S T A T E O F N E W Y O R K
________________________________________________________________________
7988
2017-2018 Regular Sessions
I N A S S E M B L Y
May 24, 2017
___________
Introduced by M. of A. ABBATE -- read once and referred to the Committee
on Governmental Employees
AN ACT to amend the administrative code of the city of New York, in
relation to the rate of 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 crediting of special interest and additional interest to members
of such retirement systems, and the allowance of supplementary inter-
est on the funds of such retirement systems
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraph 2 of subdivision b of section 13-638.2 of the
administrative code of the city of New York, as amended by chapter 83 of
the laws of 2016, 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 7% July 1, 2011 to
June 30, [2017] 2018
NYCTRS 7% July 1, 2011 to
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11258-02-7
A. 7988 2
June 30, [2017] 2018
PPF 7% July 1, 2011 to
June 30, [2017] 2018
FPF 7% July 1, 2011 to
June 30, [2017] 2018
BERS 7% July 1, 2011 to
June 30, [2017] 2018
§ 2. 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 83 of the
laws of 2016, 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, 2011 to
June 30, [2017] 2018
NYCTRS 1 1/4% July 1, 2011 to
June 30, [2017] 2018
PPF 1 1/4% July 1, 2011 to
June 30, [2017] 2018
FPF 1 1/4% July 1, 2011 to
June 30, [2017] 2018
BERS 1 1/4% July 1, 2011 to
June 30, [2017] 2018
§ 3. 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 83 of the
laws of 2016, 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, 2011 to
June 30, [2017] 2018
NYCTRS 1 1/4% July 1, 2011 to
June 30, [2017] 2018
PPF 1 1/4% July 1, 2011 to
June 30, [2017] 2018
FPF 1 1/4% July 1, 2011 to
June 30, [2017] 2018
BERS 1 1/4% July 1, 2011 to
June 30, [2017] 2018
A. 7988 3
§ 4. 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 83 of the
laws of 2016, 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
Rate of interest fiscal year or
per centum per series of fiscal
Retirement annum, compounded years for which
System annually rate is effective
________________________________________________________________________
NYCERS 0% July 1, 2011 to
June 30, [2017] 2018
NYCTRS 0% July 1, 2011 to
June 30, [2017] 2018
PPF 0% July 1, 2011 to
June 30, [2017] 2018
FPF 0% July 1, 2011 to
June 30, [2017] 2018
BERS 0% July 1, 2011 to
June 30, [2017] 2018
§ 5. This act shall take effect July 1, 2017, except that if it shall
have become a law subsequent to such date, this act shall take effect
immediately and be deemed to have been in full force and effect on and
after July 1, 2017.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This proposed legislation would continue for Fiscal Year 2018 the
interest rate of 8.25% per annum used for Fiscal Years 2012 through 2017
to credit interest on Tier 1 and Tier 2 member contributions (the sum of
the 7.00% regular interest rate and the 1.25% special interest rate) and
Increased-Take-Home-Pay (ITHP) Reserves (the sum of the 7.00% regular
interest rate and the 1.25% additional interest rate). The proposed
legislation would also continue for Fiscal Year 2018 the Actuarial
Interest Rate (AIR) assumption of 7.00% per annum used to determine
employer contributions to the New York City Pension Funds and Retirement
Systems (NYCRS).
PROVISIONS OF PROPOSED LEGISLATION - OVERVIEW: The enactment of this
proposed legislation (the Interest Rate Extender Legislation) would
amend Administrative Code of the City of New York (ACNY) Section
13-638.2, as amended by Chapter 83 of the Laws of 2016, to continue for
Fiscal Year 2018 the following rates of interest that expire on July 1,
2017 for the five actuarially-funded New York City Pension Funds and
Retirement Systems (NYCRS):
* The 8.25% per annum rate used to credit interest on Tier 1 and Tier
2 member account balances (the sum of the 7.00% regular interest rate
and the 1.25% special interest rate) and Increased-Take-Home-Pay (ITHP)
Reserves (the sum of the 7.00% regular interest rate and the 1.25% addi-
tional interest rate), and
* The 7.00% per annum Actuarial Interest Rate (AIR) assumption used to
compute employer contributions.
The Effective Date for this proposed Interest Rate Extender Legis-
lation would be July 1, 2017.
A. 7988 4
FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS: The continuation for Fiscal
Year 2018 of the same 8.25% per annum rate that was used for Fiscal Year
2017 to credit interest on Tier 1 and Tier 2 member contributions and
ITHP Reserves would not change the amount of timing of expected employer
contributions.
The continuation for Fiscal Year 2018 of the AIR assumption of 7.00%
per annum that was used to determine employer contributions to the NYCRS
for Fiscal Year 2017 would not change the expected amount or timing of
employer contributions.
OTHER COSTS: Enactment of this proposed legislation would not be
expected to produce any additional costs.
STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu-
ary for, and independent of, the New York City Pension Funds and Retire-
ment Systems. I am a Fellow of the Society of Actuaries, a Fellow of the
Conference of Consulting 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. To the
best of my knowledge, the results contained herein have been prepared in
accordance with generally accepted actuarial principles and procedures
and with the Actuarial Standards of Practice issued by the Actuarial
Standards Board.
FISCAL NOTE IDENTIFICATION: This is Fiscal Note 2017-05 dated April 5,
2017, was prepared by the Chief Actuary for the New York City Pension
Funds and Retirement Systems. This estimate is intended for use only
during the 2017 Legislative Session.