What's happening
This bill extends current interest rates used in New York City public pension fund calculations through June 30, 2021.
Why it matters
Prevents sudden changes in pension funding requirements. By extending current interest rates for two more years, the bill avoids abrupt increases or decreases in required employer contributions, helping New York City and other public employers maintain budget stability.
Maintains predictability for pension system members. The extension ensures that Tier 1 and Tier 2 pension holders, as well as other members, continue to receive interest credits on their accounts at established rates, supporting retirement planning and trust in the system.
Reduces risk of unintended financial consequences. Without this extension, reverting to different (potentially lower or higher) rates could disrupt actuarial calculations and create unforeseen costs or funding gaps for the pension systems.
Signals ongoing review of pension assumptions. The need for periodic extensions highlights that the interest rates used for both member accounts and employer contributions are subject to regular legislative scrutiny, reflecting changing economic conditions and actuarial best practices.
Albany, before your first meeting.
Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.
Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.
Who cares
New York City public employers and other pension contributors
The bill would extend the 7% actuarial interest assumption used to calculate employer contributions through June 30, 2021, with no expected change in contribution amounts or timing according to the fiscal note.
Tier 1 and Tier 2 members of the five city retirement systems
The bill would continue the combined 8.25% annual interest rate credited to their member contribution balances for fiscal years 2020 and 2021.
NYCERS, NYCTRS, the police and fire pension funds, and BERS
The bill would extend their existing special, additional and supplementary interest rates through June 30, 2021, including the combined 8.25% rate on Increased-Take-Home-Pay reserves.
Headline styles
Extend Pension Interest Rates
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Substituted by S4488A
- Advanced to third reading cal.427
- Reported
- Reported referred to ways and means
- Print number 6596a
- Amend and recommit to governmental employees
- 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
Signed by Governor · Sponsor Andrew Gounardes
Full text
4 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
6596--A
2019-2020 Regular Sessions
IN ASSEMBLY
March 12, 2019
Introduced by M. of A. ABBATE -- read once and referred to the Committee on Governmental Employees -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
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 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 100 of the laws of 2018, 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, [2019] 2021
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10353-05-9
A. 6596--A 2
NYCTRS 7% July 1, 2011 to
June 30, [2019] 2021 PPF 7% July 1, 2011 to
June 30, [2019] 2021 FPF 7% July 1, 2011 to
June 30, [2019] 2021 BERS 7% July 1, 2011 to
June 30, [2019] 2021
§ 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 100 of the laws of 2018, 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, [2019] 2021 NYCTRS 1 1/4% July 1, 2011 to
June 30, [2019] 2021 PPF 1 1/4% July 1, 2011 to
June 30, [2019] 2021 FPF 1 1/4% July 1, 2011 to
June 30, [2019] 2021 BERS 1 1/4% July 1, 2011 to
June 30, [2019] 2021
§ 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 100 of the laws of 2018, 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, [2019] 2021 NYCTRS 1 1/4% July 1, 2011 to
June 30, [2019] 2021 PPF 1 1/4% July 1, 2011 to
June 30, [2019] 2021 FPF 1 1/4% July 1, 2011 to
June 30, [2019] 2021 BERS 1 1/4% July 1, 2011 to
June 30, [2019] 2021
A. 6596--A 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 100 of the laws of 2018, 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, [2019] 2021 NYCTRS 0% July 1, 2011 to
June 30, [2019] 2021 PPF 0% July 1, 2011 to
June 30, [2019] 2021 FPF 0% July 1, 2011 to
June 30, [2019] 2021 BERS 0% July 1, 2011 to
June 30, [2019] 2021
§ 5. This act shall take effect July 1, 2019, 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, 2019.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: The enactment of this proposed legislation (the
Interest Rate Extender Legislation) would amend Administrative Code of
the City of New York (ACCNY) Section 13-638.2, as amended by Chapter 100
of the Laws of 2018, to continue for Fiscal Years 2020 and 2021 the
following rates of interest that expire on July 1, 2019 for the five
actuarially-funded New York City Retirement Systems and Pension Funds
(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.
Effective Date: July 1, 2019.
FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: The continuation for
Fiscal Years 2020 and 2021 of the same 8.25% per annum rate that was
used for Fiscal Year 2019 to credit interest on Tier 1 and Tier 2 member
contributions and ITHP Reserves would not change the amount or timing of
expected employer contributions.
The continuation of the AIR assumption of 7.00% per annum that was
used to determine preliminary employer contributions to the NYCRS for
Fiscal Year 2019 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.
A. 6596--A 4
RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend
highly on the actuarial assumptions and methods used and are subject to
change based on the realization of potential investment, demographic,
contribution, and other risks. If actual experience deviates from actu-
arial assumptions, the actual costs could differ from those presented
herein. Costs are also dependent on the actuarial methods used, and
therefore different actuarial methods could produce different results.
Quantifying these risks is beyond the scope of this Fiscal Note.
STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu-
ary for, and independent of, the New York City Retirement Systems and
Pension Funds. I am a Fellow of the Society of Actuaries, an Enrolled
Actuary under the Employee Retirement Income and Security Act of 1974, a
Member of the American Academy of Actuaries, and a Fellow of the Confer-
ence of Consulting 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 Fiscal Note 2019-01 dated March 8,
2019 was prepared by the Chief Actuary for the New York City Retirement
Systems and Pension Funds. This estimate is intended for use only during
the 2019 Legislative Session.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.