N.Y. Retirement & Social Security Law § 19-a: Employer contributions for the two thousand ten - two thousand eleven fiscal year and subsequent fiscal years

§ 19-a. Employer contributions for the two thousand ten - two thousand

eleven fiscal year and subsequent fiscal years. a. In addition to the

definitions in section two of this article, when used in this section:

(1) "Amortizing employer" shall mean an employer that elects to

amortize a portion of the employer's annual bill pursuant to paragraph

one of subdivision d of this section for the two thousand ten - two

thousand eleven fiscal year, or any subsequent fiscal year, pursuant to

the system graded contribution rate regardless of whether the employer

has subsequently paid in full all such amortized amounts, and that does

not elect to amortize as an alternative amortizing employer for the two

thousand thirteen - two thousand fourteen fiscal year.

(1-a) "Alternative amortizing employer" shall mean a county, city,

town, village, school district, board of cooperative educational

services, or public benefit corporation that operates a public general

hospital located in the county of Westchester, the county of Erie, or

the county of Nassau that, on a form prepared by the comptroller, elects

to and does amortize a portion of the employer's annual bill pursuant to

paragraph one of subdivision d of this section for the two thousand

thirteen - two thousand fourteen fiscal year pursuant to the alternative

system graded contribution rate, regardless of whether the employer has

subsequently paid in full all such amortized amounts.

(2) "Amount eligible for amortization" for a given fiscal year shall

mean the amount by which an employer's actuarial contribution for such

fiscal year exceeds the employer's graded contribution for the same

fiscal year, less any amount from the employer contribution reserve fund

applied to reduce the employer's payment to the retirement system for

the fiscal year, provided, however, that if the employer's average

actuarial contribution rate for the fiscal year is less than nine and

one-half percent, then the amount eligible for amortization shall be

zero.

(3) "Employer's actuarial contribution" for a given fiscal year shall

mean an employer's annual bill for such fiscal year exclusive of

deficiency contributions and payments on account of group term life

insurance, adjustments relating to prior fiscal years' obligations,

retirement incentives and prior amortizations.

(4) "Employer's annual bill" shall mean for a given fiscal year the

sum of the following amounts: (i) an employer's normal contributions for

the fiscal year determined in accordance with paragraph one of

subdivision b of section twenty-three of this article and the

comprehensive structural reform program implemented pursuant to

subdivision b of section twenty-three-a of this article, including the

provisions of subdivision b of section twenty-three-a of this article

relating to the required minimum annual contribution of four and

one-half percent of pensionable salaries; (ii) the employer's deficiency

contributions and administration contributions for the fiscal year

determined in accordance with paragraphs two and three of subdivision b

of section twenty-three of this article; and (iii) any payments by the

employer due in the fiscal year on account of group term life insurance,

adjustments relating to prior fiscal years' obligations, retirement

incentives and prior amortizations.

(5) "Employer's average actuarial contribution rate" for a given

fiscal year shall mean an employer's actuarial contribution for such

fiscal year divided by the employer's payroll for the previous fiscal

year.

(6) "Employer contribution reserve fund" or "fund" shall mean the

employer contribution reserve fund established pursuant to subdivision e

of this section.

(7) "Employer's graded contribution" for a given fiscal year shall

mean the amount determined by applying the employer's graded

contribution rate or the alternative system graded contribution rate for

such fiscal year to an employer's payroll for the previous fiscal year.

(8) "Employer's graded payment" for a given fiscal year shall mean the

amount by which an employer's graded contribution for such fiscal year

exceeds the employer's actuarial contribution for the same fiscal year.

(9) "Prior amortization" shall mean with respect to a given fiscal

year any payment due in such fiscal year on account of an obligation

from a prior fiscal year that an employer is permitted to pay to the

retirement system on an amortized basis.

(10) "System average actuarial contribution rate" for a given fiscal

year shall mean the sum of all employers' actuarial contributions for

such fiscal year divided by the sum of all employers' payroll for the

previous fiscal year.

(11) "System graded contribution rate" for a given fiscal year shall

mean the graded contribution rate for the retirement system as a whole

determined for such fiscal year pursuant to subdivision c of this

section.

(12) "Alternative system graded contribution rate" for a given fiscal

year shall mean the graded contribution rate for the retirement system

as a whole determined for such fiscal year pursuant to subdivision c-1

of this section.

(13) "Employer's graded contribution rate" for a given fiscal year

shall mean (i) the system graded contribution rate for such fiscal year,

or (ii) in the case of an individual employer for which a graded

contribution rate has been determined pursuant to paragraph three of

subdivision c of this section, the graded contribution rate for the

individual employer for such fiscal year.

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

the contrary, the comptroller, in his or her discretion, shall have

authority to implement this section. If the comptroller elects to

implement this section, the provisions of this section shall apply to

the payment of employer contributions for the fiscal year commencing on

April first, two thousand ten, and for subsequent fiscal years. If the

comptroller, within his or her discretion, elects to implement the

alternative system graded contribution rate as provided by subdivision

c-1 of this section, the provisions of paragraph one-a of subdivision d

of this section shall apply to the payment of employer contributions for

the fiscal year commencing on April first, two thousand thirteen, and

for subsequent fiscal years.

c. For each fiscal year to which the provisions of this section apply,

the comptroller shall determine a graded contribution rate for the

retirement system as a whole in the manner provided in this subdivision.

(1) For the two thousand ten - two thousand eleven fiscal year the

system graded contribution rate shall be nine and one-half percent.

(2) For the two thousand eleven - two thousand twelve fiscal year, and

subsequent fiscal years, system graded contribution rates shall be

determined as follows:

(i) if the system average actuarial contribution rate for a given

fiscal year is at least nine and one-half percent and exceeds the system

graded contribution rate for the immediately preceding fiscal year by

more than one percentage point, then the system graded contribution rate

for the given fiscal year shall equal the system graded contribution

rate for the immediately preceding fiscal year plus one percentage

point, provided, however, that in no event shall the system graded

contribution rate be less than nine and one-half percent;

(ii) if the system average actuarial contribution rate for a given

fiscal year is at least nine and one-half percent and either equals the

system graded contribution rate for the immediately preceding fiscal

year or exceeds the system graded contribution rate for the immediately

preceding fiscal year by one percentage point or less, then the system

graded contribution rate for the given fiscal year shall equal the

system average actuarial contribution rate for such fiscal year,

provided, however, that in no event shall the system graded contribution

rate be less than nine and one-half percent;

(iii) if the system average actuarial contribution rate for a given

fiscal year is less than nine and one-half percent and greater than the

system graded contribution rate for the immediately preceding fiscal

year, then the system graded contribution rate for the given fiscal year

shall equal the system actuarial contribution rate for such fiscal year;

(iv) if the system average actuarial contribution rate for a given

fiscal year is smaller than the system graded contribution rate for the

immediately preceding fiscal year by more than one percentage point,

then the system graded contribution rate for the given fiscal year shall

equal the system graded contribution rate for the immediately preceding

fiscal year minus one percentage point; and

(v) if the system average actuarial contribution rate for a given

fiscal year either equals the system graded contribution rate for the

immediately preceding fiscal year or is smaller than the system graded

contribution rate for the immediately preceding fiscal year by one

percentage point or less, then the system graded contribution rate for

the given fiscal year shall equal the system actuarial contribution rate

for such fiscal year.

(3) The comptroller shall determine a graded contribution rate for

individual employers as provided in this paragraph. The graded

contribution rate for an individual employer is the product of the

system's graded contribution rate with the ratio of the employer's

average actuarial contribution rate to the system's average actuarial

contribution rate, not to exceed one hundred percent of the system's

graded contribution rate.

c-1. For each fiscal year to which the provisions of this section

apply, the comptroller shall determine an alternative system graded

contribution rate for the retirement system as a whole in the manner

provided in this subdivision.

(1) For the two thousand thirteen - two thousand fourteen fiscal year

and the two thousand fourteen - two thousand fifteen fiscal year, the

alternative system graded contribution rate shall be twelve percent.

(2) For the two thousand fifteen - two thousand sixteen fiscal year

and for subsequent fiscal years, the alternative system graded

contribution rates shall be determined as follows:

(i) if the system average actuarial contribution rate for a given

fiscal year is at least nine and one-half percent and exceeds the

alternative system graded contribution rate for the immediately

preceding fiscal year by more than one-half percentage point, then the

alternative system graded contribution rate for the given fiscal year

shall equal the alternative system graded contribution rate for the

immediately preceding fiscal year plus one-half percentage point,

provided, however, that in no event shall the alternative system graded

contribution rate be less than nine and one-half percent;

(ii) if the system average actuarial contribution rate for a given

fiscal year is at least nine and one-half percent and either equals the

alternative system graded contribution rate for the immediately

preceding fiscal year or exceeds the alternative system graded

contribution rate for the immediately preceding fiscal year by one-half

percentage point or less, then the alternative system graded

contribution rate for the given fiscal year shall equal the system

average actuarial contribution rate for such fiscal year, provided,

however, that in no event shall the alternative system graded

contribution rate be less than nine and one-half percent;

(iii) if the system average actuarial contribution rate for a given

fiscal year is less than nine and one-half percent and greater than the

alternative system graded contribution rate for the immediately

preceding fiscal year, then the alternative system graded contribution

rate for the given fiscal year shall equal the system actuarial

contribution rate for such fiscal year;

(iv) if the system average actuarial contribution rate for a given

fiscal year is smaller than the alternative system graded contribution

rate for the immediately preceding fiscal year by more than one-half

percentage point, then the alternative system graded contribution rate

for the given fiscal year shall equal the alternative system graded

contribution rate for the immediately preceding fiscal year minus

one-half percentage point; and

(v) if the system average actuarial contribution rate for a given

fiscal year either equals the alternative system graded contribution

rate for the immediately preceding fiscal year or is smaller than the

alternative system graded contribution rate for the immediately

preceding fiscal year by one-half percentage point or less, then the

alternative system graded contribution rate for the given fiscal year

shall equal the system actuarial contribution rate for such fiscal year.

d. (1) For any given fiscal year for which an employer's average

actuarial contribution rate exceeds the employer graded contribution

rate, the employer shall pay to the retirement system an amount equal to

the employer's annual bill for such year or, in lieu of paying the

entire annual bill, the employer may pay an amount equal to the

employer's annual bill less all or a portion of the employer's amount

eligible for amortization for the fiscal year. If in accordance with

this paragraph the employer's payment to the retirement system is less

than the entire amount of the employer's annual bill, then the

difference between the employer's annual bill, and the amount actually

paid by the employer to the retirement system exclusive of any amount

from the employer contribution reserve fund applied to reduce the

employer's payment, shall be the amount amortized for the fiscal year.

The amount amortized for the fiscal year shall be paid to the retirement

system in equal annual installments over a ten-year period, with

interest on the unpaid balance at a rate determined by the comptroller

which approximates a market rate of return on taxable fixed rate

securities with similar terms issued by comparable issuers, and with the

first installment due in the immediately succeeding fiscal year.

Provided however that, notwithstanding any provision of law to the

contrary and at the sole discretion of the director of the division of

the budget, the state as an amortizing employer may prepay to the

retirement system the total amount of principal due for any such annual

installment or installments for a given fiscal year prior to the

expiration of the ten-year amortization period. In the event the state

elects to make such prepayment, the director of the division of budget

must identify the fiscal year or years for which the total principal

amount due for the annual installment is being prepaid. In any fiscal

year for which the director of the division of the budget identifies

such prepayment is being made, the state (i) shall not be required to

make a payment of principal to the retirement system for such fiscal

year, and (ii) shall pay to the retirement system annual interest on the

remaining principal balance at the rate originally set by the

comptroller when the state first elected to amortize in accordance with

this paragraph. Nothing contained herein shall permit the state to

extend the amortization period originally established in accordance with

this paragraph beyond the original ten-year amortization period.

(1-a) For any given fiscal year for which an employer's average

actuarial contribution rate exceeds the alternative system graded

contribution rate, the employer shall pay to the retirement system an

amount equal to the employer's annual bill for such year or, in lieu of

paying the entire annual bill, the employer may pay an amount equal to

the employer's annual bill less all or a portion of the employer's

amount eligible for amortization for the fiscal year. If in accordance

with this paragraph the employer's payment to the retirement system is

less than the entire amount of the employer's annual bill, then the

difference between the employer's annual bill, and the amount actually

paid by the employer to the retirement system exclusive of any amount

from the employer contribution reserve fund applied to reduce the

employer's payment, shall be the amount amortized for the fiscal year.

The amount amortized for the fiscal year shall be paid to the retirement

system in equal annual installments over a twelve year period, with

interest on the unpaid balance at a rate determined by the comptroller

which shall be the twelve year interpolated rate based on the most

recently published yield to maturity of a ten year and twenty year U.S.

Treasury Security plus one hundred basis points.

(2) For any given fiscal year for which the employer graded

contribution rate equals or exceeds an amortizing employer's average

actuarial contribution rate, the amortizing employer shall pay to the

retirement system an amount equal to the employer's annual bill for such

year plus the employer's graded payment for the fiscal year.

(i) If the amortizing employer's annual bill for the fiscal year does

not include an amount attributable to a prior amortization, then the

employer's graded payment shall be paid into the employer contribution

reserve fund provided for in subdivision e of this section and credited

to an account within such fund established for the employer.

(ii) If the amortizing employer's annual bill for the fiscal year

includes an amount attributable to a prior amortization, the employer's

graded payment shall be used first to eliminate the amount of the

employer's unpaid prior amortization balances in chronological order

starting with the oldest prior amortization balance. When in any fiscal

year the employer's graded payment eliminates all balances owed on the

employer's prior amortizations, any remaining portion of the employer's

graded payment for such fiscal year, and the employer's graded payment

in any subsequent fiscal year in which the amortizing employer has no

unpaid prior amortizations, shall be paid into the employer contribution

reserve fund provided for in subdivision e of this section and credited

to an account within such fund established for the employer.

(2-a) For any given fiscal year for which the alternative system

graded contribution rate equals or exceeds an alternative amortizing

employer's average actuarial contribution rate, the alternative

amortizing employer shall pay to the retirement system an amount equal

to the employer's annual bill for such year plus the employer's graded

payment for the fiscal year.

(i) If the alternative amortizing employer's annual bill for the

fiscal year does not include an amount attributable to a prior

amortization, then the employer's graded payment shall be paid into the

employer contribution reserve fund provided for in subdivision e of this

section and credited to an account within such fund established for the

employer.

(ii) If the alternative amortizing employer's annual bill for the

fiscal year includes an amount attributable to a prior amortization, the

employer's graded payment shall be used first to eliminate the amount of

the employer's unpaid prior amortization balances in chronological order

starting with the oldest prior amortization balance. When in any fiscal

year the employer's graded payment eliminates all balances owed on the

employer's prior amortizations, any remaining portion of the employer's

graded payment for such fiscal year, and the employer's graded payment

in any subsequent fiscal year in which the amortizing employer has no

unpaid prior amortizations, shall be paid into the employer contribution

reserve fund provided for in subdivision e of this section and credited

to an account within such fund established for the employer.

(3) Nothing in this subdivision shall be construed as prohibiting an

employer from pre-paying any prior amortization.

e. (1) Notwithstanding any law to the contrary, there shall be

maintained separate and apart from the other funds of the retirement

system an employer contribution reserve fund, the assets of which shall

not be used or invested in a manner contrary to the provisions of this

subdivision. The fund shall consist of all employer contributions

required to be deposited into the fund pursuant to subdivision d of this

section. Within such fund there shall be a separate account for each

employer making such contributions and payments.

(2) For any given fiscal year for which (i) the system actuarial

contribution rate exceeds nine and one-half percent of payroll as of the

end of the previous fiscal year, and (ii) an employer's average

actuarial contribution rate exceeds the employer's graded contribution

rate or the alternative employer's graded contribution rate, the balance

in the employer's account within such fund shall be applied to reduce

the employer's payment to the retirement system for such fiscal year in

an amount not to exceed the difference between the employer's actuarial

contribution and the employer's graded contribution for the fiscal year.

(3) Notwithstanding the provisions of paragraph two of this

subdivision, if at the close of any given fiscal year the balance of an

employer's account within the fund exceeds the employer's actuarial

contribution for the previous fiscal year, no graded payment shall be

required or allowed.

(4) The assets of the fund shall be invested in only the following

types of investments:

(i) obligations of the United States of America or in obligations

guaranteed by agencies of the United States of America where the payment

of principal and interest are guaranteed by the United States of America

or in obligations of the state of New York;

(ii) general obligation bonds and notes of any state other than this

state, provided that such bonds and notes receive the highest rating of

at least one independent rating agency;

(iii) obligations of, or instruments issued by or fully guaranteed as

to principal and interest by, any agency or instrumentality of the

United States acting pursuant to a grant of authority from the congress

of the United States, including, but not limited to, any federal home

loan bank or banks, the Tennessee valley authority, the federal national

mortgage association, the federal home loan mortgage corporation and the

United States postal service;

(iv) certificate of deposits that are fully secured by the issuer by

depositing with the comptroller direct or indirect obligations of the

United States or its agencies or a letter of credit issued by the

Federal Home Loan Bank; and

(v) obligations of any corporation organized under the laws of any

state in the United States maturing within two hundred seventy days

provided that such obligations receive the highest rating of two

independent rating services designated by the comptroller.

(5) At the close of each fiscal year, the amount of interest and

earnings attributable to each employer's account shall be computed by

the actuary and certified to the comptroller, who shall thereupon credit

each employer's account in accordance therewith.

(6) The assets of the fund shall be excluded from the annual valuation

of the assets and liabilities of the funds of the retirement system

required by section eleven of this title. The assets of the fund shall

not be used to finance increases in pension benefits.

f. (1) An amortizing employer may elect to terminate participation in

the contribution stabilization program provided that such employer shall

have paid in full all such prior year amortization amounts including

interest as determined by the comptroller. Furthermore, any amortizing

employer that has terminated participation in the contribution

stabilization program may re-enter the program in a year in which the

employer is eligible to amortize and their employer contribution reserve

fund has been depleted.

(2) An alternative amortizing employer may elect to terminate

participation in the alternative contribution stabilization program

provided that such employer shall have paid in full all such prior year

amortization amounts including interest as determined by the

comptroller. Furthermore, any alternative amortizing employer that has

terminated participation in the alternative contribution stabilization

program may not re-enter the alternative contribution stabilization

program; provided, however, such employer may enter the regular

contribution stabilization program as set forth in paragraph one of this

subdivision.

(3) In order to terminate participation in the contribution

stabilization or alternative contribution stabilization program, such

employer must file an election on a form prescribed by the comptroller.

Such election is subject to review and approval by the comptroller.

(4) Termination shall take effect for the fiscal year billing cycle

following the fiscal year of approval. An employer who has been approved

to terminate from the contribution stabilization or alternative

contribution stabilization program pursuant to this section shall not be

required to make a graded payment starting in the following fiscal year

billing cycle.

(5) In the event an employer in the contribution stabilization program

or alternative contribution stabilization program terminates

participation pursuant to this section, any such balance in their

employer contribution reserve fund shall be applied to the employer's

annual bill in the maximum amount permitted under paragraph two of

subdivision e of this section, for the following fiscal year and

continue to be applied to future annual bills until the reserve fund is

depleted.