Section 323. Employers' contributions and their use; pension accumulation fund

a. Except as otherwise provided  pursuant  to  this  article,  the
  pension   accumulation  fund  shall  be  the  fund  in  which  shall  be
  accumulated:
    1. All contributions made by employers, and
    2. All income received from the investments  of  the  policemen's  and
  firemen's retirement system, and
    3.  All  monies  received  from  all  other  sources and which are not
  required to be credited to any other fund.
    b. Each employer shall make two contributions annually. They shall  be
  known  as  the  normal  contribution  as  defined in subparagraph (a) of
  paragraph one of this subdivision and  the  deficiency  contribution  as
  defined in paragraph two of this subdivision. The rates thereof shall be
  computed by the actuary.
    1.  (a)  Normal  contribution.  The rate of such contribution shall be
  applied to the members' annual compensation as of the end of the  fiscal
  year.  Such  rate  shall  be  a  uniform and constant rate per centum of
  annual compensation when determined by dividing the valuation  costs  by
  the  payroll amount used in the valuation. Notwithstanding any provision
  of law to the contrary, the valuation costs consist of:
    (i) the normal cost, which shall be the actuarial present value of the
  employer provided benefits accrued  during  the  year,  based  upon  the
  projected  future  salary  on which benefits are expected to be paid, by
  prorating each employee's projected benefit over his or her total  years
  of service;
    (ii)  the  supplemental  cost,  which  shall  be the cost of providing
  supplemental retirement allowance payments pursuant to subdivision e  of
  section three hundred seventy-eight of this article;
    (iii)  the  administrative  cost,  which  shall be the expenses of the
  retirement system pursuant to paragraph three of subdivision b  of  this
  section;
    (iv)  the  prior service cost, which shall be equal to the interest on
  the unfunded actuarial accrued liability or surplus plus  a  portion  of
  the  unfunded  liability  or  surplus,  said  portion to be equal to the
  unfunded liability or surplus divided by the  average  future  years  of
  service of active employees; and
    (v)  the  annual amortization cost, which shall be equal to the amount
  of the annual amortization payment required to be paid into the system's
  pension accumulation fund under  section  three  hundred  sixteen-a  and
  three hundred seventeen-a of this article.
    Provided,  however,  in no event shall the amount of contribution cost
  be less than zero.
    (b) The comptroller is authorized to make appropriate adjustments  for
  those  participating employers that have paid an amount in excess of the
  minimum annual amortization payment required by  section  three  hundred
  seventeen-a  of  this  article. The excess payment shall accumulate with
  interest earned at the rate used in the annual actuarial  valuation  and
  be  applied  against  future pension contribution requirements to insure
  equitable treatment of all participating employers.
    (c) In any year in which no contribution is required  to  the  pension
  accumulation  fund,  any adjustment reducing a prior year's contribution
  resulting from the enactment of section three hundred sixteen-b of  this
  chapter,  shall be credited with interest earned at the rate used in the
  annual  actuarial  valuation  and   applied   against   future   pension
  contributions.
    Such  rate  shall  be  computed  each  year  by  means of an actuarial
  valuation as prescribed in section three hundred eleven of this chapter.
    2. Deficiency contribution.

    (a) In the case of employers  who  were  participating  in  the  state
  employees'  retirement  system  on  March thirty-first, nineteen hundred
  sixty-seven, the rate of such contribution shall continue to be the rate
  determined for such participating employer pursuant to  law.  Such  rate
  may  be  varied,  however, if an adjustment is necessitated by reason of
  the allowance of additional prior service credits.
    (b) In the case of an employer who elects to participate in the police
  and fire retirement system on or after  April  first,  nineteen  hundred
  sixty-seven and before March thirty-first, nineteen hundred ninety-nine,
  an  initial  actuarial  valuation shall be made to determine the accrued
  liability of such employer by reason of the prior service  of  those  of
  its  employees  who  are  members  of the retirement system. The rate of
  deficiency contribution for such employer shall then be determined. Such
  rate shall be that proportion of the total annual compensation  of  such
  employees as is equivalent to four per centum of such accrued liability.
  Such rate shall be applied to the employer's payroll of members, as used
  in the annual valuation. The cost of making such initial valuation shall
  be assessed against and paid by such employer.
    Notwithstanding the above, for employers who commence participation in
  the  retirement  system  on  or  after  April  first,  nineteen  hundred
  ninety-nine, the accrued liability shall be amortized  in  equal  annual
  installments  over  a  twenty-five  year  period.  With  respect to such
  employers the cost of making such initial valuation  shall  be  assessed
  against  and  paid  by the employer. The provisions of subdivisions c, d
  and e of  this  section  shall  not  apply  to  employers  who  commence
  participation in the retirement system on or after April first, nineteen
  hundred ninety-nine.
    (c) The amount of each annual deficiency contribution payable by every
  employer  shall be at least three per centum greater than the amount for
  the preceding year.
    (d) The comptroller shall approve the discontinuance  of  the  state's
  deficiency contribution on account of members employed by it when:
    (1)  The  total  amount in the pension accumulation fund on account of
  all members, and
    (2) The present value of future deficiency contributions still  to  be
  paid by other employers, and
    (3)  The present value of future normal contributions, on the basis of
  the rate of normal contribution then in effect,  shall  equal  the  then
  present  value  of  the total liability of such fund on the basis of the
  tables then in use.
    (e) Unless previously discontinued, or unless  hereafter  discontinued
  pursuant  to  other  provisions of law, the deficiency contribution of a
  participating employer shall be discontinued when the  total  amount  of
  deficiency  contributions paid by such employer at least equals or shall
  hereafter equal such percentum of its initial accrued liability computed
  by the actuary as shall equal that  percentum  of  the  state's  initial
  accrued  liability  paid  by  deficiency contributions during the period
  equal to the period last determined by the  actuary  as  the  deficiency
  payment  period.  Nothing  herein  contained shall be deemed to give any
  participating employer any valid claim or cause of action for refund  or
  credit  for any sum or sums paid or to be paid for fiscal years prior to
  and including  the  fiscal  year  ending  March  thirty-first,  nineteen
  hundred  sixty-six  nor  to  excuse  any participating employer from the
  payment of any contributions for such fiscal years.
    3. Administration contribution.
    (a) The  expenses  of  the  retirement  system,  including  an  amount
  allocated  to amortize over a period of thirty years, with interest, the
  cost of construction of the retirement system building, and the cost  of

  maintenance  of  such building, for each fiscal year shall be determined
  at the close of each such year. The ratio of such expenses to the  total
  compensation  of  all members, as used in the actuarial valuation, shall
  be  the  rate  of  such  administration contribution. Such rate shall be
  applied to each employer's payroll of members, as  used  in  the  annual
  valuation.
    (b)  All  such  expenses shall be paid out of the pension accumulation
  fund which shall be reimbursed through administration contributions  and
  other monies received from employers pursuant to this article.
    (c)  Notwithstanding  any  other  provision of this subdivision or any
  other law, the administrative contribution for  a  year,  as  determined
  pursuant  to  paragraph  one  of subdivision b of this section, shall be
  paid from the pension accumulation fund if payment from such  fund  will
  not affect the normal contribution for such year.
    c.  Additional  contributions shall be made in accordance therewith by
  employers obligated to contribute to the retirement system  pursuant  to
  any other section of this article.
    d.  When a pension or a pension-providing-for-increased-take-home-pay,
  if any, becomes payable to or on account of any member, a reserve, in an
  amount computed by the actuary to be necessary to provide the pension or
  pension-providing-for-increased-take-home-pay, if any, granted  in  each
  such  case,  shall  be transferred from the pension accumulation fund to
  the pension reserve fund.
    e. Whenever the comptroller, upon recommendation by the actuary, shall
  determine that it is necessary to increase  the  reserves  held  in  the
  annuity reserve fund or the pension reserve fund, he may direct that the
  amount   so  needed  shall  be  transferred  thereto  from  the  pension
  accumulation fund.
    f. The amount of regular interest which  is  to  be  credited  to  the
  annuity  savings  fund, the annuity reserve fund and the pension reserve
  fund, and the amount  of  special  interest,  if  any,  which  shall  be
  credited  to  the  annuity savings accounts in the annuity savings fund,
  shall be determined after the close  of  each  fiscal  year.  Each  such
  amount thereupon shall be transferred from the pension accumulation fund
  to each such fund.