A08200 Summary:

BILL NOA08200
 
SAME ASNo same as
 
SPONSORAbbate
 
COSPNSR
 
MLTSPNSR
 
Amd SS604-c & 604-d, R & SS L
 
Authorizes refunding of certain member contributions made by members of the transit managerial benevolent association.
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A08200 Actions:

BILL NOA08200
 
06/06/2011referred to governmental employees
01/04/2012referred to governmental employees
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A08200 Floor Votes:

There are no votes for this bill in this legislative session.
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A08200 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          8200
 
                               2011-2012 Regular Sessions
 
                   IN ASSEMBLY
 
                                      June 6, 2011
                                       ___________
 
        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
          refunding contributions made to the twenty-five year early  retirement
          program  and  the  age fifty-seven retirement program by New York city
          transit authority members
 

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section 1. Subdivision d of section 604-c of the retirement and social
     2  security  law, as added by chapter 96 of the laws of 1995, is amended by
     3  adding a new paragraph 15 to read as follows:
     4    15. An eligible former participant,  as  defined  in  this  paragraph,
     5  shall  be  entitled  to  a  refund of the employee portion of his or her
     6  additional member contributions made pursuant to this subdivision  which
     7  shall  include  any and all interest thereon at the rate of five percent
     8  per annum, compounded annually and such refund shall  be  payable,  upon
     9  such  participant's  application  pursuant  to procedures promulgated in

    10  regulations of the board of trustees of the retirement system. An eligi-
    11  ble former participant shall be a current New York city transit authori-
    12  ty member, as defined in subdivision a of section six hundred four-b  of
    13  this  article,  who  was  a  participant  in  the twenty-five year early
    14  retirement program prior to the starting  date  of  the  elimination  of
    15  additional  member contributions, as such date is defined in an election
    16  made pursuant to paragraph ten of subdivision e of section  six  hundred
    17  four-b of this article.
    18    § 2. Subdivision f of section 604-d of the retirement and social secu-
    19  rity law is amended by adding a new paragraph 15 to read as follows:
    20    15.  An  eligible  former  participant,  as defined in this paragraph,

    21  shall be entitled to a refund of the employee  portion  of  his  or  her
    22  additional  contributions  made pursuant to this subdivision which shall
    23  include any and all interest  thereon  paid  to  the  retirement  system
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD04787-02-1

        A. 8200                             2
 
     1  together  with  interest  thereon at the rate of five percent per annum,
     2  compounded annually and such refund shall be payable, upon such  partic-
     3  ipant's application pursuant to procedures promulgated in regulations of

     4  the  board  of  trustees  of  the  retirement system. An eligible former
     5  participant shall be a current New York city transit  authority  member,
     6  as  defined in subdivision a of section six hundred four-b of this arti-
     7  cle, who was a participant in the  age  fifty-seven  retirement  program
     8  prior  to  the  starting  date  of  the elimination of additional member
     9  contributions, as such date is defined in an election made  pursuant  to
    10  paragraph  ten  of  subdivision  e of section six hundred four-b of this
    11  article.
    12    § 3. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          PROVISIONS OF PROPOSED LEGISLATION: This  proposed  legislation  would
        amend  New  York  State  Retirement  and  Social  Security  Law ("RSSL")

        Sections 604-c and 604-d to provide to certain  New  York  City  Transit
        Authority  ("NYCTA")  members of the New York City Employees' Retirement
        System ("NYCERS") a refund of Additional  Member  Contributions  ("AMC")
        that  were  paid while participants of one of the Chapter 96 of the Laws
        of 1995 ("Chapter 96/95") Retirement Programs.
          The Effective Date of the proposed legislation would be  the  date  of
        enactment.
          This  Fiscal Note assumes that the proposed legislation is intended to
        refund interest on AMC in accordance with NYCERS procedures for  credit-
        ing interest on member contributions.
          IMPACT  ON  PLAN  PROVISIONS  - ADDITIONAL MEMBER CONTRIBUTIONS: Under
        Chapter 96/95, AMC were required under  each  of  the  Early  Retirement
        Programs:
          * The Twenty-Five-Year Early Retirement Program ("55/25 Program") and

          * The Age-Fifty-Seven Retirement Program ("57/5 Program").
          Those  NYCERS members who participated in either of such Programs paid
        AMC of:
          4.35% of salary for service on and after January 1, 1995 until January
        1, 1998,
          2.85% of salary for service on and after January 1, 1998 until  Decem-
        ber 2, 2001, and
          1.85% of salary for service on and after December 2, 2001.
          In addition, if such member's job title was considered Physically-Tax-
        ing  ("PT"),  an  additional Physically-Taxing AMC ("PTAMC") of 1.98% of
        salary was required for all service on and after January 1, 1995.
          As a result of Chapter 10 of the Laws of 2000, many of the NYCTA  Tier
        IV  members  of  NYCERS who participated in the Chapter 96/95 Retirement
        Program were transferred  into  the  Transit  Twenty-Five-Year  and  Age
        Fifty-Five Retirement Program ("Transit 55/25 Program") effective Decem-

        ber 15, 2000. For these members, the AMC and PTAMC that had been payable
        under  the  Chapter  96/95  Retirement  Programs were no longer required
        after January 3, 2001 (i.e.,  the  effective  implementation  date,  the
        first payroll period following the transfer date).
          This  proposed  legislation  would  refund, on and after the Effective
        Date, to certain Transit 55/25 Program participants with initial Program
        participation dates on or before December 15, 2000, the employee portion
        of the AMC and PTAMC, if any, paid  for  participation  in  the  Chapter
        96/95 Retirement Programs, including accrued interest at 5.0% per annum.
          Note,  under the Chapter 96/95 Retirement Programs, 50% of the AMC and
        PTAMC paid into such Programs is  considered  an  employer  contribution
        while  the  other  50%  is considered to be the employee portion. If the


        A. 8200                             3
 
        proposed Legislation were enacted, those impacted Transit 55/25  Program
        participants  would  receive  the  balance  of  the accumulated employee
        portion of AMC and PTAMC.
          To  receive such refund, those eligible participants would be required
        to complete a form and follow procedures to be established by the NYCERS
        Board of Trustees.
          FINANCIAL IMPACT - OVERVIEW: If enacted into  the  law,  the  ultimate
        employer  cost  of  this  proposed legislation will be determined by the
        reduction in expected benefits paid, (due to there  no  longer  being  a
        requirement  to  refund  AMC  on  a  future  withdrawal),  offset by the
        reduction in Fund assets due to the current refund of AMC.
          FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: With  respect  to  NYCERS
        and  based  on  the  census  data  and actuarial assumptions and methods

        described herein, the  enactment  of  this  proposed  legislation  would
        result  in a decrease in the Actuarial Present Value ("APV") of Benefits
        ("APVB") of approximately $0.1 million as of June 30, 2010.
          In addition, there would be a reduction in Actuarial Asset Value as of
        June 30, 2010 to reflect the expected refund of the employee portion  of
        accumulated  Chapter 96/95 Retirement Program AMC and PTAMC, if any, for
        those impacted Transit 55/25 Program participants of approximately  $1.7
        million.
          Together,  the enactment of the proposed legislation would result in a
        net increase in the APV of Future Employer Normal  Costs  to  NYCERS  of
        approximately $1.6 million as of June 30, 2010.
          FINANCIAL IMPACT - ADDITIONAL ANNUAL EMPLOYER COSTS AND CONTRIBUTIONS:
        With respect to NYCERS, the enactment of this proposed legislation would

        increase annual employer costs by approximately $210,000 per year.
          Increases  in  employer contributions would be comparable to the esti-
        mated increases in employer costs.
          If enacted during the 2011 Legislative Session on or before  June  30,
        2011, then increased employer contributions to NYCERS would begin Fiscal
        Year 2011.
          If  enacted  during  the 2011 Legislative Session after June 30, 2011,
        then increased employer contributions to NYCERS would begin Fiscal  Year
        2012.
          FINANCIAL  IMPACT  -  POTENTIAL  CHANGES  IN ACTUARIAL ASSUMPTIONS AND
        METHODS: The impact of enactment of the proposed legislation provided in
        this Fiscal Note has been based on the continued use of certain  current
        actuarial assumptions.
          However,  this  set of actuarial assumptions and methods do not repre-
        sent the only possible approach for funding the New York City Retirement

        Systems ("NYCRS").
          Historically, actuarial assumptions and methods have been reviewed  on
        average  every  five  years  in  connection with an actuarial experience
        study mandated by New York City Charter Section 96.
          Following this review, the Actuary generally proposes changes in actu-
        arial assumptions and methods  that  he  believes  are  appropriate  and
        reasonably related to such experience period and future expectations.
          The  next  such review is anticipated during Fiscal Year 2012 at which
        time the Actuary is likely to propose new packages of actuarial  assump-
        tions  and  methods  to  be  effective  for  use in determining employer
        contributions beginning Fiscal Year 2012.
          It is anticipated that whatever new actuarial assumptions  are  recom-
        mended by the Actuary are likely to result in increased APVB and employ-

        er  costs  as  the current actuarial assumptions no longer represent the
        Actuary's best estimates.

        A. 8200                             4
 
          Note: The Actuary has not yet committed to  any  particular  actuarial
        assumptions  or  methodology for determining employer costs and employer
        contributions in connection with  the  upcoming,  experience  review  of
        actuarial assumptions and methods.
          OTHER  COSTS:  Not  measured  in  this  Fiscal Note are any additional
        administrative costs or the impact of this proposed legislation  on  the
        Manhattan and Bronx Surface Transit Operating Authority ("MaBSTOA").
          CENSUS DATA: The census data used for estimates of APVB, APV of Future
        Employer  Normal  Costs  and employer contributions presented herein are
        the 35,300 Tier IV active members of NYCERS who participate in the Tran-

        sit 55/25 Program with annual salaries of approximately $2,490.0 million
        included in the June 30, 2010 actuarial valuation of NYCERS.
          Of these 35,300 Tier IV members of NYCERS who participate in the Tran-
        sit 55/25 Program as of June 30, 2010, 746 members with annual  salaries
        of  approximately  $57.7 million have AMC (and, in certain cases, PTAMC)
        account balances from contributions made under the Chapter 96/95 Retire-
        ment Programs while 34,554 of these members do not have such  AMC  (and,
        in certain cases, PTAMC) account balances.
          Of such 746 NYCERS members, 467 members with salaries of approximately
        $40.2  million  became  participants  of the Transit 55/25 Program on or
        before December 15, 2000 while 279 of  such  members  with  salaries  of
        approximately  $17.6  million  have  Chapter  96/95 AMC (and, in certain

        cases, PTAMC) account balances,  but are not eligible for a refund.
          Those former participants of the Transit 55/25 Program who do not meet
        the definition of active participant because  they  withdrew  and  their
        length  of  absence  has  exceeded five years, or withdrew with deferred
        vested benefits or who have retired, were therefore excluded.
          ACTUARIAL ASSUMPTIONS AND METHODS:  Additional  APVB,  APV  of  Future
        Employer  Normal Costs and employer costs have been calculated using the
        actuarial assumptions and methods in effect for the June 30, 2010  (Lag)
        actuarial  valuation  of  NYCERS to determine employer contributions for
        Fiscal Year 2012.
          The development of the APVB and the expected refund of  Chapter  96/95
        AMC  and  PTAMC  assume  that all impacted Transit 55/25 Program partic-
        ipants would still be active participants in that Program.

          Additional annual employer costs  have  been  estimated  assuming  the
        additional  APV  of Future Normal Costs would be financed through future
        normal contributions.
          As stated earlier, the Actuary is likely to propose  new  packages  of
        actuarial assumptions and methods to be effective for use in determining
        employer  contributions  beginning  Fiscal  Year  2012. As such, not all
        assumptions employed in determining the results contained in this letter
        for Fiscal Years 2012 and later represent  the  Actuary's  current  best
        estimate  of  future  experience.  However,  most of the assumptions and
        methods used to determine the results  contained  herein  are  generally
        those  adopted  by the NYCRS Boards of Trustees and enacted by the State
        Legislature and Governor, and  provide  consistency  with  the  employer
        contributions currently being presented.

          Finally,  the actuarial assumptions currently employed for determining
        employer contributions do not represent risk-adjusted,  economic  evalu-
        ations.  Such  risk-adjusted,  economic  evaluations  could, for certain
        components of the proposed  Legislation,  produce  results  that  differ
        significantly from the results shown herein.
          STATEMENT  OF ACTUARIAL OPINION: I, Robert C. North, Jr., am the Chief
        Actuary for the New York City Retirement Systems. I am a Fellow  of  the
        Society  of Actuaries and a Member of the American Academy of Actuaries.

        A. 8200                             5
 
        I meet the Qualification Standards of the American Academy of  Actuaries
        to render the actuarial opinion contained herein.
          FISCAL  NOTE  IDENTIFICATION:  This  estimate is intended for use only

        during the 2011 Legislative Session. It is Fiscal  Note  2011-19,  dated
        May  18,  2011,  prepared  by  the  Chief  Actuary for the New York City
        Employees' Retirement System.
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