What's happening
This bill extends current interest rates used for actuarial valuations and member account crediting in New York City retirement systems through June 30, 2021.
Why it matters
Provides stability and predictability. for New York City’s retirement systems by maintaining existing interest rates through June 2021, which can help both the city and employees plan for pension funding and member account growth without sudden changes.
Prevents potential disruptions. in pension calculations and employer contributions that could occur if the interest rates were allowed to revert or change sharply, thereby supporting smoother financial operations for the city and retirement funds.
Impacts benefit calculations for certain members. , particularly those in Tier 1 and 2, as the continued rates directly affect credited interest on member accounts and reserves, influencing the growth of their pension savings.
Signals ongoing review and adjustment. of actuarial assumptions, highlighting the importance of periodic legislative updates to keep pension system funding aligned with fiscal realities and actuarial best practices.
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Extend Pension Interest Rates
Plain English, a few words. Used as the page title.
Sponsors
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History
- Signed chap.76
- Delivered to governor
- Returned to senate
- Passed assembly
- Ordered to third reading cal.427
- Substituted for A6596A
- Referred to ways and means
- Delivered to assembly
- Passed senateVote 60–0
- Advanced to third reading
- 2nd report cal.
- 1st report cal.750
Show 3 earlier actions
- Print number 4488a
- Amend and recommit to civil service and pensions
- 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
Assembly Floor Calendar · Sponsor Peter Abbate
Full text
4 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4488--A
2019-2020 Regular Sessions
IN SENATE
March 13, 2019
Introduced by Sen. GOUNARDES -- (at request of the NYC Actuary) -- read twice and ordered printed, and when printed to be committed to the Committee on Civil Service and Pensions -- 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
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10353-04-9
S. 4488--A 2
________________________________________________________________________ NYCERS 7% July 1, 2011 to
June 30, [2019] 2021 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
S. 4488--A 3
June 30, [2019] 2021 BERS 1 1/4% July 1, 2011 to
June 30, [2019] 2021
§ 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
S. 4488--A 4
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.
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.
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 teach- ers' 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
Summary of provisions
This bill would extend for two fiscal years, until June 30, 2021, the current 7% per annum statutory rate of interest used by the Chief Actu- ary ("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 special interest, additional interest and supplementary interest, which, in effect govern the amount of interest to be paid into certain constit- uent 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 1 and 2 members of those retirement systems. The current valuation rate of interest and the rate of supplementary inter- est were originally enacted by Chapter 3 of the Laws of 2013. 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, 20 19, for all these rates of interest was enacted by Chapter 100 of the Laws of 2018.
Reasons for support
The current rates of interest are effective for the period ending June 30, 2019, and expire as of July 1, 2019.
Read the full memo (724 words)
The City of New York supports the enactment of this bill, which would provide for a two-year extension of the current valuation rate of inter- est and the accompanying rates of special, additional and supplementary interest. The Actuary has stated that the proposed two-year extension of these rates to June 30, 2021 is consistent with the current preliminary recommendations regarding these rates from its actuarial auditor, retained pursuant to New York City Charter § 96. Seeking a two-year extension is preferable to a longer extension at this time because it will enable the Actuary to further examine the final experience analysis of its auditor and expected market conditions. After the expiration of the current rates, later in calendar year 2019.
It should be noted that the Legislature has enacted similar short-term extensions of such interest rates for the City retirement systems on numerous previous occasions. See, Chapter 878 of the Laws of 1990, Chap- ter 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, Chapter 180 of the Laws of 2011, Chapter 83 of the Laws of 2016. Chapter 71 of the Laws of 2017 and Chapter 100 of the Laws of 2018.
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.
Accordingly, the Mayor urges the earliest possible favorable consider- ation of this proposal by the Legislature.
Prior legislative history
2018: Chapter 100 2017: Chapter 71 2016: Chapter 83 2011: Chapter 180 2010: Chapter 265 2009: Chapter 211 2005: Chapter 133 2004: Chapter 133 1995: Chapter 642 1990: Chapter 878
Fiscal implications
None to the State.
Effective date
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 imme- diately and be deemed to have been in full force and effect on and after July 1, 2019.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.