Final Actuarial Audit Reports Submitted by Bolton Partners, Inc. – Actuarial Audit of Employer Contributions for Fiscal Year 2016 (2014 lag valuation)
March 12, 2018
Bolton Partners, Inc. (Bolton) was retained by the Comptroller to serve as the Independent Actuary under Section 96 of the New York City Charter and provide other services related to the review of the funding of the following five actuarial pension funds (collectively NYCRS or the Systems):
- New York City Employees’ Retirement System (NYCERS);
- Teachers’ Retirement System of the City of New York (TRS);
- Board of Education Retirement System of the City of New York (BERS);
- New York City Police Pension Fund (POLICE); and
- New York City Fire Pension Fund (FIRE).
Bolton will conduct two consecutive biennial actuarial engagements, encompassing the following:
- Biennial Contribution Audits of the computed employer contributions for each System in NYCRS for fiscal years 2016 and 2018 (including an audit of actuarial accrued liabilities and actuarial valuation of assets);
- Biennial Experience Studies for the periods ending June 30, 2015 and June 30, 2017, for each System in NYCRS;
- Two Administrative Reviews of the data gathering and maintenance practices of the Office of the Actuary (OA) and each System in NYCRS (one review corresponding with each Contribution Audit); and
- Two Independent Actuarial Statements (one for each engagement); Bolton, as the independent actuarial auditor, will submit a statement that will briefly describe the scope of the entire engagement, will review the entire engagement and comment on the financial condition and financing progress and policies of each System, and certify that the Systems are being funded on a sound actuarial, financial, and legal basis.
This report constitutes the deliverable with respect to the Actuarial Audit of the Employer Contributions for Fiscal Year 2016 and the underlying derivations of valuation assets and liabilities.
The purposes of this audit are to:
- Verify that the employer contributions calculated by the OA are accurate, appropriate and reasonable;
- Verify that the actuarial liabilities and actuarial values of assets have been computed using actuarial assumptions and methods that have been approved by each System’s Board of Trustees and conform to applicable laws and generally accepted Actuarial Standards of Practice;
- Verify that the actuarial software is operating accurately;
- Review methods and assumptions for general reasonableness; and
- Recommend changes that improve the annual valuation calculations.
The Actuarial Contribution Audit provides an independent verification of the computation of employer pension contributions – including the methodologies used therein and their conformity to law and generally accepted actuarial principles – for the fiscal years 2016 and 2018. The Experience Studies review and comment on the continued appropriateness of the actuarial assumptions used in the computations of employer contributions and identify areas where assumptions may be improved. The Administrative Review evaluates the actuarial data gathering process to ensure that the data collection methods produce sufficiently accurate data for valuation and Experience Study purposes. Thus the three components of the assignment provide assurance that:
- Assets and liabilities are calculated accurately, using appropriate actuarial assumptions and methods, and are based on sufficient and accurate census data; and
- Employer contribution amounts are computed in conformity with all applicable financial, actuarial and statutory requirements.