N.Y. Retirement & Social Security Law § 23-a: Statement of intent

§ 23-a. Statement of intent. a. This legislation is intended, by means

of a comprehensive reform program, to strengthen the long-term fiscal

health of the retirement system, to reduce the volatility of

contribution rates and to provide budget certainty for participating

employers by addressing current structural problems with respect to the

calculation and payment of employer contributions. There is a need to

address structural problems in the current billing cycles for the state

and local governments with respect to their annual contributions to the

retirement system. The state currently pays its contributions on the

basis of estimates, which are subject to adjustment at a later date

(with interest, if applicable) on the basis of subsequent calculations

of the required contributions. Local governments must currently adopt

budgets based on estimates of the required contributions, but then make

payment of the full amount of the actual contributions that are finally

billed on the basis of subsequent calculations of the required

contributions. In addition, dramatic fluctuations in the performance of

the investment markets have produced unprecedented volatility in

employer contribution rates. These rate fluctuations have been

exacerbated by the lack of a reasonable minimum payment by employers in

years where investment performance was strong and employer rates were

low. In order to enhance the continuing ability of the retirement system

to provide services and benefits for the more than nine hundred forty

thousand members and retirees and for their beneficiaries, this section

provides for measures to (1) enhance the long-term fiscal health of the

retirement system, (2) facilitate the planning and budgeting of state

and participating employer contributions, and (3) ease the volatility of

retirement system employer contribution rates in the future.

b. Notwithstanding the provisions of this chapter or any other

provision of law to the contrary, the comptroller shall have the

authority, in his or her discretion, to implement a comprehensive

structural reform program, which shall consist of all of the following

measures:

1. revision of the schedule pertaining to the valuation, billing and

payment of contributions by the state and participating employers under

which the valuation of the assets and liabilities of the retirement

system undertaken on the first day of a fiscal year shall be used to

determine the contribution rates to be applied to the pensionable

salaries of the state and participating employers earned during such

fiscal year for the payment of contributions due for the next succeeding

fiscal year; and

2. requiring a minimum annual contribution from the state and every

participating employer (exclusive of 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 the state or participating employer is

permitted to pay on an amortized basis) equal to four and one-half

percent of pensionable salaries. Effective immediately upon

implementation by the comptroller of the comprehensive structural reform

program set forth in this section, and in all subsequent years,

participating employers shall pay either the required annual

contribution determined under the revised schedule pertaining to the

valuation, billing and payment of contributions pursuant to paragraph

one of this subdivision, or the required minimum annual contribution of

four and one-half percent of pensionable salaries, whichever is greater;

and

3. notwithstanding any provision of subdivision a of section sixteen

of this article to the contrary, upon the comptroller's implementation

of the measures set forth in this subdivision, all contributions payable

by the state and participating employers under the valuation, billing

and payment schedule implemented under paragraph one of this

subdivision, including the minimum contribution required by paragraph

two of this subdivision, must be paid in full by the state on or before

March first of the then current fiscal year and by participating

employers on the date set forth in subdivision c of section seventeen of

this article.