New York State Assembly

 
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A11169 Summary:

A11169 Actions:

A11169 Committee Votes:

Committee:WAYS AND MEANS   Chair:Weinstein      
DATE:06/14/2018AYE/NAY:31/2  Action: Favorable refer to committee Rules        
Weinstein
Aye
Oaks
Aye
Lentol
Aye
Crouch
Aye
Schimminger
Aye
Barclay
Aye
Gantt
Excused
Fitzpatrick
Nay
Glick
Aye
Hawley
Aye
Nolan
Aye
Malliotakis
Aye
Pretlow
Aye
Walter
Aye
Perry
Aye
Montesano
Nay
Colton
Aye
Curran
Aye
Cook
Aye
Ra
Aye
Cahill
Aye
Aubry
Aye
Hooper
Excused
Thiele
Aye
Cusick
Aye
Ortiz
Aye
Benedetto
Aye
Weprin
Aye
Rodriguez
Aye
Ramos
Aye
Braunstein
Aye
McDonald
Aye
Rozic
Aye
Peoples-Stokes
Aye
Simotas
Aye

Committee:RULES   Chair:Heastie      
DATE:06/18/2018AYE/NAY:30/0  Action: Favorable         
Heastie
Aye
Kolb
Aye
Gottfried
Aye
Oaks
Aye
Lentol
Aye
Butler
Aye
Gantt
Excused
Crouch
Aye
Nolan
Aye
Finch
Aye
Weinstein
Aye
Barclay
Aye
Hooper
Aye
Raia
Aye
Ortiz
Aye
Hawley
Aye
Pretlow
Aye
Cook
Aye
Glick
Aye
Morelle
Aye
Aubry
Aye
Englebright
Aye
Dinowitz
Aye
Colton
Aye
Magnarelli
Aye
Perry
Aye
Galef
Aye
Paulin
Aye
Titus
Aye
Peoples-Stokes
Aye
Benedetto
Aye

A11169 Floor Votes:

A11169 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          11169
 
                   IN ASSEMBLY
 
                                      June 12, 2018
                                       ___________
 
        Introduced  by COMMITTEE ON RULES -- (at request of M. of A. Pretlow) --
          read once and referred to the Committee on Ways and Means
 
        AN ACT to provide for the payment of the annual contributions  owed  and
          to  be  owed  on  behalf of the New York city off-track betting corpo-
          ration to the New York city employees' retirement system

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1. Statement of legislative findings and intent. The legisla-
     2  ture hereby finds that the state  has  a  statutory  and  constitutional
     3  obligation  to  protect  and  fund  the  pension  benefits of the former
     4  employees and retirees of the defunct New York  city  off-track  betting
     5  corporation.
     6    The  New  York  city off-track betting corporation is a public benefit
     7  corporation created pursuant to state law and is a participating employ-
     8  er in the New York city employees' retirement system. The pension  bene-
     9  fits  of  the  corporation's former employees and retirees are protected
    10  from impairment under article V, section 7 of the state constitution.
    11    In 2008, the state legislatively enhanced its role with respect to the
    12  New York city off-track betting corporation due to its financial  diffi-
    13  culties, thus becoming its successor for purposes of assuming the statu-
    14  tory  and  constitutional  obligation to make pension contributions. The
    15  corporation ceased operations in 2010 and has since failed to make annu-
    16  al contributions to the New York city employees'  retirement  system  as
    17  required under the administrative code of the city of New York.
    18    Sections 13-130 and 13-638.2 of the administrative code of the city of
    19  New  York  provide  that  the  employer  liabilities of a public benefit
    20  corporation that participates in the New York city employees' retirement
    21  system, such as the New York city off-track betting corporation, are  to
    22  be  paid  by the corporation or a successor. On March 8, 2018, the board
    23  of trustees of the New York city employees' retirement system adopted  a
    24  resolution  recognizing  the  state  as a successor to the New York city
    25  off-track betting corporation and a responsible obligor with respect  to
    26  its required contributions.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD16151-06-8
        A. 11169                            2
 
     1    As a successor to the New York city off-track betting corporation, and
     2  in  the  interest of properly funding the pension benefits of its former
     3  employees and retirees in compliance with the  state  constitution,  the
     4  state  will fulfill the past, present, and future obligations of the New
     5  York  city off-track betting corporation to the New York city employees'
     6  retirement system as follows:
     7    § 2. Definitions. The following words and phrases as used in this  act
     8  shall  have the following meanings unless a different meaning is plainly
     9  required by context.
    10    1. "Actuary" shall mean the actuary appointed by the board of trustees
    11  of the New York city employees' retirement system  pursuant  to  section
    12  13-121 of the administrative code of the city of New York.
    13    2. "City fiscal year" shall mean a fiscal year of the city of New York
    14  as defined in section 226 of the New York city charter.
    15    3. "Executive director" shall mean the executive director appointed by
    16  the  board of trustees of the New York city employees' retirement system
    17  pursuant to paragraph 2 of subdivision a of section 13-103 of the admin-
    18  istrative code of the city of New York.
    19    4. "Interest" shall mean the rate per centum  per  annum  of  interest
    20  specified  in  paragraph  2  of subdivision b of section 13-638.2 of the
    21  administrative code of the city of New York.
    22    5. "NYC administrative code" shall mean the administrative code of the
    23  city of New York.
    24    6. "NYCERS" shall mean the New York city employees' retirement system,
    25  as established by chapter 427 of the laws of 1920.
    26    7. "NYCOTB" shall mean the New  York  city  off-track  betting  corpo-
    27  ration,  as established by chapter 144 of the laws of 1970 and continued
    28  pursuant to article 6 of the racing, pari-mutuel wagering  and  breeding
    29  law.
    30    8.  "State  fiscal  year"  shall  mean  a  fiscal year of the state as
    31  defined in section 3 of the state finance law.
    32    § 3. Payment of the future annual contributions to be owed  by  NYCOTB
    33  to  NYCERS.  Notwithstanding  the  provisions  of any general or special
    34  state law or local law to the contrary, in state fiscal year 2020 and in
    35  each state fiscal year thereafter, the department of audit  and  control
    36  shall  take  actions necessary to pay in full, subject to appropriation,
    37  the annual contribution determined to be owed by NYCOTB to NYCERS  under
    38  the provisions of the NYC administrative code, including but not limited
    39  to sections 13-127, 13-130, 13-133, and 13-638.2 thereof, for the corre-
    40  sponding  city fiscal year. On or prior to the date specified in section
    41  13-133 of the NYC administrative code for the payment of annual contrib-
    42  utions by NYCOTB, such moneys, to  the  extent  of  such  appropriation,
    43  shall  be  payable to NYCERS on the audit and warrant of the comptroller
    44  of the state of New York on vouchers certified or approved by the execu-
    45  tive director of NYCERS in the manner prescribed by law.   Notwithstand-
    46  ing  the  provisions of any general or special state law or local law to
    47  the contrary, an annual contribution  determined  and  paid  under  this
    48  section shall not include any amount attributable to any annual contrib-
    49  ution  previously determined to be owed by NYCOTB to NYCERS for any city
    50  fiscal year prior to the 2020 city fiscal  year  and  not  yet  paid  by
    51  NYCOTB or the state.
    52    § 4. Payment of overdue annual contributions owed by NYCOTB to NYCERS.
    53  a. Notwithstanding the provisions of any general or special state law or
    54  local  law  to  the  contrary, on or before January 2, 2019, the actuary
    55  shall determine the sum of all annual  contributions  previously  deter-
    56  mined  to  be owed by NYCOTB to NYCERS for any city fiscal year prior to
        A. 11169                            3

     1  the 2020 city fiscal year and not yet paid  by  NYCOTB,  with  interest.
     2  Such interest, compounded annually, shall be computed on each such over-
     3  due  annual contribution from the date such contribution was required to
     4  be  paid  pursuant  to  section  13-133  of  the NYC administrative code
     5  through January 1, 2019. This sum shall be known as the  "amount  to  be
     6  amortized".
     7    b.  Notwithstanding the provisions of any general or special state law
     8  or local law to the contrary, on or before January 2, 2019, the  actuary
     9  shall  further  determine an amount that if paid in fifteen equal annual
    10  installments beginning on January 1, 2020, would be sufficient to pay in
    11  full the amount to be  amortized  with  interest,  compounded  annually,
    12  computed  from January 2, 2019, to January 1, 2034. This amount shall be
    13  known as the "annual  amortization  payment".  Any  annual  amortization
    14  payment subsequent to the initial annual amortization payment payable on
    15  January  1,  2020,  shall include the unpaid balance of any prior annual
    16  amortization payment, with interest, compounded annually, computed  from
    17  the  date such prior annual amortization payment was required to be paid
    18  to the  date  that  such  subsequent  annual  authorization  payment  is
    19  required to be paid.
    20    c.  Notwithstanding the provisions of any general or special state law
    21  or local law to the contrary, in state fiscal  year  2020  and  in  each
    22  state  fiscal  year  thereafter  until  the amount to be amortized, with
    23  interest, is paid in full, the department of  audit  and  control  shall
    24  take  actions  necessary to pay in full the annual amortization payment,
    25  subject to appropriation. On or prior to January 1st of each such  state
    26  fiscal  year,  such moneys, to the extent of such appropriation shall be
    27  payable to NYCERS on the audit and warrant of  the  comptroller  of  the
    28  state  of  New  York  on vouchers certified or approved by the executive
    29  director of NYCERS in the manner prescribed by law.
    30    § 5. Deposit of moneys.   NYCERS shall  deposit  all  moneys  received
    31  pursuant to this act in the contingent reserve fund specified in section
    32  13-127 of the NYC administrative code.
    33    § 6. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY  OF  BILL:  The  proposed legislation provides a funding mech-
        anism, through unconsolidated provisions of law, for the  State  of  New
        York  (State), as a successor obligor, to appropriate funds to pay past,
        present, and future New York City Off-Track Betting Corporation (NYCOTB)
        employer contributions, with applicable interest, to the New  York  City
        Employees'  Retirement  System  (NYCERS) on behalf of former and retired
        NYCOTB employees.
          Effective Date: Upon enactment.
          BACKGROUND: NYCOTB is a defunct public benefit corporation  and  is  a
        participating employer in NYCERS. NYCOTB retirees currently receive full
        retirement  benefits  from  NYCERS  even though NYCOTB last made partial
        employer contributions to NYCERS in  fiscal  years  2010  and  2011  and
        completely  ceased making employer contributions thereafter. Unpaid past
        and future annual  employer  contributions,  with  applicable  interest,
        continue to accrue.
          IMPACT  ON  EMPLOYER  CONTRIBUTIONS:  The  proposed  legislation would
        require the Actuary of the City of New York (Actuary) to  calculate  the
        cumulative  owed  past  and  current NYCOTB employer contributions, with
        applicable interest, through and inclusive  of  fiscal  year  2019  (the
        Amount to be Amortized), on or before January 2, 2019, and amortize such
        cumulative  Amount in fifteen equal installments, with applicable inter-
        est, to be paid by the  State  Comptroller,  subject  to  appropriation,
        A. 11169                            4
 
        commencing  on  or  before January 1, 2020 and ending by January 1, 2034
        (the  Annual  Amortization  Payment).  The  proposed  legislation  would
        further  require  the  calculation  and, subject to State appropriation,
        annual payment of future annual NYCOTB employer contributions in accord-
        ance  with  applicable provisions of the Administrative Code of the City
        of New York (ACCNY).
          FINANCIAL IMPACT: Based  on  the  actuarial  assumptions  and  methods
        described  herein,  the  enactment  of  this proposed legislation would,
        assuming full and timely payment, result in a  potential  total  present
        value cost to the State of approximately $270.1 million as of January 1,
        2020.  Any  amount appropriated and paid by the State to NYCERS would be
        applied as a credit to NYCOTB,  and  relieve  any  potential  additional
        successor,  and any potential guarantor, including the City of New York,
        of such amounts paid.
          The following Table presents an estimate of the annual cost for Fiscal
        Years 2020 through 2024 as of January 1, 2020.
 
                     Cost Attributable       Cost Attributable to
                        to Employer         Employer Contributions
        Fiscal   Contributions for Fiscal      for Fiscal Years
         Year      Years Prior to 2020*      Subsequent to 2019**       Total
         2020           $14,479,143               $13,021,623        $27,500,766
         2021           $14,479,143               $13,346,228        $27,825,371
         2022           $14,479,143               $13,679,859        $28,159,002
         2023           $14,479,143               $14,023,465        $28,502,608
         2024           $14,479,143               $14,376,862        $28,856,005
 
          * Equal to a 15-year amortization of $141,106,026  as  of  January  1,
        2020.
          **  Estimates  of  future  employer contributions for OTB based on the
        actuarial assumptions and methods in effect for the June 30, 2017  (Lag)
        actuarial  valuation, including an assumed investment return of 7.0% per
        annum.
 
          CENSUS DATA: The estimates presented herein are based  on  the  census
        data  used in the Preliminary June 30, 2017 (Lag) actuarial valuation of
        NYCERS to determine the Preliminary Fiscal Year 2019  employer  contrib-
        utions.
          As  of  June  30,  2017, OTB had 1,211 retirees with an average age of
        approximately 74.7 years, 285 terminated vested members with an  average
        age  of approximately 52.1 years, and 4 inactive members with an average
        age of approximately 61.3 years.
          ACTUARIAL ASSUMPTIONS AND METHODS:  The  estimates  of  annual  future
        employer  contributions  presented  herein have been calculated based on
        the actuarial assumptions and methods in effect for the  June  30,  2017
        (Lag) actuarial valuations used to determine the Preliminary Fiscal Year
        2019 employer contributions of NYCERS. Please note these assumptions and
        methods  are subject to change as this valuation is not considered final
        until the end of Fiscal Year 2019.
          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
        (ERISA), a Member of the American Academy of Actuaries, and a Fellow  of
        the  Conference of Consulting Actuaries. I meet the Qualification Stand-
        ards of the American Academy of Actuaries to render the actuarial  opin-
        A. 11169                            5
 
        ion contained herein. To the best of my knowledge, the results contained
        herein have been prepared in accordance with generally accepted actuari-
        al  principles  and procedures and with the Actuarial Standards of Prac-
        tice issued by the Actuarial Standards Board.
          FISCAL  NOTE  IDENTIFICATION:  This Fiscal Note 2018-33 dated June 11,
        2018 was prepared by the Chief Actuary for the New York City  Employees'
        Retirement  System.  This  estimate  is intended for use only during the
        2018 Legislative Session.