Final Actuarial Audit Reports Submitted by Gabriel Roeder Smith & Co. – Actuarial Audit of Employer Contributions for Fiscal Year 2012 (2010 lag valuation)

New York City Retirement Systems Actuarial Audit of Fiscal Year 2012 (June 30, 2010 Lag Valuation) Employer Contributions October, 2014

EXECUTIVE SUMMARY

Background

Gabriel, Roeder, Smith & Company (GRS) was retained by the Comptroller to serve as 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)
•  New York Fire Department Pension Fund (FIRE)

GRS 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 2012 and 2014 (including an audit of actuarial accrued liabilities and actuarial valuation of assets);
• Biennial Experience Studies for the periods ending June 30, 2011 and June 30, 2013, 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); GRS, 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 2012 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.