Bill S5485-2011

Relates to the rate of regular interest used in the actuarial valuation of liabilities for the purpose of calculating contributions to retirement systems

Relates to the rate of regular interest used in the actuarial valuation of liabilities for the purpose of calculating contributions to retirement systems.

Details

Actions

  • Jun 16, 2011: SUBSTITUTED BY A8012
  • Jun 14, 2011: ADVANCED TO THIRD READING
  • Jun 13, 2011: 2ND REPORT CAL.
  • Jun 7, 2011: 1ST REPORT CAL.1131
  • May 25, 2011: REFERRED TO CITIES

Meetings

Calendars

Votes

VOTE: COMMITTEE VOTE: - Cities - Jun 7, 2011
Ayes (5): Lanza, DeFrancisco, Grisanti, Robach, Oppenheimer
Ayes W/R (1): Avella

Memo

BILL NUMBER:S5485

TITLE OF BILL: An act to amend the administrative code of the city of New York, in relation to the rate of regular 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 interest on the funds of such retirement systems

SUMMARY OF PROVISIONS: This bill would extend for the one-year period ending on June 30, 2012 the current 8% per annum statutory rate of interest used by the Chief Actuary for the New York City Employees' Retirement System, Teachers' Retirement System, Board of Education Retirement System, Police Pension Fund and Fire Department Pension Fund ("City retirement systems") in valuing retirement system liabilities for the purpose of computing the amount of employer contributions to those systems. The bill also would extend for that same period of time the current rates of supplementary interest, special interest and additional interest which, in effect, govern the amount of interest to be paid into certain constituent funds of the City retirement systems, and the amount of interest to be credited on accumulated member contributions and increased-takehome-pay reserves of tier 1 and 2 members of those retirement systems. The current valuation rate of interest, as well as the current rates of supplementary, special and additional interest, were enacted by Chapter 152 of the Laws of 2006 for the five-year period ending on June 30, 2009, and those current interest rates were extended until June 30, 2010 by Chapter 211 of the Laws of 2009, an d until June 30,2011 by Chapter 265 of the Laws of 2010.

REASONS FOR SUPPORT: The City pension laws currently provide with respect to the valuation rate of interest that (1) such rate for the period after June 30, 2011 shall be the rate prescribed by an enactment of the State Legislature; and (2) the board of trustees of each of the City retirement systems shall submit to designated New York State and New York City officials, including the Governor, the Mayor and the leaders of the Legislature, its recommendation as to what such rate should be after June 30, 2011. Similar statutory provisions apply with respect to the rates of supplementary interest, special interest and additional interest.

The Chief Actuary of the City retirement systems will be presenting to the retirement system boards of trustees his recommendations for (1) the valuation rate of interest for the five-year period ending on June 30, 2014; and (2) proposed changes in actuarial tables used in calculating employer contributions. Those recommendations are based

in part on the Chief Actuary's examination of the actuarial experience and investment experience of the retirement systems, his study of general inflation trends and an experience study prepared by a firm of actuarial consultants. The Actuary has advised the boards of trustees that there will not be sufficient time before the close of the current session of the State Legislature to formulate recommendations, and have those recommendations approved and transmitted to the concerned State and local legislative and executive officials.

Therefore, the City of New York recommends to the Legislature that this bill providing for a one-year extension of the current valuation rate of interest and the accompanying rates of supplementary, special and additional interest be enacted. Such one-year extension would give all concerned officials an opportunity to determine the most suitable rates for a five-year period and arrive at the result which will best serve the retirement systems and the public interest. It should be noted that the Legislature enacted similar one-year extensions of such interest rates for the City retirement systems in 1990, 1995, 2004, 2005, 2009 and 2010. See Chapter 878 of the Laws of 1990, Chapter 642 of the Laws of 1995, Chapter 133 of the Laws of 2004, Chapter 133 of the Laws of 2005, Chapter 211 of the Laws of 2009 and Chapter 265 of the Laws of 2010.

Since this bill would continue the existing valuation rate of interest and the existing rates of special, additional and supplementary interest, its enactment would not result in any cost to the City of New York or other participating employers.

Accordingly, the Mayor urges the earliest possible favorable consideration of this proposal by the Legislature.


Text

STATE OF NEW YORK ________________________________________________________________________ 5485 2011-2012 Regular Sessions IN SENATE May 25, 2011 ___________
Introduced by Sen. GOLDEN -- read twice and ordered printed, and when printed to be committed to the Committee on Cities AN ACT to amend the administrative code of the city of New York, in relation to the rate of regular interest used in the actuarial valu- ation 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 interest 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 265 of the laws of 2010, 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 8% July 1, 2004 to June 30, [2011] 2012 NYCTRS 8% July 1, 2004 to
June 30, [2011] 2012 PPF 8% July 1, 2004 to June 30, [2011] 2012 FPF 8% July 1, 2004 to June 30, [2011] 2012 BERS 8% July 1, 2004 to June 30, [2011] 2012 S 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 265 of the laws of 2010, 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, 2004 to June 30, [2011] 2012 NYCTRS 1 1/4% July 1, 2004 to June 30, [2011] 2012 PPF 1 1/4% July 1, 2004 to June 30, [2011] 2012 FPF 1 1/4% July 1, 2004 to June 30, [2011] 2012 BERS 1 1/4% July 1, 2004 to June 30, [2011] 2012 S 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 265 of the laws of 2010, 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, 2004 to June 30, [2011] 2012 NYCTRS 1 1/4% July 1, 2004 to June 30, [2011] 2012 PPF 1 1/4% July 1, 2004 to June 30, [2011] 2012 FPF 1 1/4% July 1, 2004 to June 30, [2011] 2012 BERS 1 1/4% July 1, 2004 to June 30, [2011] 2012
S 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 265 of the laws of 2010, 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 1% July 1, 2004 to June 30, [2011] 2012 NYCTRS 1% July 1, 2004 to June 30, [2011] 2012 PPF 1% July 1, 2004 to June 30, [2011] 2012 FPF 1% July 1, 2004 to June 30, [2011] 2012 BERS 1% July 1, 2004 to June 30, [2011] 2012 S 5. This act shall take effect July 1, 2011; provided, however, if this act shall become a law after such date, it shall take effect imme- diately and shall be deemed to have been in full force and effect on and after July 1, 2011.

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