NY State Senate Bill 2015-S3944

Senate Bill S3944

2015-2016 Legislative Session

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

download bill text pdf

Archive: Last Bill Status - Stricken

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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 21, 2016	recommit, enacting clause stricken
Jan 06, 2016	referred to civil service and pensions
Feb 23, 2015	referred to civil service and pensions

2015-S3944 (ACTIVE) - Details

See Assembly Version of this Bill:: A6931
Law Section:: Education Law
Laws Affected:: Add §3653, Ed L

2015-S3944 (ACTIVE) - Summary

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

2015-S3944 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S3944

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:

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

SUMMARY OF PROVISIONS:

Section 1: Section 1 adds a new section 3653 to the education law by
allowing for the board of education or trustees of a participating
employer to establish, by a resolution, a retirement contribution
reserve fund for the purpose of offsetting employer contributions to
the NYS teachers' retirement system.

Section 2: Section 2 sets forth an effective date on the first of July
next succeeding the date on which it shall have become a law.

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 has been at historically low levels, to increase, sometimes
quite markedly. The New York State legislature responded in several
ways, one of which was to allow employers to prepare for the 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 the statute. Consistent with existing
practices, specifically General Municipal Law Second 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 systems. If this legislation were enacted,
it would be at the option of the employer and would not be mandated 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.

LEGISLATIVE HISTORY:

New Bill

FISCAL IMPLICATIONS:

None to the State

EFFECTIVE DATE:

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

2015-S3944 (ACTIVE) - Bill Text download pdf

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

                                  3944

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                            February 23, 2015
                               ___________

Introduced  by Sen. FLANAGAN -- (at request of the New York State Teach-
  ers' 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.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09379-01-5

S. 3944                             2

  3. FOR PURPOSES OF THIS SECTION:
  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.

S. 3944                             3

  ANY MEMBER OF THE BOARD OF EDUCATION OR ANY TRUSTEE WHO  VIOLATES  THE
PROVISIONS OF THIS SUBDIVISION SHALL BE GUILTY OF A MISDEMEANOR.
  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 2015-5  dated  January  20,
2015  prepared by the Actuary of the New York State Teachers' Retirement
System and is intended for use only during the 2015 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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