Relates to membership in retirement systems

BILL NUMBER:S2744

Title of bill

CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY propos- ing an amendment to article V of the constitution, relating to member- ship in retirement systems and that benefits not be diminished

Purpose

To permit the comptroller to choose the methodology for valu- ing the assets, liabilities and obligations of pension funds, which do not diminish benefits.

Summary of provisions

Section 1 amends section 1 of article V of the constitution by clarify- ing that the comptroller is the sole custodian and manager of the pension fund and can determine the method for valuing the assets, liabilities, and obligations of such funds.

Section 2 amends section 7 of article V by stating that the methodology chosen by the Comptroller cannot be considered an impairment of pension benefits if the actual and tangible benefit received by the retiree is not diminished.

Effects of present law which this bill would alter

This amendment would reaffirm the authority of the comptroller as the sole manager of the pension funds and would grant him/her flexibility in determining the method for valuing these funds as long as they do not impair the actual benefits of retirees.

Justification

The Comptroller has the annual responsibility of certi- fying the contribution rates of employees to the retirement system. However, due to the fluctuations in the performance in investment markets, there has been a trend of strong investment performance and low employer rate contributions. This constitutional amendment will allow the comptroller greater flexibility in determining, by means of actuari- al valuation, the best method to administer the pension fund.

Legislative history

This is a new bill.

Fiscal implications

None to the State.

Effective date

Resolved (if the Assembly concur), That the foregoing amendment be referred to the first regular legislative session convening after the next succeeding general election of members of the assembly, and, in conformity with section 1 of article 19 of the constitution, be published for 3 months previous to the time of such election.