STATE OF NEW YORK
________________________________________________________________________
6438--A
IN SENATE
February 9, 2012
___________
Introduced by Sen. GOLDEN -- read twice and ordered printed, and when
printed to be committed to the Committee on Local Government --
committee discharged, bill amended, ordered reprinted as amended and
recommitted to said committee
AN ACT to amend the general municipal law and the retirement and social
security law, in relation to increasing certain special accidental
death benefits
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision c of section 208-f of the general municipal
2 law, as amended by chapter 161 of the laws of 2011, is amended to read
3 as follows:
4 c. Commencing July first, two thousand [eleven] twelve the special
5 accidental death benefit paid to a widow or widower or the deceased
6 member's children under the age of eighteen or, if a student, under the
7 age of twenty-three, if the widow or widower has died, shall be esca-
8 lated by adding thereto an additional percentage of the salary of the
9 deceased member (as increased pursuant to subdivision b of this section)
10 in accordance with the following schedule:
11 calendar year of death
12 of the deceased member per centum
13 1977 or prior [173.2%] 181.4%
14 1978 [165.2%] 173.2%
15 1979 [157.5%] 165.2%
16 1980 [150.0%] 157.5%
17 1981 [142.7%] 150.0%
18 1982 [135.7%] 142.7%
19 1983 [128.8%] 135.7%
20 1984 [122.1%] 128.8%
21 1985 [115.7%] 122.1%
22 1986 [109.4%] 115.7%
23 1987 [103.3%] 109.4%
24 1988 [97.4%] 103.3%
25 1989 [91.6%] 97.4%
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD13981-03-2
S. 6438--A 2
1 1990 [86.0%] 91.6%
2 1991 [80.6%] 86.0%
3 1992 [75.4%] 80.6%
4 1993 [70.2%] 75.4%
5 1994 [65.3%] 70.2%
6 1995 [60.5%] 65.3%
7 1996 [55.8%] 60.5%
8 1997 [51.3%] 55.8%
9 1998 [46.9%] 51.3%
10 1999 [42.6%] 46.9%
11 2000 [38.4%] 42.6%
12 2001 [34.4%] 38.4%
13 2002 [30.5%] 34.4%
14 2003 [26.7%] 30.5%
15 2004 [23.0%] 26.7%
16 2005 [19.4%] 23.0%
17 2006 [15.9%] 19.4%
18 2007 [12.6%] 15.9%
19 2008 [9.3%] 12.6%
20 2009 [6.1%] 9.3%
21 2010 [3.0%] 6.1%
22 2011 [0.0%] 3.0%
23 20120.0%
24 § 2. Subdivision c of section 361-a of the retirement and social secu-
25 rity law, as amended by chapter 161 of the laws of 2011, is amended to
26 read as follows:
27 c. Commencing July first, two thousand [eleven] twelve the special
28 accidental death benefit paid to a widow or widower or the deceased
29 member's children under the age of eighteen or, if a student, under the
30 age of twenty-three, if the widow or widower has died, shall be esca-
31 lated by adding thereto an additional percentage of the salary of the
32 deceased member, as increased pursuant to subdivision b of this section,
33 in accordance with the following schedule:
34 calendar year of death
35 of the deceased member per centum
36 1977 or prior [173.2%] 181.4%
37 1978 [165.2%] 173.2%
38 1979 [157.5%] 165.2%
39 1980 [150.0%] 157.5%
40 1981 [142.7%] 150.0%
41 1982 [135.7%] 142.7%
42 1983 [128.8%] 135.7%
43 1984 [122.1%] 128.8%
44 1985 [115.7%] 122.1%
45 1986 [109.4%] 115.7%
46 1987 [103.3%] 109.4%
47 1988 [97.4%] 103.3%
48 1989 [91.6%] 97.4%
49 1990 [86.0%] 91.6%
50 1991 [80.6%] 86.0%
51 1992 [75.4%] 80.6%
52 1993 [70.2%] 75.4%
53 1994 [65.3%] 70.2%
54 1995 [60.5%] 65.3%
55 1996 [55.8%] 60.5%
56 1997 [51.3%] 55.8%
S. 6438--A 3
1 1998 [46.9%] 51.3%
2 1999 [42.6%] 46.9%
3 2000 [38.4%] 42.6%
4 2001 [34.4%] 38.4%
5 2002 [30.5%] 34.4%
6 2003 [26.7%] 30.5%
7 2004 [23.0%] 26.7%
8 2005 [19.4%] 23.0%
9 2006 [15.9%] 19.4%
10 2007 [12.6%] 15.9%
11 2008 [9.3%] 12.6%
12 2009 [6.1%] 9.3%
13 2010 [3.0%] 6.1%
14 2011 [0.0%] 3.0%
15 20120.0%
16 § 3. This act shall take effect July 1, 2012.
FISCAL NOTE.-- Pursuant to Legislative Law, Section 50:
This bill would amend both the General Municipal Law and the Retire-
ment and Social Security Law to increase the salary used in the computa-
tion of the special accidental death benefit by 3% in cases where the
date of death was before 2012.
Insofar as this bill would amend the Retirement and Social Security
Law, it is estimated that there would be an additional annual cost of
approximately $390,000 above the approximately $8.7 million current
annual cost of this benefit. This cost would be shared by the State of
New York and all participating employers of the New York State and Local
Police and Fire Retirement System.
Summary of relevant resources:
Data: March 31, 2011 Actuarial Year End File with distributions of
membership and other statistics displayed in the 2011 Report of the
Actuary and 2011 Comprehensive Annual Financial Report.
Assumptions and Methods: 2010 and 2011 Annual Report to the Comp-
troller on Actuarial Assumptions, Codes Rules and Regulations of the
State of New York: Audit and Control.
Market Assets and GASB Disclosures: March 31, 2011 New York State and
Local Retirement System Financial Statements and Supplementary Informa-
tion.
Valuations of Benefit Liabilities and Actuarial Assets: summarized in
the 2011 Actuarial Valuations report.
I am a member of the American Academy of Actuaries and meet the Quali-
fication Standards to render the actuarial opinion contained.
This estimate, dated January 6, 2012 and intended for use only during
the 2012 Legislative Session, is Fiscal Note No. 2012-43, prepared by
the Actuary for the New York State and Local Police and Fire Retirement
System.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
PROVISIONS OF PROPOSED LEGISLATION - OVERVIEW:
With respect to the City of New York (the "City"), this proposed
legislation would amend General Municipal Law ("GML") Section 208-f.c to
increase certain Special Accidental Death Benefits ("SADB") for line-of-
duty widows/widowers and/or children of former uniformed employees of
the City and the New York City Health and Hospitals Corporation and
certain former employees of the Triborough Bridge and Tunnel Authority
who were members of certain New York City Retirement Systems ("NYCRS").
In addition, the proposed legislation would amend Retirement and
Social Security Law Section 361-a.c to cover such SADB for certain
S. 6438--A 4
survivors of deceased members of the New York State and Local Police
and Fire Retirement System.
The Effective Date of the proposed legislation would be July 1, 2012.
IMPACT ON BENEFITS - SADB RECIPIENTS: With respect to the NYCRS, the
proposed legislation would impact the SADB payable to certain survivors
of members of the:
* New York City Employees' Retirement System ("NYCERS"), or
* New York City Police Pension Fund ("POLICE"), or
* New York City Fire Department Pension Fund ("FIRE"), and
who were employed by one of the following employers in certain posi-
tions:
* New York City Police Department - Uniformed Position,
* New York City Fire Department - Uniformed Position,
* New York City Housing Authority - Uniformed Position,
* New York City Transit Authority - Uniformed Position,
* New York City Department of Correction - Uniformed Position,
* New York City - Uniformed Position as Emergency Medical Technician
("EMT"),
* New York City Health and Hospitals Corporation - Uniformed Position
as EMT, or
* Triborough Bridge and Tunnel Authority - Bridge and Tunnel Position.
DESCRIPTION OF BENEFITS PAYABLE: Under the GML, the basic SADB is
defined to equal:
The salary of the deceased member at the date of death (or, in certain
instances, a greater salary based on rank or other status) ("Final Sala-
ry"), less:
* Any death benefit is adjusted by any Supplementation or Cost-of-Liv-
ing Adjustment ("COLA") paid by the NYCRS to the member's survivors,
* Any death benefit paid by Social Security to the member's survivors,
and
* Any Worker's Compensation benefit paid to the member's survivors.
The SADB is paid to the deceased member's surviving widow or widower,
if alive. If the widow/widower is no longer alive, then the SADB is paid
to the deceased member's children until age eighteen or while attending
school until age twenty-three.
The GML also provides that the SADB is subject to escalation based on
the calendar year of death of the member. Each year since Calendar Year
1977 the SADB has been increased by an additional cumulative, incre-
mental percentage of Final Salary. For example, for a covered member
deceased in Calendar Year 1979, the SADB cumulative percentage is 157.5%
of Final Salary as of July 1, 2011.
Under the proposed legislation, the additional, incremental percentage
of Final Salary to be effective July 1, 2012 would be 3.0%.
FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES OF BENEFITS ("APVB"): With
respect to NYCRS members under the actuarial assumptions and methods as
noted herein, the enactment of this proposed legislation would increase
APVB by approximately $25.4 million as of June 30, 2012.
FINANCIAL IMPACT - EMPLOYER PAYMENTS: With respect to the NYCRS, as
these SADB are provided on a pay-as-you-go basis, the additional annual
employer payments expected to be paid during the first year, if the
proposed legislation is enacted, would equal approximately $2.4 million.
Note: These additional payments represent an increase of approximately
4.6% in the estimated SADB payments during the first year.
The SADB payments are made by the NYCRS who are reimbursed by the City
who is then reimbursed by the State of New York.
S. 6438--A 5
OTHER COSTS: The enactment of this proposed legislation would also be
expected to result in modest increases in administrative expenses of
NYCERS, POLICE, FIRE, the employers and certain New York City agencies.
CENSUS DATA: The financial impact of the proposed legislation is based
upon the census data for such widows, widowers and children provided by
the NYCRS and adjusted, as necessary, to prepare the computations and
for consistency with other data.
The following table shows, by Retirement System, the number of
deceased members with eligible survivors as of June 30, 2011 and the
estimated annual SADB rate prior to the increase proposed to be effec-
tive as of July 1, 2012.
Table 1
SADB Census Data as of June 30, 2011
($ Millions)
Number of Annual SADB Rate
Deceased Members Prior to Proposed
with Eligible July 1, 2012
Retirement System Survivors Increase
NYCERS 31 $ 1.3
POLICE 306 15.0
FIRE 614 35.9
Total 951 $52.2
ACTUARIAL ASSUMPTIONS AND METHODS: Additional APVB have been computed
based on the actuarial assumptions and methods in effect for the June
30, 2010 (Lag) actuarial valuations of NYCERS, POLICE and FIRE used to
determine the Preliminary Fiscal Year 2012 employer contributions,
including an Actuarial Interest Rate ("AIR") assumption of 8.0% per
annum.
The demographic actuarial assumptions were adopted by the Board of
Trustees of each NYCRS during Fiscal Year 2006 and the AIR assumption
was enacted by the New York State Legislature and Governor and continues
in effect.
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 current actuarial assumptions and methods used to
determine employer contributions to the NYCRS.
However, based, in part, on the results of experience studies mandated
by the New York City Charter, the Actuary has proposed new packages of
actuarial assumptions and methods for use in determining employer
contributions to NYCRS for Fiscal Year 2012 and after. Therefore,
current actuarial assumptions no longer represent the Actuary's best
estimates of future experience.
It is anticipated that the APVB determined under the proposed new
packages of actuarial assumptions and methods will increase compared
with the APVB determined under current actuarial assumptions and meth-
ods.
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
S. 6438--A 6
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 continued herein.
FISCAL NOTE IDENTIFICATION: This estimate is intended for use only
during the 2012 Legislative Session. It is Fiscal Note 2012-05, dated
February 29, 2012, prepared by the Chief Actuary for the New York City
Employees' Retirement System, the New York City Police Pension Fund and
the New York City Fire Department Pension Fund.
