Provides up to three years of service credit to members of public retirement systems of the state for military service; removes requirement that such military service occur during specified periods of hostilities; requires such members have at least five years of credited service, not including military service; appropriates $31,500,000 therefor.
STATE OF NEW YORK
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4124
2015-2016 Regular Sessions
IN SENATE
March 2, 2015
___________
Introduced by Sens. LARKIN, AVELLA, CROCI, FARLEY, FLANAGAN, GALLIVAN,
GOLDEN, LAVALLE, LIBOUS, MARTINS, NOZZOLIO, ORTT, RANZENHOFER,
RITCHIE, ROBACH, SEWARD, SKELOS, YOUNG -- read twice and ordered
printed, and when printed to be committed to the Committee on Finance
AN ACT to amend the retirement and social security law, in relation to
providing credit to members of public retirement systems of the state
for military service; and making an appropriation therefor
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 1000 of the retirement and social security law, as
2 added by chapter 548 of the laws of 2000, subdivision 9 as added by
3 chapter 547 of the laws of 2002 and subdivision 10 as added by chapter
4 18 of the laws of 2012, is amended to read as follows:
5 § 1000. Military service credit. Notwithstanding any law to the
6 contrary, a member of a public retirement system of the state, as
7 defined in subdivision twenty-three of section five hundred one of this
8 chapter, shall be eligible for credit for military service as hereinaft-
9 er provided:
10 1. A member, upon application to such retirement system, may obtain a
11 total not to exceed three years of service credit for up to three years
12 of military duty, as defined in section two hundred forty-three of the
13 military law, if the member was honorably discharged from the military
14 [and all or part of such military service was rendered during the
15 following periods: (a) commencing December seventh, nineteen hundred
16 forty-one and terminating December thirty-first, nineteen hundred
17 forty-six; (b) commencing June twenty-seventh, nineteen hundred fifty
18 and terminating January thirty-first, nineteen hundred fifty-five; or
19 (c) commencing February twenty-eighth, nineteen hundred sixty-one and
20 terminating May seventh, nineteen hundred seventy-five;
21 2. A member, upon application to such retirement system, may obtain a
22 total not to exceed three years of service credit for up to three years
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07385-03-5
S. 4124 2
1 of military duty, as defined in section two hundred forty-three of the
2 military law, if honorably discharged therefrom, if all or part of such
3 services was rendered in the military conflicts referenced below, as
4 follows:
5 (a) hostilities participated in by the military forces of the United
6 States in Lebanon, from the first day of June, nineteen hundred eighty-
7 three to the first day of December, nineteen hundred eighty-seven, as
8 established by receipt of the armed forces expeditionary medal, the navy
9 expeditionary medal, or the marine corps expeditionary medal;
10 (b) hostilities participated in by the military forces of the United
11 States in Grenada, from the twenty-third day of October, nineteen
12 hundred eighty-three to the twenty-first day of November, nineteen
13 hundred eighty-three, as established by receipt of the armed forces
14 expeditionary medal, the navy expeditionary medal, or the marine corps
15 expeditionary medal;
16 (c) hostilities participated in by the military forces of the United
17 States in Panama, from the twentieth day of December, nineteen hundred
18 eighty-nine to the thirty-first day of January, nineteen hundred ninety,
19 as established by receipt of the armed forces expeditionary medal, the
20 navy expeditionary medal, or the marine corps expeditionary medal; or
21 (d) hostilities participated in by the military forces of the United
22 States, from the second day of August, nineteen hundred ninety, to the
23 end of such hostilities in case of a veteran who served in the theater
24 of operations including Iraq, Kuwait, Saudi Arabia, Bahrain, Qatar, the
25 United Arab Emirates, Oman, the Gulf of Aden, the Gulf of Oman, the
26 Persian Gulf, the Red Sea, and the airspace above these locations].
27 [3] 2. A member must have at least five years of credited service (not
28 including service granted hereunder) to be eligible to receive credit
29 under this section.
30 [4] 3. To obtain such credit, a member shall pay such retirement
31 system, for deposit in the fund used to accumulate employer contrib-
32 utions, a sum equal to the product of the number of years of military
33 service being claimed and three percent of such member's compensation
34 earned during the twelve months of credited service immediately preced-
35 ing the date that the member made application for credit pursuant to
36 this section. If permitted by rule or regulation of the applicable
37 retirement system, the member may pay such member costs by payroll
38 deduction for a period which shall not exceed the time period of mili-
39 tary service to be credited pursuant to this section. In the event the
40 member leaves the employer payroll prior to completion of payment, he or
41 she shall forward all remaining required payments to the appropriate
42 retirement system prior to the effective date of retirement. If the full
43 amount of such member costs is not paid to the appropriate retirement
44 system prior to the member's retirement, the amount of service credited
45 shall be proportional to the total amount of the payments made prior to
46 retirement.
47 [5] 4. In no event shall the credit granted pursuant to this section,
48 when added to credit granted for military service with any retirement
49 system of this state pursuant to this or any other provision of law,
50 exceed a total of three years.
51 [6] 5. To be eligible to receive credit for military service under
52 this section, a member must make application for such credit before the
53 effective date of retirement. [Notwithstanding the foregoing provisions
54 of this subdivision, an individual who retired on or after December
55 twenty-first, nineteen hundred ninety-eight and before the effective
56 date of this section may make application for credit pursuant to this
S. 4124 3
1 section within one year following the effective date of this section, in
2 which event, the cost to the retiree would be based on the twelve month
3 period immediately preceding retirement.]
4 [7] 6. All costs for service credited to a member pursuant to this
5 section, other than the member costs set forth in subdivision [three]
6 two of this section, shall be paid by the state and all employers which
7 participate in the retirement system in which such member is granted
8 credit.
9 [8] 7. A member who has purchased military service credit pursuant to
10 section two hundred forty-four-a of the military law shall be entitled
11 to a refund of the difference between the amount paid by the member for
12 such purchase and the amount that would be payable if service had been
13 purchased pursuant to this section.
14 [9] 8. Notwithstanding any other provision of law, in the event of
15 death prior to retirement, amounts paid by the member for the purchase
16 of military service credit pursuant to this section shall be refunded,
17 with interest, to the extent the military service purchased with such
18 amounts does not produce a greater death benefit than would have been
19 payable had the member not purchased such credit.
20 Notwithstanding any other provision of law, in the event of retire-
21 ment, amounts paid by the member for the purchase of military service
22 credit pursuant to this section shall be refunded, with interest, to the
23 extent the military service purchased with such amounts does not produce
24 a greater retirement allowance than would have been payable had the
25 member not purchased such credit.
26 [10.] 9. Anything to the contrary in subdivision [four] three of this
27 section notwithstanding, to obtain such credit, a member who first joins
28 a public retirement system of the state on or after April first, two
29 thousand twelve shall pay such retirement system, for deposit in the
30 fund used to accumulate employer contributions, a sum equal to the prod-
31 uct of the number of years of military service being claimed and six
32 percent of such member's compensation earned during the twelve months of
33 credited service immediately preceding the date that the member made
34 application for credit pursuant to this section.
35 § 2. The sum of thirty-one million five hundred thousand dollars
36 ($31,500,000), or so much thereof as may be necessary, is hereby appro-
37 priated to the department of audit and control out of any moneys in the
38 state treasury in the general fund to the credit of the state purposes
39 account, not otherwise appropriated, and made immediately available, for
40 the purpose of carrying out the provisions of this act. Such moneys
41 shall be payable on the audit and warrant of the comptroller on vouchers
42 certified or approved by the head of the appropriate public retirement
43 system in the manner prescribed by law.
44 § 3. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would allow up to three (3) years of service credit for
military duty by removing all existing requirements that such military
service be performed during certain war periods, during certain hostil-
ities while in the theater of operations or upon the receipt of an
expeditionary medal. However, the total service credit granted for
active and peacetime military service shall not exceed three (3) years.
Tier 6 members would be required to make a payment of six percent of
current compensation per year of additional service credit granted by
this bill. Members of all other Tiers would be required to make a
payment of three percent of current compensation per year of additional
S. 4124 4
service credit granted by this bill. Members must have at least five (5)
years of credited service (not including military service).
If this bill is enacted, insofar as this proposal affects the New York
State and Local Employees' Retirement System (ERS), it is estimated that
the past service cost will average approximately 12% (9% for Tier 6) of
an affected members' compensation for each year of additional service
credit that is purchased.
Insofar as this proposal affects the New York State and Local Police
and Fire Retirement System (PFRS), it is estimated that the past service
cost will average approximately 17% (14% for Tier 6) of an affected
members' compensation for each year of additional service that is
purchased.
The exact number of current members as well as future members who
could be affected by this legislation cannot be readily determined.
ERS Costs: Pursuant to Section 25 of the Retirement and Social Securi-
ty Law, the increased cost to the New York State and Local Employees'
Retirement System would be borne entirely by the State of New York and
would require an itemized appropriation sufficient to pay the cost of
the provision. Since a member can apply for this service credit at any
time prior to retirement, a precise cost can't be determined until each
member, as well as future members, applies for the service credit. Every
year a cost will be determined (and billed to the state) based on those
benefiting from this provision.
PFRS Costs: These costs would be shared by the State of New York and
the participating employers in the 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, 2014 actuarial valu-
ation. Distributions and other statistics can be found in the 2014
Report of the Actuary and the 2014 Comprehensive Annual Financial
Report.
The actuarial assumptions and methods used are described in the 2010,
2011, 2012, 2013 and 2014 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, 2014
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 February 11, 2015 and intended for use only
during the 2015 Legislative Session, is Fiscal Note No. 2015-65,
prepared by the Actuary for the New York State and Local Employees'
Retirement System and the New York State and Local Police and Fire
Retirement System.
