N.Y. Education Law § 521: Collection of contributions

§ 521. Collection of contributions. 1. The collection of members'

contributions shall be as follows:

a. Each employer shall cause to be deducted on each and every payroll

of a contributor for each and every payroll period, the contribution

payable by such contributor as provided in this article. Each employer

shall certify to the treasurer of said employer on each and every

payroll a statement as voucher for the amounts so deducted.

b. The treasurer of each employer on receipt from the employer of the

voucher for deductions from the salaries of teachers as provided in this

article shall transmit monthly or at such times as the retirement board

shall designate, the amount specified in such voucher to the secretary

of the retirement board. The secretary of the retirement board after

making record of all such receipts shall transmit them to the head of

the division of the treasury in the department of taxation and finance

for use according to the provisions of this article.

But nothing in this section shall prevent the retirement board from

modifying the method of collecting the contribution of members so that

employers may retain the amounts so deducted and have a corresponding

amount deducted from the appropriation for the support of common schools

otherwise payable to them.

2. The collection of employers' contributions shall be made as

follows:

a. Upon the basis of each actuarial determination and appraisal

provided herein, the retirement board shall annually prepare and certify

to the commissioner of education a statement of the total amount

necessary to be paid by all employers for the ensuing fiscal year to the

pension accumulation and expense funds as provided under subdivision two

of section five hundred seventeen and under section five hundred

nineteen of this article. Upon the basis of the rate of contribution for

supplemental retirement allowances, determined in accordance with

section five hundred thirty-two of this article, the retirement board

shall certify to the commissioner of education a statement of the total

amount necessary to be paid by all employers for the ensuing fiscal year

to the supplemental retirement allowance fund. Said certification shall

include interest on amounts necessary to repay advances made to the

supplemental retirement allowance fund pursuant to subdivision f of

section five hundred thirty-two of this article computed from the date

of such advances at the rate determined in accordance with paragraph f

of this subdivision.

b. The commissioner of education shall include in the certificate

which he files with the state comptroller showing the amount of state

funds apportioned to the school districts within each county for the

support of common schools, a statement showing the amount to be

contributed by each employer in each of such counties as required under

this article.

The amount to be contributed by each employer except those who operate

local district pension systems, shall be such percentage of the total

compensation or salaries of all teachers in his employ who are members

of the retirement system as the aggregate amount of the normal and

deficiency contributions for the year shall bear to the total

compensation or salaries paid by all employers, except those who operate

local district pension systems, to all teachers who are members of the

retirement system.

c. The comptroller shall issue his warrant to the custodian of such

fund directing such custodian to credit to the pension accumulation fund

and expense fund respectively, from the appropriation for the support of

common schools the amounts required to be made as contributions to such

funds by the employers as shown by the certificate of the commissioner

of education filed with him as directed in paragraph b of this

subdivision.

d. The comptroller, in issuing his warrant to the custodian for

payment to each county treasurer of that portion of the moneys

apportioned for the support of common schools, shall deduct therefrom an

amount equal to the amount required to be contributed by employers of

such county, as shown by the certificate of the commissioner of

education of this state filed with the comptroller as required by

paragraph b of this subdivision.

e. In order to meet the financial requirements of this article,

employers who obtain funds directly by taxation are hereby authorized

and directed to levy annually such additional taxes as are required to

provide the funds deducted from the amounts apportioned to such

employers from the appropriation of the state for the support of the

common schools.

f. Employers whose payments from the moneys apportioned from the state

for the support of common schools are insufficient to pay the amount due

and owing the system, or who do not receive such payments, shall pay the

system each year the amount of contributions due and owing from the

employer pursuant to this article within thirty days from the date a

bill is mailed by the system. Interest, at a rate equal to the average

yield payable on fifty-two week United States treasury bills on June

thirtieth immediately preceding the day the bill is mailed by the

system, shall accrue on the outstanding amount due and owing commencing

with the thirty-first day after the bill is mailed.

g. Whenever the system determines the contributions made by an

employer are less than the percentage of total compensation or salaries

of members of the system in the employ of such employer, as required by

this article, such employer shall pay the system such deficiency within

thirty days from the date a bill is mailed by the system. Interest, at a

rate equal to the average yield payable on fifty-two week United States

treasury bills on June thirtieth immediately preceding the day before

the bill is mailed by the system, shall accrue on the outstanding amount

due and owing commencing with the thirty-first day after the bill is

mailed.

h. Notwithstanding any provision of law to the contrary, commencing

with the payments made in the fiscal year beginning July first, nineteen

hundred ninety, and each fiscal year thereafter, the employer

contributions due and payable as determined pursuant to the provisions

of this article and the employee contributions due and payable pursuant

to this article and articles fourteen and fifteen of the retirement and

social security law, on account of compensation paid in the fiscal year

immediately preceding, and those employer contributions due and payable

in each fiscal year pursuant to chapter six hundred sixty-five of the

laws of nineteen hundred eighty-four shall be made to the retirement

system and collected in the manner set forth in this section each fiscal

year in three payments, each equal to thirty-three and one-third percent

of the total amount due for such fiscal year. Such payments shall be

paid on September fifteenth, October fifteenth, and November fifteenth

of each fiscal year. If a participating employer underpaid its

obligation to the retirement system, such underpayment as determined by

the retirement system shall be deducted from the amounts apportioned to

such employer from the appropriation of the state for the support of the

common schools due and payable the next April fifteenth. Employers whose

payments from such appropriation are insufficient to pay the amount due

and owing the system, or who do not receive such payments, shall be

billed by the system for such underpayment and shall pay the system the

amount due within thirty days from the date a bill is mailed by the

system. The amount of any employer overpayment of its obligation to the

retirement system, as determined by such system shall be a credit to the

employer and shall reduce by an equal amount thereof the initial payment

to be made by such employer to such system on the next succeeding

September fifteenth.

i. Notwithstanding any provision of law to the contrary, the employer

and employee contributions due and payable in the nineteen hundred

eighty-nine--ninety fiscal year on account of compensation paid in the

nineteen hundred eighty-eight--eighty-nine fiscal year which were paid

prior to April first, nineteen hundred ninety shall be deemed (to the

extent such amount is sufficient) to have consisted of all the employee

contributions due and payable pursuant to this article and articles

fourteen and fifteen of the retirement and social security law in the

nineteen hundred eighty-nine--ninety fiscal year and those employer

contributions due and payable in such fiscal year pursuant to chapter

six hundred sixty-five of the laws of nineteen hundred eighty-four; and

the remaining employer contributions so paid shall be applied evenly to

the payments due and payable on September fifteenth, nineteen hundred

ninety, October fifteenth, nineteen hundred ninety and November

fifteenth, nineteen hundred ninety and the employer contributions

amounting to eight hundred seventy-three million seven hundred eleven

thousand six hundred fifteen dollars ($873,711,615), due and payable

pursuant to the provisions of this section in the nineteen hundred

eighty-nine--ninety fiscal year on account of compensation paid in

nineteen hundred eighty-eight--eighty-nine fiscal year, except those

employer contributions due and payable in such fiscal year pursuant to

chapter six hundred sixty-five of the laws of nineteen hundred

eighty-four, shall be deferred and payment shall be made to the

retirement system in fifteen equal annual payments of ninety-eight

million five hundred thirty-seven thousand five hundred seven dollars

($98,537,507) on October fifteenth, commencing on October fifteenth,

nineteen hundred ninety. Such payments are calculated at an interest

rate of eight percent per annum. Provided, however, the retirement board

is directed to permit the pre-payment of the amounts outstanding under

this paragraph. The retirement board shall: (1) On or before September

first, nineteen hundred ninety, in addition to the amount due for the

current fiscal year billing and for the payment of the amortized annual

installment, furnish the total amount due and be authorized to accept

pre-payment in full of said amount by October fifteenth, nineteen

hundred ninety. (2) On or before each September first thereafter, in

addition to the amount due for the current fiscal year billing and for

the payment of the annual amortized installment, furnish the total

amount still outstanding and be authorized to accept the pre-payment of

any portion of the balance remaining to be paid by October fifteenth of

that year.

j. Prior to June first, nineteen hundred ninety, the valuation rate of

interest adopted by the retirement board on April twenty-seventh,

nineteen hundred eighty-nine, may be retroactively revised to eight

percent by the retirement board, as recommended by the actuary, as if

adopted at the April twenty-seventh, nineteen hundred eighty-nine board

meeting, and the employer contribution rate, adopted by the retirement

board at the April twenty-seventh, nineteen hundred eighty-nine board

meeting, revised by the retirement board at the July twenty-seventh,

nineteen hundred eighty-nine board meeting, may be retroactively amended

by the retirement board as if adopted at the July twenty-seventh,

nineteen hundred eighty-nine board meeting and applied to contributions

paid in the nineteen hundred ninety--ninety-one fiscal year.

Notwithstanding any provision of law to the contrary, the actions of the

retirement board pursuant to the provisions of this paragraph shall be

deemed reasonable, prudent and proper. No member of the retirement

board, officer, or employee of the New York state teachers' retirement

system shall incur or suffer any liability whatsoever by reason of any

actions pursuant to this paragraph, and such system shall save harmless

and indemnify all members of the retirement board, its officers and

employees from financial loss arising out of any claim, demand, suit,

action or judgment as a result of the actions taken pursuant to this

paragraph provided that such person shall, within five days after the

date on which he is served with any summons, complaint, process, notice,

demand, claim or pleading, deliver the original or a true copy thereof

to the legal advisor of such system. Upon such delivery, the legal

advisor of such system may assume control of the representation of such

person in connection with such claim, demand, suit, action or

proceeding. Such person shall cooperate fully with the legal advisor of

the system or any other person designated to assume such defense in

respect of such representation or defense.

k. The retirement board is authorized to adopt procedures and/or to

promulgate rules and regulations as it deems necessary to adjust and

reconcile any payments from employers to actual amounts due whether such

payments were received prior or subsequent to the effective date of the

chapter of the laws of nineteen hundred ninety which added this

paragraph to this section.

l. The provisions of paragraphs h and i of this subdivision shall

constitute a contract and the rights of the New York state teachers'

retirement system thereunder shall not be impaired in any way

whatsoever.

m. In addition to any other payment or collection procedure provided

by this article, if the amounts credited from the appropriation for the

support of common schools are insufficient to fully cover the amounts to

be contributed by the employers, the retirement board is authorized to

certify the unpaid amount to the state comptroller, and the state

comptroller shall, to the extent not otherwise prohibited by law,

withhold such amount from any succeeding payment from any other form of

state aid provided to the employer. If any employer fails to pay the

amounts required to be contributed pursuant to this section, the

retirement system shall be entitled to reasonable attorney fees and

other expenses incurred to collect such amounts due and owing. Fees

shall be determined pursuant to prevailing market rates for the kind and

quality of the services furnished.

n. Notwithstanding any other provision of law to the contrary, the

board of education or trustees of a school district which is a

participating employer, which has elected to make payments of the

employer contributions due and payable to the retirement system pursuant

to paragraph i of this subdivision in amortized annual installments, and

which has determined to make pre-payment of the total amount of such

contributions outstanding in accordance with said paragraph i, may adopt

a bond resolution authorizing the refinancing of such debt by the

issuance of bonds in the amount of such pre-payment without conducting a

vote on a tax to be collected in installments, provided that such

refinancing will result in savings to the school district, as certified

by the state comptroller, and provided further that the issuance of such

obligations otherwise complies with the requirements of the local

finance law and this chapter.

3. Stable contribution option for participating educational employers

for the two thousand thirteen - two thousand fourteen plan year. a. In

addition to the definitions in section five hundred one of this article,

when used in this subdivision:

(1) "participating educational employer" shall mean a school district

or board of cooperative educational services which elects to pay the

stable contribution amount in the manner provided in this subdivision;

(2) "stable contribution amount" shall mean an amount equal to the

stable contribution rate multiplied by the pensionable salary base

(exclusive of payments for group term life insurance, deficiency

contributions, adjustments relating to prior fiscal years' obligations,

obligations pertaining to retirement incentives or any other obligations

that a participating educational employer is permitted to pay on an

amortized basis);

(3) "stable contribution rate" shall mean fourteen percent for the two

thousand thirteen - two thousand fourteen plan year and the two thousand

fourteen - two thousand fifteen plan year and the rate as adopted by the

retirement board in accordance with paragraph h of this subdivision; and

(4) "deferred employer contribution amount" shall mean an amount

adequate to fund the benefits for active and retired members associated

with such participating educational employer had such participating

educational employer not elected the provisions of this subdivision.

Such deferred employer contribution amount shall be calculated for each

year of participation in the stable contribution option with associated

interest determined specific to each applicable plan year's deferred

amount.

b. Notwithstanding the provisions of this chapter or any other law to

the contrary, the retirement board, in its discretion, shall have

authority to implement the provisions of this subdivision. If the

retirement board elects to implement the provisions of this subdivision,

the provisions shall apply to the payment of participating educational

employer contributions in the plan year commencing July first, two

thousand thirteen, for the pension bill paid on September fifteenth,

October fifteenth, and November fifteenth of two thousand fourteen, and

for the subsequent six plan years. If a participating educational

employer does not elect the stable contribution option in the fiscal

year commencing on July first, two thousand thirteen for the pension

bill paid on September fifteenth, October fifteenth, and November

fifteenth of two thousand fourteen, it shall not be eligible to elect

the stable contribution option in any succeeding plan year.

c. For each of the seven plan years to which the provisions of this

subdivision apply, the retirement board shall use a stable contribution

rate established by the retirement board for participating educational

employers.

d. If the retirement board, in its discretion, decides to adopt a

stable contribution option pursuant to this subdivision, the retirement

board shall determine the stable contribution amount in each plan year

for a participating educational employer pursuant to subparagraph two of

paragraph a of this subdivision. Such stable contribution amount shall

be in lieu of a participating educational employer's actuarially

required contribution rate of normal and administrative contributions

pursuant to sections five hundred seventeen and five hundred nineteen of

this article for the plan year commencing July first, two thousand

thirteen, and for the next six subsequent plan years.

e. Any participating educational employer which elects to pay the

stable contribution amount pursuant to this subdivision shall pay the

amount based on the stable contribution rate for a period of seven years

and such option shall be available to participating educational

employers from the two thousand thirteen - two thousand fourteen plan

year through the two thousand nineteen - two thousand twenty plan year.

In the sixth plan year, the two thousand eighteen - two thousand

nineteen plan year, the participating educational employer shall pay the

stable contribution rate and, in addition, commence payment for deferred

employer contributions in accordance with paragraph j of this

subdivision. Commencing with the plan year beginning July first, two

thousand twenty, the participating educational employer shall resume

payment of the actuarially required contribution rate of normal and

administrative contributions pursuant to sections five hundred seventeen

and five hundred nineteen of this article and, in addition, any payment

for deferred employer contribution amounts in accordance with paragraphs

j and k of this subdivision.

f. A participating educational employer paying a stable contribution

amount shall remit, commencing with the July first, two thousand

thirteen plan year, an amount determined by the retirement board by

adding the following two amounts together:

(1) the stable contribution amount calculated pursuant to this

subdivision; and

(2) payments for group term life insurance, deficiency payments,

adjustments relating to prior fiscal years' obligations and obligations

pertaining to retirement incentives or any other obligations that a

participating educational employer is permitted to pay on an amortized

basis.

g. The stable contribution amount must be paid in full by

participating educational employers on the dates specified in paragraph

h of subdivision two of this section.

h. Prior to July first, two thousand fifteen and July first, two

thousand seventeen the retirement board is authorized to evaluate the

stable contribution rate used to calculate participating educational

employer stable contribution amounts. Such evaluation shall be based on

a projection of assets and liabilities so as to ensure that

contributions by participating educational employers which participate

in the stable contribution option are adequate to ensure that system

assets are sufficient to fund benefits for active and retired members.

The retirement board is authorized to increase the stable contribution

rate by up to two percentage points on July first, two thousand fifteen

and on July first, two thousand seventeen. The revised stable

contribution rate resulting from the foregoing evaluations and July

first, two thousand fifteen and July first, two thousand seventeen

stable rate increases may not, in combination, exceed eighteen percent.

The retirement board is authorized to decrease the stable contribution

rate, if warranted, but in no event shall the stable contribution rate

be less than fourteen percent.

i. A participating educational employer may elect to terminate

participation in the stable contribution option and resume payment of

the actuarially required contribution of normal and administrative

contributions in accordance with sections five hundred seventeen and

five hundred nineteen of this article. Provided, however, that such

participating educational employer which elects to terminate

participation shall make a reconciliation contribution to the retirement

system, at an amount to be determined by the retirement board, adequate

to fund the benefits for active and retired members associated with such

participating educational employer had such participating educational

employer not elected the provisions of this subdivision. Such

reconciliation contribution shall be made over a period not to exceed

five years and shall be made in addition to the normal and

administrative contributions pursuant to sections five hundred seventeen

and five hundred nineteen of this article for the plan year in which

such participating educational employer chooses to resume payment of the

normal and administrative contributions pursuant to sections five

hundred seventeen and five hundred nineteen of this article. For the

purposes of determining the reconciliation contribution amount, the

retirement board shall assume interest on the deferred employer

contribution amount at a rate which approximates the monthly average

yield on United States treasury securities at ten-year constant maturity

for the twelve-month period preceding August first of each year plus one

percentage point. The interest rate associated with such deferred

employer contribution amount shall be specific to each applicable plan

year's deferred amount.

j. In the sixth plan year, commencing July first, two thousand

eighteen, all participating educational employers having elected the

stable contribution option shall continue to contribute the stable

contribution amount to the retirement system and remit to the retirement

system the accrued deferred employer contributions accumulated in the

first five plan years. The stable payment of the deferred employer

contribution accrued by the participating educational employer shall be

paid to the retirement system in equal annual installments over a

five-year period, with interest on the unpaid portion to be based on the

monthly average yield on United States treasury securities at a ten-year

constant maturity for the twelve-month period preceding August first of

each year plus one percentage point. The interest rate associated with

such deferred employer contribution amount shall be specific to the rate

as measured on August first of the applicable plan year to such deferred

amount. Payments of the stable installments shall be made in the same

manner as other employer contributions as prescribed in this article.

Nothing in this subdivision shall be construed as prohibiting such

participating educational employer from making a reconciliation

contribution in accordance with paragraph i of this subdivision.

k. In the eighth plan year, commencing July first, two thousand

twenty, all participating educational employers having elected the

stable contribution option shall resume payment of the actuarially

required contribution rate of normal and administrative contributions in

accordance with section five hundred seventeen and five hundred nineteen

of this article. Additionally, such employer will remit to the

retirement system the accrued deferred employer contributions

accumulated during the plan years commencing July first, two thousand

eighteen and July first, two thousand nineteen of the stable

contribution option. The stable payment of the deferred employer

contribution accrued by the participating educational employer shall be

paid to the retirement system in equal annual installments over a

five-year period with interest on the unpaid portion to be based on the

monthly average yield on United States treasury securities at a ten-year

constant maturity for the twelve-month period preceding August first of

each year plus one percentage point. The interest rate associated with

such deferred employer contribution amount shall be specific to the rate

as measured on August first of the applicable plan year to such deferred

amount. Payments of the stable installments shall be made in the same

manner as other employer contributions as prescribed in this article.

Nothing in this subdivision shall be construed as prohibiting such

participating educational employer from making a reconciliation

contribution in accordance with paragraph i of this subdivision.

l. Notwithstanding the provisions of this subdivision, if the

retirement board decides to adopt a stable contribution option, in

accordance with this subdivision, and the funded status of the

retirement system reaches a threshold below eighty percent at the end of

any plan year during the seven plan year term of this option, the option

shall cease and participating educational employers who have elected the

stable contribution option shall resume payment of the actuarially

required contribution rate of normal and administrative contributions in

accordance with section five hundred seventeen and five hundred nineteen

of this article. Additionally, such employer will make a reconciliation

contribution to the retirement system, at an amount to be determined by

the retirement board, adequate to fund the benefits for active and

retired members associated with such participating educational employer

had such participating educational employer not elected the provisions

of this section. The payment of the deferred employer contribution

accrued by the participating educational employer shall be paid to the

retirement system in equal annual installments over a five-year period

with interest on the unpaid portion to be based on the monthly average

yield on United States treasury securities at a ten-year constant

maturity for the twelve-month period preceding August first of each year

plus one percentage point. The interest rate associated with such

deferred employer contribution amount shall be specific to the rate as

measured on August first of the applicable plan year to such deferred

amount. Payments of the stable installments shall be made in the same

manner as other employer contributions as prescribed in this article.

m. The retirement board is authorized to promulgate rules and

regulations for implementation of this subdivision.