S T A T E O F N E W Y O R K
________________________________________________________________________
4488--A
2019-2020 Regular Sessions
I N S E N A T E
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:
Section 1. Paragraph 2 of subdivision b of section 13-638.2 of the
administrative code of the city of New York, as amended by chapter 100
of the laws of 2018, is amended to read as follows:
(2) With respect to each retirement system, such rate of interest
shall be as hereinafter set forth in this paragraph:
First day and
last day of
Rate of interest fiscal year or
per centum per series of fiscal
Retirement annum, compounded years for which
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
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NYCERS 7% July 1, 2011 to
June 30, [2019] 2021
NYCTRS 7% July 1, 2011 to
June 30, [2019] 2021
PPF 7% July 1, 2011 to
June 30, [2019] 2021
FPF 7% July 1, 2011 to
June 30, [2019] 2021
BERS 7% July 1, 2011 to
June 30, [2019] 2021
§ 2. Paragraph 2 of subdivision f of section 13-638.2 of the adminis-
trative code of the city of New York, as amended by chapter 100 of the
laws of 2018, is amended to read as follows:
(2) Such special interest shall be allowed at the rates and for the
periods set forth below in this paragraph:
First day and
last day of
Rate of interest fiscal year or
per centum per series of fiscal
Retirement annum, compounded years for which
System annually rate is effective
________________________________________________________________________
NYCERS 1 1/4% July 1, 2011 to
June 30, [2019] 2021
NYCTRS 1 1/4% July 1, 2011 to
June 30, [2019] 2021
PPF 1 1/4% July 1, 2011 to
June 30, [2019] 2021
FPF 1 1/4% July 1, 2011 to
June 30, [2019] 2021
BERS 1 1/4% July 1, 2011 to
June 30, [2019] 2021
§ 3. Paragraph 2 of subdivision g of section 13-638.2 of the adminis-
trative code of the city of New York, as amended by chapter 100 of the
laws of 2018, is amended to read as follows:
(2) Such additional interest shall be included at the rates and for
the periods set forth below in this paragraph:
First day and
last day of
Rate of interest fiscal year or
per centum per series of fiscal
Retirement annum, compounded years for which
System annually rate is effective
________________________________________________________________________
NYCERS 1 1/4% July 1, 2011 to
June 30, [2019] 2021
NYCTRS 1 1/4% July 1, 2011 to
June 30, [2019] 2021
PPF 1 1/4% July 1, 2011 to
June 30, [2019] 2021
FPF 1 1/4% July 1, 2011 to
S. 4488--A 3
June 30, [2019] 2021
BERS 1 1/4% July 1, 2011 to
June 30, [2019] 2021
§ 4. Paragraph 2 of subdivision i of section 13-638.2 of the adminis-
trative code of the city of New York, as amended by chapter 100 of the
laws of 2018, is amended to read as follows:
(2) Such supplementary interest shall be allowed at the rates and for
the periods set forth below in this paragraph:
First day and
last day of
Rate of interest fiscal year or
per centum per series of fiscal
Retirement annum, compounded years for which
System annually rate is effective
________________________________________________________________________
NYCERS 0% July 1, 2011 to
June 30, [2019] 2021
NYCTRS 0% July 1, 2011 to
June 30, [2019] 2021
PPF 0% July 1, 2011 to
June 30, [2019] 2021
FPF 0% July 1, 2011 to
June 30, [2019] 2021
BERS 0% July 1, 2011 to
June 30, [2019] 2021
§ 5. This act shall take effect July 1, 2019, except that if it shall
have become a law subsequent to such date, this act shall take effect
immediately and be deemed to have been in full force and effect on and
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
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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.
