§ 23-A — Statement of intent

§ 23-a. Statement of intent. a. This legislation is intended, by means\nof a comprehensive reform program, to strengthen the long-term fiscal\nhealth of the retirement system, to reduce the volatility of\ncontribution rates and to provide budget certainty for participating\nemployers by addressing current structural problems with respect to the\ncalculation and payment of employer contributions. There is a need to\naddress structural problems in the current billing cycles for the state\nand local governments with respect to their annual contributions to the\nretirement system. The state currently pays its contributions on the\nbasis of estimates, which are subject to adjustment at a later date\n(with interest, if applicable) on the basis of subsequent calculations\nof the required contributions. Local governments must currently adopt\nbudgets based on estimates of the required contributions, but then make\npayment of the full amount of the actual contributions that are finally\nbilled on the basis of subsequent calculations of the required\ncontributions. In addition, dramatic fluctuations in the performance of\nthe investment markets have produced unprecedented volatility in\nemployer contribution rates. These rate fluctuations have been\nexacerbated by the lack of a reasonable minimum payment by employers in\nyears where investment performance was strong and employer rates were\nlow. In order to enhance the continuing ability of the retirement system\nto provide services and benefits for the more than nine hundred forty\nthousand members and retirees and for their beneficiaries, this section\nprovides for measures to (1) enhance the long-term fiscal health of the\nretirement system, (2) facilitate the planning and budgeting of state\nand participating employer contributions, and (3) ease the volatility of\nretirement system employer contribution rates in the future.\n b. Notwithstanding the provisions of this chapter or any other\nprovision of law to the contrary, the comptroller shall have the\nauthority, in his or her discretion, to implement a comprehensive\nstructural reform program, which shall consist of all of the following\nmeasures:\n 1. revision of the schedule pertaining to the valuation, billing and\npayment of contributions by the state and participating employers under\nwhich the valuation of the assets and liabilities of the retirement\nsystem undertaken on the first day of a fiscal year shall be used to\ndetermine the contribution rates to be applied to the pensionable\nsalaries of the state and participating employers earned during such\nfiscal year for the payment of contributions due for the next succeeding\nfiscal year; and\n 2. requiring a minimum annual contribution from the state and every\nparticipating employer (exclusive of payments for group term life\ninsurance, deficiency payments, adjustments relating to prior fiscal\nyears' obligations and obligations pertaining to retirement incentives\nor any other obligations that the state or participating employer is\npermitted to pay on an amortized basis) equal to four and one-half\npercent of pensionable salaries. Effective immediately upon\nimplementation by the comptroller of the comprehensive structural reform\nprogram set forth in this section, and in all subsequent years,\nparticipating employers shall pay either the required annual\ncontribution determined under the revised schedule pertaining to the\nvaluation, billing and payment of contributions pursuant to paragraph\none of this subdivision, or the required minimum annual contribution of\nfour and one-half percent of pensionable salaries, whichever is greater;\nand\n 3. notwithstanding any provision of subdivision a of section sixteen\nof this article to the contrary, upon the comptroller's implementation\nof the measures set forth in this subdivision, all contributions payable\nby the state and participating employers under the valuation, billing\nand payment schedule implemented under paragraph one of this\nsubdivision, including the minimum contribution required by paragraph\ntwo of this subdivision, must be paid in full by the state on or before\nMarch first of the then current fiscal year and by participating\nemployers on the date set forth in subdivision c of section seventeen of\nthis article.\n