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.
STATE OF NEW YORK
________________________________________________________________________
10726
IN ASSEMBLY
May 15, 2018
___________
Introduced by M. of A. ABBATE -- read once and referred to the Committee
on Governmental Employees
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.
18 2. The calculation of the amount of such service credit for a member
19 will be determined by multiplying the eligible service credited in the
20 New York state and local employees' retirement system plan by a salary
21 multiplier, reflecting the rate of salary in the New York state and
22 local employees' retirement system plan relative to the rate of salary
23 in the New York state and local police and fire retirement system plan,
24 and a billing rate multiplier, reflecting the actuarial long-term aver-
25 age billing rate in the New York state and local employees' retirement
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD15447-03-8
A. 10726 2
1 system plan relative to the actuarial long-term average billing rate in
2 the New York state and local police and fire retirement system plan. The
3 determination of the salary multiplier and billing rate multiplier will
4 be determined by the actuary of the New York state and local employees'
5 retirement system and the New York state and local police and fire
6 retirement system. The amount of such service credited to the member in
7 the New York state and local police and fire retirement system plan
8 shall not exceed the amount of service credited to the member in the New
9 York state and local employees' retirement system plan.
10 § 2. Section 343 of the retirement and social security law is amended
11 by adding a new subdivision i to read as follows:
12 i. 1. Notwithstanding any other law, rule or regulation to the contra-
13 ry, any member in the title of deputy sheriff transferring from the New
14 York state and local employees' retirement system to the New York state
15 and local police and fire retirement system after the effective date of
16 this subdivision and any member previously in the title of deputy sher-
17 iff having made such transfer shall be entitled to a determination of
18 the amount of service credit that is eligible on a twenty year or twen-
19 ty-five year retirement plan if, within one year of the date on which he
20 or she first became a member of the New York state and local police and
21 fire retirement system or within one year of the effective date of this
22 subdivision, such member elects to do so. If the member subsequently
23 transfers back to the New York state and local employees' retirement
24 system, the full amount of service credit earned while in the title of
25 deputy sheriff shall be transferred back to New York state and local
26 employees' retirement system.
27 2. The calculation of the amount of such service credit for a member
28 will be determined by multiplying the eligible service credited in the
29 New York state and local employees' retirement system plan by a salary
30 multiplier, reflecting the rate of salary in the New York state and
31 local employees' retirement system plan relative to the rate of salary
32 in the New York state and local police and fire retirement system plan,
33 and a billing rate multiplier, reflecting the actuarial long-term aver-
34 age billing rate in the New York state and local employees' retirement
35 system plan relative to the actuarial long-term average billing rate in
36 the New York state and local police and fire retirement system plan. The
37 determination of the salary multiplier and billing rate multiplier will
38 be determined by the actuary of the New York state and local employees'
39 retirement system and the New York state and local police and fire
40 retirement system. The amount of such service credited to the member in
41 the New York state and local police and fire retirement system plan
42 shall not exceed the amount of service credited to the member in the New
43 York state and local employees' retirement system plan.
44 3. If the member subsequently retires on an age based retirement plan
45 in the New York state and local police and fire retirement system
46 instead of a twenty year or twenty-five year plan, the full amount of
47 service credit earned while in the title of deputy sheriff shall be
48 granted.
49 4. No member who receives service credit pursuant to this subdivision
50 shall be eligible to receive additional service credit pursuant to
51 subdivision b of section three hundred eighty four-e of this article if
52 his or her employer has elected to provide such service credit.
53 § 3. This act shall take effect on the sixtieth day after an internal
54 revenue service ruling stating that the transfer and crediting of deputy
55 sheriff service credit from the New York state and local employees'
56 retirement system into the New York state and local police and fire
A. 10726 3
1 retirement system special retirement plan by this act is allowable and
2 does not jeopardize such retirement system's tax-qualified status, and
3 shall remain in full force and effect only as long as such transfer is
4 authorized pursuant to the provisions of the internal revenue code;
5 provided, that the state comptroller shall notify the legislative bill
6 drafting commission upon the occurrence of such ruling and upon any
7 change in the provisions of the internal revenue code affecting the
8 provisions of this act in order that the commission may maintain an
9 accurate and timely effective data base of the official text of the laws
10 of the state of New York in furtherance of effecting the provisions of
11 section 44 of the legislative law and section 70-b of the public offi-
12 cers law.
FISCAL NOTE.-- Pursuant to Legislative Law, section 50:
This bill will expand the definition of credible service under 20-year
and 25-year plans (special plans) in the New York State and Local Police
and Fire Retirement System (PFRS) to include service credit earned in
the New York State and Local Employees' Retirement System (ERS) for
those individuals previously employed in the title of Deputy Sheriff. To
be eligible for the service credit, an individual must be a member of
PFRS and elect to transfer the ERS service credit to the PFRS plan with-
in 12 months of first joining PFRS, or within 12 months of the effective
date of the bill, whichever is later. The amount of service credit
granted in the PFRS special plan will be calculated by The Actuary of
the New York State and Local Retirement Systems (NYLSRS), not to exceed
the service credited under the ERS plan.
Internal Revenue Service (IRS) plan qualification issues: granting
service credit towards retirement in a 20 year plan in the New York
State and Local Police and Fire Retirement System (PFRS) for employment
that was not rendered in the PFRS could jeopardize the Retirement
System's governmental plan status and its exemption from 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 NYLSRS 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 so
authorized by the IRS. It is estimated that the costs to obtain an
initial ruling would be $28,000 for the services of the IRS, and $800
per hour for legal consultants.
In addition to the costs to obtain a ruling for the IRS stated above,
if this bill is enacted, there will be an administrative cost to imple-
ment the provisions of this legislation.
All costs will be shared and spread by the participating employers in
PFRS.
Summary of relevant resources:
The membership data used in measuring the impact of the proposed
change was the same as that used in the March 31, 2017 actuarial valu-
ation. Distributions and other statistics can be found in the 2017
Report of the Actuary and the 2017 Comprehensive Annual Financial
Report.
The actuarial assumptions and methods used are described in the 2015,
2016, and 2017 Annual Report to the Comptroller on Actuarial Assump-
tions, and the Codes Rules and Regulations of the State of New York:
Audit and Control.
A. 10726 4
The Market Assets and GASB Disclosures are found in the March 31, 2017
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 estimate, dated May 10, 2018, and intended for use only during
the 2018 Legislative Session, is Fiscal Note No. 2018-99, prepared by
the Actuary for the New York State and Local Retirement System.
