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
________________________________________________________________________
7216--A
2021-2022 Regular Sessions
IN ASSEMBLY
April 29, 2021
___________
Introduced by M. of A. ABBATE, BLANKENBUSH -- read once and referred to
the Committee on Governmental Employees -- recommitted to the Commit-
tee 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.
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
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04164-05-2
A. 7216--A 2
1 New York state and local employees' retirement system plan by a salary
2 multiplier, reflecting the rate of salary in the New York state and
3 local employees' retirement system plan relative to the rate of salary
4 in the New York state and local police and fire retirement system plan,
5 and a billing rate multiplier, reflecting the actuarial long-term aver-
6 age billing rate in the New York state and local employees' retirement
7 system plan relative to the actuarial long-term average billing rate in
8 the New York state and local police and fire retirement system plan. The
9 determination of the salary multiplier and billing rate multiplier will
10 be determined by the actuary of the New York state and local employees'
11 retirement system and the New York state and local police and fire
12 retirement system. The amount of such service credited to the member in
13 the New York state and local police and fire retirement system plan
14 shall not exceed the amount of service credited to the member in the New
15 York state and local employees' retirement system plan.
16 § 2. Section 343 of the retirement and social security law is amended
17 by adding a new subdivision i to read as follows:
18 i. 1. Notwithstanding any other law, rule or regulation to the contra-
19 ry, any member in the title of deputy sheriff transferring from the New
20 York state and local employees' retirement system to the New York state
21 and local police and fire retirement system after the effective date of
22 this subdivision and any member previously in the title of deputy sher-
23 iff having made such transfer shall be entitled to a determination of
24 the amount of service credit that is eligible on a twenty year or twen-
25 ty-five year retirement plan if, within one year of the date on which he
26 or she first became a member of the New York state and local police and
27 fire retirement system or within one year of the effective date of this
28 subdivision, such member elects to do so. If the member subsequently
29 transfers back to the New York state and local employees' retirement
30 system, the full amount of service credit earned while in the title of
31 deputy sheriff shall be transferred back to New York state and local
32 employees' retirement system.
33 2. The calculation of the amount of such service credit for a member
34 will be determined by multiplying the eligible service credited in the
35 New York state and local employees' retirement system plan by a salary
36 multiplier, reflecting the rate of salary in the New York state and
37 local employees' retirement system plan relative to the rate of salary
38 in the New York state and local police and fire retirement system plan,
39 and a billing rate multiplier, reflecting the actuarial long-term aver-
40 age billing rate in the New York state and local employees' retirement
41 system plan relative to the actuarial long-term average billing rate in
42 the New York state and local police and fire retirement system plan. The
43 determination of the salary multiplier and billing rate multiplier will
44 be determined by the actuary of the New York state and local employees'
45 retirement system and the New York state and local police and fire
46 retirement system. The amount of such service credited to the member in
47 the New York state and local police and fire retirement system plan
48 shall not exceed the amount of service credited to the member in the New
49 York state and local employees' retirement system plan.
50 3. If the member subsequently retires on an age based retirement plan
51 in the New York state and local police and fire retirement system
52 instead of a twenty year or twenty-five year plan, the full amount of
53 service credit earned while in the title of deputy sheriff shall be
54 granted.
55 4. No member who receives service credit pursuant to this subdivision
56 shall be eligible to receive additional service credit pursuant to
A. 7216--A 3
1 subdivision b of section three hundred eighty four-e of this article if
2 his or her employer has elected to provide such service credit.
3 § 3. This act shall take effect on the sixtieth day after an internal
4 revenue service ruling stating that the transfer and crediting of deputy
5 sheriff service credit from the New York state and local employees'
6 retirement system into the New York state and local police and fire
7 retirement system special retirement plan by this act is allowable and
8 does not jeopardize such retirement system's tax-qualified status, and
9 shall remain in full force and effect only as long as such transfer is
10 authorized pursuant to the provisions of the internal revenue code;
11 provided, that the state comptroller shall notify the legislative bill
12 drafting commission upon the occurrence of such ruling and upon any
13 change in the provisions of the internal revenue code affecting the
14 provisions of this act in order that the commission may maintain an
15 accurate and timely effective data base of the official text of the laws
16 of the state of New York in furtherance of effecting the provisions of
17 section 44 of the legislative law and section 70-b of the public offi-
18 cers law.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would expand the definition of creditable 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 within 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 Actu-
ary of the New York State and Local Retirement System (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 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 from 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 by the State of New York and all of the
participating employers in the PFRS.
Summary of relevant resources:
Membership data as of March 31, 2021 was used in measuring the impact
of the proposed change, the same data used in the April 1, 2021 actuari-
al valuation. Distributions and other statistics can be found in the
A. 7216--A 4
2021 Report of the Actuary and the 2021 Comprehensive Annual Financial
Report.
The actuarial assumptions and methods used are described in the 2020
and 2021 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, 2021
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 18, 2022, and intended for use only
during the 2022 Legislative Session, is Fiscal Note No. 2022-60,
prepared by the Actuary for the New York State and Local Retirement
System.
