EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03902-02-5
S. 3991 2
b. Each participating employer annually shall appropriate a sum suffi-
cient to pay such amount, SUBJECT TO THE LIMITATION SET FORTH IN SUBDI-
VISION F OF THIS SECTION. In the event the comptroller's statement is
not received before annual appropriations are made by such employer, a
sum estimated by the comptroller to be sufficient for such purpose shall
be included with such annual appropriations.
c. Payment of the amount specified in the comptroller's statement,
SUBJECT TO THE LIMITATION SET FORTH IN SUBDIVISION F OF THIS SECTION,
shall be made by a participating employer within seventy-eight days
after the receipt of such statement; provided, however, that in no case
shall any participating employer be required to make this payment before
February first of the calendar year next succeeding the calendar year in
which such statement is received. The comptroller is authorized to
provide for and accept pre-payment.
d. If payment of the [full amount] EMPLOYER'S PORTION of such obli-
gations is not made by the date required by subdivision c of this
section, interest at a rate determined in accordance with the provisions
of section sixteen of this [article] TITLE shall commence to run against
the unpaid balance thereof on the first day after the date required by
said subdivision c.
e. The comptroller shall have full power and authority to bring suit
in the supreme court against any participating employer to recover any
sum FOR WHICH THE EMPLOYER IS RESPONSIBLE, payment of which is not made
as herein required. While any such sum OWED BY THE EMPLOYER shall remain
due and unpaid [he] THE COMPTROLLER may refuse to audit any claim for
funds due to such employer from the state.
F. (1) OF THE AMOUNT DETERMINED BY THE COMPTROLLER PURSUANT TO SUBDI-
VISION A OF THIS SECTION, AN EMPLOYER SHALL NOT BE REQUIRED TO PAY MORE
THAN THE PRIOR YEAR'S ACTUARIAL REQUIRED CONTRIBUTION PLUS THE LESSER
OF: TWO PERCENT OR THE PERCENTAGE SET FORTH IN PARAGRAPH FOUR OF THIS
SUBDIVISION.
(2) ANY DIFFERENCE BETWEEN THE AMOUNT COMPUTED BY THE COMPTROLLER
PURSUANT TO SUBDIVISION A OF THIS SECTION AND THE MAXIMUM AMOUNT
REQUIRED TO BE PAID BY THE EMPLOYER PURSUANT TO PARAGRAPH ONE OF THIS
SUBDIVISION SHALL BE APPROPRIATED TO THE RETIREMENT SYSTEM OUT OF MONEYS
IN THE GENERAL FUND OF THE STATE.
(3) THE AFOREMENTIONED APPROPRIATED MONEYS SHALL BE PAID BY THE STATE
ON OR BEFORE THE FIRST OF FEBRUARY. THE STATE SHALL NOT HAVE THE OPTION
TO AMORTIZE THE PAYMENT REQUIRED IN THIS SUBDIVISION AS PROVIDED IN
SECTION NINETEEN-A OF THIS TITLE.
(4) THE PERCENTAGE REFERRED TO IN PARAGRAPH ONE OF THIS SUBDIVISION
SHALL BE DETERMINED ANNUALLY BY REFERENCE TO THE CONSUMER PRICE INDEX
(ALL URBAN CONSUMERS, CPI-U, U.S. CITY AVERAGE, ALL ITEMS, 1982-84=100),
PUBLISHED BY THE UNITED STATES BUREAU OF LABOR STATISTICS, FOR EACH
APPLICABLE CALENDAR YEAR. SAID PERCENTAGE SHALL EQUAL THE ANNUAL
INFLATION, AS DETERMINED FROM THE INCREASE IN THE CONSUMER PRICE INDEX
IN THE ONE YEAR PERIOD ENDING THE THIRTY-FIRST OF MARCH OF THE CURRENT
YEAR'S ACTUARIAL, REQUIRED CONTRIBUTION. SAID PERCENTAGE SHALL THEN BE
ROUNDED UP TO THE NEXT HIGHER ONE-TENTH OF ONE PERCENT.
(5) FOR PURPOSES OF THIS SUBDIVISION, "ACTUARIAL REQUIRED CONTRIB-
UTION" MEANS THE AMOUNT COMPUTED BY THE COMPTROLLER PRIOR TO THE DETER-
MINATION OF THE AMOUNT ELIGIBLE FOR AMORTIZATION, IF ANY, AS SET FORTH
IN SECTION NINETEEN-A OF THIS TITLE.
(6) FOR PURPOSES OF THIS SUBDIVISION, THE BASE YEAR FOR THE INITIAL
CALCULATION OF LIMITED EMPLOYER CONTRIBUTIONS PURSUANT TO PARAGRAPH ONE
OF THIS SUBDIVISION SHALL BE THE AMOUNT PAID BY THE EMPLOYER IN THE
S. 3991 3
FISCAL YEAR ENDING THE THIRTY-FIRST OF MARCH, TWO THOUSAND FIFTEEN. THE
EMPLOYER PARTICIPATION CAP IMPOSED BY THIS SUBDIVISION SHALL COMMENCE
WITH EMPLOYER CONTRIBUTIONS MADE IN THE FISCAL YEAR ENDING THE
THIRTY-FIRST OF MARCH, TWO THOUSAND SIXTEEN.
(7) THE PROVISIONS OF THIS SUBDIVISION SHALL NOT APPLY IN CITIES WITH
A POPULATION OF ONE MILLION OR MORE.
S 2. Section 317 of the retirement and social security law, as
amended by chapter 33 of the laws of 1986, subdivision a as amended by
chapter 62 of the laws of 1989, and subdivision c as amended by chapter
260 of the laws of 2004, is amended to read as follows:
S 317. Annual appropriation by participating employers. a. On or
before the fifteenth day of November, nineteen hundred eighty-nine and
of each succeeding year, the comptroller shall determine the amount
which each participating employer is required to pay to the police and
fire retirement system to discharge its obligations thereto for the
fiscal year of the retirement system which ends on March thirty-first of
nineteen hundred ninety and of each succeeding calendar year on account
of its employees who are members of this system. The comptroller shall
submit to the fiscal officer of each [of] such employer a statement of
the amount so payable.
This amount shall consist of the amount deemed necessary to provide
for payment in full of (i) all estimated obligations of each participat-
ing employer for the current fiscal year of the retirement systems and
(ii) any additional obligation, plus interest on such amount, for fiscal
years preceding the current fiscal year. SUCH AMOUNT SHALL, HOWEVER, BE
SUBJECT TO THE LIMITATION SET FORTH IN SUBDIVISION F OF THIS SECTION. If
as a result of the amount determined to be paid for any fiscal year, a
participating employer overpaid its actual obligation to the retirement
system for that year, the amount to be determined by the comptroller for
the next succeeding November fifteenth shall reflect the amount of the
overpayment, plus interest as defined in section three hundred sixteen
of this [article] TITLE on such amount, as a reduction in the amount
otherwise required to be paid by such participating employer.
b. Each participating employer annually shall appropriate a sum suffi-
cient to pay such amount, SUBJECT TO THE LIMITATION SET FORTH IN SUBDI-
VISION F OF THIS SECTION. In the event the comptroller's statement is
not received before annual appropriations are made by such employer, a
sum estimated by the comptroller to be sufficient for such purpose shall
be included with such annual appropriations.
c. Payment of the amount specified in the comptroller's statement,
SUBJECT TO THE LIMITATION SET FORTH IN SUBDIVISION F OF THIS SECTION,
shall be made by a participating employer within seventy-eight days
after the receipt of such statement; provided, however, that in no case
shall any participating employer be required to make this payment before
February first of the calendar year next succeeding the calendar year in
which such statement is received. The comptroller is authorized to
provide for and accept pre-payment.
d. If payment of the [full amount] EMPLOYER'S PORTION of such obli-
gations is not made by the date required by subdivision c of this
section, interest at a rate determined in accordance with the provisions
of section three hundred sixteen of this [article] TITLE shall commence
to run against the unpaid balance thereof on the first day after the
date required by said subdivision c.
e. The comptroller shall have full power and authority to bring suit
in the supreme court against any participating employer to recover any
sum FOR WHICH THE EMPLOYER IS RESPONSIBLE, payment of which is not made
S. 3991 4
as herein required. While any such sum OWED BY THE EMPLOYER shall remain
due and unpaid [he] THE COMPTROLLER may refuse to audit any claim for
funds due to such employer from the state.
F. (1) OF THE AMOUNT DETERMINED BY THE COMPTROLLER PURSUANT TO SUBDI-
VISION A OF THIS SECTION, AN EMPLOYER SHALL NOT BE REQUIRED TO PAY MORE
THAN THE PRIOR YEAR'S ACTUARIAL REQUIRED CONTRIBUTION PLUS THE LESSER
OF: TWO PERCENT OR THE PERCENTAGE SET FORTH IN PARAGRAPH FOUR OF THIS
SUBDIVISION.
(2) ANY DIFFERENCE BETWEEN THE AMOUNT COMPUTED BY THE COMPTROLLER
PURSUANT TO SUBDIVISION A OF THIS SECTION AND THE MAXIMUM AMOUNT
REQUIRED TO BE PAID BY THE EMPLOYER PURSUANT TO PARAGRAPH ONE OF THIS
SUBDIVISION SHALL BE APPROPRIATED TO THE RETIREMENT SYSTEM OUT OF MONEYS
IN THE GENERAL FUND OF THE STATE.
(3) THE AFOREMENTIONED APPROPRIATED MONEYS SHALL BE PAID BY THE STATE
ON OR BEFORE THE FIRST OF FEBRUARY. THE STATE SHALL NOT HAVE THE OPTION
TO AMORTIZE THE PAYMENT REQUIRED IN THIS SUBDIVISION AS PROVIDED IN
SECTION THREE HUNDRED NINETEEN-A OF THIS TITLE.
(4) THE PERCENTAGE REFERRED TO IN PARAGRAPH ONE OF THIS SUBDIVISION
SHALL BE DETERMINED ANNUALLY BY REFERENCE TO THE CONSUMER PRICE INDEX
(ALL URBAN CONSUMERS, CPI-U, U.S. CITY AVERAGE, ALL ITEMS, 1982-84=100),
PUBLISHED BY THE UNITED STATES BUREAU OF LABOR STATISTICS, FOR EACH
APPLICABLE CALENDAR YEAR. SAID PERCENTAGE SHALL EQUAL THE ANNUAL
INFLATION, AS DETERMINED FROM THE INCREASE IN THE CONSUMER PRICE INDEX
IN THE ONE YEAR PERIOD ENDING THE THIRTY-FIRST OF MARCH OF THE CURRENT
YEAR'S ACTUARIAL, REQUIRED CONTRIBUTION. SAID PERCENTAGE SHALL THEN BE
ROUNDED UP TO THE NEXT HIGHER ONE-TENTH OF ONE PERCENT.
(5) FOR THE PURPOSES OF THIS SUBDIVISION, "ACTUARIAL REQUIRED CONTRIB-
UTION" MEANS THE AMOUNT COMPUTED BY THE COMPTROLLER PRIOR TO THE DETER-
MINATION OF THE AMOUNT ELIGIBLE FOR AMORTIZATION, IF ANY, AS SET FORTH
IN SECTION THREE HUNDRED NINETEEN-A OF THIS TITLE.
(6) FOR PURPOSES OF THIS SUBDIVISION, THE BASE YEAR FOR THE INITIAL
CALCULATION OF LIMITED EMPLOYER CONTRIBUTIONS PURSUANT TO PARAGRAPH ONE
OF THIS SUBDIVISION SHALL BE THE AMOUNT PAID BY THE EMPLOYER IN THE
FISCAL YEAR ENDING THE THIRTY-FIRST OF MARCH, TWO THOUSAND FIFTEEN. THE
EMPLOYER PARTICIPATION CAP IMPOSED BY THIS SUBDIVISION SHALL COMMENCE
WITH EMPLOYER CONTRIBUTIONS MADE IN THE FISCAL YEAR ENDING THE
THIRTY-FIRST OF MARCH, TWO THOUSAND SIXTEEN.
(7) THE PROVISIONS OF THIS SUBDIVISION SHALL NOT APPLY IN CITIES WITH
A POPULATION OF ONE MILLION OR MORE.
S 3. Subdivision 2 of section 521 of the education law, paragraph a as
amended by chapter 553 of the laws of 1997, paragraph b as amended by
chapter 871 of the laws of 1963, paragraphs f and g as added by chapter
538 of the laws of 1984, paragraph h as amended by chapter 830 of the
laws of 1992, paragraphs i, j, k, l, and m as added by chapter 175 of
the laws of 1990, and paragraph n as added by chapter 482 of the laws of
1996, is amended and a new subdivision 4 is added to read as follows:
2. The collection of employers' contributions shall be made as
follows:
a. Upon the basis of each actuarial determination and appraisal
provided herein, the retirement board shall annually prepare and certify
to the commissioner [of education] a statement of the total amount
necessary to be paid by all employers for the ensuing fiscal year to the
pension accumulation and expense funds as provided under subdivision two
of section five hundred seventeen and under section five hundred nine-
teen of this article. Upon the basis of the rate of contribution for
supplemental retirement allowances, determined in accordance with
S. 3991 5
section five hundred thirty-two of this article, the retirement board
shall certify to the commissioner [of education] a statement of the
total amount necessary to be paid by all employers for the ensuing
fiscal year to the supplemental retirement allowance fund. Said certif-
ication shall include interest on amounts necessary to repay advances
made to the supplemental retirement allowance fund pursuant to subdivi-
sion f of section five hundred thirty-two of this article computed from
the date of such advances at the rate determined in accordance with
paragraph f of this subdivision.
b. The commissioner [of education] shall include in the certificate
which he files with the state comptroller showing the amount of state
funds apportioned to the school districts within each county for the
support of common schools, a statement showing the amount to be contrib-
uted by each employer in each of such counties as required under this
article.
The amount to be contributed by each employer except those who operate
local district pension systems, shall be such percentage of the total
compensation or salaries of all teachers in his employ who are members
of the retirement system as the aggregate amount of the normal and defi-
ciency contributions for the year shall bear to the total compensation
or salaries paid by all employers, except those who operate local
district pension systems, to all teachers who are members of the retire-
ment system; PROVIDED, HOWEVER, THAT THE AMOUNT REMITTED BY SUCH EMPLOY-
ER SHALL BE SUBJECT TO THE CONTRIBUTION LIMITS ESTABLISHED IN SUBDIVI-
SION FOUR OF THIS SECTION.
c. The comptroller shall issue his warrant to the custodian of such
fund directing such custodian to credit to the pension accumulation fund
and expense fund respectively, from the appropriation for the support of
common schools the amounts required to be made as contributions to such
funds by the employers as shown by the certificate of the commissioner
[of education] filed with him as directed in paragraph b of this subdi-
vision, BUT SUBJECT TO THE CONTRIBUTION LIMIT ESTABLISHED PURSUANT TO
SUBDIVISION FOUR OF THIS SECTION.
d. The comptroller, in issuing his warrant to the custodian for
payment to each county treasurer of that portion of the moneys appor-
tioned for the support of common schools, shall deduct therefrom an
amount equal to the amount required to be contributed by employers of
such county, as shown by the certificate of the commissioner [of educa-
tion] of this state filed with the comptroller as required by paragraph
b of this subdivision, BUT SUBJECT TO THE CONTRIBUTION LIMIT ESTABLISHED
PURSUANT TO SUBDIVISION FOUR OF THIS SECTION.
e. In order to meet the financial requirements of this article,
employers who obtain funds directly by taxation are hereby authorized
and directed to levy annually such additional taxes as are required to
provide the [funds deducted from the amounts apportioned to such employ-
ers from the appropriation of the state for the support of the common
schools] EMPLOYER'S CONTRIBUTION AMOUNT AS DETERMINED PURSUANT TO SUBDI-
VISION FOUR OF THIS SECTION.
f. Employers whose payments from the moneys apportioned from the state
for the support of common schools are insufficient to pay the EMPLOYER'S
PORTION OF THE amount due and owing the system, or who do not receive
such payments, shall pay the system each year the amount of contrib-
utions due and owing from the employer, SUBJECT TO THE CONTRIBUTION
LIMIT ESTABLISHED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION, pursuant
to this article within thirty days from the date a bill is mailed by the
system. Interest, at a rate equal to the average yield payable on
S. 3991 6
fifty-two week United States treasury bills on June thirtieth immediate-
ly preceding the day the bill is mailed by the system, shall accrue on
the EMPLOYER'S PORTION OF THE outstanding amount due and owing commenc-
ing with the thirty-first day after the bill is mailed.
g. Whenever the system determines the contributions made by an employ-
er are less than the percentage of total compensation or salaries of
members of the system in the employ of such employer, as required by
this article, such employer shall pay the system such deficiency within
thirty days from the date a bill is mailed by the system, PROVIDED SUCH
DEFICIENCY AMOUNT DOES NOT CAUSE THE EMPLOYER TO PAY MORE THAN THE MAXI-
MUM REQUIRED CONTRIBUTION AMOUNT CALCULATED PURSUANT TO SUBDIVISION FOUR
OF THIS SECTION. Interest, at a rate equal to the average yield payable
on fifty-two week United States treasury bills on June thirtieth imme-
diately preceding the day before the bill is mailed by the system, shall
accrue on the EMPLOYER'S PORTION OF THE outstanding amount due and owing
commencing with the thirty-first day after the bill is mailed.
h. Notwithstanding any provision of law to the contrary, commencing
with the payments made in the fiscal year beginning July first, nineteen
hundred ninety, and each fiscal year thereafter, the employer contrib-
utions due and payable as determined pursuant to the provisions of this
article and the employee contributions due and payable pursuant to this
article and articles fourteen and fifteen of the retirement and social
security law, on account of compensation paid in the fiscal year imme-
diately preceding, and those employer contributions due and payable in
each fiscal year pursuant to chapter six hundred sixty-five of the laws
of nineteen hundred eighty-four shall be made to the retirement system
and collected in the manner set forth in this section each fiscal year
in three payments, each equal to thirty-three and one-third percent of
the total amount due for such fiscal year. Such payments shall be paid
on September fifteenth, October fifteenth, and November fifteenth of
each fiscal year. If a participating employer underpaid its obligation
to the retirement system, such underpayment as determined by the retire-
ment system shall be deducted from the amounts apportioned to such
employer from the appropriation of the state for the support of the
common schools due and payable the next April fifteenth. Employers whose
payments from such appropriation are insufficient to pay the amount due
and owing the system, or who do not receive such payments, shall be
billed by the system for such underpayment and shall pay the system the
amount due within thirty days from the date a bill is mailed by the
system. The amount of any employer overpayment of its obligation to the
retirement system, as determined by such system shall be a credit to the
employer and shall reduce by an equal amount thereof the initial payment
to be made by such employer to such system on the next succeeding
September fifteenth.
i. Notwithstanding any provision of law to the contrary, the employer
and employee contributions due and payable in the nineteen hundred
eighty-nine--ninety fiscal year on account of compensation paid in the
nineteen hundred eighty-eight--eighty-nine fiscal year which were paid
prior to April first, nineteen hundred ninety shall be deemed (to the
extent such amount is sufficient) to have consisted of all the employee
contributions due and payable pursuant to this article and articles
fourteen and fifteen of the retirement and social security law in the
nineteen hundred eighty-nine--ninety fiscal year and those employer
contributions due and payable in such fiscal year pursuant to chapter
six hundred sixty-five of the laws of nineteen hundred eighty-four; and
the remaining employer contributions so paid shall be applied evenly to
S. 3991 7
the payments due and payable on September fifteenth, nineteen hundred
ninety, October fifteenth, nineteen hundred ninety and November
fifteenth, nineteen hundred ninety and the employer contributions
amounting to eight hundred seventy-three million seven hundred eleven
thousand six hundred fifteen dollars ($873,711,615), due and payable
pursuant to the provisions of this section in the nineteen hundred
eighty-nine--ninety fiscal year on account of compensation paid in nine-
teen hundred eighty-eight--eighty-nine fiscal year, except those employ-
er contributions due and payable in such fiscal year pursuant to chapter
six hundred sixty-five of the laws of nineteen hundred eighty-four,
shall be deferred and payment shall be made to the retirement system in
fifteen equal annual payments of ninety-eight million five hundred thir-
ty-seven thousand five hundred seven dollars ($98,537,507) on October
fifteenth, commencing on October fifteenth, nineteen hundred ninety.
Such payments are calculated at an interest rate of eight percent per
annum. Provided, however, the retirement board is directed to permit the
pre-payment of the amounts outstanding under this paragraph. The retire-
ment board shall: (1) On or before September first, nineteen hundred
ninety, in addition to the amount due for the current fiscal year bill-
ing and for the payment of the amortized annual installment, furnish the
total amount due and be authorized to accept pre-payment in full of said
amount by October fifteenth, nineteen hundred ninety. (2) On or before
each September first thereafter, in addition to the amount due for the
current fiscal year billing and for the payment of the annual amortized
installment, furnish the total amount still outstanding and be author-
ized to accept the pre-payment of any portion of the balance remaining
to be paid by October fifteenth of that year.
j. Prior to June first, nineteen hundred ninety, the valuation rate of
interest adopted by the retirement board on April twenty-seventh, nine-
teen hundred eighty-nine, may be retroactively revised to eight percent
by the retirement board, as recommended by the actuary, as if adopted at
the April twenty-seventh, nineteen hundred eighty-nine board meeting,
and the employer contribution rate, adopted by the retirement board at
the April twenty-seventh, nineteen hundred eighty-nine board meeting,
revised by the retirement board at the July twenty-seventh, nineteen
hundred eighty-nine board meeting, may be retroactively amended by the
retirement board as if adopted at the July twenty-seventh, nineteen
hundred eighty-nine board meeting and applied to contributions paid in
the nineteen hundred ninety--ninety-one fiscal year. Notwithstanding any
provision of law to the contrary, the actions of the retirement board
pursuant to the provisions of this paragraph shall be deemed reasonable,
prudent and proper. No member of the retirement board, officer, or
employee of the New York state teachers' retirement system shall incur
or suffer any liability whatsoever by reason of any actions pursuant to
this paragraph, and such system shall save harmless and indemnify all
members of the retirement board, its officers and employees from finan-
cial loss arising out of any claim, demand, suit, action or judgment as
a result of the actions taken pursuant to this paragraph provided that
such person shall, within five days after the date on which he is served
with any summons, complaint, process, notice, demand, claim or pleading,
deliver the original or a true copy thereof to the legal advisor of such
system. Upon such delivery, the legal advisor of such system may assume
control of the representation of such person in connection with such
claim, demand, suit, action or proceeding. Such person shall cooperate
fully with the legal advisor of the system or any other person desig-
S. 3991 8
nated to assume such defense in respect of such representation or
defense.
k. The retirement board is authorized to adopt procedures and/or to
promulgate rules and regulations as it deems necessary to adjust and
reconcile any payments from employers to actual amounts due whether such
payments were received prior or subsequent to the effective date of
[the] chapter ONE HUNDRED SEVENTY-FIVE of the laws of nineteen hundred
ninety [which added this paragraph to this section].
l. The provisions of paragraphs h and i of this subdivision shall
constitute a contract and the rights of the New York state teachers'
retirement system thereunder shall not be impaired in any way whatsoev-
er.
m. In addition to any other payment or collection procedure provided
by this article, if the amounts credited from the appropriation for the
support of common schools are insufficient to fully cover the amounts to
be contributed by the employers, SUBJECT TO THE EMPLOYER'S CONTRIBUTION
LIMIT ESTABLISHED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION, the
retirement board is authorized to certify the unpaid amount OF THE
EMPLOYER'S CONTRIBUTION to the state comptroller, and the state comp-
troller shall, to the extent not otherwise prohibited by law, withhold
such amount from any succeeding payment from any other form of state aid
provided to the employer. If any employer fails to pay the amounts
required to be contributed pursuant to this section, the retirement
system shall be entitled to reasonable attorney fees and other expenses
incurred to collect such amounts due and owing. Fees shall be determined
pursuant to prevailing market rates for the kind and quality of the
services furnished.
n. Notwithstanding any other provision of law to the contrary, the
board of education or trustees of a school district which is a partic-
ipating employer, which has elected to make payments of the employer
contributions due and payable to the retirement system pursuant to para-
graph i of this subdivision in amortized annual installments, and which
has determined to make pre-payment of the total amount of such contrib-
utions outstanding in accordance with said paragraph i, may adopt a bond
resolution authorizing the refinancing of such debt by the issuance of
bonds in the amount of such pre-payment without conducting a vote on a
tax to be collected in installments, provided that such refinancing will
result in savings to the school district, as certified by the state
comptroller, and provided further that the issuance of such obligations
otherwise complies with the requirements of the local finance law and
this chapter.
4. A. NOTWITHSTANDING THE PROVISIONS OF THIS SECTION, AN EMPLOYER
SHALL NOT BE REQUIRED TO CONTRIBUTE MORE THAN THE PRIOR PLAN YEAR'S
EMPLOYER CONTRIBUTION PLUS THE LESSER OF: TWO PERCENT OR THE PERCENTAGE
SET FORTH IN PARAGRAPH D OF THIS SUBDIVISION.
B. ANY DIFFERENCE BETWEEN THE AMOUNT CONTAINED IN THE WARRANT ISSUED
BY THE COMPTROLLER PURSUANT TO SUBDIVISION TWO OF THIS SECTION AND THE
MAXIMUM AMOUNT REQUIRED TO BE PAID BY THE EMPLOYER PURSUANT TO THIS
SUBDIVISION SHALL BE APPROPRIATED TO THE RETIREMENT SYSTEM OUT OF MONEYS
IN THE GENERAL FUND OF THE STATE.
C. THE MONEYS APPROPRIATED BY THE STATE FROM THE GENERAL FUND IN
ACCORDANCE WITH THIS SUBDIVISION SHALL BE PAID BY THE STATE TO THE
RETIREMENT SYSTEM ON OR BEFORE THE FIFTEENTH OF NOVEMBER IN THE FISCAL
YEAR IN WHICH THE MONEYS ARE DUE AND PAYABLE BY THE PARTICIPATING
EMPLOYER.
S. 3991 9
D. THE PERCENTAGE REFERRED TO IN PARAGRAPH A OF THIS SUBDIVISION
SHALL BE DETERMINED ANNUALLY BY REFERENCE TO THE CONSUMER PRICE INDEX
(ALL URBAN CONSUMERS, CPI-U, U.S. CITY AVERAGE, ALL ITEMS, 1982-84=100),
PUBLISHED BY THE UNITED STATES BUREAU OF LABOR STATISTICS, FOR EACH
APPLICABLE CALENDAR YEAR. SAID PERCENTAGE SHALL EQUAL THE ANNUAL
INFLATION, AS DETERMINED FROM THE INCREASE IN THE CONSUMER PRICE INDEX
IN THE ONE YEAR PERIOD ENDING THE THIRTIETH OF JUNE OF THE CURRENT
YEAR'S ACTUARIAL REQUIRED CONTRIBUTION. SAID PERCENTAGE SHALL THEN BE
ROUNDED UP TO THE NEXT HIGHER ONE-TENTH OF ONE PERCENT.
E. FOR PURPOSES OF THIS SUBDIVISION, "ACTUARIAL REQUIRED CONTRIBUTION"
MEANS THE AMOUNT COMPUTED BY THE ACTUARY, AS SET FORTH IN SECTION FIVE
HUNDRED SEVENTEEN OF THIS ARTICLE.
F. FOR PURPOSES OF THIS SUBDIVISION, THE BASE YEAR FOR THE INITIAL
CALCULATION OF LIMITED EMPLOYER CONTRIBUTIONS PURSUANT TO PARAGRAPH A OF
THIS SUBDIVISION SHALL BE THE AMOUNT PAID BY THE EMPLOYER IN THE PLAN
YEAR ENDING THE THIRTIETH OF JUNE, TWO THOUSAND FIFTEEN. THE EMPLOYER
CONTRIBUTION CAP IMPOSED BY THIS SUBDIVISION SHALL COMMENCE WITH EMPLOY-
ER CONTRIBUTIONS DUE IN THE PLAN YEAR ENDING THE THIRTIETH OF JUNE, TWO
THOUSAND SIXTEEN.
S 4. This act shall take effect immediately and shall apply to employ-
er contributions made commencing in the employer's fiscal year ending
2016.
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 2016.
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, 2016. 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, 2014 actuarial valu-
ation. Distributions and other statistics can be found in the 2014
Report of the Actuary and the 2014 Comprehensive Annual Financial
Report.
The actuarial assumptions and methods used are described in the 2010,
2011, 2012, 2013 and 2014 Annual Report to the Comptroller on Actuarial
Assumptions, and the Codes Rules and Regulations of the State of New
York: Audit and Control.
S. 3991 10
The Market Assets and GASB Disclosures are found in the March 31, 2014
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 January 23, 2015, and intended for use only
during the 2015 Legislative Session, is Fiscal Note No. 2015-42,
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.
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, 2016.
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 determined each year based on
an actuarial valuation of System assets and liabilities, and is depend-
ent upon a number of actuarial 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, 2016,
which for NYSTRS corresponds to contributions collected in the fall of
2015. We estimate the State of New York would be required to make a
payment of approximately $170 million at that time for its share of the
contribution. In the fall of 2016 we estimate the state would not be
required to make any payment due to an estimated decline in required
employer contributions from the fall of 2015 to the fall of 2016. The
state's cost in future years would depend on the actuarially required
contribution and the rate of inflation in those years.
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
the CAFR. Actuarial assumptions and methods are provided in the System's
Actuarial Valuation Report.
The source of this estimate is Fiscal Note 2015-7 dated February 17,
2015 prepared by the Actuary of the New York State Teachers' Retirement
System and is intended for use only during the 2015 Legislative Session.
I, Richard A. Young, am the Actuary for the New York State Teachers'
S. 3991 11
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.