Bill Text: NY A06596 | 2019-2020 | General Assembly | Amended


Bill Title: Relates to the rate of interest used in the actuarial valuation of liabilities for the purpose of calculating contributions to the New York city employees' retirement system, the New York city teachers' retirement system, the police pension fund, the fire department pension fund 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.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2019-07-03 - SIGNED CHAP.76 [A06596 Detail]

Download: New_York-2019-A06596-Amended.html


                STATE OF NEW YORK
        ________________________________________________________________________
                                         6596--A
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                     March 12, 2019
                                       ___________
        Introduced by M. of A. ABBATE -- read once and referred to the Committee
          on  Governmental  Employees  --  committee  discharged,  bill amended,
          ordered reprinted as amended and recommitted to said committee
        AN ACT to amend the administrative code of the  city  of  New  York,  in
          relation  to  the  rate of interest used in the actuarial valuation of
          liabilities for the purpose of calculating contributions  to  the  New
          York  city  employees'  retirement system, the New York city teachers'
          retirement system, the police pension fund, subchapter two,  the  fire
          department  pension  fund,  subchapter  two and the board of education
          retirement system of such city by public employers and other  obligors
          required  to  make  employer contributions to such retirement systems,
          the crediting of special interest and additional  interest  and  addi-
          tional  interest to members of such retirement systems, and the allow-
          ance 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:
     1    Section  1.  Paragraph  2  of subdivision b of section 13-638.2 of the
     2  administrative code of the city of New York, as amended by  chapter  100
     3  of the laws of 2018, is amended to read as follows:
     4    (2)  With  respect  to  each  retirement system, such rate of interest
     5  shall be as hereinafter set forth in this paragraph:
     6                                                  First day and
     7                                                  last day of
     8                     Rate of interest             fiscal year or
     9                     per centum per               series of fiscal
    10  Retirement         annum, compounded            years for which
    11  System             annually                     rate is effective
    12  ________________________________________________________________________
    13  NYCERS             7%                           July 1, 2011 to
    14                                                  June 30, [2019] 2021
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10353-05-9

        A. 6596--A                          2
     1  NYCTRS             7%                           July 1, 2011 to
     2                                                  June 30, [2019] 2021
     3  PPF                7%                           July 1, 2011 to
     4                                                  June 30, [2019] 2021
     5  FPF                7%                           July 1, 2011 to
     6                                                  June 30, [2019] 2021
     7  BERS               7%                           July 1, 2011 to
     8                                                  June 30, [2019] 2021
     9    §  2. Paragraph 2 of subdivision f of section 13-638.2 of the adminis-
    10  trative code of the city of New York, as amended by chapter 100  of  the
    11  laws of 2018, is amended to read as follows:
    12    (2)  Such  special  interest shall be allowed at the rates and for the
    13  periods set forth below in this paragraph:
    14                                                  First day and
    15                                                  last day of
    16                     Rate of interest             fiscal year or
    17                     per centum per               series of fiscal
    18  Retirement         annum, compounded            years for which
    19  System             annually                     rate is effective
    20  ________________________________________________________________________
    21  NYCERS              1 1/4%                      July 1, 2011 to
    22                                                  June 30, [2019] 2021
    23  NYCTRS              1 1/4%                      July 1, 2011 to
    24                                                  June 30, [2019] 2021
    25  PPF                 1 1/4%                      July 1, 2011 to
    26                                                  June 30, [2019] 2021
    27  FPF                 1 1/4%                      July 1, 2011 to
    28                                                  June 30, [2019] 2021
    29  BERS                1 1/4%                      July 1, 2011 to
    30                                                  June 30, [2019] 2021
    31    § 3. Paragraph 2 of subdivision g of section 13-638.2 of the  adminis-
    32  trative  code  of the city of New York, as amended by chapter 100 of the
    33  laws of 2018, is amended to read as follows:
    34    (2) Such additional interest shall be included at the  rates  and  for
    35  the periods set forth below in this paragraph:
    36                                                  First day and
    37                                                  last day of
    38                     Rate of interest             fiscal year or
    39                     per centum per               series of fiscal
    40  Retirement         annum, compounded            years for which
    41  System             annually                     rate is effective
    42  ________________________________________________________________________
    43  NYCERS              1 1/4%                      July 1, 2011 to
    44                                                  June 30, [2019] 2021
    45  NYCTRS              1 1/4%                      July 1, 2011 to
    46                                                  June 30, [2019] 2021
    47  PPF                 1 1/4%                      July 1, 2011 to
    48                                                  June 30, [2019] 2021
    49  FPF                 1 1/4%                      July 1, 2011 to
    50                                                  June 30, [2019] 2021
    51  BERS                1 1/4%                      July 1, 2011 to
    52                                                  June 30, [2019] 2021

        A. 6596--A                          3
     1    §  4. Paragraph 2 of subdivision i of section 13-638.2 of the adminis-
     2  trative code of the city of New York, as amended by chapter 100  of  the
     3  laws of 2018, is amended to read as follows:
     4    (2)  Such supplementary interest shall be allowed at the rates and for
     5  the periods set forth below in this paragraph:
     6                                                  First day and
     7                                                  last day of
     8                     Rate of interest             fiscal year or
     9                     per centum per               series of fiscal
    10  Retirement         annum, compounded            years for which
    11  System             annually                     rate is effective
    12  ________________________________________________________________________
    13  NYCERS             0%                           July 1, 2011 to
    14                                                  June 30, [2019] 2021
    15  NYCTRS             0%                           July 1, 2011 to
    16                                                  June 30, [2019] 2021
    17  PPF                0%                           July 1, 2011 to
    18                                                  June 30, [2019] 2021
    19  FPF                0%                           July 1, 2011 to
    20                                                  June 30, [2019] 2021
    21  BERS               0%                           July 1, 2011 to
    22                                                  June 30, [2019] 2021
    23    § 5. This act shall take effect July 1, 2019, except that if it  shall
    24  have  become  a  law subsequent to such date, this act shall take effect
    25  immediately and be deemed to have been in full force and effect  on  and
    26  after July 1, 2019.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY  OF  BILL:  The  enactment  of  this proposed legislation (the
        Interest Rate Extender Legislation) would amend Administrative  Code  of
        the City of New York (ACCNY) Section 13-638.2, as amended by Chapter 100
        of  the  Laws  of  2018,  to continue for Fiscal Years 2020 and 2021 the
        following rates of interest that expire on July 1,  2019  for  the  five
        actuarially-funded  New  York  City Retirement Systems and Pension Funds
        (NYCRS):
          * The 8.25% per annum rate used to credit interest on Tier 1 and  Tier
        2  member  account  balances (the sum of the 7.00% regular interest rate
        and the 1.25% special interest rate) and Increased-Take-Home-Pay  (ITHP)
        Reserves (the sum of the 7.00% regular interest rate and the 1.25% addi-
        tional interest rate), and
          * The 7.00% per annum Actuarial Interest Rate (AIR) assumption used to
        compute employer contributions.
          Effective Date: July 1, 2019.
          FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: The continuation for
        Fiscal  Years  2020  and  2021 of the same 8.25% per annum rate that was
        used for Fiscal Year 2019 to credit interest on Tier 1 and Tier 2 member
        contributions and ITHP Reserves would not change the amount or timing of
        expected employer contributions.
          The continuation of the AIR assumption of 7.00%  per  annum  that  was
        used  to  determine  preliminary employer contributions to the NYCRS for
        Fiscal Year 2019 would not change  the  expected  amount  or  timing  of
        employer contributions.
          OTHER  COSTS:  Enactment  of  this  proposed  legislation would not be
        expected to produce any additional costs.

        A. 6596--A                          4
          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. 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
        and procedures and with the Actuarial Standards of  Practice  issued  by
        the Actuarial Standards Board.
          FISCAL  NOTE  IDENTIFICATION:  This Fiscal Note 2019-01 dated March 8,
        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.
feedback