S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5414
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              April 30, 2019
                                ___________
 
 Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
 
 AN  ACT  to amend the retirement and social security law, in relation to
   investment of moneys of retirement funds in foreign equity securities

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subdivision 8 of section 177 of the retirement and social
 security law, as amended by chapter 594 of the laws of 1993, is  amended
 to read as follows:
   8.  The  trustees  of a fund shall have the power to invest the moneys
 thereof in foreign equity securities provided that (a) any  such  equity
 security is registered on a national securities exchange, as provided in
 an  act  of  congress  of  the  United  States, entitled the "Securities
 Exchange Act of 1934", approved June  sixth,  nineteen  hundred  thirty-
 four,  as  amended, or otherwise registered pursuant to said act and, if
 such equity security is so otherwise registered, price quotations there-
 for are  furnished  through  a  nationwide  automated  quotation  system
 approved  by  the National Association of Securities Dealers, Inc. or is
 registered on a foreign exchange organized and regulated pursuant to the
 laws of the jurisdiction of such exchange and (b)  the  corporation  has
 averaged  at  least  one  billion  dollars in annual sales for the three
 consecutive years preceding the year in which the investment is made  or
 has  market  capitalization  of at least one billion dollars at the time
 the investment is made. Investments in such foreign  equities  shall  be
 included  together  with a fund's investments in other equity securities
 for purposes of the percentage limitations set forth  in  the  foregoing
 subdivisions  of this section, and not more than [ten] THIRTY per centum
 of the assets of any fund shall be invested in  the  aggregate  in  such
 foreign equities.
   § 2. This act shall take effect immediately.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11293-01-9
              

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5414--A
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              April 30, 2019
                                ___________
 
 Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
   --  committee  discharged,  bill amended, ordered reprinted as amended
   and recommitted to said committee
 
 AN ACT to amend the retirement and social security law, in  relation  to
   investment of moneys of retirement funds in foreign equity securities
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision 8 of section 177 of the retirement  and  social
 security  law, as amended by chapter 594 of the laws of 1993, is amended
 to read as follows:
   8. The trustees of a fund shall have the power to  invest  the  moneys
 thereof  in  foreign equity securities provided that (a) any such equity
 security is registered on a national securities exchange, as provided in
 an act of congress  of  the  United  States,  entitled  the  "Securities
 Exchange  Act  of  1934",  approved June sixth, nineteen hundred thirty-
 four, as amended, or otherwise registered pursuant to said act  and,  if
 such equity security is so otherwise registered, price quotations there-
 for  are  furnished  through  a  nationwide  automated  quotation system
 approved by the National Association of Securities Dealers, Inc.  or  is
 registered on a foreign exchange organized and regulated pursuant to the
 laws  of  the  jurisdiction of such exchange and (b) the corporation has
 averaged at least one billion dollars in  annual  sales  for  the  three
 consecutive  years preceding the year in which the investment is made or
 has market capitalization of at least one billion dollars  at  the  time
 the  investment  is  made. Investments in such foreign equities shall be
 included together with a fund's investments in other  equity  securities
 for  purposes  of  the percentage limitations set forth in the foregoing
 subdivisions of this section, and not more than [ten] THIRTY per  centum
 of  the  assets  of  any fund shall be invested in the aggregate in such
 foreign equities.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
 
              

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11293-02-9

 S. 5414--A                          2
 
   SUMMARY OF BILL: This proposed legislation, as it relates to  the  New
 York  City  Pension  Funds  and  Retirement Systems (NYCRS), would amend
 section 177(8) of the Retirement  and  Social  Security  Law  (RSSL)  to
 increase  the  current  foreign  equities investment cap from 10% of the
 fund's assets in the aggregate to 30% of the fund's assets in the aggre-
 gate.
   Effective Date: Upon enactment.
   FINANCIAL  IMPACT  -  SUMMARY:  This legislation, as it related to any
 costs in the potential reallocation of  current  NYCRS  investments,  is
 expected  to  have  minimal  to no impact on member or employer contrib-
 utions. The cost of a retirement program is based on the  benefits  paid
 plus  any  expenses  to  administer  the  program. The cost is funded by
 contributions and investment income, the latter of which  is  driven  by
 the  rate  of  return  on  the  assets. To the extent that this proposed
 legislation increases  or  decreases  this  rate  of  return,  it  would
 decrease or increase the employer contributions, respectively.
   OTHER COSTS: Not measured in this Fiscal Note are the following:
   *  The initial, additional administrative costs to each of the retire-
 ment systems and other New York City agencies to implement the  proposed
 legislation.
   *  The  impact  of  this  proposed legislation on Other Postemployment
 Benefit (OPEB) costs.
   CENSUS DATA: The estimates presented herein are based  on  the  census
 data  used  in  the June 30, 2016 (Lag) actuarial valuations of NYCRS to
 determine the Final Fiscal Year 2018 employer contributions.
   ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
 been calculated based on the actuarial assumptions and methods in effect
 for the June 30, 2016 (Lag) actuarial valuations used to  determine  the
 Final Fiscal Year 2018 employer contributions of NYCRS.
   RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
 highly on the actuarial assumptions and methods used and are subject  to
 change  based  on  the realization of potential investment, demographic,
 contribution, and other risks. If actual experience deviates from  actu-
 arial  assumptions,  the  actual costs could differ from those presented
 herein. As a reference, increasing the current discount rate  (i.e.  the
 rate  of  return  on the Plan's assets of 7.0%) by 1.0% would reduce the
 unfunded liability by $22.6 billion, while decreasing it by  1.0%  would
 increase the unfunded liability by $26.8 billion. Costs are also depend-
 ent  on  the  actuarial  methods used, and therefore different actuarial
 methods could produce different  results.  Quantifying  these  risks  is
 beyond the scope of this Fiscal Note.
   STATEMENT  OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu-
 ary for, and independent of, the New York City  Retirement  Systems  and
 Pension  Funds.  I  am a Fellow of the Society of Actuaries, an Enrolled
 Actuary under the Employee Retirement Income and Security Act of 1974, a
 Member of the American Academy of Actuaries, and a Fellow of the Confer-
 ence of Consulting 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 Fiscal Note 2019-33  dated  June  11,
 2019  was prepared by the Chief Actuary for the New York City Retirement
 Systems and Pension Funds. This estimate is intended for use only during
 the 2019 Legislative Session.

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5414--B
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              April 30, 2019
                                ___________
 
 Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
   --  committee  discharged,  bill amended, ordered reprinted as amended
   and recommitted  to  said  committee  --  committee  discharged,  bill
   amended,  ordered reprinted as amended and recommitted to said commit-
   tee
 
 AN ACT to amend the retirement and social security law, in  relation  to
   investment of moneys of retirement funds in foreign equity securities
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision 8 of section 177 of the retirement  and  social
 security  law, as amended by chapter 594 of the laws of 1993, is amended
 to read as follows:
   8. The trustees of a fund shall have the power to  invest  the  moneys
 thereof  in  foreign equity securities provided that (a) any such equity
 security is registered on a national securities exchange, as provided in
 an act of congress  of  the  United  States,  entitled  the  "Securities
 Exchange  Act  of  1934",  approved June sixth, nineteen hundred thirty-
 four, as amended, or otherwise registered pursuant to said act  and,  if
 such equity security is so otherwise registered, price quotations there-
 for  are  furnished  through  a  nationwide  automated  quotation system
 approved by the National Association of Securities Dealers, Inc.  or  is
 registered on a foreign exchange organized and regulated pursuant to the
 laws  of  the  jurisdiction of such exchange and (b) the corporation has
 averaged at least one billion dollars in  annual  sales  for  the  three
 consecutive  years preceding the year in which the investment is made or
 has market capitalization of at least one billion dollars  at  the  time
 the  investment  is  made. Investments in such foreign equities shall be
 included together with a fund's investments in other  equity  securities
 for  purposes  of  the percentage limitations set forth in the foregoing
 subdivisions of this section, and not more than [ten] TWENTY per  centum
 of  the  assets  of  any fund shall be invested in the aggregate in such
 foreign equities.
   § 2. This act shall take effect immediately.
              

 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11293-04-9

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5414--C
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              April 30, 2019
                                ___________
 
 Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
   --  committee  discharged,  bill amended, ordered reprinted as amended
   and recommitted  to  said  committee  --  committee  discharged,  bill
   amended,  ordered reprinted as amended and recommitted to said commit-
   tee --  committee  discharged,  bill  amended,  ordered  reprinted  as
   amended and recommitted to said committee
 
 AN  ACT  to amend the retirement and social security law, in relation to
   investment of moneys of retirement funds in foreign equity securities
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subdivision 8 of section 177 of the retirement and social
 security law, as amended by chapter 594 of the laws of 1993, is  amended
 to read as follows:
   8.  The  trustees  of a fund shall have the power to invest the moneys
 thereof in foreign equity securities provided that (a) any  such  equity
 security is registered on a national securities exchange, as provided in
 an  act  of  congress  of  the  United  States, entitled the "Securities
 Exchange Act of 1934", approved June  sixth,  nineteen  hundred  thirty-
 four,  as  amended, or otherwise registered pursuant to said act and, if
 such equity security is so otherwise registered, price quotations there-
 for are  furnished  through  a  nationwide  automated  quotation  system
 approved  by  the National Association of Securities Dealers, Inc. or is
 registered on a foreign exchange organized and regulated pursuant to the
 laws of the jurisdiction of such exchange and (b)  the  corporation  has
 averaged  at  least  one  billion  dollars in annual sales for the three
 consecutive years preceding the year in which the investment is made  or
 has  market  capitalization  of at least one billion dollars at the time
 the investment is made. Investments in such foreign  equities  shall  be
 included  together  with a fund's investments in other equity securities
 for purposes of the percentage limitations set forth  in  the  foregoing
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD11293-06-9

 S. 5414--C                          2
 
 subdivisions  of this section, and not more than [ten] TWENTY per centum
 of the assets of any fund shall be invested in  the  aggregate  in  such
 foreign equities.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY  OF  BILL: This proposed legislation, as it relates to the New
 York City Pension Funds and  Retirement  Systems  (NYCRS),  would  amend
 section  177(8)  of  the  Retirement  and  Social Security Law (RSSL) to
 increase the current foreign equities investment cap  from  10%  of  the
 fund's assets in the aggregate to 20% of the fund's assets in the aggre-
 gate.
   Effective Date: Upon enactment.
   FINANCIAL  IMPACT  -  SUMMARY:  This legislation, as it relates to any
 costs in the potential reallocation of  current  NYCRS  investments,  is
 expected  to  have  minimal  to no impact on member or employer contrib-
 utions. The cost of a retirement program is based on the  benefits  paid
 plus  any  expenses  to  administer  the  program. The cost is funded by
 contributions and investment income, the latter of which  is  driven  by
 the  rate  of  return  on  the  assets. To the extent that this proposed
 legislation increases  or  decreases  this  rate  of  return,  it  would
 decrease or increase the employer contributions, respectively.
   OTHER COSTS: Not measured in this Fiscal Note are the following:
   *  The initial, additional administrative costs to each of the retire-
 ment systems and other New York City agencies to implement the  proposed
 legislation.
   *  The  impact  of  this  proposed legislation on Other Postemployment
 Benefit (OPEB) costs.
   CENSUS DATA: The estimates presented herein are based  on  the  census
 data  used  in  the June 30, 2016 (Lag) actuarial valuations of NYCRS to
 determine the Final Fiscal Year 2018 employer contributions.
   ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
 been calculated based on the actuarial assumptions and methods in effect
 for the June 30, 2016 (Lag) actuarial valuations used to  determine  the
 Final Fiscal Year 2018 employer contributions of NYCRS.
   RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
 highly on the actuarial assumptions and methods used and are subject  to
 change  based  on  the realization of potential investment, demographic,
 contribution, and other risks. If actual experience deviates from  actu-
 arial  assumptions,  the  actual costs could differ from those presented
 herein. As a reference, increasing the current discount rate  (i.e.  the
 assumed  rate  of  return  on  the  Plan's assets of 7.0%) by 1.0% would
 reduce the unfunded liability by $22.6 billion, while decreasing  it  by
 1.0%  would  increase the unfunded liability by $26.8 billion. Costs are
 also dependent on the actuarial methods used,  and  therefore  different
 actuarial  methods  could  produce  different results. Quantifying these
 risks is beyond the scope of this Fiscal Note.
   STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief  Actu-
 ary  for,  and  independent of, the New York City Retirement Systems and
 Pension Funds. I am a Fellow of the Society of  Actuaries,  an  Enrolled
 Actuary under the Employee Retirement Income and Security Act of 1974, a
 Member of the American Academy of Actuaries, and a Fellow of the Confer-
 ence  of Consulting 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

 S. 5414--C                          3
 
 and procedures and with the Actuarial Standards of  Practice  issued  by
 the Actuarial Standards Board.
   FISCAL  NOTE  IDENTIFICATION:  This Fiscal Note 2019-37 dated June 17,
 2019 was prepared by the Chief Actuary for the New York City  Retirement
 Systems and Pension Funds. This estimate is intended for use only during
 the 2019 Legislative Session.

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5414--D
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              April 30, 2019
                                ___________
 
 Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
   --  committee  discharged,  bill amended, ordered reprinted as amended
   and recommitted  to  said  committee  --  committee  discharged,  bill
   amended,  ordered reprinted as amended and recommitted to said commit-
   tee --  committee  discharged,  bill  amended,  ordered  reprinted  as
   amended  and  recommitted  to  said  committee  --  recommitted to the
   Committee on Civil Service and Pensions in accordance with Senate Rule
   6, sec. 8 -- committee discharged, bill amended, ordered reprinted  as
   amended and recommitted to said committee
 
 AN  ACT  to amend the retirement and social security law, in relation to
   investment of moneys of retirement funds in foreign equity securities
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subdivision 8 of section 177 of the retirement and social
 security law, as amended by chapter 594 of the laws of 1993, is  amended
 to read as follows:
   8.  The  trustees  of a fund shall have the power to invest the moneys
 thereof in foreign equity securities provided that (a) any  such  equity
 security is registered on a national securities exchange, as provided in
 an  act  of  congress  of  the  United  States, entitled the "Securities
 Exchange Act of 1934", approved June  sixth,  nineteen  hundred  thirty-
 four,  as  amended, or otherwise registered pursuant to said act and, if
 such equity security is so otherwise registered, price quotations there-
 for are  furnished  through  a  nationwide  automated  quotation  system
 approved  by  the National Association of Securities Dealers, Inc. or is
 registered on a foreign exchange organized and regulated pursuant to the
 laws of the jurisdiction of such exchange and (b)  the  corporation  has
 averaged  at  least  one  billion  dollars in annual sales for the three
 consecutive years preceding the year in which the investment is made  or
 has  market  capitalization  of at least one billion dollars at the time
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD11293-07-0

 S. 5414--D                          2
 
 the investment is made. Investments in such foreign  equities  shall  be
 included  together  with a fund's investments in other equity securities
 for purposes of the percentage limitations set forth  in  the  foregoing
 subdivisions  of this section, and not more than [ten] TWENTY per centum
 of the assets of any fund shall be invested in  the  aggregate  in  such
 foreign equities.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY  OF  BILL: This proposed legislation, as it relates to the New
 York City Pension Funds and  Retirement  Systems  (NYCRS),  would  amend
 section  177(8)  of  the  Retirement  and  Social Security Law (RSSL) to
 increase the current foreign equities investment cap  from  10%  of  the
 fund's assets in the aggregate to 20% of the fund's assets in the aggre-
 gate.
   Effective Date: Upon enactment.
   FINANCIAL  IMPACT  -  SUMMARY:  This legislation, as it relates to any
 costs in the potential reallocation of  current  NYCRS  investments,  is
 expected  to  have  minimal  to no impact on member or employer contrib-
 utions. The cost of a retirement program is based on the  benefits  paid
 plus  any  expenses  to  administer the program.   The cost is funded by
 contributions and investment income, the latter of which  is  driven  by
 the  rate  of  return  on  the  assets. To the extent that this proposed
 legislation increases  or  decreases  this  rate  of  return,  it  would
 decrease or increase the employer contributions, respectively.
   CENSUS  DATA:  The  estimates presented herein are based on the census
 data used in the June 30, 2018 (Lag) actuarial valuations  of  NYCRS  to
 determine the Preliminary Fiscal Year 2020 employer contributions.
   ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
 been calculated based on the actuarial assumptions and methods in effect
 for  the  June 30, 2018 (Lag) actuarial valuations used to determine the
 Preliminary Fiscal Year 2020 employer contributions of NYCRS.
   RISK AND UNCERTAINTY: The costs presented in this Fiscal  Note  depend
 highly  on the realization of the actuarial assumptions used, as well as
 certain demographic characteristics of  the  Plan  and  other  exogenous
 factors  such as investment, demographic, contribution, and other risks.
 If actual experience deviates from  actuarial  assumptions,  the  actual
 costs could differ from those presented herein. As a reference, increas-
 ing  the  current  discount rate (i.e. the assumed rate of return on the
 Plan's assets of 7.0%) by 1.0% would reduce the  unfunded  liability  by
 approximately  $23.3 billion, while decreasing it by 1.0% would increase
 the unfunded liability by approximately $27.8 billion.  Costs  are  also
 dependent on the actuarial methods used, and therefore different actuar-
 ial  methods could produce different results. Quantifying these risks is
 beyond the scope of this Fiscal Note.
   Not measured in this Fiscal Note are the following:
   * The initial, additional administrative costs to each of the  retire-
 ment  systems and other New York City agencies to implement the proposed
 legislation.
   * The impact of this  proposed  legislation  on  Other  Postemployment
 Benefit (OPEB) costs.
   STATEMENT  OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu-
 ary for, and independent of, the New York City  Retirement  Systems  and
 Pension  Funds.  I  am a Fellow of the Society of Actuaries, an Enrolled
 Actuary under the Employee Retirement Income and Security Act of 1974, a
 Member of the American Academy of Actuaries, and a Fellow of the Confer-
 ence of Consulting Actuaries. I meet the Qualification Standards of  the

 S. 5414--D                          3
 
 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 Fiscal Note 2020-01 dated January 24,
 2020 was prepared by the Chief Actuary for the New York City  Retirement
 Systems and Pension Funds. This estimate is intended for use only during
 the 2020 Legislative Session.

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5414--E
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              April 30, 2019
                                ___________
 
 Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
   --  committee  discharged,  bill amended, ordered reprinted as amended
   and recommitted  to  said  committee  --  committee  discharged,  bill
   amended,  ordered reprinted as amended and recommitted to said commit-
   tee --  committee  discharged,  bill  amended,  ordered  reprinted  as
   amended  and  recommitted  to  said  committee  --  recommitted to the
   Committee on Civil Service and Pensions in accordance with Senate Rule
   6, sec. 8 -- committee discharged, bill amended, ordered reprinted  as
   amended  and  recommitted  to  said committee -- committee discharged,
   bill amended, ordered reprinted as amended  and  recommitted  to  said
   committee
 
 AN  ACT  to amend the retirement and social security law, in relation to
   investment of moneys of retirement funds in foreign equity securities
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subdivision 8 of section 177 of the retirement and social
 security law, as amended by chapter 594 of the laws of 1993, is  amended
 to read as follows:
   8.  The  trustees  of a fund shall have the power to invest the moneys
 thereof in foreign equity securities provided that (a) any  such  equity
 security is registered on a national securities exchange, as provided in
 an  act  of  congress  of  the  United  States, entitled the "Securities
 Exchange Act of 1934", approved June  sixth,  nineteen  hundred  thirty-
 four,  as  amended, or otherwise registered pursuant to said act and, if
 such equity security is so otherwise registered, price quotations there-
 for are  furnished  through  a  nationwide  automated  quotation  system
 approved  by  the National Association of Securities Dealers, Inc. or is
 registered on a foreign exchange organized and regulated pursuant to the
 laws of the jurisdiction of such exchange and (b)  the  corporation  has
 averaged  at  least  one  billion  dollars in annual sales for the three
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD11293-08-0

 S. 5414--E                          2
 
 consecutive years preceding the year in which the investment is made  or
 has  market  capitalization  of at least one billion dollars at the time
 the investment is made. Investments in such foreign  equities  shall  be
 included  together  with a fund's investments in other equity securities
 for purposes of the percentage limitations set forth  in  the  foregoing
 subdivisions  of this section, and not more than [ten] TWENTY per centum
 of the assets of any fund shall be invested in  the  aggregate  in  such
 foreign equities.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY  OF  BILL: This proposed legislation, as it relates to the New
 York City Pension Funds and  Retirement  Systems  (NYCRS),  would  amend
 section  177(8)  of  the  Retirement  and  Social Security Law (RSSL) to
 increase the current foreign equities investment cap  from  10%  of  the
 fund's assets in the aggregate to 20% of the fund's assets in the aggre-
 gate.
   Effective Date: Upon enactment.
   FINANCIAL  IMPACT  -  SUMMARY:  This legislation, as it relates to any
 costs in the potential reallocation of  current  NYCRS  investments,  is
 expected  to  have  minimal  to no impact on member or employer contrib-
 utions. The cost of a retirement program is based on the  benefits  paid
 plus  any  expenses  to  administer the program.   The cost is funded by
 contributions and investment income, the latter of which  is  driven  by
 the  rate  of  return  on  the  assets. To the extent that this proposed
 legislation increases  or  decreases  this  rate  of  return,  it  would
 decrease or increase the employer contributions, respectively.
   CENSUS  DATA:  The  estimates presented herein are based on the census
 data used in the June 30, 2018 (Lag) actuarial valuations  of  NYCRS  to
 determine the Preliminary Fiscal Year 2020 employer contributions.
   ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
 been calculated based on the actuarial assumptions and methods in effect
 for  the  June 30, 2018 (Lag) actuarial valuations used to determine the
 Preliminary Fiscal Year 2020 employer contributions of NYCRS.
   RISK AND UNCERTAINTY: The costs presented in this Fiscal  Note  depend
 highly  on the realization of the actuarial assumptions used, as well as
 certain demographic characteristics of  the  Plan  and  other  exogenous
 factors  such as investment, demographic, contribution, and other risks.
 If actual experience deviates from  actuarial  assumptions,  the  actual
 costs could differ from those presented herein. As a reference, increas-
 ing  the  current  discount rate (i.e. the assumed rate of return on the
 Plan's assets of 7.0%) by 1.0% would reduce the  unfunded  liability  by
 approximately  $23.3 billion, while decreasing it by 1.0% would increase
 the unfunded liability by approximately $27.8 billion.  Costs  are  also
 dependent on the actuarial methods used, and therefore different actuar-
 ial  methods could produce different results. Quantifying these risks is
 beyond the scope of this Fiscal Note.
   Not measured in this Fiscal Note are the following:
   * The initial, additional administrative costs to each of the  retire-
 ment  systems and other New York City agencies to implement the proposed
 legislation.
   * The impact of this  proposed  legislation  on  Other  Postemployment
 Benefit (OPEB) costs.
   STATEMENT  OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu-
 ary for, and independent of, the New York City  Retirement  Systems  and
 Pension  Funds.  I  am a Fellow of the Society of Actuaries, an Enrolled
 Actuary under the Employee Retirement Income and Security Act of 1974, a

 S. 5414--E                          3
 
 Member of the American Academy of Actuaries, and a Fellow of the Confer-
 ence of Consulting 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 Fiscal Note 2020-01 dated January 24,
 2020  was prepared by the Chief Actuary for the New York City Retirement
 Systems and Pension Funds. This estimate is intended for use only during
 the 2020 Legislative Session.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would amend the Retirement and Social Security Law to  allow
 the  8  public  retirement  systems of New York State to invest up to 20
 percent of their assets  in  eligible  Foreign  Equity  Securities.  The
 current limit on foreign equities is 10 percent.
   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
 some investment changes.  Any  increases  in  investment  earnings  will
 result  in decreases in employer contributions. Similarly, any decreases
 in investment earnings will result in  increases  in  employer  contrib-
 utions
   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, 2019  actuarial  valu-
 ation.    Distributions  and  other  statistics can be found in the 2019
 Report of the  Actuary  and  the  2019  Comprehensive  Annual  Financial
 Report.
   The  actuarial assumptions and methods used are described in the 2015,
 2016, 2017, 2018, and 2019 Annual Report to the Comptroller on Actuarial
 Assumptions, and the Codes, Rules, and Regulations of the State  of  New
 York: Audit and Control.
   The Market Assets and GASB Disclosures are found in the March 31, 2019
 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 fiscal note does not constitute a legal opinion on the  viability
 of  the  proposed change nor is it intended to serve as a substitute for
 the professional judgment of an attorney.
   This estimate, dated February 24, 2020,  and  intended  for  use  only
 during  the  2020  Legislative  Session,  is  Fiscal  Note  No. 2020-65,
 prepared by the Actuary for the New  York  State  and  Local  Retirement
 System.