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, for up to twelve years.
Both Contribution Stabilization Programs are optional programs that establish a graded contribution rate system. Employers who wished to participate in the Alternate Program were required to make a one-time election to enroll during the 2013–2014 billing cycle. Forty-one employers elected to participate in the Alternate Program for any future amortizations that they intended to make.
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.
This program is closed to new entrants. 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.
If you elected to participate in the Alternate Program during the one-time election period, you can view the payment schedules of any outstanding amortizations in Retirement Online. Sign in to your Retirement Online account. From your Account Homepage, click the “Access Billing Dashboard” button. After choosing your location code and retirement system (ERS or PFRS), click the ‘Amortization Schedule Review’ link on the Billing Dashboard.
You will be able to search for a specific amortization or view a list of all amortizations. If you click on an amortization in the search results list, you will see details associated with that amortization, including the effective date, maturity date, interest rate, payment amount and payment schedule.
You can save on interest costs by paying off amortizations ahead of schedule. To calculate a payoff amount for any amortization based on a payment date of your choice, from the Billing Dashboard, click the ‘Amortization Payoff Calculator’ link, then click the “Search” button. In the list of search results, click the amortization you want to pay off. Next, enter your preferred payoff date in the Payment Date field and click the “Calculate Payoff” button.
If you plan to pay off an amortization, please notify us in advance so we can identify your payment and post it to the proper amortization. You can use our help desk form select “Employer Billing” from the dropdown) or call 866-805-0990 and press 1, then 6.
The Alternate Program is only one type of amortization you can view in Retirement Online. Other types are:
- Original Contribution Stabilization Program (CSP): amortizations of annual contributions by employers who elected to participate in the original program.
- Deficiency: a 25-year amortization required of new participating employers. Deficiencies cover the cost of benefits for employees who were on the payroll before the employer participated.
- Incentives: amortizations of costs to participate in an incentive. Generally, employers can elect to participate in an incentive if one is offered and can choose to amortize the cost or pay the full amount.
- Past Service Costs: costs associated with adopting a new retirement plan or option. The employer can choose to pay the cost in a lump sum or amortize.
- Special Legislation: Generally, employers can choose to pay any cost in a lump sum or amortize. The legislation defines the amortization period, which is usually five or ten years.
- In the first years of participation, the Alternate Program allowed employers to amortize more than the original program. Each year, the graded rate changes. The new graded rate always moves from the previous graded rate towards the new system average actuarial rate. The pace at which the graded rate increases or decreases is slower under the Alternate program than it is under the original CSP. The original CSP 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 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 do not have to amortize each year and you can choose to amortize less than the maximum amount allowed.
- 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 pay interest on the amortized amount. The interest rate is 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, and is usually higher than the interest rate for the CSP.
- 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 amounts amortized in fiscal year end 2022 — the invoice provided in November 2021, for payment due by February 1, 2022 — is 2.24 percent over 12 years.
|Fiscal Year End||System Average
|Employees’ Retirement System|
|Police and Fire Retirement System|
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 the 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 the original CSP, please use our help desk form (select “Employer Billing” from the dropdown) or call 866-805-0990 and press 1, then 6.