Bill Text: NY A07104 | 2013-2014 | General Assembly | Amended
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: Moderate Partisan Bill (Democrat 13-3)
Status: (Introduced - Dead) 2014-03-03 - print number 7104a [A07104 Detail]
Download: New_York-2013-A07104-Amended.html
S T A T E O F N E W Y O R K ________________________________________________________________________ 7104--A 2013-2014 Regular Sessions I N A S S E M B L Y May 1, 2013 ___________ Introduced by M. of A. ABINANTI, PAULIN, THIELE, RUSSELL, GOODELL, GUNTHER, JAFFEE, HOOPER, OTIS -- Multi-Sponsored by -- M. of A. ENGLE- BRIGHT, KATZ, LUPARDO, MAGEE, McDONALD, RAIA, SCHIMEL -- read once and referred to the Committee on Governmental Employees -- recommitted to the Committee on Governmental Employees in accordance with Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee 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 S 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 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD03647-10-4 A. 7104--A 2 1 system for that year, the amount to be determined by the comptroller for 2 the next succeeding November fifteenth shall reflect the amount of the 3 overpayment, plus interest as defined in section sixteen of this [arti- 4 cle] TITLE on such amount, as a reduction in the amount otherwise 5 required to be paid by such participating employer. 6 b. Each participating employer annually shall appropriate a sum suffi- 7 cient to pay such amount, SUBJECT TO THE LIMITATION SET FORTH IN SUBDI- 8 VISION F OF THIS SECTION. In the event the comptroller's statement is 9 not received before annual appropriations are made by such employer, a 10 sum estimated by the comptroller to be sufficient for such purpose shall 11 be included with such annual appropriations. 12 c. Payment of the amount specified in the comptroller's statement, 13 SUBJECT TO THE LIMITATION SET FORTH IN SUBDIVISION F OF THIS SECTION, 14 shall be made by a participating employer within seventy-eight days 15 after the receipt of such statement; provided, however, that in no case 16 shall any participating employer be required to make this payment before 17 February first of the calendar year next succeeding the calendar year in 18 which such statement is received. The comptroller is authorized to 19 provide for and accept pre-payment. 20 d. If payment of the [full amount] EMPLOYER'S PORTION of such obli- 21 gations is not made by the date required by subdivision c of this 22 section, interest at a rate determined in accordance with the provisions 23 of section sixteen of this article shall commence to run against the 24 unpaid balance thereof on the first day after the date required by said 25 subdivision c. 26 e. The comptroller shall have full power and authority to bring suit 27 in the supreme court against any participating employer to recover any 28 sum FOR WHICH THE EMPLOYER IS RESPONSIBLE, payment of which is not made 29 as herein required. While any such sum OWED BY THE EMPLOYER shall remain 30 due and unpaid [he] THE COMPTROLLER may refuse to audit any claim for 31 funds due to such employer from the state. 32 F. (1) OF THE AMOUNT DETERMINED BY THE COMPTROLLER PURSUANT TO SUBDI- 33 VISION A OF THIS SECTION, AN EMPLOYER SHALL NOT BE REQUIRED TO PAY MORE 34 THAN THE PRIOR YEAR'S ACTUARIAL REQUIRED CONTRIBUTION PLUS THE LESSER 35 OF: TWO PERCENT OR THE PERCENTAGE SET FORTH IN PARAGRAPH FOUR OF THIS 36 SUBDIVISION. 37 (2) ANY DIFFERENCE BETWEEN THE AMOUNT COMPUTED BY THE COMPTROLLER 38 PURSUANT TO SUBDIVISION A OF THIS SECTION AND THE MAXIMUM AMOUNT 39 REQUIRED TO BE PAID BY THE EMPLOYER PURSUANT TO PARAGRAPH ONE OF THIS 40 SUBDIVISION SHALL BE APPROPRIATED TO THE RETIREMENT SYSTEM OUT OF MONEYS 41 IN THE GENERAL FUND OF THE STATE. 42 (3) THE AFOREMENTIONED APPROPRIATED MONEYS SHALL BE PAID BY THE STATE 43 ON OR BEFORE THE FIRST OF FEBRUARY. THE STATE SHALL NOT HAVE THE OPTION 44 TO AMORTIZE THE PAYMENT REQUIRED IN THIS SUBDIVISION AS PROVIDED IN 45 SECTION NINETEEN-A OF THIS TITLE. 46 (4) THE PERCENTAGE REFERRED TO IN PARAGRAPH ONE OF THIS SUBDIVISION 47 SHALL BE DETERMINED ANNUALLY BY REFERENCE TO THE CONSUMER PRICE INDEX 48 (ALL URBAN CONSUMERS, CPI-U, U.S. CITY AVERAGE, ALL ITEMS, 1982-84=100), 49 PUBLISHED BY THE UNITED STATES BUREAU OF LABOR STATISTICS, FOR EACH 50 APPLICABLE CALENDAR YEAR. SAID PERCENTAGE SHALL EQUAL THE ANNUAL 51 INFLATION, AS DETERMINED FROM THE INCREASE IN THE CONSUMER PRICE INDEX 52 IN THE ONE YEAR PERIOD ENDING THE THIRTY-FIRST OF MARCH OF THE CURRENT 53 YEAR'S ACTUARIAL, REQUIRED CONTRIBUTION. SAID PERCENTAGE SHALL THEN BE 54 ROUNDED UP TO THE NEXT HIGHER ONE-TENTH OF ONE PERCENT. 55 (5) FOR PURPOSES OF THIS SUBDIVISION, "ACTUARIAL REQUIRED CONTRIB- 56 UTION" MEANS THE AMOUNT COMPUTED BY THE COMPTROLLER PRIOR TO THE DETER- A. 7104--A 3 1 MINATION OF THE AMOUNT ELIGIBLE FOR AMORTIZATION, IF ANY, AS SET FORTH 2 IN SECTION NINETEEN-A OF THIS TITLE. 3 (6) FOR PURPOSES OF THIS SUBDIVISION, THE BASE YEAR FOR THE INITIAL 4 CALCULATION OF LIMITED EMPLOYER CONTRIBUTIONS PURSUANT TO PARAGRAPH ONE 5 OF THIS SUBDIVISION SHALL BE THE AMOUNT PAID BY THE EMPLOYER IN THE 6 FISCAL YEAR ENDING THE THIRTY-FIRST OF MARCH, TWO THOUSAND FOURTEEN. THE 7 EMPLOYER PARTICIPATION CAP IMPOSED BY THIS SUBDIVISION SHALL COMMENCE 8 WITH EMPLOYER CONTRIBUTIONS MADE IN THE FISCAL YEAR ENDING THE 9 THIRTY-FIRST OF MARCH, TWO THOUSAND FIFTEEN. 10 (7) THE PROVISIONS OF THIS SUBDIVISION SHALL NOT APPLY IN CITIES WITH 11 A POPULATION OF ONE MILLION OR MORE. 12 S 2. Section 317 of the retirement and social security law, as 13 amended by chapter 33 of the laws of 1986, subdivision a as amended by 14 chapter 62 of the laws of 1989, and subdivision c as amended by chapter 15 260 of the laws of 2004, is amended to read as follows: 16 S 317. Annual appropriation by participating employers. a. On or 17 before the fifteenth day of November, nineteen hundred eighty-nine and 18 of each succeeding year, the comptroller shall determine the amount 19 which each participating employer is required to pay to the police and 20 fire retirement system to discharge its obligations thereto for the 21 fiscal year of the retirement system which ends on March thirty-first of 22 nineteen hundred ninety and of each succeeding calendar year on account 23 of its employees who are members of this system. The comptroller shall 24 submit to the fiscal officer of each of such employer a statement of the 25 amount so payable. 26 This amount shall consist of the amount deemed necessary to provide 27 for payment in full of (i) all estimated obligations of each participat- 28 ing employer for the current fiscal year of the retirement systems and 29 (ii) any additional obligation, plus interest on such amount, for fiscal 30 years preceding the current fiscal year. SUCH AMOUNT SHALL, HOWEVER, BE 31 SUBJECT TO THE LIMITATION SET FORTH IN SUBDIVISION F OF THIS SECTION. If 32 as a result of the amount determined to be paid for any fiscal year, a 33 participating employer overpaid its actual obligation to the retirement 34 system for that year, the amount to be determined by the comptroller for 35 the next succeeding November fifteenth shall reflect the amount of the 36 overpayment, plus interest as defined in section three hundred sixteen 37 of this [article] TITLE on such amount, as a reduction in the amount 38 otherwise required to be paid by such participating employer. 39 b. Each participating employer annually shall appropriate a sum suffi- 40 cient to pay such amount, SUBJECT TO THE LIMITATION SET FORTH IN SUBDI- 41 VISION F OF THIS SECTION. In the event the comptroller's statement is 42 not received before annual appropriations are made by such employer, a 43 sum estimated by the comptroller to be sufficient for such purpose shall 44 be included with such annual appropriations. 45 c. Payment of the amount specified in the comptroller's statement, 46 SUBJECT TO THE LIMITATION SET FORTH IN SUBDIVISION F OF THIS SECTION, 47 shall be made by a participating employer within seventy-eight days 48 after the receipt of such statement; provided, however, that in no case 49 shall any participating employer be required to make this payment before 50 February first of the calendar year next succeeding the calendar year in 51 which such statement is received. The comptroller is authorized to 52 provide for and accept pre-payment. 53 d. If payment of the [full amount] EMPLOYER'S PORTION of such obli- 54 gations is not made by the date required by subdivision c of this 55 section, interest at a rate determined in accordance with the provisions 56 of section three hundred sixteen of this [article] TITLE shall commence A. 7104--A 4 1 to run against the unpaid balance thereof on the first day after the 2 date required by said subdivision c. 3 e. The comptroller shall have full power and authority to bring suit 4 in the supreme court against any participating employer to recover any 5 sum FOR WHICH THE EMPLOYER IS RESPONSIBLE, payment of which is not made 6 as herein required. While any such sum OWED BY THE EMPLOYER shall remain 7 due and unpaid [he] THE COMPTROLLER may refuse to audit any claim for 8 funds due to such employer from the state. 9 F. (1) OF THE AMOUNT DETERMINED BY THE COMPTROLLER PURSUANT TO SUBDI- 10 VISION A OF THIS SECTION, AN EMPLOYER SHALL NOT BE REQUIRED TO PAY MORE 11 THAN THE PRIOR YEAR'S ACTUARIAL REQUIRED CONTRIBUTION PLUS THE LESSER 12 OF: TWO PERCENT OR THE PERCENTAGE SET FORTH IN PARAGRAPH FOUR OF THIS 13 SUBDIVISION. 14 (2) ANY DIFFERENCE BETWEEN THE AMOUNT COMPUTED BY THE COMPTROLLER 15 PURSUANT TO SUBDIVISION A OF THIS SECTION AND THE MAXIMUM AMOUNT 16 REQUIRED TO BE PAID BY THE EMPLOYER PURSUANT TO PARAGRAPH ONE OF THIS 17 SUBDIVISION SHALL BE APPROPRIATED TO THE RETIREMENT SYSTEM OUT OF MONEYS 18 IN THE GENERAL FUND OF THE STATE. 19 (3) THE AFOREMENTIONED APPROPRIATED MONEYS SHALL BE PAID BY THE STATE 20 ON OR BEFORE THE FIRST OF FEBRUARY. THE STATE SHALL NOT HAVE THE OPTION 21 TO AMORTIZE THE PAYMENT REQUIRED IN THIS SUBDIVISION AS PROVIDED IN 22 SECTION THREE HUNDRED NINETEEN-A OF THIS TITLE. 23 (4) THE PERCENTAGE REFERRED TO IN PARAGRAPH ONE OF THIS SUBDIVISION 24 SHALL BE DETERMINED ANNUALLY BY REFERENCE TO THE CONSUMER PRICE INDEX 25 (ALL URBAN CONSUMERS, CPI-U, U.S. CITY AVERAGE, ALL ITEMS, 1982-84=100), 26 PUBLISHED BY THE UNITED STATES BUREAU OF LABOR STATISTICS, FOR EACH 27 APPLICABLE CALENDAR YEAR. SAID PERCENTAGE SHALL EQUAL THE ANNUAL 28 INFLATION, AS DETERMINED FROM THE INCREASE IN THE CONSUMER PRICE INDEX 29 IN THE ONE YEAR PERIOD ENDING THE THIRTY-FIRST OF MARCH OF THE CURRENT 30 YEAR'S ACTUARIAL, REQUIRED CONTRIBUTION. SAID PERCENTAGE SHALL THEN BE 31 ROUNDED UP TO THE NEXT HIGHER ONE-TENTH OF ONE PERCENT. 32 (5) FOR THE PURPOSES OF THIS SUBDIVISION, "ACTUARIAL REQUIRED CONTRIB- 33 UTION" MEANS THE AMOUNT COMPUTED BY THE COMPTROLLER PRIOR TO THE DETER- 34 MINATION OF THE AMOUNT ELIGIBLE FOR AMORTIZATION, IF ANY, AS SET FORTH 35 IN SECTION THREE HUNDRED NINETEEN-A OF THIS TITLE. 36 (6) FOR PURPOSES OF THIS SUBDIVISION, THE BASE YEAR FOR THE INITIAL 37 CALCULATION OF LIMITED EMPLOYER CONTRIBUTIONS PURSUANT TO PARAGRAPH ONE 38 OF THIS SUBDIVISION SHALL BE THE AMOUNT PAID BY THE EMPLOYER IN THE 39 FISCAL YEAR ENDING THE THIRTY-FIRST OF MARCH, TWO THOUSAND FOURTEEN. THE 40 EMPLOYER PARTICIPATION CAP IMPOSED BY THIS SUBDIVISION SHALL COMMENCE 41 WITH EMPLOYER CONTRIBUTIONS MADE IN THE FISCAL YEAR ENDING THE 42 THIRTY-FIRST OF MARCH, TWO THOUSAND FIFTEEN. 43 (7) THE PROVISIONS OF THIS SUBDIVISION SHALL NOT APPLY IN CITIES WITH 44 A POPULATION OF ONE MILLION OR MORE. 45 S 3. Subdivision 2 of section 521 of the education law, paragraph a as 46 amended by chapter 553 of the laws of 1997, paragraph b as amended by 47 chapter 871 of the laws of 1963, paragraphs f and g as added by chapter 48 538 of the laws of 1984, paragraph h as amended by chapter 830 of the 49 laws of 1992, paragraphs i, j, k, l, and m as added by chapter 175 of 50 the laws of 1990, and paragraph n as added by chapter 482 of the laws of 51 1996, is amended and a new subdivision 4 is added to read as follows: 52 2. The collection of employers' contributions shall be made as 53 follows: 54 a. Upon the basis of each actuarial determination and appraisal 55 provided herein, the retirement board shall annually prepare and certify 56 to the commissioner [of education] a statement of the total amount A. 7104--A 5 1 necessary to be paid by all employers for the ensuing fiscal year to the 2 pension accumulation and expense funds as provided under subdivision two 3 of section five hundred seventeen and under section five hundred nine- 4 teen of this article. Upon the basis of the rate of contribution for 5 supplemental retirement allowances, determined in accordance with 6 section five hundred thirty-two of this article, the retirement board 7 shall certify to the commissioner [of education] a statement of the 8 total amount necessary to be paid by all employers for the ensuing 9 fiscal year to the supplemental retirement allowance fund. Said certif- 10 ication shall include interest on amounts necessary to repay advances 11 made to the supplemental retirement allowance fund pursuant to subdivi- 12 sion f of section five hundred thirty-two of this article computed from 13 the date of such advances at the rate determined in accordance with 14 paragraph f of this subdivision. 15 b. The commissioner [of education] shall include in the certificate 16 which he files with the state comptroller showing the amount of state 17 funds apportioned to the school districts within each county for the 18 support of common schools, a statement showing the amount to be contrib- 19 uted by each employer in each of such counties as required under this 20 article. 21 The amount to be contributed by each employer except those who operate 22 local district pension systems, shall be such percentage of the total 23 compensation or salaries of all teachers in his employ who are members 24 of the retirement system as the aggregate amount of the normal and defi- 25 ciency contributions for the year shall bear to the total compensation 26 or salaries paid by all employers, except those who operate local 27 district pension systems, to all teachers who are members of the retire- 28 ment system; PROVIDED, HOWEVER, THAT THE AMOUNT REMITTED BY SUCH EMPLOY- 29 ER SHALL BE SUBJECT TO THE CONTRIBUTION LIMITS ESTABLISHED IN SUBDIVI- 30 SION FOUR OF THIS SECTION. 31 c. The comptroller shall issue his warrant to the custodian of such 32 fund directing such custodian to credit to the pension accumulation fund 33 and expense fund respectively, from the appropriation for the support of 34 common schools the amounts required to be made as contributions to such 35 funds by the employers as shown by the certificate of the commissioner 36 [of education] filed with him as directed in paragraph b of this subdi- 37 vision, BUT SUBJECT TO THE CONTRIBUTION LIMIT ESTABLISHED PURSUANT TO 38 SUBDIVISION FOUR OF THIS SECTION. 39 d. The comptroller, in issuing his warrant to the custodian for 40 payment to each county treasurer of that portion of the moneys appor- 41 tioned for the support of common schools, shall deduct therefrom an 42 amount equal to the amount required to be contributed by employers of 43 such county, as shown by the certificate of the commissioner [of educa- 44 tion] of this state filed with the comptroller as required by paragraph 45 b of this subdivision, BUT SUBJECT TO THE CONTRIBUTION LIMIT ESTABLISHED 46 PURSUANT TO SUBDIVISION FOUR OF THIS SECTION. 47 e. In order to meet the financial requirements of this article, 48 employers who obtain funds directly by taxation are hereby authorized 49 and directed to levy annually such additional taxes as are required to 50 provide the [funds deducted from the amounts apportioned to such employ- 51 ers from the appropriation of the state for the support of the common 52 schools] EMPLOYER'S CONTRIBUTION AMOUNT AS DETERMINED PURSUANT TO SUBDI- 53 VISION FOUR OF THIS SECTION. 54 f. Employers whose payments from the moneys apportioned from the state 55 for the support of common schools are insufficient to pay the EMPLOYER'S 56 PORTION OF THE amount due and owing the system, or who do not receive A. 7104--A 6 1 such payments, shall pay the system each year the amount of contrib- 2 utions due and owing from the employer, SUBJECT TO THE CONTRIBUTION 3 LIMIT ESTABLISHED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION, pursuant 4 to this article within thirty days from the date a bill is mailed by the 5 system. Interest, at a rate equal to the average yield payable on 6 fifty-two week United States treasury bills on June thirtieth immediate- 7 ly preceding the day the bill is mailed by the system, shall accrue on 8 the EMPLOYER'S PORTION OF THE outstanding amount due and owing commenc- 9 ing with the thirty-first day after the bill is mailed. 10 g. Whenever the system determines the contributions made by an employ- 11 er are less than the percentage of total compensation or salaries of 12 members of the system in the employ of such employer, as required by 13 this article, such employer shall pay the system such deficiency within 14 thirty days from the date a bill is mailed by the system, PROVIDED SUCH 15 DEFICIENCY AMOUNT DOES NOT CAUSE THE EMPLOYER TO PAY MORE THAN THE MAXI- 16 MUM REQUIRED CONTRIBUTION AMOUNT CALCULATED PURSUANT TO SUBDIVISION FOUR 17 OF THIS SECTION. Interest, at a rate equal to the average yield payable 18 on fifty-two week United States treasury bills on June thirtieth imme- 19 diately preceding the day before the bill is mailed by the system, shall 20 accrue on the EMPLOYER'S PORTION OF THE outstanding amount due and owing 21 commencing with the thirty-first day after the bill is mailed. 22 h. Notwithstanding any provision of law to the contrary, commencing 23 with the payments made in the fiscal year beginning July first, nineteen 24 hundred ninety, and each fiscal year thereafter, the employer contrib- 25 utions due and payable as determined pursuant to the provisions of this 26 article and the employee contributions due and payable pursuant to this 27 article and articles fourteen and fifteen of the retirement and social 28 security law, on account of compensation paid in the fiscal year imme- 29 diately preceding, and those employer contributions due and payable in 30 each fiscal year pursuant to chapter six hundred sixty-five of the laws 31 of nineteen hundred eighty-four shall be made to the retirement system 32 and collected in the manner set forth in this section each fiscal year 33 in three payments, each equal to thirty-three and one-third percent of 34 the total amount due for such fiscal year. Such payments shall be paid 35 on September fifteenth, October fifteenth, and November fifteenth of 36 each fiscal year. If a participating employer underpaid its obligation 37 to the retirement system, such underpayment as determined by the retire- 38 ment system shall be deducted from the amounts apportioned to such 39 employer from the appropriation of the state for the support of the 40 common schools due and payable the next April fifteenth. Employers whose 41 payments from such appropriation are insufficient to pay the amount due 42 and owing the system, or who do not receive such payments, shall be 43 billed by the system for such underpayment and shall pay the system the 44 amount due within thirty days from the date a bill is mailed by the 45 system. The amount of any employer overpayment of its obligation to the 46 retirement system, as determined by such system shall be a credit to the 47 employer and shall reduce by an equal amount thereof the initial payment 48 to be made by such employer to such system on the next succeeding 49 September fifteenth. 50 i. Notwithstanding any provision of law to the contrary, the employer 51 and employee contributions due and payable in the nineteen hundred 52 eighty-nine--ninety fiscal year on account of compensation paid in the 53 nineteen hundred eighty-eight--eighty-nine fiscal year which were paid 54 prior to April first, nineteen hundred ninety shall be deemed (to the 55 extent such amount is sufficient) to have consisted of all the employee 56 contributions due and payable pursuant to this article and articles A. 7104--A 7 1 fourteen and fifteen of the retirement and social security law in the 2 nineteen hundred eighty-nine--ninety fiscal year and those employer 3 contributions due and payable in such fiscal year pursuant to chapter 4 six hundred sixty-five of the laws of nineteen hundred eighty-four; and 5 the remaining employer contributions so paid shall be applied evenly to 6 the payments due and payable on September fifteenth, nineteen hundred 7 ninety, October fifteenth, nineteen hundred ninety and November 8 fifteenth, nineteen hundred ninety and the employer contributions 9 amounting to eight hundred seventy-three million seven hundred eleven 10 thousand six hundred fifteen dollars ($873,711,615), due and payable 11 pursuant to the provisions of this section in the nineteen hundred 12 eighty-nine--ninety fiscal year on account of compensation paid in nine- 13 teen hundred eighty-eight--eighty-nine fiscal year, except those employ- 14 er contributions due and payable in such fiscal year pursuant to chapter 15 six hundred sixty-five of the laws of nineteen hundred eighty-four, 16 shall be deferred and payment shall be made to the retirement system in 17 fifteen equal annual payments of ninety-eight million five hundred thir- 18 ty-seven thousand five hundred seven dollars ($98,537,507) on October 19 fifteenth, commencing on October fifteenth, nineteen hundred ninety. 20 Such payments are calculated at an interest rate of eight percent per 21 annum. Provided, however, the retirement board is directed to permit the 22 pre-payment of the amounts outstanding under this paragraph. The retire- 23 ment board shall: (1) On or before September first, nineteen hundred 24 ninety, in addition to the amount due for the current fiscal year bill- 25 ing and for the payment of the amortized annual installment, furnish the 26 total amount due and be authorized to accept pre-payment in full of said 27 amount by October fifteenth, nineteen hundred ninety. (2) On or before 28 each September first thereafter, in addition to the amount due for the 29 current fiscal year billing and for the payment of the annual amortized 30 installment, furnish the total amount still outstanding and be author- 31 ized to accept the pre-payment of any portion of the balance remaining 32 to be paid by October fifteenth of that year. 33 j. Prior to June first, nineteen hundred ninety, the valuation rate of 34 interest adopted by the retirement board on April twenty-seventh, nine- 35 teen hundred eighty-nine, may be retroactively revised to eight percent 36 by the retirement board, as recommended by the actuary, as if adopted at 37 the April twenty-seventh, nineteen hundred eighty-nine board meeting, 38 and the employer contribution rate, adopted by the retirement board at 39 the April twenty-seventh, nineteen hundred eighty-nine board meeting, 40 revised by the retirement board at the July twenty-seventh, nineteen 41 hundred eighty-nine board meeting, may be retroactively amended by the 42 retirement board as if adopted at the July twenty-seventh, nineteen 43 hundred eighty-nine board meeting and applied to contributions paid in 44 the nineteen hundred ninety--ninety-one fiscal year. Notwithstanding any 45 provision of law to the contrary, the actions of the retirement board 46 pursuant to the provisions of this paragraph shall be deemed reasonable, 47 prudent and proper. No member of the retirement board, officer, or 48 employee of the New York state teachers' retirement system shall incur 49 or suffer any liability whatsoever by reason of any actions pursuant to 50 this paragraph, and such system shall save harmless and indemnify all 51 members of the retirement board, its officers and employees from finan- 52 cial loss arising out of any claim, demand, suit, action or judgment as 53 a result of the actions taken pursuant to this paragraph provided that 54 such person shall, within five days after the date on which he is served 55 with any summons, complaint, process, notice, demand, claim or pleading, 56 deliver the original or a true copy thereof to the legal advisor of such A. 7104--A 8 1 system. Upon such delivery, the legal advisor of such system may assume 2 control of the representation of such person in connection with such 3 claim, demand, suit, action or proceeding. Such person shall cooperate 4 fully with the legal advisor of the system or any other person desig- 5 nated to assume such defense in respect of such representation or 6 defense. 7 k. The retirement board is authorized to adopt procedures and/or to 8 promulgate rules and regulations as it deems necessary to adjust and 9 reconcile any payments from employers to actual amounts due whether such 10 payments were received prior or subsequent to the effective date of 11 [the] chapter ONE HUNDRED SEVENTY-FIVE of the laws of nineteen hundred 12 ninety [which added this paragraph to this section]. 13 l. The provisions of paragraphs h and i of this subdivision shall 14 constitute a contract and the rights of the New York state teachers' 15 retirement system thereunder shall not be impaired in any way whatsoev- 16 er. 17 m. In addition to any other payment or collection procedure provided 18 by this article, if the amounts credited from the appropriation for the 19 support of common schools are insufficient to fully cover the amounts to 20 be contributed by the employers, SUBJECT TO THE EMPLOYER'S CONTRIBUTION 21 LIMIT ESTABLISHED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION, the 22 retirement board is authorized to certify the unpaid amount OF THE 23 EMPLOYER'S CONTRIBUTION to the state comptroller, and the state comp- 24 troller shall, to the extent not otherwise prohibited by law, withhold 25 such amount from any succeeding payment from any other form of state aid 26 provided to the employer. If any employer fails to pay the amounts 27 required to be contributed pursuant to this section, the retirement 28 system shall be entitled to reasonable attorney fees and other expenses 29 incurred to collect such amounts due and owing. Fees shall be determined 30 pursuant to prevailing market rates for the kind and quality of the 31 services furnished. 32 n. Notwithstanding any other provision of law to the contrary, the 33 board of education or trustees of a school district which is a partic- 34 ipating employer, which has elected to make payments of the employer 35 contributions due and payable to the retirement system pursuant to para- 36 graph i of this subdivision in amortized annual installments, and which 37 has determined to make pre-payment of the total amount of such contrib- 38 utions outstanding in accordance with said paragraph i, may adopt a bond 39 resolution authorizing the refinancing of such debt by the issuance of 40 bonds in the amount of such pre-payment without conducting a vote on a 41 tax to be collected in installments, provided that such refinancing will 42 result in savings to the school district, as certified by the state 43 comptroller, and provided further that the issuance of such obligations 44 otherwise complies with the requirements of the local finance law and 45 this chapter. 46 4. A. NOTWITHSTANDING THE PROVISIONS OF THIS SECTION, AN EMPLOYER 47 SHALL NOT BE REQUIRED TO CONTRIBUTE MORE THAN THE PRIOR PLAN YEAR'S 48 EMPLOYER CONTRIBUTION PLUS THE LESSER OF: TWO PERCENT OR THE PERCENTAGE 49 SET FORTH IN PARAGRAPH D OF THIS SUBDIVISION. 50 B. ANY DIFFERENCE BETWEEN THE AMOUNT CONTAINED IN THE WARRANT ISSUED 51 BY THE COMPTROLLER PURSUANT TO SUBDIVISION TWO OF THIS SECTION AND THE 52 MAXIMUM AMOUNT REQUIRED TO BE PAID BY THE EMPLOYER PURSUANT TO THIS 53 SUBDIVISION SHALL BE APPROPRIATED TO THE RETIREMENT SYSTEM OUT OF MONEYS 54 IN THE GENERAL FUND OF THE STATE. 55 C. THE MONEYS APPROPRIATED BY THE STATE FROM THE GENERAL FUND IN 56 ACCORDANCE WITH THIS SUBDIVISION SHALL BE PAID BY THE STATE TO THE A. 7104--A 9 1 RETIREMENT SYSTEM ON OR BEFORE THE FIFTEENTH OF NOVEMBER IN THE FISCAL 2 YEAR IN WHICH THE MONEYS ARE DUE AND PAYABLE BY THE PARTICIPATING 3 EMPLOYER. 4 D. THE PERCENTAGE REFERRED TO IN PARAGRAPH A OF THIS SUBDIVISION 5 SHALL BE DETERMINED ANNUALLY BY REFERENCE TO THE CONSUMER PRICE INDEX 6 (ALL URBAN CONSUMERS, CPI-U, U.S. CITY AVERAGE, ALL ITEMS, 1982-84=100), 7 PUBLISHED BY THE UNITED STATES BUREAU OF LABOR STATISTICS, FOR EACH 8 APPLICABLE CALENDAR YEAR. SAID PERCENTAGE SHALL EQUAL THE ANNUAL 9 INFLATION, AS DETERMINED FROM THE INCREASE IN THE CONSUMER PRICE INDEX 10 IN THE ONE YEAR PERIOD ENDING THE THIRTIETH OF JUNE OF THE CURRENT 11 YEAR'S ACTUARIAL REQUIRED CONTRIBUTION. SAID PERCENTAGE SHALL THEN BE 12 ROUNDED UP TO THE NEXT HIGHER ONE-TENTH OF ONE PERCENT. 13 E. FOR PURPOSES OF THIS SUBDIVISION, "ACTUARIAL REQUIRED CONTRIBUTION" 14 MEANS THE AMOUNT COMPUTED BY THE ACTUARY, AS SET FORTH IN SECTION FIVE 15 HUNDRED SEVENTEEN OF THE EDUCATION LAW. 16 F. FOR PURPOSES OF THIS SUBDIVISION, THE BASE YEAR FOR THE INITIAL 17 CALCULATION OF LIMITED EMPLOYER CONTRIBUTIONS PURSUANT TO PARAGRAPH A OF 18 THIS SUBDIVISION SHALL BE THE AMOUNT PAID BY THE EMPLOYER IN THE PLAN 19 YEAR ENDING THE THIRTIETH OF JUNE, TWO THOUSAND FOURTEEN. THE EMPLOYER 20 CONTRIBUTION CAP IMPOSED BY THIS SUBDIVISION SHALL COMMENCE WITH EMPLOY- 21 ER CONTRIBUTIONS DUE IN THE PLAN YEAR ENDING THE THIRTIETH OF JUNE, TWO 22 THOUSAND FIFTEEN. 23 S 4. This act shall take effect immediately and shall apply to employ- 24 er contributions made commencing in the employer's fiscal year ending 25 2015. FISCAL NOTE.-- This bill would amend Section 521 of the Education Law to limit the amount of year over year increase in employer contributions required to be made each year to the New York State Teachers' Retirement System (NYSTRS) by participating employers. Participating employers of NYSTRS would not be required to contribute more than the prior year's contribution amount increased by the lesser of two percent, or a percentage based upon the one year increase in the Consumer Price Index (CPI). Any difference in the actuarially 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, 2015. To the extent that the actuarially required employer contribution continues to be paid in full and on time to the Retirement System every year, there will 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 actuarially required contribution is based upon a number of actu- arial assumptions, member demographic data, and investment returns. The rate of increase in this contribution can be expected to bear very little relationship to the rate of inflation. Therefore the required contribution due from the state could grow substantially in any given year. The first year the employer contribution cap would be applied would be with respect to contributions due in the plan year ending June 30, 2015, which for NYSTRS corresponds to contributions collected in the fall of 2014. We estimate the State of New York would be required to make a payment of approximately $640 million at that time for its share of the contribution. In the fall of 2015 we estimate the state would be required to make a payment of approximately $170 million for its share of the contribution. The state's cost in future years would depend on A. 7104--A 10 the actuarially required contribution and the rate of inflation in those years. The source of this estimate is Fiscal Note 2014-20 dated February 27, 2014 prepared by the Actuary of the New York State Teachers' Retirement System and is intended for use only during the 2014 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.-- This bill would limit the year to year increase in the dollar amount of the annual employer contributions to be made by partic- ipating employers of the New York State and Local Employees' Retirement System (NYSLERS), the New York State and Local Police and Fire Retire- ment System (NYSLPFRS) and the New York State Teachers' Retirement System. Such dollar increase in the actuarially determined contributions would be limited to the lesser of 2% and the increase in the Consumer Price Index (CPI-U), as determined by the United States Department 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 2015. If this bill is enacted, insofar as it would affect the NYSLERS and the NYSLPFRS, it is unlikely that there would be an additional contrib- ution payable by the State of New York on behalf of most of the partic- ipating employers for the fiscal year ending March 31, 2015. However, there could be costs on behalf of certain participating employers whose payroll increases were significantly greater than our salary increase assumptions or who adopted significant plan improvements. The costs for future years would depend on each year's actuarially determined contrib- utions, increases in employer payroll, and CPI. There would be no cost to the Systems. 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, 2013 actuarial valu- ation. Distributions and other statistics can be found in the 2013 Report of the Actuary and the 2013 Comprehensive Annual Financial Report. The actuarial assumptions and methods used are described in the 2010, 2011, 2012 and 2013 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, 2013 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 statement of actuarial opinion contained herein. This estimate, dated February 27, 2014, and intended for use only during the 2014 Legislative Session, is Fiscal Note No. 2014-73, prepared by the Actuary for the New York State and Local Employees' Retirement System and the New York State and Local Police and Fire Retirement System.