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.
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.
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.