Relates to the calculation of past service credit for members in the title of deputy sheriff transferring between the New York state and local employees' retirement system to the New York state and local police and fire retirement system.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5231A
SPONSOR: Pheffer Amato TITLE OF BILL:
An act to amend the retirement and social security law, in relation to
the calculation of past service credit for members in the title of depu-
ty sheriff transferring between the New York state and local employees'
retirement system to the New York state and local police and fire
retirement system
SUMMARY OF PROVISIONS:
Section 1 amends Section 43 of the retirement and social security law to
permit Deputy Sheriffs that transfer from the State and Local Retirement
System to the Police and Fire Retirement System, to keep the eligible
service credit accrued while they were a Deputy Sheriff and permits
former Deputy Sheriffs that subsequently transfer back in the opposite
direction to keep the eligible service credit accrued while they were
State and local police officers.
Section 2 Section 343 of the retirement and social security law to
permit Deputy Sheriffs"that transfer from the State and Local Retirement
System to the Police and Fire Retirement System, to keep the eligible
service credit accrued while they were a Deputy Sheriff and permits
former Deputy Sheriffs that subsequently transfer back in the opposite
direction to keep the eligible service credit accrued while they were
State and local police officers.
Section 3 sets forth the effective date.
JUSTIFICATION:
Under current law, firefighters and police officers, members or officers
of the New York State Police and members of the military may all trans-
fer service credits to the Police and Fire Retirement System as estab-
lished by Section 384-e of the Retirement and Social Security Law from
the New York State and Local Employee Retirement System. Deputy Sher-
iffs may not. This legislation would allow deputy sheriffs to retain
their service credits if they transfer from the New York State and Local
Employees Retirement System to the Police and Fire Retirement System.
Police officers and deputy sheriffs should receive retirement benefits
for all previously earned pension service credit, regardless of whether
the prior service was rendered as a police officer or deputy sheriff.
PRIOR LEGISLATIVE HISTORY:
S9115/A7216(2021-22): Referred to Civil Service and Pensions
S2094/ A5062(2019-20): Referred to Civil Service and Pensions in 2020;
Referred to Finance in 2019
S8789/ A10726 (2017-18): Advanced to Third Reading
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
See fiscal note.
EFFECTIVE DATE:
Sixty days following an IRS ruling that passage of this bill does not
alter the tax status of the current retirement system.
STATE OF NEW YORK
________________________________________________________________________
5231--A
2023-2024 Regular Sessions
IN ASSEMBLY
March 7, 2023
___________
Introduced by M. of A. PHEFFER AMATO, LUNSFORD, WOERNER, McDONALD,
DURSO, BRABENEC, SLATER, SANTABARBARA -- read once and referred to the
Committee on Governmental Employees -- recommitted to the Committee on
Governmental Employees in accordance with Assembly Rule 3, sec. 2 --
committee discharged, bill amended, ordered reprinted as amended and
recommitted to said committee
AN ACT to amend the retirement and social security law, in relation to
the calculation of past service credit for members in the title of
deputy sheriff transferring between the New York state and local
employees' retirement system to the New York state and local police
and fire retirement system
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 43 of the retirement and social security law is
2 amended by adding a new subdivision m to read as follows:
3 m. 1. Notwithstanding any other law, rule or regulation to the contra-
4 ry, any member in the title of deputy sheriff transferring from the New
5 York state and local employees' retirement system to the New York state
6 and local police and fire retirement system after the effective date of
7 this subdivision and any member previously in the title of deputy sher-
8 iff having made such transfer shall be entitled to a determination of
9 the amount of service credit that is eligible on a twenty year or twen-
10 ty-five year retirement plan if, within one year of the date on which he
11 or she first became a member of the New York state and local police and
12 fire retirement system or within one year of the effective date of this
13 subdivision, such member elects to do so. If the member subsequently
14 transfers back to the New York state and local employees' retirement
15 system, the full amount of service credit earned while in the title of
16 deputy sheriff shall be transferred back to the New York state and local
17 employees' retirement system.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07037-03-4
A. 5231--A 2
1 2. The calculation of the amount of such service credit for a member
2 will be determined by multiplying the eligible service credited in the
3 New York state and local employees' retirement system plan by a salary
4 multiplier, reflecting the rate of salary in the New York state and
5 local employees' retirement system plan relative to the rate of salary
6 in the New York state and local police and fire retirement system plan,
7 and a billing rate multiplier, reflecting the actuarial long-term aver-
8 age billing rate in the New York state and local employees' retirement
9 system plan relative to the actuarial long-term average billing rate in
10 the New York state and local police and fire retirement system plan. The
11 determination of the salary multiplier and billing rate multiplier will
12 be determined by the actuary of the New York state and local employees'
13 retirement system and the New York state and local police and fire
14 retirement system. The amount of such service credited to the member in
15 the New York state and local police and fire retirement system plan
16 shall not exceed the amount of service credited to the member in the New
17 York state and local employees' retirement system plan.
18 § 2. Section 343 of the retirement and social security law is amended
19 by adding a new subdivision i to read as follows:
20 i. 1. Notwithstanding any other law, rule or regulation to the contra-
21 ry, any member in the title of deputy sheriff transferring from the New
22 York state and local employees' retirement system to the New York state
23 and local police and fire retirement system after the effective date of
24 this subdivision and any member previously in the title of deputy sher-
25 iff having made such transfer shall be entitled to a determination of
26 the amount of service credit that is eligible on a twenty year or twen-
27 ty-five year retirement plan if, within one year of the date on which he
28 or she first became a member of the New York state and local police and
29 fire retirement system or within one year of the effective date of this
30 subdivision, such member elects to do so. If the member subsequently
31 transfers back to the New York state and local employees' retirement
32 system, the full amount of service credit earned while in the title of
33 deputy sheriff shall be transferred back to New York state and local
34 employees' retirement system.
35 2. The calculation of the amount of such service credit for a member
36 will be determined by multiplying the eligible service credited in the
37 New York state and local employees' retirement system plan by a salary
38 multiplier, reflecting the rate of salary in the New York state and
39 local employees' retirement system plan relative to the rate of salary
40 in the New York state and local police and fire retirement system plan,
41 and a billing rate multiplier, reflecting the actuarial long-term aver-
42 age billing rate in the New York state and local employees' retirement
43 system plan relative to the actuarial long-term average billing rate in
44 the New York state and local police and fire retirement system plan. The
45 determination of the salary multiplier and billing rate multiplier will
46 be determined by the actuary of the New York state and local employees'
47 retirement system and the New York state and local police and fire
48 retirement system. The amount of such service credited to the member in
49 the New York state and local police and fire retirement system plan
50 shall not exceed the amount of service credited to the member in the New
51 York state and local employees' retirement system plan.
52 3. If the member subsequently retires on an age based retirement plan
53 in the New York state and local police and fire retirement system
54 instead of a twenty year or twenty-five year plan, the full amount of
55 service credit earned while in the title of deputy sheriff shall be
56 granted.
A. 5231--A 3
1 4. No member who receives service credit pursuant to this subdivision
2 shall be eligible to receive additional service credit pursuant to
3 subdivision b of section three hundred eighty four-e of this article if
4 his or her employer has elected to provide such service credit.
5 § 3. This act shall take effect on the sixtieth day after an internal
6 revenue service ruling stating that the transfer and crediting of deputy
7 sheriff service credit from the New York state and local employees'
8 retirement system into the New York state and local police and fire
9 retirement system special retirement plan by this act is allowable and
10 does not jeopardize such retirement system's tax-qualified status, and
11 shall remain in full force and effect only as long as such transfer is
12 authorized pursuant to the provisions of the internal revenue code;
13 provided, that the state comptroller shall notify the legislative bill
14 drafting commission upon the occurrence of such ruling and upon any
15 change in the provisions of the internal revenue code affecting the
16 provisions of this act in order that the commission may maintain an
17 accurate and timely effective data base of the official text of the laws
18 of the state of New York in furtherance of effecting the provisions of
19 section 44 of the legislative law and section 70-b of the public offi-
20 cers law.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would expand the definition of creditable service under
twenty-year and twenty-five-year retirement plans (special plans) in the
New York State and Local Police and Fire Retirement System (NYSLPFRS) to
include service credit earned in the New York State and Local Employees'
Retirement System (NYSLERS) for those individuals previously employed in
the title of Deputy Sheriff. To be eligible an individual must be a
member of the NYSLPFRS and elect to transfer the NYSLERS service credit
to the NYSLPFRS special plan within twelve months of first joining the
NYSLPFRS, or within twelve months of the effective date of this bill,
whichever is later. The amount of service credit granted in the NYSLPFRS
special plan will be calculated by the Actuary of the New York State and
Local Retirement System and will not exceed the service credited under
the NYSLERS plan.
Insofar as this bill affects the NYSLPFRS, if enacted during the 2024
Legislative Session, it is estimated that the past service cost will
average approximately 21 percent of an affected member's compensation
for each year of additional service credit that is granted.
Internal Revenue Service (IRS) plan qualification issues: granting
service credit towards retirement in a twenty-year plan in the NYSLPFRS
for employment that was not rendered in the NYSLPFRS could jeopardize
the governmental plan status of the Retirement System ("the System") and
its exemption from the Employees Retirement Income Security Act (ERISA).
This development could result in the loss of qualified status, which
would mean the loss of tax benefits. This result would substantially
impair the System's value to our more than one million participants.
This legislation will not become effective until the System obtains a
favorable ruling from the IRS stating that these provisions would not
harm the qualification status of the System. Further, the provisions of
this legislation will only continue in full force and effect while
authorized by the IRS. It is estimated that the costs to obtain such a
ruling would be $38,000 for the services of the IRS, and $1,000 per hour
for legal consultants.
In addition to the costs to obtain a ruling from the IRS stated above,
if this bill is enacted, there will be an administrative cost to imple-
ment the provisions of this legislation.
A. 5231--A 4
All costs will be shared by the State of New York and the local
participating employers in the NYSLPFRS.
Summary of relevant resources:
Membership data as of March 31, 2023 was used in measuring the impact
of the proposed change, the same data used in the April 1, 2023 actuari-
al valuation. Distributions and other statistics can be found in the
2023 Report of the Actuary and the 2023 Annual Comprehensive Financial
Report.
The actuarial assumptions and methods used are described in the 2023
Annual Report to the Comptroller on Actuarial Assumptions, and the
Codes, Rules and Regulations of the State of New York: Audit and
Control.
The Market Assets and GASB Disclosures are found in the March 31, 2023
New York State and Local Retirement System Financial Statements and
Supplementary Information.
I am a member of the American Academy of Actuaries and meet the Quali-
fication Standards to render the actuarial opinion contained herein.
This fiscal note does not constitute a legal opinion on the viability
of the proposed change nor is it intended to serve as a substitute for
the professional judgment of an attorney.
This estimate, dated February 15, 2024, and intended for use only
during the 2024 Legislative Session, is Fiscal Note No. 2024-32,
prepared by the Actuary for the New York State and Local Retirement
System.
