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A09643 Summary:

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A09643 Floor Votes:

A09643 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         9643--A
 
                   IN ASSEMBLY
 
                                      May 13, 2014
                                       ___________
 
        Introduced  by M. of A. FARRELL, ABBATE -- read once and referred to the
          Committee on  Governmental  Employees  --  reference  changed  to  the
          Committee  on Ways and Means -- reported and referred to the Committee
          on  Rules  --  Rules  Committee  discharged,  bill  amended,   ordered
          reprinted as amended and recommitted to the Committee on Rules
 

        AN  ACT  to amend the retirement and social security law, in relation to
          investments by public pension funds
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Paragraph  (a)  of  subdivision  9  of section 177 of the
     2  retirement and social security law, as amended by chapter 22 of the laws
     3  of 2006, is amended to read as follows:
     4    (a) the investments by a fund made pursuant to this subdivision  shall
     5  not  at any time exceed [twenty-five] thirty per centum of the assets of
     6  such fund;
     7    § 2. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          This bill would amend subdivision 9 of Section 177 of  the  Retirement
        and  Social  security  Law  to  increase to 30% the percentage of assets

        which may be invested by the New York State Teachers' Retirement  System
        in  those investments that aren't otherwise specifically permitted under
        the other subdivisions of this section. The current limit is 25%.
          If this bill is enacted, any cost  or  savings  to  the  employers  of
        members  of  the New York State Teachers' Retirement System would depend
        on the investment performance of any  assets  that  are  invested  in  a
        different  manner  due  to  this  change in the investment restrictions.
        Additional investment income results in lower required employer contrib-
        utions, and vice-versa.
          Employee data is from the System's  most  recent  actuarial  valuation
        files,  consisting  of  data provided by the employers to the Retirement
        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
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14954-07-4
        A. 9643--A                          2
 
        the CAFR. Actuarial assumptions and methods are provided in the System's
        Actuarial Valuation Report.
          The  source of this estimate is Revised Fiscal Note 2014-31 dated June
        11, 2014 prepared by the Actuary of the New York State Teachers' Retire-
        ment 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 Actuaries to render the actuarial opinion contained herein.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          PROVISIONS  OF PROPOSED LEGISLATION: With respect to the New York City
        Retirement Systems ("NYCRS"),  this  proposed  legislation  would  amend
        Retirement  and  Social Security Law ("RSSL") Section 177.9(a) to permit
        an increase to 30% the percentage of assets that may be held in  "Basket
        Clause"  investments  (i.e.,  investments  not  explicitly identified as
        permissible elsewhere in New York State law).
          This 30% limit compares with a limit of 25% under current law.
          FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS: With respect to the  NYCRS,
        the  enactment of this proposed legislation would not, in and of itself,
        result in any change in employer contributions.

          The ultimate cost of a Retirement Program is the benefits it pays. The
        financing of that ultimate cost is provided by contributions and invest-
        ment income.
          Investment income depends upon the amounts of assets of the  Fund  and
        the  rate of return received on those assets. The rate of return depends
        primarily upon the asset allocation policy of the Fund.
          To the extent that the NYCRS increase their investments in the securi-
        ties authorized  by  this  proposed  legislation  and  those  securities
        produce  greater  (lesser) rates of return than the rates of return that
        the NYCRS would otherwise have  achieved,  then  employer  contributions
        will be lesser (greater).
          FISCAL  NOTE  IDENTIFICATION:  This estimated is intended for use only
        during the 2014 Legislative Session. It  is  Fiscal  Note  No.  2014-27,

        dated June 11, 2014, prepared by the Chief Actuary for the New York City
        Retirement Systems.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          This  bill  will  amend  the  Retirement  and  Social  Security Law to
        increase the limit on non-legal  list  investments  for  the  eight  (8)
        public  retirement  systems  of  New  York  State.  It would replace the
        current 25% limit with a 30% limit.
          If this bill is enacted, insofar as this bill  affects  the  New  York
        State  and Local Employees' Retirement System and the New York State and
        Local Police and Fire Retirement System, we assume that there  would  be
        small investment changes. Any increases or decreases in investment earn-
        ings  will  result  in decreases or increases, respectively, in employer
        contributions. Annual changes in assets will be shared by all  employers

        and will be spread over the future working lifetimes of active members.
          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
        A. 9643--A                          3
 
        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 actuarial opinion contained herein.
          This estimate, dated June 12, 2014, and intended for use  only  during
        the  2014  Legislative Session, is Fiscal Note No. 2014-152, 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.