Final Actuarial Audit Reports Submitted by Bolton Partners, Inc. – Independent Actuary’s Statement

Transmittal Letter

The Honorable Scott M. Stringer
New York City Comptroller
Office of the New York City Comptroller
One Centre Street
New York, NY 10007

Re:   Independent Actuary’s Certification Regarding the Funding of the Five Actuarially-Funded New York City Retirement Systems 

Dear Comptroller Stringer:

Bolton Partners, Inc. is pleased to present our Independent Actuarial Certification.  This is one of the deliverables under our second biennial engagement to serve as Independent Actuary under Section 96 of the New York City Charter.  Bolton Partners was hired by the New York City Comptroller’s Office to perform an actuarial audit of the following five New York City Retirement Systems (NYCRS):

• 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);
• New York City Fire Pension Fund (FIRE).

Our second engagement encompasses the following:

• Contribution Audits of the computed employer contributions for each System in NYCRS for fiscal year 2018 (including an audit of actuarial accrued liabilities and actuarial valuation of assets);
• Experience Studies for the 4-year and 10-year periods ending June 30, 2017, for each System in NYCRS;
• An Administrative Review of the data gathering and maintenance practices of the Office of the Actuary (OA) and each System in NYCRS; and
• An Independent Actuarial Statement: Bolton Partners, 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 sound actuarial, financial, and legal bases.

This report constitutes the deliverable with respect to the Independent Actuarial Statement for the second engagement. The purpose of this report is to:

• Summarize the findings from the Contribution Audit, the Experience Study and the Administrative Review from the second engagement; and
• Provide each System with a certification of the findings of the second engagement.

The Comptroller’s Office also asked us to provide recommendations for changes in the audit process, so as to make the audit more useful and to streamline the work.  We have addressed our thoughts on this issue at the end of the Summary of Conclusions section below.

A separate certification is provided for each plan.  These certifications cover:

• An affirmative statement as to the independence of the actuary,
• Summary of findings from the Contribution Audit, the Experience Study and the Administrative Review,
• Review of the financial objectives and soundness of each plan,
• Assessment regarding the overall quality of valuation data,
• Evaluation of the appropriateness of actuarial assumptions and methods,
• Assessment of the adequacy of the employer contributions to each system,
• Summary of our recommended changes in general and for each system, based on the three major project components, and
• Estimated cost impact of our