- 5 -
On January 1, 1967, as required by the law creating the
State Fund, the liabilities and assets of the City Fund were
transferred to the State Fund.
The State law required each municipality to pay to the State
Fund, either immediately or over time with interest, an amount
equal to its accrued unfunded pension liability, i.e., the
difference between the transferred liabilities and assets. If a
municipality opted to pay that amount over time, the State law,
as originally enacted, required it to pay interest at 4 percent
per annum on the unpaid balance. Subsequent to an amendment to
the State law in 1968, the interest rate charged by the State
Fund has been 4.25 percent per annum.
Petitioner chose to pay the present value of its accrued
unfunded pension liability over time (the City Obligation). It
has never been obligated to make up for any shortfalls or
deviations from the actuarial calculation of its accrued unfunded
pension liability.
The deferred payment option in the original State law
required any amount unpaid as of January 1, 1968, to be paid over
20 years in equal principal installments, i.e., at least 5
percent of the amount unpaid as of January 1, 1968, each year),
together with interest at 4 percent. Principal and interest on
the obligation were payable semiannually on dates to be
determined by the trustees of the State Fund. By State law,
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011