Bill Text: NY A05911 | 2021-2022 | General Assembly | Introduced
Bill Title: Limits the amount of employer contributions to the state retirement system; authorizes an annual increase in employer contribution of the lesser of two percent or an inflation factor.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2022-01-05 - referred to governmental employees [A05911 Detail]
Download: New_York-2021-A05911-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 5911 2021-2022 Regular Sessions IN ASSEMBLY March 2, 2021 ___________ Introduced by M. of A. ABINANTI -- read once and referred to the Commit- tee on Governmental Employees AN ACT to amend the retirement and social security law and the education law, in relation to imposing a cap on the amount of contributions paid by employers The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 17 of the retirement and social security law, as 2 amended by chapter 33 of the laws of 1986, subdivision a as amended by 3 chapter 62 of the laws of 1989, subdivision c as amended by chapter 260 4 of the laws of 2004, is amended to read as follows: 5 § 17. Annual appropriation by participating employers. a. On or before 6 the fifteenth day of November, nineteen hundred eighty-nine and of each 7 succeeding calendar year, the comptroller shall determine the amount 8 which each participating employer is required to pay to the retirement 9 system to discharge its obligations thereto for the fiscal year of the 10 retirement system which ends on March thirty-first of nineteen hundred 11 ninety and of each succeeding calendar year on account of its employees 12 who are members of this system. The comptroller shall submit to the 13 fiscal officer of each such employer a statement of the amount so paya- 14 ble. 15 This amount shall consist of the amount deemed necessary to provide 16 for payment in full of (i) all estimated obligations of each participat- 17 ing employer for the current fiscal year of the retirement systems and 18 (ii) any additional obligation, plus interest on such amount, for fiscal 19 years preceding the current fiscal year. Such amount shall, however, be 20 subject to the limitation set forth in subdivision f of this section. If 21 as a result of the amount determined to be paid for any fiscal year, a 22 participating employer overpaid its actual obligation to the retirement 23 system for that year, the amount to be determined by the comptroller for 24 the next succeeding November fifteenth shall reflect the amount of the EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD03509-05-1A. 5911 2 1 overpayment, plus interest as defined in section sixteen of this [arti-2cle] title on such amount, as a reduction in the amount otherwise 3 required to be paid by such participating employer. 4 b. Each participating employer annually shall appropriate a sum suffi- 5 cient to pay such amount, subject to the limitation set forth in subdi- 6 vision f of this section. In the event the comptroller's statement is 7 not received before annual appropriations are made by such employer, a 8 sum estimated by the comptroller to be sufficient for such purpose shall 9 be included with such annual appropriations. 10 c. Payment of the amount specified in the comptroller's statement, 11 subject to the limitation set forth in subdivision f of this section, 12 shall be made by a participating employer within seventy-eight days 13 after the receipt of such statement; provided, however, that in no case 14 shall any participating employer be required to make this payment before 15 February first of the calendar year next succeeding the calendar year in 16 which such statement is received. The comptroller is authorized to 17 provide for and accept pre-payment. 18 d. If payment of the [full amount] employer's portion of such obli- 19 gations is not made by the date required by subdivision c of this 20 section, interest at a rate determined in accordance with the provisions 21 of section sixteen of this [article] title shall commence to run against 22 the unpaid balance thereof on the first day after the date required by 23 said subdivision c. 24 e. The comptroller shall have full power and authority to bring suit 25 in the supreme court against any participating employer to recover any 26 sum for which the employer is responsible, payment of which is not made 27 as herein required. While any such sum owed by the employer shall remain 28 due and unpaid [he] the comptroller may refuse to audit any claim for 29 funds due to such employer from the state. 30 f. (1) Of the amount determined by the comptroller pursuant to subdi- 31 vision a of this section, an employer shall not be required to pay more 32 than the prior year's actuarial required contribution plus the lesser 33 of: two percent or the percentage set forth in paragraph four of this 34 subdivision. 35 (2) Any difference between the amount computed by the comptroller 36 pursuant to subdivision a of this section and the maximum amount 37 required to be paid by the employer pursuant to paragraph one of this 38 subdivision shall be appropriated to the retirement system out of moneys 39 in the general fund of the state. 40 (3) The aforementioned appropriated moneys shall be paid by the state 41 on or before the first of February. The state shall not have the option 42 to amortize the payment required in this subdivision as provided in 43 section nineteen-a of this title. 44 (4) The percentage referred to in paragraph one of this subdivision 45 shall be determined annually by reference to the consumer price index 46 (all urban consumers, CPI-U, U.S. city average, all items, 1982-84=100), 47 published by the United States bureau of labor statistics, for each 48 applicable calendar year. Said percentage shall equal the annual 49 inflation, as determined from the increase in the consumer price index 50 in the one year period ending the thirty-first of March of the current 51 year's actuarial, required contribution. Said percentage shall then be 52 rounded up to the next higher one-tenth of one percent. 53 (5) For purposes of this subdivision, "actuarial required contrib- 54 ution" means the amount computed by the comptroller prior to the deter- 55 mination of the amount eligible for amortization, if any, as set forth 56 in section nineteen-a of this title.A. 5911 3 1 (6) For purposes of this subdivision, the base year for the initial 2 calculation of limited employer contributions pursuant to paragraph one 3 of this subdivision shall be the amount paid by the employer in the 4 fiscal year ending the thirty-first of March, two thousand twenty-one. 5 The employer participation cap imposed by this subdivision shall 6 commence with employer contributions made in the fiscal year ending the 7 thirty-first of March, two thousand twenty-two. 8 (7) The provisions of this subdivision shall not apply in cities with 9 a population of one million or more. 10 § 2. Section 317 of the retirement and social security law, as amended 11 by chapter 33 of the laws of 1986, subdivision a as amended by chapter 12 62 of the laws of 1989, and subdivision c as amended by chapter 260 of 13 the laws of 2004, is amended to read as follows: 14 § 317. Annual appropriation by participating employers. a. On or 15 before the fifteenth day of November, nineteen hundred eighty-nine and 16 of each succeeding year, the comptroller shall determine the amount 17 which each participating employer is required to pay to the police and 18 fire retirement system to discharge its obligations thereto for the 19 fiscal year of the retirement system which ends on March thirty-first of 20 nineteen hundred ninety and of each succeeding calendar year on account 21 of its employees who are members of this system. The comptroller shall 22 submit to the fiscal officer of each [of] such employer a statement of 23 the amount so payable. 24 This amount shall consist of the amount deemed necessary to provide 25 for payment in full of (i) all estimated obligations of each participat- 26 ing employer for the current fiscal year of the retirement systems and 27 (ii) any additional obligation, plus interest on such amount, for fiscal 28 years preceding the current fiscal year. Such amount shall, however, be 29 subject to the limitation set forth in subdivision f of this section. If 30 as a result of the amount determined to be paid for any fiscal year, a 31 participating employer overpaid its actual obligation to the retirement 32 system for that year, the amount to be determined by the comptroller for 33 the next succeeding November fifteenth shall reflect the amount of the 34 overpayment, plus interest as defined in section three hundred sixteen 35 of this [article] title on such amount, as a reduction in the amount 36 otherwise required to be paid by such participating employer. 37 b. Each participating employer annually shall appropriate a sum suffi- 38 cient to pay such amount, subject to the limitation set forth in subdi- 39 vision f of this section. In the event the comptroller's statement is 40 not received before annual appropriations are made by such employer, a 41 sum estimated by the comptroller to be sufficient for such purpose shall 42 be included with such annual appropriations. 43 c. Payment of the amount specified in the comptroller's statement, 44 subject to the limitation set forth in subdivision f of this section, 45 shall be made by a participating employer within seventy-eight days 46 after the receipt of such statement; provided, however, that in no case 47 shall any participating employer be required to make this payment before 48 February first of the calendar year next succeeding the calendar year in 49 which such statement is received. The comptroller is authorized to 50 provide for and accept pre-payment. 51 d. If payment of the [full amount] employer's portion of such obli- 52 gations is not made by the date required by subdivision c of this 53 section, interest at a rate determined in accordance with the provisions 54 of section three hundred sixteen of this [article] title shall commence 55 to run against the unpaid balance thereof on the first day after the 56 date required by said subdivision c.A. 5911 4 1 e. The comptroller shall have full power and authority to bring suit 2 in the supreme court against any participating employer to recover any 3 sum for which the employer is responsible, payment of which is not made 4 as herein required. While any such sum owed by the employer shall remain 5 due and unpaid [he] the comptroller may refuse to audit any claim for 6 funds due to such employer from the state. 7 f. (1) Of the amount determined by the comptroller pursuant to subdi- 8 vision a of this section, an employer shall not be required to pay more 9 than the prior year's actuarial required contribution plus the lesser 10 of: two percent or the percentage set forth in paragraph four of this 11 subdivision. 12 (2) Any difference between the amount computed by the comptroller 13 pursuant to subdivision a of this section and the maximum amount 14 required to be paid by the employer pursuant to paragraph one of this 15 subdivision shall be appropriated to the retirement system out of moneys 16 in the general fund of the state. 17 (3) The aforementioned appropriated moneys shall be paid by the state 18 on or before the first of February. The state shall not have the option 19 to amortize the payment required in this subdivision as provided in 20 section three hundred nineteen-a of this title. 21 (4) The percentage referred to in paragraph one of this subdivision 22 shall be determined annually by reference to the consumer price index 23 (all urban consumers, CPI-U, U.S. city average, all items, 1982-84=100), 24 published by the United States bureau of labor statistics, for each 25 applicable calendar year. Said percentage shall equal the annual 26 inflation, as determined from the increase in the consumer price index 27 in the one year period ending the thirty-first of March of the current 28 year's actuarial, required contribution. Said percentage shall then be 29 rounded up to the next higher one-tenth of one percent. 30 (5) For the purposes of this subdivision, "actuarial required contrib- 31 ution" means the amount computed by the comptroller prior to the deter- 32 mination of the amount eligible for amortization, if any, as set forth 33 in section three hundred nineteen-a of this title. 34 (6) For purposes of this subdivision, the base year for the initial 35 calculation of limited employer contributions pursuant to paragraph one 36 of this subdivision shall be the amount paid by the employer in the 37 fiscal year ending the thirty-first of March, two thousand twenty-one. 38 The employer participation cap imposed by this subdivision shall 39 commence with employer contributions made in the fiscal year ending the 40 thirty-first of March, two thousand twenty-two. 41 (7) The provisions of this subdivision shall not apply in cities with 42 a population of one million or more. 43 § 3. Subdivision 2 of section 521 of the education law, paragraph a as 44 amended by chapter 553 of the laws of 1997, paragraph b as amended by 45 chapter 871 of the laws of 1963, paragraphs f and g as added by chapter 46 538 of the laws of 1984, paragraph h as amended by chapter 830 of the 47 laws of 1992, paragraphs i, j, k, l, and m as added by chapter 175 of 48 the laws of 1990, and paragraph n as added by chapter 482 of the laws of 49 1996, is amended and a new subdivision 4 is added to read as follows: 50 2. The collection of employers' contributions shall be made as 51 follows: 52 a. Upon the basis of each actuarial determination and appraisal 53 provided herein, the retirement board shall annually prepare and certify 54 to the commissioner [of education] a statement of the total amount 55 necessary to be paid by all employers for the ensuing fiscal year to the 56 pension accumulation and expense funds as provided under subdivision twoA. 5911 5 1 of section five hundred seventeen and under section five hundred nine- 2 teen of this article. Upon the basis of the rate of contribution for 3 supplemental retirement allowances, determined in accordance with 4 section five hundred thirty-two of this article, the retirement board 5 shall certify to the commissioner [of education] a statement of the 6 total amount necessary to be paid by all employers for the ensuing 7 fiscal year to the supplemental retirement allowance fund. Said certif- 8 ication shall include interest on amounts necessary to repay advances 9 made to the supplemental retirement allowance fund pursuant to subdivi- 10 sion f of section five hundred thirty-two of this article computed from 11 the date of such advances at the rate determined in accordance with 12 paragraph f of this subdivision. 13 b. The commissioner [of education] shall include in the certificate 14 which he files with the state comptroller showing the amount of state 15 funds apportioned to the school districts within each county for the 16 support of common schools, a statement showing the amount to be contrib- 17 uted by each employer in each of such counties as required under this 18 article. 19 The amount to be contributed by each employer except those who operate 20 local district pension systems, shall be such percentage of the total 21 compensation or salaries of all teachers in his employ who are members 22 of the retirement system as the aggregate amount of the normal and defi- 23 ciency contributions for the year shall bear to the total compensation 24 or salaries paid by all employers, except those who operate local 25 district pension systems, to all teachers who are members of the retire- 26 ment system; provided, however, that the amount remitted by such employ- 27 er shall be subject to the contribution limits established in subdivi- 28 sion four of this section. 29 c. The comptroller shall issue his warrant to the custodian of such 30 fund directing such custodian to credit to the pension accumulation fund 31 and expense fund respectively, from the appropriation for the support of 32 common schools the amounts required to be made as contributions to such 33 funds by the employers as shown by the certificate of the commissioner 34 [of education] filed with him as directed in paragraph b of this subdi- 35 vision, but subject to the contribution limit established pursuant to 36 subdivision four of this section. 37 d. The comptroller, in issuing his warrant to the custodian for 38 payment to each county treasurer of that portion of the moneys appor- 39 tioned for the support of common schools, shall deduct therefrom an 40 amount equal to the amount required to be contributed by employers of 41 such county, as shown by the certificate of the commissioner [of educa-42tion] of this state filed with the comptroller as required by paragraph 43 b of this subdivision, but subject to the contribution limit established 44 pursuant to subdivision four of this section. 45 e. In order to meet the financial requirements of this article, 46 employers who obtain funds directly by taxation are hereby authorized 47 and directed to levy annually such additional taxes as are required to 48 provide the [funds deducted from the amounts apportioned to such employ-49ers from the appropriation of the state for the support of the common50schools] employer's contribution amount as determined pursuant to subdi- 51 vision four of this section. 52 f. Employers whose payments from the moneys apportioned from the state 53 for the support of common schools are insufficient to pay the employer's 54 portion of the amount due and owing the system, or who do not receive 55 such payments, shall pay the system each year the amount of contrib- 56 utions due and owing from the employer, subject to the contributionA. 5911 6 1 limit established pursuant to subdivision four of this section, pursuant 2 to this article within thirty days from the date a bill is mailed by the 3 system. Interest, at a rate equal to the average yield payable on 4 fifty-two week United States treasury bills on June thirtieth immediate- 5 ly preceding the day the bill is mailed by the system, shall accrue on 6 the employer's portion of the outstanding amount due and owing commenc- 7 ing with the thirty-first day after the bill is mailed. 8 g. Whenever the system determines the contributions made by an employ- 9 er are less than the percentage of total compensation or salaries of 10 members of the system in the employ of such employer, as required by 11 this article, such employer shall pay the system such deficiency within 12 thirty days from the date a bill is mailed by the system, provided such 13 deficiency amount does not cause the employer to pay more than the maxi- 14 mum required contribution amount calculated pursuant to subdivision four 15 of this section. Interest, at a rate equal to the average yield payable 16 on fifty-two week United States treasury bills on June thirtieth imme- 17 diately preceding the day before the bill is mailed by the system, shall 18 accrue on the employer's portion of the outstanding amount due and owing 19 commencing with the thirty-first day after the bill is mailed. 20 h. Notwithstanding any provision of law to the contrary, commencing 21 with the payments made in the fiscal year beginning July first, nineteen 22 hundred ninety, and each fiscal year thereafter, the employer contrib- 23 utions due and payable as determined pursuant to the provisions of this 24 article and the employee contributions due and payable pursuant to this 25 article and articles fourteen and fifteen of the retirement and social 26 security law, on account of compensation paid in the fiscal year imme- 27 diately preceding, and those employer contributions due and payable in 28 each fiscal year pursuant to chapter six hundred sixty-five of the laws 29 of nineteen hundred eighty-four shall be made to the retirement system 30 and collected in the manner set forth in this section each fiscal year 31 in three payments, each equal to thirty-three and one-third percent of 32 the total amount due for such fiscal year. Such payments shall be paid 33 on September fifteenth, October fifteenth, and November fifteenth of 34 each fiscal year. If a participating employer underpaid its obligation 35 to the retirement system, such underpayment as determined by the retire- 36 ment system shall be deducted from the amounts apportioned to such 37 employer from the appropriation of the state for the support of the 38 common schools due and payable the next April fifteenth. Employers whose 39 payments from such appropriation are insufficient to pay the amount due 40 and owing the system, or who do not receive such payments, shall be 41 billed by the system for such underpayment and shall pay the system the 42 amount due within thirty days from the date a bill is mailed by the 43 system. The amount of any employer overpayment of its obligation to the 44 retirement system, as determined by such system shall be a credit to the 45 employer and shall reduce by an equal amount thereof the initial payment 46 to be made by such employer to such system on the next succeeding 47 September fifteenth. 48 i. Notwithstanding any provision of law to the contrary, the employer 49 and employee contributions due and payable in the nineteen hundred 50 eighty-nine--ninety fiscal year on account of compensation paid in the 51 nineteen hundred eighty-eight--eighty-nine fiscal year which were paid 52 prior to April first, nineteen hundred ninety shall be deemed (to the 53 extent such amount is sufficient) to have consisted of all the employee 54 contributions due and payable pursuant to this article and articles 55 fourteen and fifteen of the retirement and social security law in the 56 nineteen hundred eighty-nine--ninety fiscal year and those employerA. 5911 7 1 contributions due and payable in such fiscal year pursuant to chapter 2 six hundred sixty-five of the laws of nineteen hundred eighty-four; and 3 the remaining employer contributions so paid shall be applied evenly to 4 the payments due and payable on September fifteenth, nineteen hundred 5 ninety, October fifteenth, nineteen hundred ninety and November 6 fifteenth, nineteen hundred ninety and the employer contributions 7 amounting to eight hundred seventy-three million seven hundred eleven 8 thousand six hundred fifteen dollars ($873,711,615), due and payable 9 pursuant to the provisions of this section in the nineteen hundred 10 eighty-nine--ninety fiscal year on account of compensation paid in nine- 11 teen hundred eighty-eight--eighty-nine fiscal year, except those employ- 12 er contributions due and payable in such fiscal year pursuant to chapter 13 six hundred sixty-five of the laws of nineteen hundred eighty-four, 14 shall be deferred and payment shall be made to the retirement system in 15 fifteen equal annual payments of ninety-eight million five hundred thir- 16 ty-seven thousand five hundred seven dollars ($98,537,507) on October 17 fifteenth, commencing on October fifteenth, nineteen hundred ninety. 18 Such payments are calculated at an interest rate of eight percent per 19 annum. Provided, however, the retirement board is directed to permit the 20 pre-payment of the amounts outstanding under this paragraph. The retire- 21 ment board shall: (1) On or before September first, nineteen hundred 22 ninety, in addition to the amount due for the current fiscal year bill- 23 ing and for the payment of the amortized annual installment, furnish the 24 total amount due and be authorized to accept pre-payment in full of said 25 amount by October fifteenth, nineteen hundred ninety. (2) On or before 26 each September first thereafter, in addition to the amount due for the 27 current fiscal year billing and for the payment of the annual amortized 28 installment, furnish the total amount still outstanding and be author- 29 ized to accept the pre-payment of any portion of the balance remaining 30 to be paid by October fifteenth of that year. 31 j. Prior to June first, nineteen hundred ninety, the valuation rate of 32 interest adopted by the retirement board on April twenty-seventh, nine- 33 teen hundred eighty-nine, may be retroactively revised to eight percent 34 by the retirement board, as recommended by the actuary, as if adopted at 35 the April twenty-seventh, nineteen hundred eighty-nine board meeting, 36 and the employer contribution rate, adopted by the retirement board at 37 the April twenty-seventh, nineteen hundred eighty-nine board meeting, 38 revised by the retirement board at the July twenty-seventh, nineteen 39 hundred eighty-nine board meeting, may be retroactively amended by the 40 retirement board as if adopted at the July twenty-seventh, nineteen 41 hundred eighty-nine board meeting and applied to contributions paid in 42 the nineteen hundred ninety--ninety-one fiscal year. Notwithstanding any 43 provision of law to the contrary, the actions of the retirement board 44 pursuant to the provisions of this paragraph shall be deemed reasonable, 45 prudent and proper. No member of the retirement board, officer, or 46 employee of the New York state teachers' retirement system shall incur 47 or suffer any liability whatsoever by reason of any actions pursuant to 48 this paragraph, and such system shall save harmless and indemnify all 49 members of the retirement board, its officers and employees from finan- 50 cial loss arising out of any claim, demand, suit, action or judgment as 51 a result of the actions taken pursuant to this paragraph provided that 52 such person shall, within five days after the date on which he is served 53 with any summons, complaint, process, notice, demand, claim or pleading, 54 deliver the original or a true copy thereof to the legal advisor of such 55 system. Upon such delivery, the legal advisor of such system may assume 56 control of the representation of such person in connection with suchA. 5911 8 1 claim, demand, suit, action or proceeding. Such person shall cooperate 2 fully with the legal advisor of the system or any other person desig- 3 nated to assume such defense in respect of such representation or 4 defense. 5 k. The retirement board is authorized to adopt procedures and/or to 6 promulgate rules and regulations as it deems necessary to adjust and 7 reconcile any payments from employers to actual amounts due whether such 8 payments were received prior or subsequent to the effective date of 9 [the] chapter one hundred seventy-five of the laws of nineteen hundred 10 ninety [which added this paragraph to this section]. 11 l. The provisions of paragraphs h and i of this subdivision shall 12 constitute a contract and the rights of the New York state teachers' 13 retirement system thereunder shall not be impaired in any way whatsoev- 14 er. 15 m. In addition to any other payment or collection procedure provided 16 by this article, if the amounts credited from the appropriation for the 17 support of common schools are insufficient to fully cover the amounts to 18 be contributed by the employers, subject to the employer's contribution 19 limit established pursuant to subdivision four of this section, the 20 retirement board is authorized to certify the unpaid amount of the 21 employer's contribution to the state comptroller, and the state comp- 22 troller shall, to the extent not otherwise prohibited by law, withhold 23 such amount from any succeeding payment from any other form of state aid 24 provided to the employer. If any employer fails to pay the amounts 25 required to be contributed pursuant to this section, the retirement 26 system shall be entitled to reasonable attorney fees and other expenses 27 incurred to collect such amounts due and owing. Fees shall be determined 28 pursuant to prevailing market rates for the kind and quality of the 29 services furnished. 30 n. Notwithstanding any other provision of law to the contrary, the 31 board of education or trustees of a school district which is a partic- 32 ipating employer, which has elected to make payments of the employer 33 contributions due and payable to the retirement system pursuant to para- 34 graph i of this subdivision in amortized annual installments, and which 35 has determined to make pre-payment of the total amount of such contrib- 36 utions outstanding in accordance with said paragraph i, may adopt a bond 37 resolution authorizing the refinancing of such debt by the issuance of 38 bonds in the amount of such pre-payment without conducting a vote on a 39 tax to be collected in installments, provided that such refinancing will 40 result in savings to the school district, as certified by the state 41 comptroller, and provided further that the issuance of such obligations 42 otherwise complies with the requirements of the local finance law and 43 this chapter. 44 4. a. Notwithstanding the provisions of this section, an employer 45 shall not be required to contribute more than the prior plan year's 46 actuarial required contribution plus the lesser of: two percent or the 47 percentage set forth in paragraph d of this subdivision. 48 b. Any difference between the amount contained in the warrant issued 49 by the comptroller pursuant to subdivision two of this section and the 50 maximum amount required to be paid by the employer pursuant to this 51 subdivision shall be appropriated to the retirement system out of moneys 52 in the general fund of the state. 53 c. The moneys appropriated by the state from the general fund in 54 accordance with this subdivision shall be paid by the state to the 55 retirement system on or before the fifteenth of November in the fiscalA. 5911 9 1 year in which the moneys are due and payable by the participating 2 employer. 3 d. The percentage referred to in paragraph a of this subdivision 4 shall be determined annually by reference to the consumer price index 5 (all urban consumers, CPI-U, U.S. city average, all items, 1982-84=100), 6 published by the United States bureau of labor statistics, for each 7 applicable calendar year. Said percentage shall equal the annual 8 inflation, as determined from the increase in the consumer price index 9 in the one year period ending the thirtieth of June of the current 10 year's actuarial required contribution. Said percentage shall then be 11 rounded up to the next higher one-tenth of one percent. 12 e. For purposes of this subdivision, "actuarial required contribution" 13 means the amount computed by the actuary, as set forth in section five 14 hundred seventeen of this article. 15 f. For purposes of this subdivision, the base year for the initial 16 calculation of limited employer contributions pursuant to paragraph a of 17 this subdivision shall be the amount paid by the employer in the plan 18 year ending the thirtieth of June, two thousand twenty-one. The employer 19 contribution cap imposed by this subdivision shall commence with employ- 20 er contributions due in the plan year ending the thirtieth of June, two 21 thousand twenty-two. 22 § 4. This act shall take effect immediately and shall apply to employ- 23 er contributions made commencing in the employer's fiscal year ending 24 2022. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: This bill (legislative bill draft 03509-03-1) would amend Section 521 of the Education Law to limit the amount of year over year increase in employer contributions required to be made to the New York State Teach- ers' Retirement System (NYSTRS) by participating employers. Participat- ing employers of NYSTRS would be required to contribute no more than the prior year's actuarial required contribution amount increased by the lesser of two percent, or a percentage based upon the one-year increase in the Consumer Price Index (CPI). The difference between the current actuarial required contribution and this limited contribution would be paid by the State of New York out of the General Fund of the state. The employer contribution cap imposed under this bill would commence with employer contributions made in the fiscal year ending June 30, 2022. As long as the actuarial required employer contribution continues to be paid in full and on time to the Retirement System every year, there would be no cost to the employers of members of NYSTRS if this bill is enacted. This bill would make the State of New York into a contributing partner to NYSTRS. The actuarial required Employer Contribution Rate (ECR) is determined each year based on an actuarial valuation of System assets and liabil- ities, and is dependent upon a number of actuarial assumptions, member demographic data, and investment returns. The rate of increase in this required contribution rate can be expected to bear very little relation- ship to the rate of inflation. An employer's contribution amount is equal to this ECR multiplied by the employer's covered payroll. There- fore, a payment from the State can be triggered not only by an increase in the ECR, but also by increases in an individual employer's payroll. The required contribution from the State could be expected to vary substantially year to year due to changes in the required ECR and chang- es in employers' payroll amounts. Member data is from the System's most recent actuarial valuation files, consisting of data provided by the employers to the RetirementA. 5911 10 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 2021-14 dated February 19, 2021 prepared by the Actuary of the New York State Teachers' Retirement System and is intended for use only during the 2021 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. FISCAL NOTE.-- Pursuant to Legislative Law, Section 50: This bill would limit the year-to-year increase in the dollar amount of the annual employer contributions to be made by participating employ- ers of the New York State and Local Employees' Retirement System (NYSLERS), the New York State and Local Police and Fire Retirement System (NYSLPFRS), and the New York State Teachers' Retirement System (NYSTRS). Such dollar increase in the actuarially determined contrib- utions would be limited to the lesser of 2% and the increase in the Consumer Price Index (CPI-U), as determined by the United States Depart- ment of Labor. The difference between the actuarially determined contributions and the limited contributions would be paid by the State of New York on behalf of the participating employers. This change shall first apply to contributions made during the fiscal year ending in the year 2022. Insofar as this bill affects the NYSLERS, if this legislation is enacted during the 2021 legislative session, it is estimated that there would be an additional contribution of approximately $520 million paya- ble by the State of New York on behalf of the participating employers of NYSLERS for the fiscal year ending March 21, 2022. Insofar as this bill affects the NYSLPFRS, if this legislation is enacted during the 2021 legislative session, it is estimated that there would be an additional contribution of approximately $228 million paya- ble by the State on New York on behalf of the participating employers of NYSLPFRS for the fiscal year ending March 21, 2022. In both NYSLERS and NYSLPFRS, there could be additional costs borne by the State of New York on behalf of participating employers with payroll increases that are significantly greater than that System's salary increase assumptions or participating employers that adopt significant plan improvements. In future years, the additional contribution borne by the State of New York would depend on each year's actuarially determined contributions, increases in employer payroll, and the CPI-U. There would be no cost to NYSLERS nor NYSLPFRS. Summary of relevant resources: Membership data as of March 31, 2020 was used in measuring the impact of the proposed change, the same data used in the April 1, 2020 actuari- al valuation. Distributions and other statistics can be found in the 2020 Report of the Actuary and the 2020 Comprehensive Annual Financial Report. The actuarial assumptions and methods used are described in the 2020 Annual Report to the Comptroller on Actuarial Assumptions, and the Codes, Rules and Regulations of the State of New York: Audit and Control.A. 5911 11 The Market Assets and GASB Disclosures are found in the March 31, 2020 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 January 13, 2021, and intended for use only during the 2021 Legislative Session, is Fiscal Note No. 2021-34, prepared by the Actuary for the New York State and Local Retirement System.