§ 319-a. Employer contributions for the two thousand ten - two
thousand eleven fiscal year and subsequent fiscal years. a. In addition
to the definitions in section three hundred two of this article, when
used in this section:

(1) "Amortizing employer" shall mean an employer that elects to
amortize a portion of the employer's annual bill pursuant to paragraph
one of subdivision d of this section for the two thousand ten - two
thousand eleven fiscal year, or any subsequent fiscal year, pursuant to
the system graded contribution rate regardless of whether the employer
has subsequently paid in full all such amortized amounts, and that does
not elect to amortize as an alternative amortizing employer for the two
thousand thirteen - two thousand fourteen fiscal year.

(1-a) "Alternative amortizing employer" shall mean a county, city,
town or village that, on a form prepared by the comptroller, elects to
and does amortize a portion of the employer's annual bill pursuant to
paragraph one of subdivision d of this section for the two thousand
thirteen - two thousand fourteen fiscal year pursuant to the alternative
system graded contribution rate, regardless of whether the employer has
subsequently paid in full all such amortized amounts.

(2) "Amount eligible for amortization" for a given fiscal year shall
mean the amount by which an employer's actuarial contribution for such
fiscal year exceeds the employer's graded contribution for the same
fiscal year, less any amount from the employer contribution reserve fund
applied to reduce the employer's payment to the retirement system for
the fiscal year, provided, however, that if the employer's average
actuarial contribution rate for the fiscal year is less than seventeen
and one-half percent, then the amount eligible for amortization shall be
zero.

(3) "Employer's actuarial contribution" for a given fiscal year shall
mean an employer's annual bill for such fiscal year exclusive of the
deficiency contributions and payments on account of group term life
insurance, adjustments relating to prior fiscal years' obligations,
retirement incentives and prior amortizations.

(4) "Employer's annual bill" shall mean for a given fiscal year the
sum of the following amounts: (i) an employer's normal contributions for
the fiscal year determined in accordance with paragraph one of
subdivision b of section three hundred twenty-three of this article and
the comprehensive structural reform program implemented pursuant to
subdivision b of section three hundred twenty-three-a of this article,
including the provisions of subdivision b of section three hundred
twenty-three-a of this article relating to the required minimum annual
contribution of four and one-half percent of pensionable salaries; (ii)
the employer's deficiency contributions and administration contributions
for the fiscal year determined in accordance with paragraphs two and
three of subdivision b of section three hundred twenty-three of this
article; and (iii) any payments by the employer due in the fiscal year
on account of group term life insurance, adjustments relating to prior
fiscal years' obligations, retirement incentives and prior
amortizations.

(5) "Employer's average actuarial contribution rate" for a given
fiscal year shall mean an employer's actuarial contribution for such
fiscal year divided by the employer's payroll for the previous fiscal
year.

(6) "Employer contribution reserve fund" or "fund" shall mean the
employer contribution reserve fund established pursuant to subdivision e
of this section.

(7) "Employer's graded contribution" for a given fiscal year shall
mean the amount determined by applying the employer's graded
contribution rate or the alternative amortizing employer's graded
contribution rate for such fiscal year to an employer's payroll for the
previous fiscal year.

(8) "Employer's graded contribution rate" for a given fiscal year
shall mean (i) the system graded contribution rate for such fiscal year,
or (ii) in the case of an individual employer for which a graded
contribution rate has been determined pursuant to paragraph three of
subdivision c of this section, the graded contribution rate for the
individual employer for such fiscal year.

(9) "Employer's graded payment" for a given fiscal year shall mean the
amount by which an employer's graded contribution for such fiscal year
exceeds the employer's actuarial contribution for the same fiscal year.

(10) "Prior amortization" shall mean with respect to a given fiscal
year any payment due in such fiscal year on account of an obligation
from a prior fiscal year that an employer is permitted to pay to the
retirement system on an amortized basis.

(11) "System average actuarial contribution rate" for a given fiscal
year shall mean the sum of all employers' actuarial contributions for
such fiscal year, divided by the sum of all employers' payroll for the
previous fiscal year.

(12) "System graded contribution rate" for a given fiscal year shall
mean the graded contribution rate for the retirement system as a whole
determined for such fiscal year pursuant to paragraph one or two of
subdivision c of this section.

(13) "Alternative system graded contribution rate" for a given fiscal
year shall mean the graded contribution rate for the retirement system
as a whole determined for such fiscal year pursuant to paragraph one or
two of subdivision c-1 of this section.

b. Notwithstanding the provisions of this chapter or any other law to
the contrary, the comptroller, in his or her discretion, shall have
authority to implement this section. If the comptroller elects to
implement this section, the provisions of this section shall apply to
the payment of employer contributions for the fiscal year commencing on
April first, two thousand ten, and for subsequent fiscal years. If the
comptroller, within his or her discretion, elects to implement the
alternative system graded contribution rate as provided by subdivision
c-1 of this section, the provisions of paragraph one-a of subdivision d
of this section shall apply to the payment of employer contributions for
the fiscal year commencing on April first, two thousand thirteen, and
for subsequent fiscal years.

c. For each fiscal year to which the provisions of this section apply,
the comptroller shall determine a graded contribution rate for the
retirement system as a whole in the manner provided in this subdivision.

(1) For the two thousand ten - two thousand eleven fiscal year the
system graded contribution rate shall be seventeen and one-half percent.

(2) For the two thousand eleven - two thousand twelve fiscal year, and
subsequent fiscal years, system graded contribution rates shall be
determined as follows:

(i) if the system average actuarial contribution rate for a given
fiscal year is at least seventeen and one-half percent and exceeds the
system graded contribution rate for the immediately preceding fiscal
year by more than one percentage point, then the system graded
contribution rate for the given fiscal year shall equal the system
graded contribution rate for the immediately preceding fiscal year plus
one percentage point, provided however, that in no event shall the
system graded contribution rate be less than seventeen and one-half
percent;

(ii) if the system average actuarial contribution rate for a given
fiscal year is at least seventeen and one-half percent and either equals
the system graded contribution rate for the immediately preceding fiscal
year or exceeds the system graded contribution rate for the immediately
preceding fiscal year by one percentage point or less, then the system
graded contribution rate for the given fiscal year shall equal the
system average actuarial contribution rate for such fiscal year,
provided, however, that in no event shall the system graded contribution
rate be less than seventeen and one-half percent;

(iii) if the system average actuarial contribution rate for a given
fiscal year is less than seventeen and one-half percent and greater than
the system graded contribution rate for the immediately preceding fiscal
year, then the system graded contribution rate for the given fiscal year
shall equal the system actuarial contribution rate for such fiscal year;

(iv) if the system average actuarial contribution rate for a given
fiscal year is smaller than the system graded contribution rate for the
immediately preceding fiscal year by more than one percentage point,
then the system graded contribution rate for the given fiscal year shall
equal the system graded contribution rate for the immediately preceding
fiscal year minus one percentage point; and

(v) if the system average actuarial contribution rate for a given
fiscal year either equals the system graded contribution rate for the
immediately preceding fiscal year or is smaller than the system graded
contribution rate for the immediately preceding fiscal year by one
percentage point or less, then the system graded contribution rate for
the given fiscal year shall equal the system actuarial contribution rate
for such fiscal year.

(3) The comptroller shall determine a graded contribution rate for
individual employers as provided in this paragraph. The graded
contribution rate for an individual employer is the product of the
system's graded contribution rate with the ratio of the employer's
average actuarial contribution rate to the system's average actuarial
contribution rate, not to exceed one hundred percent of the system's
graded contribution rate.

c-1. For each fiscal year to which the provisions of this section
apply, the comptroller shall determine an alternative system graded
contribution rate for the retirement system as a whole in the manner
provided in this subdivision.

(1) For the two thousand thirteen - two thousand fourteen fiscal year
and the two thousand fourteen - two thousand fifteen fiscal year, the
alternative system graded contribution rate shall be twenty percent.

(2) For the two thousand fifteen - two thousand sixteen fiscal year
and the subsequent fiscal years, alternative system graded contribution
rates shall be determined as follows:

(i) if the system average actuarial contribution rate for a given
fiscal year is at least seventeen and one-half percent and exceeds the
alternative system graded contribution rate for the immediately
preceding fiscal year by more than one-half percentage point, then the
alternative system graded contribution rate for the given fiscal year
shall equal the alternative system graded contribution rate for the
immediately preceding fiscal year plus one-half percentage point,
provided, however, that in no event shall the alternative system graded
contribution rate be less than seventeen and one-half percent;

(ii) if the system average actuarial contribution rate for a given
fiscal year is at least seventeen and one-half percent and either equals
the alternative system graded contribution rate for the immediately
preceding fiscal year or exceeds the alternative system graded
contribution rate for the immediately preceding fiscal year by one-half
percentage point or less, then the alternative system graded
contribution rate for the given fiscal year shall equal the system
average actuarial contribution rate for such fiscal year, provided,
however, that in no event shall the alternative system graded
contribution rate be less than seventeen and one-half percent;

(iii) if the system average actuarial contribution rate for a given
fiscal year is less than seventeen and one-half percent and greater than
the alternative system graded contribution rate for the immediately
preceding fiscal year, then the alternative system graded contribution
rate for the given fiscal year shall equal the system actuarial
contribution rate for such fiscal year;

(iv) if the system average actuarial contribution rate for a given
fiscal year is smaller than the alternative system graded contribution
rate for the immediately preceding fiscal year by more than one-half
percentage point, then the alternative system graded contribution rate
for the given fiscal year shall equal the alternative system graded
contribution rate for the immediately preceding fiscal year minus
one-half percentage point; and

(v) if the system average actuarial contribution rate for a given
fiscal year either equals the alternative system graded contribution
rate for the immediately preceding fiscal year or is smaller than the
alternative system graded contribution rate for the immediately
preceding fiscal year by one-half percentage point or less, then the
alternative system graded contribution rate for the given fiscal year
shall equal the system actuarial contribution rate for such fiscal year.

d. (1) For any given fiscal year for which an employer's average
actuarial contribution rate exceeds the employer graded contribution
rate, the employer shall pay to the retirement system an amount equal to
the employer's annual bill for such year or, in lieu of paying the
entire annual bill, the employer may pay an amount equal to the
employer's annual bill less all or a portion of the employer's amount
eligible for amortization for the fiscal year. If in accordance with
this paragraph the employer's payment to the retirement system is less
than the entire amount of the employer's annual bill, then the
difference between the employer's annual bill, and the amount actually
paid by the employer to the retirement system exclusive of any amount
from the employer contribution reserve fund applied to reduce the
employer's payment, shall be the amount amortized for the fiscal year.
The amount amortized for the fiscal year shall be paid to the retirement
system in equal annual installments over a ten-year period, with
interest on the unpaid balance at a rate determined by the comptroller
which approximates a market rate of return on taxable fixed rate
securities with similar terms issued by comparable issuers, and with the
first installment due in the immediately succeeding fiscal year.
Provided however that, notwithstanding any provision of law to the
contrary and at the sole discretion of the director of the division of
the budget, the state as an amortizing employer may prepay to the
retirement system the total amount of principal due for any such annual
installment or installments for a given fiscal year prior to the
expiration of the ten-year amortization period. In the event the state
elects to make such prepayment, the director of the division of budget
must identify the fiscal year or years for which the total principal
amount due for the annual installment is being prepaid. In any fiscal
year for which the director of the division of the budget identifies
such prepayment is being made, the state (i) shall not be required to
make a payment of principal to the retirement system for such fiscal
year, and (ii) shall pay to the retirement system annual interest on the
remaining principal balance at the rate originally set by the
comptroller when the state first elected to amortize in accordance with
this paragraph. Nothing contained herein shall permit the state to
extend the amortization period originally established in accordance with
this paragraph beyond the original ten-year amortization period.

(1-a) For any given fiscal year for which an employer's average
actuarial contribution rate exceeds the alternative system graded
contribution rate, the employer shall pay to the retirement system an
amount equal to the employer's annual bill for such year or, in lieu of
paying the entire annual bill, the employer may pay an amount equal to
the employer's annual bill less all or a portion of the employer's
amount eligible for amortization for the fiscal year. If in accordance
with this paragraph the employer's payment to the retirement system is
less than the entire amount of the employer's annual bill, then the
difference between the employer's annual bill, and the amount actually
paid by the employer to the retirement system exclusive of any amount
from the employer contribution reserve fund applied to reduce the
employer's payment, shall be the amount amortized for the fiscal year.
The amount amortized for the fiscal year shall be paid to the retirement
system in equal annual installments over a twelve year period, with
interest on the unpaid balance at a rate determined by the comptroller
which shall be the twelve year interpolated rate based on the most
recently published yield to maturity of a ten year and twenty year U.S.
Treasury Security plus one hundred basis points.

(2) For any given fiscal year for which the employer graded
contribution rate equals or exceeds an amortizing employer's average
actuarial contribution rate, the amortizing employer shall pay to the
retirement system an amount equal to the employer's annual bill for such
year plus the employer's graded payment for the fiscal year.

(i) If the amortizing employer's annual bill for the fiscal year does
not include an amount attributable to a prior amortization, then the
employer's graded payment shall be paid into the employer contribution
reserve fund provided for in subdivision e of this section and credited
to an account within such fund established for the employer.

(ii) If the amortizing employer's annual bill for the fiscal year
includes an amount attributable to a prior amortization, the employer's
graded payment shall be used first to eliminate the amount of the
employer's unpaid prior amortization balances in chronological order
starting with oldest prior amortization balance. When in any fiscal year
the employer's graded payment eliminates all balances owed on the
employer's prior amortizations, any remaining portion of the employer's
graded payment for such fiscal year, and the employer's graded payment
in any subsequent fiscal year in which the amortizing employer has no
unpaid prior amortizations, shall be paid into the employer contribution
reserve fund provided for in subdivision e of this section and credited
to an account within such fund established for the employer.

(2-a) For any given fiscal year for which the alternative system
graded contribution rate equals or exceeds an alternative amortizing
employer's average actuarial contribution rate, the alternative
amortizing employer shall pay to the retirement system an amount equal
to the employer's annual bill for such year plus the employer's graded
payment for the fiscal year.

(i) If the alternative amortizing employer's annual bill for the
fiscal year does not include an amount attributable to a prior
amortization, then the employer's graded payment shall be paid into the
employer contribution reserve fund provided for in subdivision e of this
section and credited to an account within such fund established for the
employer.

(ii) If the alternative amortizing employer's annual bill for the
fiscal year includes an amount attributable to a prior amortization, the
employer's graded payment shall be used first to eliminate the amount of
the employer's unpaid prior amortization balances in chronological order
starting with oldest prior amortization balance. When in any fiscal year
the employer's graded payment eliminates all balances owed on the
employer's prior amortizations, any remaining portion of the employer's
graded payment for such fiscal year, and the employer's graded payment
in any subsequent fiscal year in which the amortizing employer has no
unpaid prior amortizations, shall be paid into the employer contribution
reserve fund provided for in subdivision e of this section and credited
to an account within such fund established for the employer.

(3) Nothing in this subdivision shall be construed as prohibiting an
employer from pre-paying any prior amortization.

e. (1) Notwithstanding any law to the contrary, there shall be
maintained separate and apart from the other funds of the retirement
system an employer contribution reserve fund, the assets of which shall
not be used or invested in a manner contrary to the provisions of this
subdivision. The fund shall consist of all employer contributions
required to be deposited into the fund pursuant to subdivision d of this
section. Within such fund there shall be a separate account for each
employer making such contributions and payments.

(2) For any given fiscal year for which (i) the system actuarial
contribution rate exceeds seventeen and one-half percent of payroll as
of the end of the previous fiscal year, and (ii) for which an employer's
average actuarial contribution rate exceeds the employer's graded
contribution rate or the alternative employer's graded contribution
rate, the balance in the employer's account within such fund shall be
applied to reduce the employer's payment to the retirement system for
such fiscal year in an amount not to exceed the difference between the
employer's actuarial contribution and the employer's graded contribution
for the fiscal year.

(3) Notwithstanding the provisions of paragraph two of this
subdivision, if at the close of any given fiscal year the balance of an
employer's account within the fund exceeds the employer's actuarial
contribution for the previous fiscal year, no graded payment shall be
required or allowed.

(4) The assets of the fund shall be invested in only the following
types of investments:

(i) obligations of the United States of America or in obligations
guaranteed by agencies of the United States of America where the payment
of principal and interest are guaranteed by the United States of America
or in obligations of the state of New York;

(ii) general obligation bonds and notes of any state other than this
state, provided that such bonds and notes receive the highest rating of
at least one independent rating agency;

(iii) obligations of, or instruments issued by or fully guaranteed as
to principal and interest by, any agency or instrumentality of the
United States acting pursuant to a grant of authority from the congress
of the United States, including, but not limited to, any federal home
loan bank or banks, the Tennessee valley authority, the federal national
mortgage association, the federal home loan mortgage corporation and the
United States postal service;

(iv) certificate of deposits that are fully secured by the issuer by
depositing with the comptroller direct or indirect obligations of the
United States or its agencies or a letter of credit issued by the
Federal Home Loan Bank; and

(v) obligations of any corporation organized under the laws of any
state in the United States maturing within two hundred seventy days
provided that such obligations receive the highest rating of two
independent rating services designated by the comptroller.

(5) At the close of each fiscal year, the amount of interest and
earnings attributable to each employer's account shall be computed by
the actuary and certified to the comptroller, who shall thereupon credit
each employer's account in accordance therewith.

(6) The assets of the fund shall be excluded from the annual valuation
of the assets and liabilities of the funds of the retirement system
required by section three hundred eleven of this title. The assets of
the fund shall not finance increases in pension benefits.

f. (1) An amortizing employer may elect to terminate participation in
the contribution stabilization program provided that such employer shall
have paid in full all such prior year amortization amounts including
interest as determined by the comptroller. Furthermore, any amortizing
employer that has terminated participation in the contribution
stabilization program may re-enter the program in a year in which the
employer is eligible to amortize and their employer contribution reserve
fund has been depleted.

(2) An alternative amortizing employer may elect to terminate
participation in the alternative contribution stabilization program
provided that such employer shall have paid in full all such prior year
amortization amounts including interest as determined by the
comptroller. Furthermore, any alternative amortizing employer that has
terminated participation in the alternative contribution stabilization
program may not re-enter the alternative contribution stabilization
program; provided, however, such employer may enter the regular
contribution stabilization program as set forth in paragraph one of this
subdivision.

(3) In order to terminate participation in the contribution
stabilization or alternative contribution stabilization program, such
employer must file an election on a form prescribed by the comptroller.
Such election is subject to review and approval by the comptroller.

(4) Termination shall take effect for the fiscal year billing cycle
following the fiscal year of approval. An employer who has been approved
to terminate from the contribution stabilization or alternative
contribution stabilization program pursuant to this section shall not be
required to make a graded payment starting in the following fiscal year
billing cycle.

(5) In the event an employer in the contribution stabilization program
or alternative contribution stabilization program terminates
participation pursuant to this section, any such balance in their
employer contribution reserve fund shall be applied to the employer's
annual bill in the maximum amount permitted under paragraph two of
subdivision e of this section, for the following fiscal year and
continue to be applied to future annual bills until the reserve fund is
depleted.