What's happening
This bill extends the current interest rates used in valuing and crediting contributions for New York City pension systems through June 30, 2018.
Why it matters
Stability for Pension Planning. By extending the existing interest rates used for pension calculations, the bill provides predictability for both the city and public employees, helping with long-term financial and retirement planning for NYC workers.
Avoids Unexpected Fiscal Impacts. The extension ensures there are no sudden changes in the city’s required pension contributions for Fiscal Year 2018, preventing surprises in the city budget and maintaining current funding expectations.
Protects Member Contributions. Maintaining the 8.25% crediting rate for Tier 1 and 2 member accounts and reserves means that affected employees will continue to see consistent credited growth on their pension balances, which is especially important for those planning to retire soon.
Short-Term Solution Signals Future Re-Evaluation. By only extending rates through June 30, 2018, the bill indicates ongoing discussions or evaluations of the pension systems’ actuarial assumptions, which could affect future contribution rates, pension liabilities, or benefit calculations for both the city and its employees.
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Who cares
New York City public employers and other pension obligors
The bill would extend the 7% actuarial interest assumption used to calculate their pension contributions through June 30, 2018.
Tier 1 and Tier 2 members of the five city retirement systems
The bill would continue the combined 8.25% annual interest rate credited on their member contributions for fiscal year 2018.
Administrators of NYCERS, NYCTRS, the police and fire pension funds, and BERS
The bill would extend existing interest rates for another year, including 1.25% special and additional interest rates and a 0% supplementary interest rate.
Headline styles
Extend Pension Interest Rates
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Substituted by A7988
- Ordered to third reading cal.1961
- Committee discharged and committed to rules
- Referred to civil service and pensions
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
Signed by Governor · Sponsor Peter Abbate
Full text
4 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5821
2017-2018 Regular Sessions
IN SENATE
May 2, 2017
Introduced by Sen. GOLDEN -- read twice and ordered printed, and when printed to be committed to the Committee on Civil Service and Pensions
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
S. 5821 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
S. 5821 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.
S. 5821 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.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
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
Summary of provisions
This bill would extend for one fiscal year, until June 30, 2018, the current 7% per annum statutory rate of interest used by the Chief Actuary for the New York City Employees' Retirement System, Teachers' Retirement System, Board of Education Retirement System, Police Pension Fund and Fire Department Pension Fund ("City retirement systems") in valuing retirement system liabilities for the purpose of computing the amount of employer contributions to those systems. The bill also would extend for that same period of time the current rates of supplementary interest, special interest and additional interest which, in effect, govern the amount of interest to be paid into certain constituent funds of the City retirement systems, and the amount of interest to be credited on accumulated member contributions and increased-take-home-pay reserves of tier I and 2 members of those retirement systems. The current five-year period ending on June 30, 2016 for the valuation rate of interest, as well as the rates of supplementary interest, special interest and additional interest, was enacted by Chapter 3 of the Laws of 2013, which also established the current valuation rate of interest and the current rate of supplementary interest. The current rates of special and additional interest were continued and recodified by Chapter 878 of the Laws of 1990 and have remained the same since. The current one-year period ending on June 30, 2017 for all these rates of interest was enacted by Chapter 83 of the Laws of 2016.
Reasons for support
The current rates of interest are effective for the period ending June 30, 2017, and expire as of July 1, 2017. The City of New York recommends a one-year extension of the current valuation rate of interest and the accompanying rates of special, additional and supplementary interest be enacted. The Actuary has stated that the proposed current one-year extension of these rates to June 30, 2018 is more advisable than a longer multi-period of time because it will enable the Actuary to examine further the potential use of multi-year interest rates after an experience analysis is published by its actuarial auditor pursuant to New York City Charter, Section 96. It should be noted that the Legislature enacted similar one-year extensions of such interest rates for the City retirement systems in 1990, 1995, 2004, 2005, 2009, 2010, 2011and 2016. See Chapter 878 of the Laws of 1990, Chapter 642 of the Laws of 1995, Chapter 133 of the Laws of 2004, Chapter 133 of the Laws of 2005, Chapter 211 of the Laws of 2009, Chapter 265 of the Laws of 2010 and Chapter 180 of the Laws of 2011and Chapter 83 of the Laws of 2016, respectively.
Read the full memo (647 words)
As this bill would continue the existing valuation rate of interest and the existing rates of special, additional and supplementary interest, its enactment would not change the amount or timing of expected employer contributions.
Fiscal impact
See Fiscal Note in bill.
Effective date
This act will take effect as of July 1, 2017, even if enacted subsequent to such date, and shall be deemed to be in full force and effect on and after July 1, 2017.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.