What's happening
This bill extends the current interest rates used for valuing liabilities and crediting contributions in New York City pension systems through June 30, 2018.
Why it matters
Prevents sudden changes in pension funding calculations. By extending existing interest rates for actuarial valuations and crediting, the bill avoids unexpected increases or decreases in employer contributions, supporting budget stability for the city and related agencies.
Maintains consistency for pension plan members. Keeping the same crediting rates (7% regular, 1.25% special/additional) for Tier 1 and Tier 2 member accounts means members’ expected interest accruals on their contributions remain predictable for another year.
Reduces risk of legal or administrative complications. By not allowing the specified interest rates to lapse, the bill helps avoid the need for retroactive corrections or adjustments that could arise if new rates were imposed without warning.
Signals ongoing deliberations about pension funding policy. The need for a one-year extension suggests that lawmakers and pension administrators are still evaluating long-term assumptions and may revisit or revise these rates in the near future, which could impact future costs or benefits.
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Who cares
New York City public employers and other pension obligors
The bill would extend through June 30, 2018 the 7% actuarial interest assumption used to calculate their contributions to the five city pension systems.
Tier 1 and Tier 2 pension members
The bill would continue the combined 8.25% annual interest rate credited to their member contributions for fiscal year 2018.
NYCERS, the Teachers’ Retirement System, the Police and Fire Pension Funds, and BERS
The bill would extend their existing special and additional interest rates of 1.25% and supplementary interest rate of 0% through June 30, 2018.
Headline styles
Extend Pension Interest Rates
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Signed chap.71
- Delivered to governor
- Returned to assembly
- Passed senateVote 62–0
- 3rd reading cal.1961
- Substituted for S5821
- Referred to rules
- Delivered to senate
- Passed assembly
- Ordered to third reading rules cal.257
- Rules report cal.257
- Reported
Show 3 earlier actions
- Reported referred to rules
- Reported referred to ways and means
- Referred to governmental employees
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Extend Pension Interest Rates
Senate Floor Calendar · Sponsor Martin J. Golden
Full text
4 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
7988
2017-2018 Regular Sessions
IN ASSEMBLY
May 24, 2017
Introduced by M. of A. ABBATE -- read once and referred to the Committee on Governmental Employees
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… Show allHide
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 to members of such retirement systems, and the allowance of supplementary interest on the funds of such retirement systems
The People of the State of New York, represented in Senate and Assembly, 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 83 of the laws of 2016, 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 ________________________________________________________________________ NYCERS 7% July 1, 2011 to
June 30, [2017] 2018 NYCTRS 7% July 1, 2011 to
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11258-02-7
A. 7988 2
June 30, [2017] 2018 PPF 7% July 1, 2011 to
June 30, [2017] 2018 FPF 7% July 1, 2011 to
June 30, [2017] 2018 BERS 7% July 1, 2011 to
June 30, [2017] 2018
§ 2. Paragraph 2 of subdivision f of section 13-638.2 of the administrative code of the city of New York, as amended by chapter 83 of the laws of 2016, 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, [2017] 2018 NYCTRS 1 1/4% July 1, 2011 to
June 30, [2017] 2018 PPF 1 1/4% July 1, 2011 to
June 30, [2017] 2018 FPF 1 1/4% July 1, 2011 to
June 30, [2017] 2018 BERS 1 1/4% July 1, 2011 to
June 30, [2017] 2018
§ 3. Paragraph 2 of subdivision g of section 13-638.2 of the administrative code of the city of New York, as amended by chapter 83 of the laws of 2016, 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, [2017] 2018 NYCTRS 1 1/4% July 1, 2011 to
June 30, [2017] 2018 PPF 1 1/4% July 1, 2011 to
June 30, [2017] 2018 FPF 1 1/4% July 1, 2011 to
June 30, [2017] 2018 BERS 1 1/4% July 1, 2011 to
June 30, [2017] 2018
A. 7988 3
§ 4. Paragraph 2 of subdivision i of section 13-638.2 of the administrative code of the city of New York, as amended by chapter 83 of the laws of 2016, 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, [2017] 2018 NYCTRS 0% July 1, 2011 to
June 30, [2017] 2018 PPF 0% July 1, 2011 to
June 30, [2017] 2018 FPF 0% July 1, 2011 to
June 30, [2017] 2018 BERS 0% July 1, 2011 to
June 30, [2017] 2018
§ 5. This act shall take effect July 1, 2017, 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, 2017.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This proposed legislation would continue for Fiscal Year 2018 the
interest rate of 8.25% per annum used for Fiscal Years 2012 through 2017
to credit interest on Tier 1 and Tier 2 member contributions (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% additional interest rate). The proposed
legislation would also continue for Fiscal Year 2018 the Actuarial
Interest Rate (AIR) assumption of 7.00% per annum used to determine
employer contributions to the New York City Pension Funds and Retirement
Systems (NYCRS).
PROVISIONS OF PROPOSED LEGISLATION - OVERVIEW: The enactment of this
proposed legislation (the Interest Rate Extender Legislation) would
amend Administrative Code of the City of New York (ACNY) Section
13-638.2, as amended by Chapter 83 of the Laws of 2016, to continue for
Fiscal Year 2018 the following rates of interest that expire on July 1,
2017 for the five actuarially-funded New York City Pension Funds and
Retirement Systems (NYCRS):
* The 8.25% per annum rate used to credit interest on Tier 1 and Tier
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.
The Effective Date for this proposed Interest Rate Extender Legis-
lation would be July 1, 2017.
A. 7988 4
FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS: The continuation for Fiscal
Year 2018 of the same 8.25% per annum rate that was used for Fiscal Year
2017 to credit interest on Tier 1 and Tier 2 member contributions and
ITHP Reserves would not change the amount of timing of expected employer
contributions.
The continuation for Fiscal Year 2018 of the AIR assumption of 7.00%
per annum that was used to determine employer contributions to the NYCRS
for Fiscal Year 2017 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.
STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu-
ary for, and independent of, the New York City Pension Funds and Retire-
ment Systems. I am a Fellow of the Society of Actuaries, a Fellow of the
Conference of Consulting Actuaries and a Member of the American Academy
of 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 is Fiscal Note 2017-05 dated April 5,
2017, was prepared by the Chief Actuary for the New York City Pension
Funds and Retirement Systems. This estimate is intended for use only
during the 2017 Legislative Session.
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