Section 13-195.1. Payments to correction officers' variable supplements fund for basis fiscal years related to a payment guarantee

1. (a) Subject to  the provisions of paragraph (b) of this subdivision, for the purposes of
  this section, the definitions of terms set forth in paragraphs (d),  (e)
  and (f) of subdivision one of section 13-195 of this chapter shall apply
  to  this  section  with the same force and effect as if such definitions
  were specifically set forth in this section.
    (b) For the purpose of any determination,  calculation  or  allocation
  under  this  section  with respect to any basis fiscal year related to a
  payment guarantee (as defined in paragraph (a) of subdivision  three  of
  this section):
    (i) the term "base fiscal year" used in paragraphs (d), (e) and (f) of
  subdivision  one  of  section  13-195 of this chapter shall be deemed to
  refer to a basis fiscal year related to a payment guarantee; and
    (ii) the term "transferable earnings", as used  in  paragraph  (f)  of
  subdivision  one  of  section 13-195 of this chapter, shall be deemed to
  refer to a cumulative earnings factor (as defined in  paragraph  (e)  of
  subdivision three of this section), whether such factor is a positive or
  a negative quantity.
    2.  For  the  purposes  of  this section, the definitions set forth in
  paragraphs five, six and seven of subdivision a  of  section  13-232  of
  this title shall apply to this section with the same force and effect as
  if  such  definitions  were  specifically  set  forth  in  this section;
  provided,  however,  that  for  the  purpose   of   any   determination,
  calculation  or  allocation under this section with respect to any basis
  fiscal year related to a payment guarantee (as defined in paragraph  (c)
  of subdivision three of this section):
    (a)  the term "basis fiscal year related to a payment guarantee" shall
  be deemed to be substituted for the term "base fiscal year" set forth in
  paragraphs five, six and seven of subdivision a  of  section  13-232  of
  this title;
    (b)  the  words  "retirement system" shall be deemed to be substituted
  for the words "pension fund" or "fund" set forth in subparagraph (a)  of
  paragraph  five  of subdivision a of section 13-232 of this title and in
  paragraph seven of such subdivision a; and
    (c) the term "assumed rate of interest"  set  forth  in  item  (i)  of
  subparagraph  (d)  of paragraph seven of subdivision a of section 13-232
  of this title shall be deemed to have the meaning set forth in paragraph
  (j) of subdivision three of this section.
    3. For the purposes of this section the following terms shall mean and
  include:
    (a) "Basis fiscal year related to a  payment  guarantee".  Any  fiscal
  year of the city commencing on or after July first of the first calendar
  year covered by a payment guarantee (as defined in paragraph (h) of this
  subdivision).
    (b)  "Prior  basis  fiscal  year  related to a payment guarantee". Any
  fiscal year of the city which begins on or after the July first referred
  to in paragraph (a) of this subdivision and which also precedes a  basis
  fiscal year related to a payment guarantee.
    (c)  "Earnings  differential".  The amount (expressed as a positive or
  negative quantity) by which the equity experience factor (expressed as a
  positive or negative quantity) with respect to  the  basis  fiscal  year
  related  to  a  payment  guarantee  (as defined in paragraph (a) of this
  subdivision) differs  from  the  hypothetical  fixed  income  securities
  earnings  with  respect  to  such  basis  fiscal  year.  If  such equity
  experience  factor  is  greater  than  such  hypothetical  fixed  income
  securities  earnings,  the difference between the two shall be expressed
  as a positive quantity. If such  hypothetical  fixed  income  securities

  earnings  are greater than such equity experience factor, the difference
  between the two shall be expressed as a negative quantity.
    (d)  "Cumulative  earnings  factor  as  of June thirtieth in the first
  calendar year covered by a payment guarantee". (i) An amount,  expressed
  as  a  positive or negative quantity, as the case may be, which shall be
  determined in accordance with the method set  forth  in  the  succeeding
  subparagraphs of this paragraph.
    (ii)(A)  Subject  to  the provisions of item (B) of this subparagraph,
  the cumulative earnings  differential  for  the  base  fiscal  year  (as
  defined  in  paragraph eleven of subdivision a of section 13-232 of this
  title), as made applicable  by  paragraph  (c)  of  subdivision  one  of
  section  13-195  of  this  chapter  to  the base fiscal years defined in
  paragraph (a) of such subdivision one, shall  be  computed  pursuant  to
  such  section  13-195  for  the  base fiscal year (as so defined by such
  paragraph (a)) next preceding July first  of  the  first  calendar  year
  covered  by  a  payment  guarantee  (as defined in paragraph (h) of this
  subdivision).
    (B) In the computation of the  cumulative  earnings  differential  for
  such next preceding base fiscal year as provided for in item (A) of this
  subparagraph,  computations for such next preceding base fiscal year and
  each preceding base fiscal year shall be made  in  compliance  with  the
  applicable  provisions  of  subdivision  three of section 13-195 of this
  chapter.
    (iii) The cumulative distributions of transferable earnings for  prior
  base  fiscal years (as defined in paragraph thirteen of subdivision a of
  section 13-232 of this chapter)  shall  be  computed  pursuant  to  such
  section  13-232  and section 13-195 of this chapter with respect to such
  base fiscal year next preceding July first of the  first  calendar  year
  covered by a payment guarantee.
    (iv)  The amount of transferable earnings (as defined in paragraph (c)
  of subdivision one of section 13-195 of this chapter), if any, for  such
  fiscal  year  next  preceding  such July first, determined in accordance
  with the applicable provisions of  subdivision  three  of  such  section
  13-195,  shall  be added to the cumulative distributions of transferable
  earnings computed pursuant to subparagraph (iii) of this paragraph.
    (v) The sum resulting from the  addition  prescribed  by  subparagraph
  (iv)  of  this  paragraph  shall  be subtracted from the amount computed
  pursuant to subparagraph (ii) of this paragraph. The remainder resulting
  from the subtraction shall be the cumulative earnings factor as of  June
  thirtieth in the first calendar year covered by a payment guarantee.
    (e)  "Cumulative  earnings factor". (i) The cumulative earnings factor
  for any basis fiscal year related to a payment guarantee (as defined  in
  paragraph (a) of this subdivision) shall be determined as follows:
    (A)  If  the  cumulative earnings factor for the immediately preceding
  basis fiscal  year  related  to  a  payment  guarantee  was  a  positive
  quantity,  the  cumulative  earnings  factor  for  the basis fiscal year
  related  to  a  payment  guarantee  shall  be  equal  to  the   earnings
  differential for such basis fiscal year related to a payment guarantee.
    (B)  If  the  cumulative earnings factor for the immediately preceding
  basis fiscal  year  related  to  a  payment  guarantee  was  a  negative
  quantity,  the  cumulative  earnings  factor  for  the basis fiscal year
  related to a payment guarantee shall be equal to the sum of:
    (1) the earnings differential for the basis fiscal year related  to  a
  payment guarantee; and
    (2) the cumulative earnings factor for the immediately preceding basis
  fiscal year related to a payment guarantee, increased with interest at a
  rate  equal to the assumed rate of interest (as defined in paragraph (j)
  of this subdivision) with respect to such basis fiscal year related to a

  payment guarantee for  which  a  cumulative  earnings  factor  is  being
  determined pursuant to this paragraph.
    (ii)  In applying the provisions of this paragraph for the first basis
  fiscal year related to a payment guarantee (as defined in paragraph  (a)
  of  this  subdivision),  the  term  defined  in  paragraph  (d)  of this
  subdivision as "cumulative earnings factor as of June thirtieth  in  the
  first calendar year covered by a payment guarantee" shall be substituted
  for  the  term "cumulative earnings factor for the immediately preceding
  basis fiscal year related to a payment guarantee".
    (f) "COVSF cumulative earnings factor".  With  respect  to  any  basis
  fiscal  year related to a payment guarantee (as defined in paragraph (a)
  of this  subdivision),  the  amount  equal  to  the  allocation  to  the
  correction  officers'  variable supplements fund (as determined pursuant
  to the provisions of paragraph (f) of subdivision one of section  13-195
  of  this  chapter, as made applicable to this section by subdivision one
  of this section), for such  basis  fiscal  year  related  to  a  payment
  guarantee.
    (g)  "COVSF  unfunded  accrued  liability".  In  any  case  where  the
  valuation of assets and liabilities of the correction officers' variable
  supplements fund by the actuary pursuant to paragraph (h) of subdivision
  three of section 13-194 of this chapter shows that for any basis  fiscal
  year  related  to  a  payment  guarantee,  such  liabilities exceed such
  assets, the term "COVSF  unfunded  accrued  liability"  shall  mean  the
  amount  of the excess of such liabilities over the amount of such assets
  for such basis fiscal year.
    (h) "Calendar year covered by a payment guarantee". The calendar  year
  in  which  a  guarantee  by  the city of payment of variable supplements
  first takes effect  pursuant  to  paragraph  (f)  or  paragraph  (g)  of
  subdivision  three  of section 13-194 of this chapter and any succeeding
  calendar year.
    (i) "Current fiscal year related to a payment guarantee".  The  fiscal
  year  of  the  city  next  succeeding  a  basis fiscal year related to a
  payment guarantee (as defined in paragraph (a) of this subdivision).
    (j) "Assumed rate of interest". The rate  of  interest  equal  to  one
  hundred  fifteen  percent  of  the  average  of monthly, ten-year United
  States  treasury  note  yields  as  published  in  the  Federal  Reserve
  Statistical  Bulletin  H.15  or  any successor publication. In the event
  that ten-year United States  treasury  note  yields  are  no  longer  so
  published, then a comparable bond yield will be used.
    4.  As  soon  as practicable after the close of each basis fiscal year
  related  to  a  payment  guarantee  (as  defined  in  paragraph  (a)  of
  subdivision  three  of  this  section),  but  not  later  than  December
  thirty-first of the current fiscal year related to a  payment  guarantee
  (as  defined in paragraph (i) of subdivision three of this section), the
  board of trustees of the  retirement  system  shall  compute  the  COVSF
  cumulative  earnings  factor (as defined in paragraph (f) of subdivision
  three of this section) with respect to such basis fiscal year.
    5. If the COVSF cumulative earnings factor for such basis fiscal  year
  is  a  positive  quantity,  the retirement system, on or before December
  thirty-first of the current fiscal year related to a payment  guarantee,
  shall  pay  from its contingent reserve fund to the correction officers'
  variable supplements fund, as the payment due for such basis fiscal year
  under this section, an amount determined pursuant to the  provisions  of
  subdivision six of this section.
    6.  The  amount  payable for such basis fiscal year as provided for in
  subdivision five of this section shall be the lesser of  (a)  the  COVSF
  cumulative  earnings  factor  for  such basis fiscal year referred to in
  such subdivision five or (b) the COVSF unfunded  accrued  liability  (as

  defined  in paragraph (g) of subdivision three of this section) for such
  basis fiscal year.
    7.  No amount shall be due from or payable by the retirement system to
  such variable supplements fund under this section for any  basis  fiscal
  year  related  to  a  payment  guarantee  which  shall  exceed the COVSF
  unfunded accrued liability for such basis fiscal year, regardless of the
  amount and character of the COVSF cumulative earnings  factor  for  such
  basis fiscal year.
    8.  The  comptroller  shall  furnish  to  the board of trustees of the
  retirement system such information and data as it may  request  for  the
  purpose of carrying out the provisions of this section.