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S04488 Summary:

S04488 Actions:

S04488 Committee Votes:

S04488 Floor Votes:

S04488 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         4488--A
 
                               2019-2020 Regular Sessions
 
                    IN SENATE
 
                                     March 13, 2019
                                       ___________
 
        Introduced  by Sen. GOUNARDES -- (at request of the NYC Actuary) -- read
          twice and ordered printed, and when printed to  be  committed  to  the
          Committee  on Civil Service and Pensions -- committee discharged, bill
          amended, ordered reprinted as amended and recommitted to said  commit-
          tee

        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
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10353-04-9
        S. 4488--A                          2
 
     1  ________________________________________________________________________
     2  NYCERS             7%                           July 1, 2011 to
     3                                                  June 30, [2019] 2021
     4  NYCTRS             7%                           July 1, 2011 to
     5                                                  June 30, [2019] 2021
     6  PPF                7%                           July 1, 2011 to
     7                                                  June 30, [2019] 2021
     8  FPF                7%                           July 1, 2011 to
     9                                                  June 30, [2019] 2021
    10  BERS               7%                           July 1, 2011 to
    11                                                  June 30, [2019] 2021
 
    12    §  2. Paragraph 2 of subdivision f of section 13-638.2 of the adminis-
    13  trative code of the city of New York, as amended by chapter 100  of  the
    14  laws of 2018, is amended to read as follows:
    15    (2)  Such  special  interest shall be allowed at the rates and for the
    16  periods set forth below in this paragraph:
 
    17                                                  First day and
    18                                                  last day of
    19                     Rate of interest             fiscal year or
    20                     per centum per               series of fiscal
    21  Retirement         annum, compounded            years for which
    22  System             annually                     rate is effective
    23  ________________________________________________________________________
    24  NYCERS              1 1/4%                      July 1, 2011 to
    25                                                  June 30, [2019] 2021
    26  NYCTRS              1 1/4%                      July 1, 2011 to
    27                                                  June 30, [2019] 2021
    28  PPF                 1 1/4%                      July 1, 2011 to
    29                                                  June 30, [2019] 2021
    30  FPF                 1 1/4%                      July 1, 2011 to
    31                                                  June 30, [2019] 2021
    32  BERS                1 1/4%                      July 1, 2011 to
    33                                                  June 30, [2019] 2021
 
    34    § 3. Paragraph 2 of subdivision g of section 13-638.2 of the  adminis-
    35  trative  code  of the city of New York, as amended by chapter 100 of the
    36  laws of 2018, is amended to read as follows:
    37    (2) Such additional interest shall be included at the  rates  and  for
    38  the periods set forth below in this paragraph:
 
    39                                                  First day and
    40                                                  last day of
    41                     Rate of interest             fiscal year or
    42                     per centum per               series of fiscal
    43  Retirement         annum, compounded            years for which
    44  System             annually                     rate is effective
    45  ________________________________________________________________________
    46  NYCERS              1 1/4%                      July 1, 2011 to
    47                                                  June 30, [2019] 2021
    48  NYCTRS              1 1/4%                      July 1, 2011 to
    49                                                  June 30, [2019] 2021
    50  PPF                 1 1/4%                      July 1, 2011 to
    51                                                  June 30, [2019] 2021
    52  FPF                 1 1/4%                      July 1, 2011 to
        S. 4488--A                          3
 
     1                                                  June 30, [2019] 2021
     2  BERS                1 1/4%                      July 1, 2011 to
     3                                                  June 30, [2019] 2021

     4    §  4. Paragraph 2 of subdivision i of section 13-638.2 of the adminis-
     5  trative code of the city of New York, as amended by chapter 100  of  the
     6  laws of 2018, is amended to read as follows:
     7    (2)  Such supplementary interest shall be allowed at the rates and for
     8  the periods set forth below in this paragraph:
 
     9                                                  First day and
    10                                                  last day of
    11                     Rate of interest             fiscal year or
    12                     per centum per               series of fiscal
    13  Retirement         annum, compounded            years for which
    14  System             annually                     rate is effective
    15  ________________________________________________________________________
    16  NYCERS             0%                           July 1, 2011 to
    17                                                  June 30, [2019] 2021
    18  NYCTRS             0%                           July 1, 2011 to
    19                                                  June 30, [2019] 2021
    20  PPF                0%                           July 1, 2011 to
    21                                                  June 30, [2019] 2021
    22  FPF                0%                           July 1, 2011 to
    23                                                  June 30, [2019] 2021
    24  BERS               0%                           July 1, 2011 to
    25                                                  June 30, [2019] 2021
 
    26    § 5. This act shall take effect July 1, 2019, except that if it  shall
    27  have  become  a  law subsequent to such date, this act shall take effect
    28  immediately and be deemed to have been in full force and effect  on  and
    29  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
        S. 4488--A                          4
 
        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.
          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.