Relates to additional member contributions for certain members under the age fifty-seven retirement program; provides that members holding certain titles who due to their age at the time of enrollment in the age fifty-seven retirement program will not obtain twenty-five years of service credit and therefore will not be eligible for a refund of their additional member contributions shall not be required to make additional member contributions.
STATE OF NEW YORK
________________________________________________________________________
7971--A
2021-2022 Regular Sessions
IN ASSEMBLY
June 4, 2021
___________
Introduced by M. of A. ABBATE -- read once and referred to the Committee
on Governmental Employees -- recommitted to the Committee on Govern-
mental Employees in accordance with Assembly Rule 3, sec. 2 -- commit-
tee discharged, bill amended, ordered reprinted as amended and recom-
mitted to said committee
AN ACT to amend the retirement and social security law, in relation to
additional member contributions for certain members under the age
fifty-seven retirement program
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 1 of subdivision f of section 604-d of the
2 retirement and social security law is amended by adding a new subpara-
3 graph (iv) to read as follows:
4 (iv) notwithstanding the provisions of subparagraph (ii) of this para-
5 graph, a participant holding the title of carpenter, supervisor carpen-
6 ter, ship carpenter, supervisor ship carpenter, rigger, dockbuilder,
7 supervisor dockbuilder and general supervisor dockbuilder who is a
8 participant in the age fifty-seven retirement program and whose age and
9 allowable service are such that he or she could not possibly be able to
10 accumulate at least twenty-five years of service by the time he or she
11 reaches age fifty-seven, shall not be required to make the additional
12 member contribution pursuant to subparagraph (ii) of this paragraph.
13 Any participant in the titles listed in this subparagraph who has made
14 additional member contributions pursuant to subparagraph (ii) of this
15 paragraph prior to the effective date of the chapter of the laws of two
16 thousand twenty-two that added this subparagraph shall receive a refund
17 of the employee portion of such contributions plus interest provided
18 that their age and allowable service are such that he or she could not
19 possibly be able to accumulate at least twenty-five years of service by
20 the time he or she reaches age fifty-seven.
21 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD06522-06-2
A. 7971--A 2
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: This proposed legislation would amend New York
Retirement and Social Security Law (RSSL) Section 604-d to exempt from
the physically taxing provisions certain Tier 4 carpenter titles, who
are participants in the New York City Employees' Retirement System
(NYCERS) or the Board of Education Retirement System of the City of New
York (BERS) Age 57 Retirement Program (57/5 Plan), and who would not
benefit from the early retirement provisions for such physically taxing
titles.
The proposed legislation would affect 57/5 Plan participants in the
physically taxing titles of carpenter, supervisor carpenter, ship
carpenter, supervisor ship carpenter, rigger, dockbuilder, supervisor
dockbuilder, and general supervisor dockbuilder (Eligible Carpenter
Title) who would be unable to reach the requisite 25 years of credited
service in a physically taxing title by age 57, and would therefore be
ineligible to take advantage of the early retirement provisions of the
physically taxing title, which permits retirement at age 50 (with 25
years of credited service).
Under the proposed legislation, Eligible Carpenter Titles who started
in the 57/5 Plan but will not reach 25 years of credited service in a
physically taxing title by age 57 would no longer pay physically taxing
Additional Member Contributions (AMCs) and would receive an immediate
refund of the employee portion (i.e., 50%) of their physically taxing
AMCs plus interest. Such Titles would remain responsible for applicable
basic member contributions and applicable non-physically taxing AMCs for
continued 57/5 Plan participation.
Effective Date: Upon enactment.
FINANCIAL IMPACT - PRESENT VALUES: Based on the census data and actu-
arial assumptions and methods described herein, the enactment of this
proposed legislation would result in an increase in the present value of
future employer contributions for NYCERS and BERS of approximately $5.2
million.
Under the Entry Age Normal cost method used to determine the employer
contributions to NYCERS and BERS, there would be an increase in the
Unfunded Accrued Liability (UAL) of approximately $2.3 million and an
increase in the present value of future employer Normal Cost of $2.9
million. These results are summarized in the table below:
Change in ($ Thousands): NYCERS BERS Total
Actuarial Value of Assets $(5,308) $ (79) $(5,387)
(AVA)
Accrued Liability (AL) $(3,053) $ (65) $(3,118)
Unfunded Accrued $ 2,255 $ 14 $ 2,269
Liability (AL-AVA)
Present Value of Future $ 2,815 $ 55 $ 2,870
Employer Normal Cost
FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with
Section 13-638.2(k-2) of the Administrative Code of the City of New York
(ACCNY), new UAL attributable to benefit changes are to be amortized as
determined by the Actuary but are generally amortized over the remaining
working lifetime of those impacted by the benefit changes. As of June
30, 2021, the remaining working lifetime of the members in Eligible
Carpenter Titles is approximately seven years for NYCERS and nine years
for BERS.
A. 7971--A 3
For the purposes of this Fiscal Note, the increase in UAL was amor-
tized over a seven-year period (six payments) for NYCERS and over a
nine-year period (eight payments) for BERS under the One-Year Lag Meth-
odology (OYLM) using level dollar payments. When added to the change in
Employer Normal Cost, the estimated increase in annual employer contrib-
utions is approximately $917,000 for NYCERS and $14,000 for BERS. The
increase in the employer contributions is estimated to be $389,000 for
New York City and $542,000 for the other obligors of NYCRS.
CONTRIBUTION TIMING: For the purposes of this Fiscal Note, it is
assumed that the changes in the Present Value of future employer
contributions and annual employer contributions would be reflected for
the first time in the Final June 30, 2021 actuarial valuation of NYCERS
and BERS. In accordance with the OYLM used to determine employer
contributions, the increase in employer contributions would first be
reflected in Fiscal Year 2023.
CENSUS DATA: The estimates presented herein are based on the census
data used in the Preliminary June 30, 2021 (Lag) actuarial valuation of
NYCERS and BERS to determine the Preliminary Fiscal Year 2023 employer
contributions.
NYCERS BERS NYCERS & BERS
Count 225 5 230
Average Age 57.2 years 57.4 years 57.2 years
Average Service 15.2 years 14.0 years 15.2 years
Average Salary $106,000 $98,700 $105,800
ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the UAL, Present Value
of future employer contributions, and annual employer contributions
presented herein have been calculated based on the same actuarial
assumptions and methods in effect for the June 30, 2021 (Lag) actuarial
valuations used to determine the Preliminary Fiscal Year 2023 employer
contributions of NYCERS and BERS.
RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend
highly on the realization of the actuarial assumptions used, as well as
certain demographic characteristics of NYCERS and BERS and other exoge-
nous factors such as investment, contribution, and other risks. If actu-
al experience deviates from actuarial assumptions, the actual costs
could differ from those presented herein. Costs are also dependent on
the actuarial methods used, and therefore different actuarial methods
could produce different results. Quantifying these risks is beyond the
scope of this Fiscal Note.
Not measured in this Fiscal Note are the following:
o The initial, additional administrative costs of NYCERS, BERS, and
other New York City agencies to implement the proposed legislation.
o The impact of this proposed legislation on Other Postemployment
Benefit (OPEB) costs.
STATEMENT OF ACTUARIAL OPINION: I, Michael J. Samet, am the Interim
Chief Actuary for, and independent of, the New York City Retirement
Systems and Pension Funds. I am a Fellow of the Society of Actuaries and
a Member of the American Academy of Actuaries. I meet the Qualification
Standards of the American Academy of Actuaries to render the actuarial
opinion contained herein. To the best of my 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.
A. 7971--A 4
FISCAL NOTE IDENTIFICATION: This Fiscal Note 2022-27 dated April 19,
2022 was prepared by the Interim Chief Actuary for the New York City
Employees' Retirement System and the Board of Education Retirement
System of the City of New York. This estimate is intended for use only
during the 2022 Legislative Session.
