Allows school districts the option of amortizing future payments to the New York state teachers' retirement system

BILL NUMBER:S4067A

Title of bill

An act to amend the education law and the the general municipal law, in relation to allowing school districts the option of amortizing future payments to the New York state teachers' retirement system

Purpose

This legislation will allow school districts the option of Amortizing.

Summary of provisions

Section one of the bill amends section 521 of the education law to allow the governing board of a participating employee of the New York State Teachers' Retirement System to finance a certain portion of the contributions due from such employer on account of pension able compensation paid by such employer during the two plan years July 1,2011 through June 30, 2012 and July 1, 2012 through June 30, 2013.

Section 2 of the bill amends the general municipal law to include educational employee as entities that are allowed to set up retirement contribution reserve funds.

Section 3 amends the general municipal law to allow education employers to deposit funds within retirement contribution reserve funds for the sole purpose of making required employer contributions to the NYSTRS.

Section 4 is the effective date.

Justification

Projections indicate that the current economic downturn will cause employer contributions to New York State Teachers' Retirement system (NYSTRS) to spike over the next several years. Even as the market rebounds, this cost spike will still take place over the next two to three years then flattening out to a more even employer contribution as has been the historical trend during other such spikes.

This legislation will afford school districts the authority to adopt a bond resolution authorizing the financing of NYSTRS contributions over a period not to extend beyond fifteen years. The amount of such bonds shall not exceed 125% of the contribution due to such employer on account of pensionable compensation paid during the plan year July 1, 2012 through June 30, 2013.

The process of this bond issuance shall be deposited by an employer into a retirement contribution reserve account and shall be applied to offset contributions due from such employer to the NYSTRS on

account of pensionable compensation paid during the plan years July 1, 2012 through June 30, 2013 and July 1, 2012 through June 30, 2013, Any funding remaining in the account will be used to offset the debt from this bonding action or pay future employer pension costs in future years.

Allowing the financing of this employer obligation will help offset the reductions in school aid that districts are experiencing this year and may continue to experience going forward.

Legislative history

New bill.

Fiscal impact on the state

None to the NYSTRS. Bond related expenses could be incurred by school districts that choose to participate in this amortization.

Effective date

Immediately.