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A05936 Summary:

BILL NOA05936B
 
SAME ASSAME AS S05618-B
 
SPONSORSillitti
 
COSPNSRMcDonald, Burdick, Dickens, Woerner, Sayegh, Jean-Pierre, Zebrowski, Gibbs, Lunsford, Pheffer Amato, Raga, Durso, Morinello, Novakhov, Palmesano, McDonough, Manktelow, Angelino, Slater, Stern, Colton
 
MLTSPNSRSimon
 
Amd 1000, R & SS L
 
Increases the amount of years of military service credit a member may purchase from three years to four years; provides that the provisions of such act shall not be subject to the requirement that the state shall make an equal payment to the retirement system.
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A05936 Actions:

BILL NOA05936B
 
03/24/2023referred to governmental employees
05/30/2023amend and recommit to governmental employees
05/30/2023print number 5936a
01/03/2024referred to governmental employees
03/14/2024amend and recommit to governmental employees
03/14/2024print number 5936b
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A05936 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A5936B
 
SPONSOR: Sillitti
  TITLE OF BILL: An act to amend the retirement and social security law, in relation to increasing the amount of years of military service credit a member may purchase   PURPOSE: To increase the number of years of military service that are eligible for service credit from three to four.   SUMMARY OF PROVISIONS: Section 1 of the bill amends section 1000 of the retirement and social security law to allow a person who served in the military to purchase service credit in the public retirement system of the state for their period of military service not to exceed four years. Section 2 of the bill states the effective date.   JUSTIFICATION: New York law allows veterans to purchase service credit in the public retirement system for the period of their military service. Currently, they can purchase service credit for up to three years of military service. In comparison, veterans in New Jersey and Connecticut are eligible for up to ten years of active military service. New York should increase the number of service years veterans can "buy back" to ensure more financial security in their retirement.   FISCAL IMPLICATIONS: See fiscal notes at the end of the bill.   EFFECTIVE DATE: This act shall take effect immediately.
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A05936 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         5936--B
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                     March 24, 2023
                                       ___________
 
        Introduced  by  M.  of A. SILLITTI, McDONALD, BURDICK, DICKENS, WOERNER,
          SAYEGH, JEAN-PIERRE, ZEBROWSKI, GIBBS, LUNSFORD, PHEFFER AMATO,  RAGA,
          DURSO, MORINELLO, NOVAKHOV, PALMESANO, McDONOUGH, MANKTELOW, ANGELINO,
          SLATER, STERN -- Multi-Sponsored by -- M. of A. SIMON -- read once and
          referred  to  the  Committee  on  Governmental  Employees -- committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to said committee -- 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
          increasing the amount of years of military service credit a member may
          purchase
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Subdivision 4 of section 1000 of the retirement and  social
     2  security  law,  as amended by chapter 41 of the laws of 2016, is amended
     3  to read as follows:
     4    4. In no event shall the credit granted pursuant to this section, when
     5  added to credit granted for military service with any retirement  system
     6  of  this  state pursuant to this or any other provision of law, exceed a
     7  total of [three] four years.
     8    § 2. Subdivision 1 of section 1000 of the retirement and social  secu-
     9  rity  law,  as amended by chapter 585 of the laws of 2022, is amended to
    10  read as follows:
    11    1. A member, upon application to such retirement system, may obtain  a
    12  total  not  to  exceed  [three]  four  years of service credit for up to
    13  [three] four years of military duty, as defined in section  two  hundred
    14  forty-three  of  the  military  law,  if  the  member  (a) was honorably
    15  discharged from the military, or (b)  has  a  qualifying  condition,  as
    16  defined  in  section  three  hundred fifty of the executive law, and has

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD09065-07-4

        A. 5936--B                          2
 
     1  received a discharge other than bad conduct or  dishonorable  from  such
     2  service,  or  (c)  is  a  discharged LGBT veteran, as defined in section
     3  three hundred fifty of the executive law, and has received  a  discharge
     4  other than bad conduct or dishonorable from such service.
     5    § 3. Notwithstanding any provision of law to the contrary, none of the
     6  provisions of this act shall be subject to the appropriation requirement
     7  of section 25 of the retirement and social security law.
     8    § 4. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY:  This  proposed  legislation, as it relates to members of the
        New York City  Retirement  Systems  and  Pension  Funds  (NYCRS),  would
        increase  the  maximum  number  of years of military duty service credit
        that a member may purchase from three years to four.
 
              ILLUSTRATION - INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
                        by Fiscal Year for the first 25 years ($)
             Year      One Year of Service      One Year of Service
                          Purchased             Purchased Per Year
             2025         2,100                 2,100
             2026         2,100                 4,200
             2027         2,100                 6,300
             2028         2,100                 8,500
             2029         2,100                 10,700
             2030         2,100                 13,000
             2031         2,100                 15,300
             2032         2,100                 17,700
             2033         2,100                 20,100
             2034         2,100                 22,500
             2035         2,100                 25,000
             2036         2,100                 27,600
             2037         2,100                 30,200
             2038         2,100                 32,900
             2039             0                 33,500
             2040             0                 34,200
             2041             0                 34,900
             2042             0                 35,600
             2043             0                 36,300
             2044             0                 37,000
             2045             0                 37,800
             2046             0                 38,500
             2047             0                 39,300
             2048             0                 40,100
             2049             0                 40,900
           Employer contribution impact beyond Fiscal Year 2049 is not shown.
 
          The potential increases in employer contributions will be allocated to
        New York City and other applicable obligors of NYCRS.
 
                  EXPECTED INCREASE (DECREASE) IN ACTUARIAL LIABILITIES
                          as of June 30, 2023 ($ in Thousands)
             Present Value (PV)                 Per Year of
                                                Service Purchased
             PV of Benefits:                    20.2
             PV of Employee Contributions:      (2.8)
             PV of Employer Contributions:      17.4
             Unfunded Accrued Liabilities:      17.4

        A. 5936--B                          3
 
                       AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
             Recognized as Ongoing Gain/Loss    Per Year of
                                                Service Purchased
             Number of Payments:                14
             Amortization Payment:              2.1 K
 
          CENSUS  DATA:  The  number  of members who will purchase an additional
        fourth year of military service  is  unknown.  The  estimates  presented
        herein  are  based  on  preliminary census data collected as of June 30,
        2023. The census data for the potentially impacted  population  used  to
        develop the average costs in this Fiscal Note is based on active members
        who have already purchased three years of military service and is summa-
        rized below.
 
                                           NYCRS
             Active Members
             - Number Count:               461
             - Average Age:                49.3
             - Average Service:            17.1
             - Average Salary:             117,900

          IMPACT ON MEMBER CONTRIBUTIONS: Eligible NYCRS members are required to
        contribute,  for  each year of military service purchased, 3% (or 6% for
        members who first join on or after  April  1,  2012)  of  such  member's
        compensation earned during the 12 months of credited service immediately
        preceding the date the member applies for military service credit.
          ASSUMPTIONS  AND  METHODS:  The  estimates  presented herein have been
        calculated based on the Revised 2021 Actuarial Assumptions  and  Methods
        of the impacted retirement systems.
          The  number  of  members  who  will  benefit  in  the future from this
        proposed legislation is unknown. The cost of this  proposed  legislation
        could vary greatly depending on the number of future members who benefit
        and, on their plan, length of service, age, and salary history.
          RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
        highly on the actuarial assumptions, methods,  and  models  used,  demo-
        graphics  of  the  impacted population and other factors such as invest-
        ment, contribution, and other risks. If actual experience deviates  from
        actuarial   assumptions,  the  actual  costs  could  differ  from  those
        presented herein. Quantifying these risks is beyond the  scope  of  this
        Fiscal Note.
          This  Fiscal  Note  is intended to measure pension-related impacts and
        does not include other potential costs (e.g., administrative  and  Other
        Postemployment Benefits).
          STATEMENT OF ACTUARIAL OPINION: Marek Tyszkiewicz and Gregory Zelikov-
        sky  are members of the Society of Actuaries and the American Academy of
        Actuaries. We are members of NYCERS but do not believe  it  impairs  our
        objectivity  and  we  meet  the  Qualification Standards of the American
        Academy of Actuaries to render the actuarial opinion  contained  herein.
        To  the  best  of  our knowledge, the results contained herein have been
        prepared in accordance with generally accepted actuarial principles  and
        procedures  and  with  the Actuarial Standards of Practice issued by the
        Actuarial Standards Board.
          FISCAL NOTE IDENTIFICATION: This Fiscal Note 2024-24 dated  March  11,
        2024  was prepared by the Chief Actuary for the New York City Retirement
        Systems and Pension Funds. This estimate is intended for use only during
        the 2024 Legislative Session.

        A. 5936--B                          4
 
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          This  bill  would amend the current military law to allow for a member
        to obtain up to a total of four years of service credit for up  to  four
        years  of  military  duty  if  the  member was honorably discharged. The
        current maximum is three years of service credit. Members must  have  at
        least  five  years of credited service (not including military service).
        Tier 1-5 members would be required to make a payment of three percent of
        their most recent compensation per year  of  additional  service  credit
        granted by this bill. Tier 6 members would be required to make a payment
        of  six percent of their most recent compensation per year of additional
        service credit. Portions of the bill would become effective on  November
        10, 2023.
          Insofar  as this proposal affects the New York State and Local Employ-
        ees' Retirement System (NYSLERS), all costs would be shared by the State
        of New York and the local participating employers  in  the  NYSLERS.  If
        enacted  during  the  2024 Legislative Session, it is estimated that the
        past service cost will be 18% (15% for Tier 6) of an  affected  member's
        compensation for each year of service credit that is purchased.
          Insofar  as  this proposal affects the New York State and Local Police
        and Fire Retirement System (NYSLPFRS), all costs would be shared by  the
        State of New York and the local participating employers in the NYSLPFRS.
        If enacted during the 2024 Legislative Session, it is estimated that the
        past  service  cost will be 23% (20% for Tier 6) of an affected member's
        compensation for each year of service credit that is purchased.
          Further, we anticipate some additional administrative costs to  imple-
        ment the provisions of this legislation.
          The  exact  number of current and future members who could be affected
        by this legislation cannot be readily determined. Through  December  31,
        2023, approximately 11,200 members have purchased military service cred-
        it  pursuant  to  Chapter  41  of the Laws of 2016, with a total cost of
        approximately $400 million. It is estimated that, had this proposal been
        law  since  2016,  approximately  7,700  of  these  members  could  have
        purchased  a  fourth  year  of military service credit for an additional
        cost of approximately $110 million.
          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 March 1, 2024, and intended for use only during
        the 2024 Legislative Session, is Fiscal Note No.  2024-64,  prepared  by
        the Actuary for the New York State and Local Retirement System.
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