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NYS Comptroller

Thomas P. DiNapoli

Alternate Contribution Stabilization Program

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Overview

Legislation enacted as part of the State budget (Chapter 57, Part BB, Laws of 2013) established an alternative to the original Contribution Stabilization Program (CSP) enacted in 2010. Like the original program, the Alternate Contribution Stabilization Program provides short-term cash relief for employers by allowing them to defer payment on a portion of their annual contribution, but then requires repayment with interest beginning the year after amortizing under the program.

Both Contribution Stabilization Programs are optional programs that establish a graded contribution rate system. Participating employers could make a one-time election to enroll in the Alternate Program for any future amortizations that they intended to make during the 2013–2014 billing cycle. Forty-one employers elected to participate in the Alternate Program. This program is closed to new entrants.

The maximum amount an employer can amortize is the difference between the normal annual contribution and the graded contribution. The normal annual contribution is the total bill, excluding payments for deficiency, group life, previous amortizations, incentive costs and prior year’s adjustments.

Participation in the Program

Eligibility was limited to counties, cities, towns, villages, school districts and Boards of Cooperative Educational Services (BOCES), as well as the four hospitals operated by public benefit corporations in Erie, Nassau and Westchester counties. The State could not participate in the Alternate Program.

Employers who elected the Alternate Program after previously being enrolled in the original CSP may not return to the original program; however, they are still required to continue payments on any existing amortizations from the original program.

Important Information

  • In the first years of participation, the Alternate Program allows employers to amortize more than the original program. Each year, the graded rate will change. The new graded rate always moves from the previous graded rate towards the new actuarial rate. The original program graded rate moves by up to 1 percent per year. The Alternate Program graded rate moves by up to 0.5 percent per year. The pace at which the rate declines is slower than it is under the original program.
  • The Alternate Program first applied to the bill that was due on February 1, 2014.
  • Once you amortize, you cannot withdraw from the Alternate Program or return to the original CSP; however, you are not required to amortize every year.
  • You can prepay amortized amounts without penalty.
  • The Alternate Program increases the maximum length of any amortizations from 10 years to 12 years.
  • Under the Alternate Program, employers will pay interest on the amortized amount. The interest rate will be set annually. The interest rate on an amount amortized in a given year will be the interest rate for that year and will be fixed for the duration of that payment period. Amounts amortized in other years will be at the interest rate set for the year of the amortization. The Alternate Program interest rate is comparable to a 12-year US Treasury Bond plus 1 percent.
  • It will be possible for the employer’s average rate to be lower than the graded rate. In this case, employers will be required to pay the graded rate.
  • Any additional contributions you make will first be used to pay off existing amortizations. If all amortizations have been paid, any excess will be deposited into a reserve account as required by the Alternate Program and will be used to offset future increases in contribution rates.
  • The interest rate for repayment of the amounts amortized in Fiscal Year Ending (FYE) 2017 (April 1, 2016 through March 31, 2017) was 2.63 percent over 12 years. The interest rate for repayment of amounts amortized in FYE 2018 (April 1, 2017 through March 31, 2018) is 3.31 percent over 12 years.
System Average Actuarial Rate Original CSP Graded Rate Alternate CSP Graded Rate
Employees’ Retirement System
2013 18.9 11.5 N/A
2014 20.9 12.5 12.0
2015 20.1 13.5 12.0
2016 18.2 14.5 12.5
2017 15.5 15.1 13.0
2018 15.3 14.9 13.5
2019 14.9 14.4 14.0
Police and Fire Retirement System
2013 25.8 19.5 N/A
2014 28.9 20.5 20.0
2015 27.6 21.5 20.0
2016 24.7 22.5 20.5
2017 24.3 23.5 21.0
2018 24.4 24.3 21.5
2019 23.5 23.5 22.0

Under this program, no money is taken from the New York State Common Retirement Fund. In addition, the calculation of future employer contribution rates and the System’s funded ratio are not affected.

While this alternate program provides more upfront cash savings than the original CSP, as actuarial contribution rates decrease, graded rates decrease by only 0.5 percent. More of the savings from the drop in rates will be used to pay off earlier deferrals.

If you have questions about either the Alternate Program or original CSP, please email Employer Services or contact our Billing Unit at 518-486-3921 or 518-474-7573.

(Rev. 10/17)

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