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.
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.
