 Legislative Session

Relates to a retirement contribution reserve fund for the purposes of the New York state teachers' retirement system

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Archive: Last Bill Status - In Senate Committee Civil Service And Pensions 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

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Feb 23, 2016	referred to civil service and pensions

co-Sponsors

2015-S6792 (ACTIVE) - Details

See Assembly Version of this Bill:: A6931
Current Committee:: Senate Civil Service And Pensions
Law Section:: Education Law
Laws Affected:: Add §3653, Ed L

2015-S6792 (ACTIVE) - Summary

Relates to a retirement contribution reserve fund for the purposes of the New York state teachers' retirement system.

2015-S6792 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S6792

 TITLE OF BILL :  An act to amend the education law, in relation to a
retirement contribution reserve fund for the purposes of the New York
state teachers' retirement system

 PURPOSE OF THE BILL :

This bill would permit participating employers of the New York State
Teachers' Retirement System to establish a retirement contribution
reserve fund.

 SUMMARY AND JUSTIFICATION :

The importance of local school districts and NYSTRS employers to fully
fund their actuarially required contributions to the System is
critical to the long term viability of the Retirement System.
Beginning in 2004, downturns in the capital markets caused required
employer contributions to the public employee retirement systems in
the state, which had been at historically low levels, to increase,
sometimes quite markedly. The New York Legislature responded in
several ways, one of which was to allow employers to prepare for
future contribution increases by establishing a retirement
contribution reserve fund, but only with respect to contributions for
the New York State and Local Employees' Retirement System ("ERS") and
the New York State and Local Police and Fire Retirement System

("PFRS").

The law provides for the establishment of reserve funds for various
restricted-purpose accounts. Most relevant, there are eleven reserve
funds currently authorized which may be established as a tool for
school districts.  Notwithstanding the fact that teachers comprise an
overwhelming majority of school district payrolls and school district
employers of New York state are authorized to establish retirement
contribution reserve funds for contributions to ERS, there currently
exists no legal mechanism to set aside reserve funds to address the
employer contribution rate for NYSTRS.

The amendments proposed by this bill are substantially similar to
existing provisions in statute. Consistent with existing practices,
specifically General Municipal Law Section 6-r, the Board of Education
or Trustees of the employer, at their option, would be authorized to
establish a reserve fund, by resolution, specifically to offset
employer contributions payable to the New York State Teachers'
Retirement System. This bill proposes to establish a new Section 3653
of the Education Law and, in accordance with authority granted by
other provisions in the Education Law, the Commissioner of Education
would be authorized to promulgate any rules and regulations deemed
necessary.

Once a reserve fund has been established, the Board of Education or
Trustees would regulate and monitor the use of such reserve funds and
expenditures would be authorized by resolution. The publication
requirements and public notice provisions of General Municipal Law
will be required for any transfer of such reserve funds. Additionally,
the money in such reserves would be classified as a restricted fund
balance on financial statement balance sheets.

The enactment of this provision rectifies the discrepancy in the
statutes and provides the remedy to allow public employers to create a
reserve fund for retirement contributions on the same basis as
currently allowed for the aforementioned retirement systems. If this
legislation were enacted, it would be at the option of the employer
and would not be a mandate on local governments.


In an effort to provide NYSTRS employers with the tools for fiscal
health and planning, and for the other reasons stated, the Retirement
Board respectfully submits this bill to the Legislature for their
consideration.

 OTHER AGENCIES TO WHOM THE BILL MAY BE OF INTEREST :

New York State Education Department and State Comptroller.

 EFFECTIVE DATE OF THE BILL :

This act shall take effect on the first day of July next succeeding
the date on which it shall have become a law.

 BUDGETARY IMPLICATION OF THE BILL :

It is estimated that there will be no annual cost to the employers of
members of the New York State Teachers' Retirement System if this bill
is enacted.

2015-S6792 (ACTIVE) - Bill Text download pdf

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

                                  6792

                            I N  S E N A T E

                            February 23, 2016
                               ___________

Introduced  by  Sen.  MARCELLINO  --  (at  request of the New York State
  Teachers' Retirement System) -- read twice and  ordered  printed,  and
  when  printed  to  be  committed to the Committee on Civil Service and
  Pensions

AN ACT to amend the education law, in relation to a retirement  contrib-
  ution  reserve  fund  for the purposes of the New York state teachers'
  retirement system

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

  Section  1.  The education law is amended by adding a new section 3653
to read as follows:
  S 3653. RETIREMENT CONTRIBUTION RESERVE FUND. 1. THE BOARD  OF  EDUCA-
TION  OR TRUSTEES OF A PARTICIPATING EMPLOYER MAY, BY RESOLUTION, ESTAB-
LISH A RETIREMENT CONTRIBUTION RESERVE FUND FOR THE PURPOSE  OF  OFFSET-
TING  EMPLOYER  CONTRIBUTIONS TO THE NEW YORK STATE TEACHERS' RETIREMENT
SYSTEM AND PAYABLE PURSUANT TO THIS CHAPTER.
  2. THERE MAY BE PAID INTO A RETIREMENT CONTRIBUTION RESERVE FUND:
  A. SUCH AMOUNTS AS MAY BE PROVIDED THEREFOR BY BUDGETARY APPROPRIATION
OR RAISED BY TAX THEREFOR;
  B. SUCH REVENUES AS ARE NOT REQUIRED BY LAW TO BE PAID INTO ANY  OTHER
FUND OR ACCOUNT;
  C. SUCH OTHER FUNDS AS MAY BE LEGALLY APPROPRIATED; AND
  D.  NOTWITHSTANDING  ANY  LAW  TO THE CONTRARY, SUCH AMOUNTS AS MAY BE
TRANSFERRED FROM A RESERVE FUND ESTABLISHED PURSUANT TO  SECTION  SIX-C,
SIX-D,  SIX-E,  SIX-F OR SIX-G OF THE GENERAL MUNICIPAL LAW COMPRISED OF
MONEYS RAISED FROM THE SAME TAX BASE AS THE  MONEYS  IN  THE  RETIREMENT
CONTRIBUTION  RESERVE  FUND,  OR  A RESERVE FUND ESTABLISHED PURSUANT TO
SECTION THIRTY-SIX HUNDRED FIFTY-ONE OF THIS ARTICLE, PROVIDED THAT  ANY
SUCH TRANSFER SHALL ONLY BE MADE BY RESOLUTION OF THE BOARD OF EDUCATION
OR  TRUSTEES  OF SUCH EMPLOYER ADOPTED AFTER A PUBLIC HEARING HELD ON AT
LEAST FIFTEEN DAYS PRIOR PUBLISHED NOTICE  IN  AT  LEAST  ONE  NEWSPAPER
HAVING GENERAL CIRCULATION IN THE SCHOOL DISTRICT OF THE EMPLOYER.
  3. FOR PURPOSES OF THIS SECTION:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09379-03-6

S. 6792                             2

  A.  "RETIREMENT  CONTRIBUTION"  SHALL  MEAN  ALL OR ANY PORTION OF THE
EMPLOYER CONTRIBUTION PAYABLE BY A PARTICIPATING  EMPLOYER  TO  THE  NEW
YORK  STATE  TEACHERS'  RETIREMENT  SYSTEM PURSUANT TO ARTICLE ELEVEN OF
THIS CHAPTER; AND
  B. "EMPLOYER" SHALL MEAN THE STATE OF NEW YORK, THE CITY, THE VILLAGE,
SCHOOL  DISTRICT  BOARD  OR  TRUSTEE,  OR OTHER AGENCY OF AND WITHIN THE
STATE BY WHICH A TEACHER IS PAID.
  4. THE MONEYS IN THE RETIREMENT CONTRIBUTION  RESERVE  FUND  SHALL  BE
DEPOSITED  AND  SECURED  IN  THE  MANNER  PROVIDED BY SECTION TEN OF THE
GENERAL MUNICIPAL LAW. THE BOARD OF  EDUCATION  OR  TRUSTEES,  OR  CHIEF
ADMINISTRATIVE  OFFICER  OR  HIS OR HER DESIGNEE THEREOF IF THE BOARD OR
TRUSTEES SHALL DELEGATE SUCH DUTY TO HIM OR HER, MAY INVEST  THE  MONEYS
IN  SUCH  FUND  IN  THE MANNER PROVIDED BY SECTION ELEVEN OF THE GENERAL
MUNICIPAL LAW. ANY INTEREST EARNED OR CAPITAL GAIN REALIZED ON THE MONEY
SO DEPOSITED OR INVESTED SHALL ACCRUE TO AND BECOME PART OF SUCH FUND.
  5. THE BOARD OF EDUCATION OR TRUSTEES OF SUCH EMPLOYER MAY, BY  RESOL-
UTION,  AUTHORIZE  EXPENDITURES FROM THE RETIREMENT CONTRIBUTION RESERVE
FUND. EXCEPT AS OTHERWISE  PROVIDED  BY  LAW,  MONEYS  IN  A  RETIREMENT
CONTRIBUTION  RESERVE  FUND  MAY ONLY BE EXPENDED TO OFFSET THE EMPLOYER
CONTRIBUTIONS PAYABLE IN ACCORDANCE WITH ARTICLE ELEVEN OF THIS CHAPTER.
  6. THE BOARD OF EDUCATION OR TRUSTEES OF SUCH EMPLOYER MAY, BY  RESOL-
UTION, AUTHORIZE THE TRANSFER OF A PORTION OF THE MONEYS IN A RETIREMENT
CONTRIBUTION  RESERVE FUND TO A RESERVE FUND OF THE EMPLOYER ESTABLISHED
PURSUANT TO SECTION SIX-C, SIX-D, SIX-E, SIX-F OR SIX-G OF  THE  GENERAL
MUNICIPAL  LAW  COMPRISED OF MONEYS RAISED FROM THE SAME TAX BASE AS THE
MONEYS IN THE RETIREMENT CONTRIBUTION RESERVE FUND, OR  A  RESERVE  FUND
ESTABLISHED  PURSUANT  TO  SECTION  THIRTY-SIX HUNDRED FIFTY-ONE OF THIS
ARTICLE, PROVIDED, THAT ANY TRANSFER SHALL ONLY BE MADE BY RESOLUTION OF
THE BOARD OF EDUCATION OR TRUSTEES OF  SUCH  EMPLOYER  ADOPTED  AFTER  A
PUBLIC  HEARING  HELD ON AT LEAST FIFTEEN DAYS PRIOR PUBLISHED NOTICE IN
AT LEAST ONE NEWSPAPER HAVING GENERAL CIRCULATION IN THE SCHOOL DISTRICT
OF THE EMPLOYER.
  7. THE CHIEF ADMINISTRATIVE OFFICER, OR HIS OR HER DESIGNEE,  OF  SUCH
EMPLOYER  SHALL ACCOUNT FOR A RETIREMENT CONTRIBUTION RESERVE FUND SEPA-
RATE AND APART FROM ALL OTHER FUNDS OF  THE  EMPLOYER.  SUCH  ACCOUNTING
SHALL  SHOW: THE SOURCE, DATE AND AMOUNT OF EACH SUM PAID INTO THE FUND;
THE INTEREST EARNED BY SUCH FUND, CAPITAL GAINS OR LOSSES RESULTING FROM
THE SALE OF INVESTMENTS OF THIS FUND; THE ORDER, PURPOSE  THEREOF,  DATE
AND AMOUNT OF EACH PAYMENT FROM THIS FUND; THE ASSETS OF THE FUND, INDI-
CATING CASH BALANCE AND A SCHEDULE OF INVESTMENTS. THE CHIEF ADMINISTRA-
TIVE  OFFICER, OR HIS OR HER DESIGNEE, WITHIN SIXTY DAYS AFTER THE CLOSE
OF EACH FISCAL YEAR, SHALL FURNISH A DETAILED REPORT  OF  THE  OPERATION
AND CONDITION OF THIS FUND TO THE BOARD OF EDUCATION OR TRUSTEES.
  8.  THE MEMBERS OF THE BOARD OF EDUCATION OR TRUSTEES OF SUCH EMPLOYER
ARE HEREBY DECLARED TRUSTEES OF A RETIREMENT CONTRIBUTION  RESERVE  FUND
AND  SHALL  BE SUBJECT TO ALL THE DUTIES AND RESPONSIBILITIES IMPOSED BY
LAW ON TRUSTEES, AND SUCH DUTIES AND RESPONSIBILITIES MAY BE ENFORCED BY
THE EMPLOYER, AS THE CASE MAY BE, OR BY ANY OFFICER OR TAXPAYER THEREOF.
  9. NO MEMBER OF THE BOARD OF EDUCATION OR TRUSTEES  OF  SUCH  EMPLOYER
SHALL:
  A.  AUTHORIZE A WITHDRAWAL FROM A RETIREMENT CONTRIBUTION RESERVE FUND
FOR ANY PURPOSE EXCEPT AS PROVIDED IN THIS SECTION; OR
  B. EXPEND ANY MONEY WITHDRAWN FROM SUCH FUND FOR A PURPOSE OTHER  THAN
AS PROVIDED IN THIS SECTION.
  ANY  MEMBER  OF THE BOARD OF EDUCATION OR ANY TRUSTEE WHO VIOLATES THE
PROVISIONS OF THIS SUBDIVISION SHALL BE GUILTY OF A MISDEMEANOR.

S. 6792                             3

  10. THE BOARD OF EDUCATION OR TRUSTEES OF SUCH EMPLOYER MAY, BY RESOL-
UTION, DETERMINE A RETIREMENT CONTRIBUTION RESERVE  FUND  IS  NO  LONGER
NEEDED  AND  MAY TERMINATE SUCH FUND. SUCH RESOLUTION SHALL TRANSFER ANY
MONEYS REMAINING IN SUCH FUND TO  ONE  OR  MORE  RESERVE  FUNDS  OF  THE
EMPLOYER  AS  ESTABLISHED PURSUANT TO SECTION SIX-C, SIX-D, SIX-E, SIX-F
OR SIX-G OF THE GENERAL MUNICIPAL LAW COMPRISED OF  MONEYS  RAISED  FROM
THE  SAME  TAX BASE AS THE MONEYS IN THE RETIREMENT CONTRIBUTION RESERVE
FUND, OR ONE OR MORE RESERVE FUNDS ESTABLISHED PURSUANT TO SECTION THIR-
TY-SIX HUNDRED FIFTY-ONE OF THIS CHAPTER.
  S 2. This act shall take effect on the first of July  next  succeeding
the date on which it shall have become a law.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  This  bill would add a new Section 3653 to the Education Law to permit
the board of education or trustees of a participating  employer  of  the
New  York  State  Teachers'  Retirement  System  (NYSTRS) to establish a
retirement contribution reserve  fund  for  the  purpose  of  offsetting
future  required employer contributions. The money that may be paid into
a retirement contribution reserve fund shall consist of amounts provided
for by budgetary appropriation, revenues that are not required by law to
be paid into any other fund or account,  such  other  funds  as  may  be
legally appropriated, and transfers from other reserve funds.
  The moneys in the retirement contribution reserve fund shall be depos-
ited  and  secured  in  the manner provided by Section 10 of the General
Municipal Law, and may be invested in the manner provided by Section  11
of  the General Municipal Law. Any interest earned or capital gain real-
ized shall accrue to and become  part  of  the  retirement  contribution
reserve fund.
  Except  as  otherwise  provided  by  law, the moneys in the retirement
contribution reserve fund  may  only  be  expended  to  offset  required
employer  contributions  payable  in  accordance  with Article 11 of the
Education Law.
  This act shall take effect on the first day of  July  next  succeeding
the date on which it shall have become a law.
  It  is estimated that there will be no annual cost to the employers of
members of the New York State Teachers' Retirement System if  this  bill
is enacted.
  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
the CAFR.   Actuarial  assumptions  and  methods  are  provided  in  the
System's Actuarial Valuation Report.
  The  source  of  this  estimate is Fiscal Note 2016-2 dated October 9,
2015 prepared by the Actuary of the New York State Teachers'  Retirement
System and is intended for use only during the 2016 Legislative Session.
I,  Richard  A.  Young,  am the Actuary for the New York State Teachers'
Retirement System. I am a member of the American  Academy  of  Actuaries
and  I meet the Qualification Standards of the American Academy of Actu-
aries to render the actuarial opinion contained herein.

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Senate Bill S6792

Sponsored By

Archive: Last Bill Status - In Senate Committee Civil Service And Pensions Committee

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co-Sponsors

2015-S6792 (ACTIVE) - Details

2015-S6792 (ACTIVE) - Summary

2015-S6792 (ACTIVE) - Sponsor Memo

2015-S6792 (ACTIVE) - Bill Text download pdf

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Sponsored By

Carl L. Marcellino

Archive: Last Bill Status - In Senate Committee Civil Service And Pensions Committee

Actions

co-Sponsors

John J. Bonacic

Patty Ritchie

2015-S6792 (ACTIVE) - Details

2015-S6792 (ACTIVE) - Summary

2015-S6792 (ACTIVE) - Sponsor Memo

2015-S6792 (ACTIVE) - Bill Text download pdf

Comments