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A09623 Summary:

BILL NOA09623
 
SAME ASSAME AS S08655
 
SPONSORAbbate
 
COSPNSRAubry
 
MLTSPNSR
 
Add §604-j, R & SS L
 
Relates to modifying the retirement program for Triborough bridge and tunnel members; provides for a twenty-year retirement program for Triborough bridge and tunnel members.
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A09623 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          9623
 
                   IN ASSEMBLY
 
                                     March 28, 2022
                                       ___________
 
        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
          modifying the retirement program  for  Triborough  bridge  and  tunnel
          members
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. The retirement and social security law is amended by adding
     2  a new section 604-j to read as follows:
     3    § 604-j. Twenty-year retirement  program  for  Triborough  bridge  and
     4  tunnel  members. a. Definitions. The following words and phrases as used
     5  in this section shall have the following  meanings  unless  a  different
     6  meaning is plainly required by the context:
     7    1.  "Triborough  bridge  and  tunnel  member"  shall  mean a member as
     8  defined in subdivision e of section six hundred one of this article  who
     9  is  employed  by  the Triborough bridge and tunnel authority as a bridge
    10  and tunnel officer, sergeant, or lieutenant in  a  non-managerial  posi-
    11  tion,  and  who is not a New York city revised plan member as defined in
    12  subdivision m of section six hundred one of this article.
    13    2. "Twenty-year retirement program"  shall  mean  all  the  terms  and
    14  conditions of this section.
    15    3.  "Starting  date  of the twenty-year retirement program" shall mean
    16  the effective date of this section, as such date is  certified  pursuant
    17  to section forty-one of the legislative law.
    18    4.  "Participant in the twenty-year retirement program" shall mean any
    19  Triborough bridge and tunnel member who, under the applicable provisions
    20  of subdivision b of this section, is entitled to  the  rights,  benefits
    21  and  privileges  and  is  subject  to the obligations of the twenty-year
    22  retirement program, as applicable to him or her.
    23    5. "Discontinued member" shall mean a participant in  the  twenty-year
    24  retirement  program  who,  while  he  or she was a Triborough bridge and
    25  tunnel member, discontinued service as such a member and has a right  to
    26  a deferred vested benefit under subdivision d of this section.
    27    6.  "Administrative  code"  shall  mean the administrative code of the
    28  city of New York.
    29    b. Participation in twenty-year retirement program. 1. Subject to  the
    30  provisions  of  paragraph  five of this subdivision, any person who is a
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14534-02-2

        A. 9623                             2
 
     1  Triborough bridge and tunnel member  as  defined  in  paragraph  one  of
     2  subdivision  a  of  this section on the starting date of the twenty-year
     3  retirement program and who, as such a bridge and tunnel member or other-
     4  wise,  last  became  subject  to the provisions of this article prior to
     5  such starting date, may elect to become a participant in the twenty-year
     6  retirement program by filing, within one hundred eighty days  after  the
     7  starting  date  of  the  twenty-year retirement program, a duly executed
     8  application for such participation with the retirement system  of  which
     9  such  person is a member, provided he or she is such a bridge and tunnel
    10  member on the date such application is filed.
    11    2. Any election to be a  participant  in  the  twenty-year  retirement
    12  program shall be irrevocable.
    13    3. Each Triborough bridge and tunnel member who becomes subject to the
    14  provisions  of this article on or after the starting date of the twenty-
    15  year retirement program shall become a participant  in  the  twenty-year
    16  retirement  program  on  the  date  he  or she becomes such a bridge and
    17  tunnel member.
    18    4. Where any participant in the twenty-year retirement  program  shall
    19  cease  to be employed by the Triborough bridge and tunnel authority as a
    20  bridge and tunnel member, he or she shall cease to be such a participant
    21  and, during any period in which such person is not so  employed,  he  or
    22  she shall not be a participant in the twenty-year retirement program and
    23  shall not be eligible for the benefits of subdivision c of this section.
    24    5.  Where any participant in the twenty-year retirement program termi-
    25  nates service as a Triborough bridge and tunnel member  and  returns  to
    26  such  service  as a Triborough bridge and tunnel member at a later date,
    27  he or she shall again become such a participant on that date.
    28    c. Service retirement benefits. 1. A participant  in  the  twenty-year
    29  retirement program:
    30    (i) who has completed twenty or more years of credited service; and
    31    (ii)  who has paid, before the effective date of retirement, all addi-
    32  tional member contributions and interest (if any) required  by  subdivi-
    33  sion e of this section; and
    34    (iii)  who  files  with  the retirement system of which he or she is a
    35  member an application for service retirement setting forth at what  time
    36  he or she desires to be retired; and
    37    (iv)  who shall be a participant in the twenty-year retirement program
    38  at the time so specified for his or her  retirement;  shall  be  retired
    39  pursuant  to  the  provisions  of  this  section affording early service
    40  retirement.
    41    2. (i) Notwithstanding any other provision of law to the contrary, the
    42  early service retirement benefit for  participants  in  the  twenty-year
    43  retirement program who retire pursuant to paragraph one of this subdivi-
    44  sion shall be a pension consisting of:
    45    (A)  an  amount, on account of the required minimum period of service,
    46  equal to one-half of his or her final average salary; plus
    47    (B) an amount of credited service, or fraction  thereof,  beyond  such
    48  required  minimum period of service equal to one and one-half percent of
    49  his or her final average salary.
    50    (ii) The maximum pension computed without optional modification  paya-
    51  ble  pursuant  to  subparagraph  (i)  of this paragraph shall equal that
    52  payable upon completion of thirty years of service.
    53    d. Vesting. 1. A participant in  the  twenty-year  retirement  program
    54  shall  be  entitled  to receive a deferred vested benefit as provided in
    55  this subdivision if such participant:

        A. 9623                             3
 
     1    (i) discontinues service as a Triborough  bridge  and  tunnel  member,
     2  other than by death or retirement; and
     3    (ii)  completed  five  but less than twenty years of credited service;
     4  and
     5    (iii) has paid, prior to such discontinuance,  all  additional  member
     6  contributions  and  interest  (if any) required by subdivision e of this
     7  section; and
     8    (iv) does not withdraw in whole or in  part  his  or  her  accumulated
     9  member  contributions  pursuant  to section six hundred thirteen of this
    10  article unless such participant thereafter returns to public service and
    11  repays the amounts so withdrawn, together  with  interest,  pursuant  to
    12  such section six hundred thirteen.
    13    2. (i) Upon such discontinuance under the conditions and in compliance
    14  with  the provisions of paragraph one of this subdivision, such deferred
    15  vested benefit shall vest automatically.
    16    (ii) Such vested benefit shall become payable on the earliest date  on
    17  which  such  discontinued  member could have retired for service if such
    18  discontinuance had not occurred.
    19    3. Such deferred vested benefit shall be a pension  consisting  of  an
    20  amount  equal  to two and one-half percent of such discontinued member's
    21  final average salary, multiplied by the  number  of  years  of  credited
    22  service.
    23    e.  Additional  member  contributions.  1.  In  addition to the member
    24  contributions required by section six hundred thirteen of this  article,
    25  each  participant  in  the twenty-year retirement program in the rank of
    26  bridge and tunnel officer shall contribute to the retirement  system  of
    27  which  he  or  she  is a member (subject to the applicable provisions of
    28  subdivision d of section six hundred thirteen of this article) an  addi-
    29  tional  five and fifty one-hundredths percent of his or her compensation
    30  and each participant in the twenty-year retirement program in  the  rank
    31  of  sergeant  or lieutenant shall contribute to the retirement system an
    32  additional six percent of his or her compensation earned from all allow-
    33  able service as a Triborough bridge and tunnel member  rendered  on  and
    34  after  the  date  which is one hundred eighty days prior to the starting
    35  date of the twenty-year retirement program. A participant in  the  twen-
    36  ty-year  retirement  program shall contribute additional member contrib-
    37  utions until the later of (i) the date as of which he or she has  twenty
    38  years  of  credited  service as a bridge and tunnel officer, or (ii) the
    39  third anniversary of the date that he or she last became  a  participant
    40  in the twenty-year retirement program.
    41    2.  Commencing  with  the  first full payroll period after each person
    42  becomes a participant in the twenty-year retirement program,  additional
    43  member  contributions  at  the  rate  specified in paragraph one of this
    44  subdivision shall be deducted (subject to the applicable  provisions  of
    45  subdivision  d of section six hundred thirteen of this article) from the
    46  compensation of such participant on  each  and  every  payroll  of  such
    47  participant for each and every payroll period.
    48    3.  (i)  Subject  to the provisions of subparagraph (ii) of this para-
    49  graph, where any additional member contributions required  by  paragraph
    50  one  of this subdivision are not paid by deductions from a participant's
    51  compensation pursuant to paragraph two of this subdivision:
    52    (A) that participant shall be charged with a  contribution  deficiency
    53  consisting of such unpaid amounts, together with interest thereon at the
    54  rate of five percent per annum, compounded annually; and
    55    (B)  such  interest  on  each amount of undeducted contributions shall
    56  accrue from the end of the payroll period for which  such  amount  would

        A. 9623                             4
 
     1  have been deducted from compensation if he or she had been a participant
     2  at  the  beginning  of that payroll period, until such amount is paid to
     3  the retirement system.
     4    (ii)  Except  as  provided in subparagraph (iii) of this paragraph, no
     5  interest shall be due on any such unpaid additional contributions  which
     6  are not attributable to the period prior to the first full payroll peri-
     7  od referred to in paragraph two of this subdivision.
     8    (iii)  Should  any  person  who,  pursuant  to paragraph eight of this
     9  subdivision, has withdrawn any additional member contributions (and  any
    10  interest  paid  thereon)  again  become a participant in the twenty-year
    11  retirement program pursuant to paragraph five of subdivision b  of  this
    12  section,  an  appropriate amount shall be included in such participant's
    13  contribution deficiency (including interest thereon as calculated pursu-
    14  ant to subparagraph  (i)  of  this  paragraph)  as  if  such  additional
    15  contributions had never been made.
    16    (iv)  Notwithstanding  any  other  provisions  of  this  paragraph, no
    17  participant shall be charged interest for  any  period  prior  to  March
    18  twenty-fifth, nineteen hundred ninety-eight with respect to any contrib-
    19  utions  owed  with respect to any payroll period beginning prior to such
    20  date.
    21    4. The head of a retirement system which includes participants in  the
    22  twenty-year  retirement  program  in its membership may, consistent with
    23  the provisions of  this  subdivision,  promulgate  regulations  for  the
    24  payment of such additional member contributions, and any interest there-
    25  on, by such participants (including the deduction of such contributions,
    26  and any interest thereon, from the participant's compensation).
    27    5.  Where a contribution deficiency chargeable to a participant pursu-
    28  ant to paragraph three of this subdivision has not  been  paid  in  full
    29  before  the  effective date of retirement, that participant shall not be
    30  eligible to retire pursuant to subdivision c of this section.
    31    6. Where a contribution deficiency chargeable to a participant  pursu-
    32  ant  to  paragraph  three  of this subdivision has not been paid in full
    33  before the date of discontinuance of service, that participant shall not
    34  be entitled to a deferred vested benefit pursuant to  subdivision  d  of
    35  this section.
    36    7. Where a participant has not paid in full any contribution deficien-
    37  cy chargeable to him or her pursuant to paragraph three of this subdivi-
    38  sion,  and a benefit, other than a refund of member contributions pursu-
    39  ant to section six hundred thirteen of  this  article  or  a  refund  of
    40  additional  member  contributions  pursuant  to  paragraph eight of this
    41  subdivision, becomes payable under this article to the participant or to
    42  his or her designated beneficiary or estate, the actuarial equivalent of
    43  any such unpaid amount shall be  deducted  from  the  benefit  otherwise
    44  payable.
    45    7-a. Notwithstanding paragraph six or seven of this subdivision, where
    46  a  deficiency chargeable to a participant pursuant to paragraph three of
    47  this subdivision has not been paid in full while the  participant  is  a
    48  Triborough  bridge  and tunnel member and such participant retires prior
    49  to July first, two thousand eleven, such participant  may  elect  to  be
    50  covered  by  this  paragraph.  Such participant shall be entitled to the
    51  benefits provided in subdivision c of this section provided that partic-
    52  ipant authorizes the retirement system to deduct from such  benefits  an
    53  amount  which will result in the deficiency, plus associated interest to
    54  date of final payment, being paid in full no later than July first,  two
    55  thousand  eleven  or  such earlier date as agreed to by the participant.
    56  Such amount will be deducted in equal installments on a  monthly  basis.

        A. 9623                             5
 
     1  Nothing  in  this  paragraph shall prevent the participant from making a
     2  partial payment of the amount of the deficiency at the time  of  retire-
     3  ment  so as to reduce the monthly payment nor to make a lump sum payment
     4  equal  to  the amount of the total unpaid balance at any time during the
     5  period of repayment.
     6    8. (i) Such additional member contributions (and any interest thereon)
     7  shall be paid into the contingent reserve fund of the retirement  system
     8  of  which  the  participant is a member and shall not for any purpose be
     9  deemed to be member contributions  or  accumulated  contributions  of  a
    10  member  under  section six hundred thirteen of this article or otherwise
    11  while he or she is a participant in the twenty-year  retirement  program
    12  or  otherwise, except that, a surplus of such additional member contrib-
    13  utions that are paid into the  retirement  system's  contingent  reserve
    14  fund  may  be used for the sole purpose of offsetting a deficit of basic
    15  member contributions.
    16    (ii) Should a participant in the twenty-year  retirement  program  who
    17  has  rendered  less than fifteen years of allowable service as a Tribor-
    18  ough bridge and tunnel member cease to hold a position as  a  Triborough
    19  bridge  and  tunnel member for any reason whatsoever, his or her accumu-
    20  lated additional member contributions made pursuant to this  subdivision
    21  (together  with  any interest thereon paid to the retirement system) may
    22  be withdrawn by him or her pursuant to procedures promulgated  in  regu-
    23  lations of the board of trustees of the retirement system, together with
    24  interest thereon at the rate of five percent per annum, compounded annu-
    25  ally.
    26    (iii)  Except  as  provided in subparagraph (ii) of this paragraph, no
    27  member, while he or she is a participant  or  otherwise,  shall  have  a
    28  right  to  withdraw such additional member contributions or any interest
    29  thereon from the retirement system.
    30    9. A member who has made the  additional  contributions  specified  by
    31  this subdivision may borrow a portion of such contributions, pursuant to
    32  the provisions of section six hundred thirteen-b of this article.
    33    § 2. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY  OF BILL: This proposed legislation would add Section 604-j to
        the Retirement and Social Security Law (RSSL)  to  establish  a  20-Year
        Retirement  Program (TBTA 20-Year Plan) for Tier 4 New York City Employ-
        ees' Retirement System (NYCERS) members employed by the TBTA as a bridge
        and tunnel officer, sergeant, or lieutenant in a non-managerial position
        (TBTA Eligible Position).
          Effective Date: Upon enactment.
          BACKGROUND: Currently, Tier 4 members  employed  in  a  TBTA  Eligible
        Position  generally  participate  in the TBTA 20/50 Plan, which sets the
        minimum age of service retirement, with 20 years of service, at age  50.
        The  proposed legislation would create a new plan that would permit Tier
        4 members in TBTA Eligible Positions to elect the TBTA 20-Year Plan  and
        retire  with 20 years of service regardless of age. Tier 6 members would
        not be eligible to participate in the TBTA 20-Year Plan.
          Participation in the TBTA 20-Year Plan is optional for anyone  who  is
        eligible  to participate in such Plan on the date of enactment by filing
        an election form within 180 days of enactment. Anyone who is an existing
        Tier 4 member of NYCERS  on  the  date  of  enactment  and  subsequently
        becomes  employed in a TBTA Eligible Position also has 180 days to elect
        to join the TBTA 20-Year Plan.

        A. 9623                             6
 
          IMPACT ON  BENEFITS:  The  proposed  legislation,  if  enacted,  would
        provide  the  following  benefits to members employed in a TBTA Eligible
        Position under the TBTA 20-Year Plan:
        * Service Retirement benefit:
            o  50% of Final Average Salary (FAS) for the first 20 years of Cred-
            ited Service, plus
            o 1.5% of FAS for each additional year of Credited Service exceeding
            20 years up to a maximum of 30 years of such service.
        * Service Retirement eligibility: Upon attaining 20  or  more  years  of
        Credited Service, without regard to age.
        * Final Average Salary: Three Year Average (FAS3).
        * Vested benefit:
            o  Eligibility:  At  least  five, but less than 20 years of Credited
            Service.
            o Payable at: The date the member would have completed 20  years  of
            Credited Service.
            o Amount: 2.5% of FAS for each year of Credited Service.
        * Other benefits: Members of the proposed TBTA 20-Year Plan are entitled
        to  the same disability and death benefits as other Tier 4 members under
        the basic plan.
          ADDITIONAL MEMBER CONTRIBUTIONS: Members of the TBTA 20-Year Plan  are
        required  to  make, in addition to the Tier 4 Basic Member Contributions
        (BMC) of 3%, Additional Member Contributions  (AMC)  equal  to  5.5%  of
        compensation  for  officers  and  6.0% of compensation for sergeants and
        lieutenants, for all service as a Plan  participant  on  and  after  the
        starting  date  of  the Plan until the later of the third anniversary of
        joining the Plan or 20 years of Credited  Service  in  a  TBTA  Eligible
        Position.
          FINANCIAL  IMPACT  - PRESENT VALUES: Based on the anticipated group of
        members joining the TBTA 20-Year Plan and the actuarial assumptions  and
        methods  described  herein,  the  enactment of this proposed legislation
        would increase the Present Value of Future Benefits (PVFB)  by  approxi-
        mately  $6.1  million  and increase the Present Value of member contrib-
        utions by approximately $0.5 million. The net result is an  increase  in
        the Present Value of future employer contributions of approximately $5.6
        million for TBTA.
          Under  the Entry Age Normal cost method used to determine the employer
        contributions to NYCERS, there would be  an  increase  in  the  Unfunded
        Accrued  Liability  (UAL)  of  approximately  $6.6  million  offset by a
        decrease in the Present Value of future employer  Normal  Cost  of  $1.0
        million.
          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 assumed to  join
        the TBTA 20-Year Plan is approximately seven years.
          For  the  purposes  of this Fiscal Note, the increase in UAL was amor-
        tized over a seven-year period (six  payments  under  the  One-Year  Lag
        Methodology  (OYLM))  using level dollar payments. This payment plus the
        increase in the Normal Cost results in an increase  in  annual  employer
        contributions of approximately $1.7 million each year for TBTA.
          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

        A. 9623                             7
 
        the first time in the Final June 30, 2021 actuarial valuation of NYCERS.
        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  to  determine the Preliminary Fiscal Year 2023 employer contrib-
        utions.
          The 105 NYCERS Tier 4 members as of June 30, 2021 assumed to join  the
        TBTA  20-Year Plan had an average age of approximately 42.3 years, aver-
        age service of approximately  16.5  years,  and  an  average  salary  of
        approximately $111,700.
          ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the Present Value of
        future   employer   contributions   and  annual  employer  contributions
        presented herein have been calculated based on the actuarial assumptions
        and methods in effect for the June 30, 2021 (Lag)  actuarial  valuations
        used  to  determine  the  Preliminary Fiscal Year 2023 employer contrib-
        utions of NYCERS.
          To determine the impact of the elective nature of the proposed  legis-
        lation,  a  subgroup of NYCERS Tier 4 members was developed based on who
        could potentially benefit actuarially. The net Present Value  of  future
        employer  costs  (i.e., the PVFB less the Present Value of future member
        contributions) of each  member's  benefit  was  determined  under  their
        current  plan  and under the TBTA 20-Year Plan. If the net Present Value
        of future employer cost under the TBTA 20-Year Plan was greater than  or
        equal  to  the  Present Value of future employer cost under the member's
        current plan, the member was deemed to benefit actuarially.
          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  other  exogenous
        factors  such  as  investment,  contribution, and other risks. If actual
        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:
        * The initial, additional administrative costs of NYCERS and  other  New
          York City agencies to implement the proposed legislation.
        *  The impact of this proposed legislation on Other Postemployment Bene-
          fit (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.
          FISCAL  NOTE  IDENTIFICATION: This Fiscal Note 2022-03 dated March 17,
        2022 was prepared by the Interim Chief Actuary for  the  New  York  City
        Employees'  Retirement  System.  This  estimate is intended for use only
        during the 2022 Legislative Session.
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