N.Y. Retirement & Social Security Law § 323-a: Statement of intent

§ 323-a. Statement of intent. a. This legislation is intended 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 by means of a comprehensive reform program. 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 contribution. 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 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 three

hundred 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 three hundred seventeen of this article.