Relates to the manner of paying employer contributions to the NYS and local employees' retirement system and the NYS and local police and fire retirement system

3 Co-sponsors

• Suzi Oppenheimer
• William T. Stachowski
• Antoine M. Thompson

Title of bill

An act to amend the retirement and social security law, in relation to the manner of paying employer contributions to the New York state and local employees' retirement system and the New York state and local police and fire retirement system

Purpose

To facilitate the payment of certain employer contributions to the New York State and Local Employees' Retirement System and the New York State and Local Police arid Fire Retirement System (collectively, "Retirement System" or "System").

Summary of provisions

Section 1 amends the Retirement and Social Security Law by adding a new section 19-a relating to employer contributions to the New York State and Local Employees' Retirement System for 2010-2011 fiscal year and subsequent fiscal years; and authorizes the creation of an employer contribution reserve fund.

Section 2 amends the opening paragraph and paragraph 1 of subdivision b of section 23 of the Retirement and Social Security Law to delete language declared unconstitutional in MCDERMOTT V. REGAN, 82 NY2nd 354 (1993) and restore the prior language.

Section 3 amends the Retirement and Social Security Law by adding a new section 319-a relating to employer contributions to the New York State and Local Police and Fire Retirement System for 2010-2011 fiscal year and subsequent fiscal years; and authorizes the creation of an employer contribution reserve fund.

Section 4 amends the opening paragraph and paragraph 1 of subdivision b of section 323 of the Retirement and Social Security Law to delete language declared unconstitutional in MCDERMOTT V. REGAN, 82 NY2nd 354 (1993) and restore the prior language.

Section 5 sets forth an immediate effective date.

Justification

Sections 1 and 3 of this bill are intended to establish a permanent solution to the problem of volatile employer contribution rates. In years when actuarial contribution rates exceed a certain level, employers would have the option of amortizing a portion of their annual bill due to the Retirement System. In other years, depending upon the pattern of contributions, amortizing employers would be required to pay the full amount of their annual bill plus an additional amount. Such additional amount must first be used to eliminate the amount of an employer's unpaid prior amortizations. Once all unpaid prior amortizations are eliminated, the additional amount would be deposited into an employer contribution reserve fund. Monies in such fund would only be used to reduce the employer's payment to the System in years when the actuarial contribution rates begin to rise again above a certain level.

The authority proposed by this legislation for employers to amortize contributions would essentially make permanent the existing authority for employers to amortize contributions in certain specified fiscal years. There is presently authority for participating employers to establish retirement contribution reserve funds and this bill would require all amortizing employers to contribute eventually to a similar fund held by the Retirement System. These changes would benefit the Retirement System by making it easier for employers to meet their obligations to the System, without reducing employer obligations or otherwise adversely affecting the System. While these changes may result in amortizing employers experiencing short-term fiscal relief, any such fiscal relief would be incidental to accomplishing the overall purpose of the bill.

Effective date

Immediately.