Allows a beneficiary of a member whose death occurs on or after July 1, 2022 and who would have been entitled to a service credit at the time of such member's death to elect to receive a lump sum payment equal to the pension reserve that would have been established had the member retired on the date of such member's death.
STATE OF NEW YORK
________________________________________________________________________
9934
IN ASSEMBLY
April 19, 2022
___________
Introduced by M. of A. JONES -- read once and referred to the Committee
on Governmental Employees
AN ACT to amend the retirement and social security law, in relation to
allowing beneficiaries of certain deceased members to elect to receive
death benefits in a lump sum
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision b of section 448 of the retirement and social
2 security law is amended by adding a new paragraph 3 to read as follows:
3 3. Provided further, notwithstanding any other provision of this arti-
4 cle to the contrary, where the member is in a title as defined in subdi-
5 vision i of section eighty-nine of this chapter, and would have been
6 entitled to a service retirement benefit at the time of such member's
7 death and where such member's death occurs on or after July first, two
8 thousand twenty-two, the beneficiary or beneficiaries nominated for the
9 purposes of this subdivision may elect to receive, in a lump sum, an
10 amount payable which shall be equal to the pension reserve that would
11 have been established had the member retired on the date of such
12 member's death, or the value of the death benefit and the reserve-for-
13 increased-take-home-pay, if any, whichever is greater.
14 § 2. Subdivision b of section 508 of the retirement and social securi-
15 ty law, as amended by chapter 476 of the laws of 2018, is amended to
16 read as follows:
17 b. A member of a retirement system subject to the provisions of this
18 article who is a police officer, firefighter, correction officer, inves-
19 tigator revised plan member or sanitation worker and is in a plan which
20 permits immediate retirement upon completion of a specified period of
21 service without regard to age or who is subject to the provisions of
22 section five hundred four or five hundred five of this article, shall
23 upon completion of ninety days of service be covered for financial
24 protection in the event of death in service pursuant to this subdivi-
25 sion.
26 1. Such death benefit shall be equal to three times the member's sala-
27 ry raised to the next highest multiple of one thousand dollars, but in
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD14308-05-2
A. 9934 2
1 no event shall it exceed three times the maximum salary specified in
2 section one hundred thirty of the civil service law or, in the case of a
3 member of a retirement system other than the New York city employees'
4 retirement system, or in the case of a member of the New York city
5 employees' retirement system who is a New York city uniformed
6 correction/sanitation revised plan member or an investigator revised
7 plan member, the specific limitations specified for age of entrance into
8 service contained in subparagraphs (b), (c), (d), (e) and (f) of para-
9 graph two of subdivision a of this section.
10 2. Provided further, notwithstanding any other provision of this arti-
11 cle to the contrary, where the member is in a title as defined in subdi-
12 vision i of section eighty-nine of this chapter, and would have been
13 entitled to a service retirement benefit at the time of such member's
14 death and where such member's death occurs on or after July first, two
15 thousand twenty-two, the beneficiary or beneficiaries nominated for the
16 purposes of this subdivision may elect to receive, in a lump sum, an
17 amount payable which shall be equal to the pension reserve that would
18 have been established had the member retired on the date of such
19 member's death, or the value of the death benefit and the reserve-for-
20 increased-take-home-pay, if any, whichever is greater.
21 § 3. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would modify the in-service death benefit for tiers 2
through 6 state correction officers and security hospital treatment
assistants. The in-service death benefit will be the value of the
pension reserve as if the member had retired on their date of death.
If this bill is enacted during the 2022 legislative session, we antic-
ipate that there will be an increase of approximately $1.7 million in
the annual contributions of the State of New York for the fiscal year
ending March 31, 2023. In future years, this cost will vary as the bill-
ing rates and salary of the affected members change.
In addition to the annual contributions discussed above, there will be
an immediate past service cost of approximately $10.3 million which will
be borne by the State of New York as a one-time payment. This estimate
is based on the assumption that payment will be made on March 1, 2023.
These estimated costs are based on 18,958 affected members employed by
the State of New York, with annual salary of approximately $1.6 billion
as of March 31, 2021.
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
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.
A. 9934 3
This estimate, dated February 25, 2022, and intended for use only
during the 2022 Legislative Session, is Fiscal Note No. 2022-62,
prepared by the Actuary for the New York State and Local Retirement
System.
