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
________________________________________________________________________
6651
2023-2024 Regular Sessions
IN ASSEMBLY
April 25, 2023
___________
Introduced by M. of A. PHEFFER AMATO -- read once and referred to the
Committee on Governmental Employees
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-three that added this subparagraph shall receive a
17 refund of the employee portion of such contributions plus interest
18 provided that their age and allowable service are such that he or she
19 could not possibly be able to accumulate at least twenty-five years of
20 service by the time he or she reaches age fifty-seven.
21 § 2. This act shall take effect immediately.
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
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08433-02-3
A. 6651 2
certain Tier 4 carpenter titles from the physically taxing provisions,
which permit retirement at age 50 (with 25 years of credited service).
Participants in Eligible Carpenter Titles who started in the Age 57
Retirement Program (57/5 Plan), but will not reach 25 years of credited
service in a physically taxing title by age 57, would be ineligible to
take advantage of the early retirement provisions of the physically
taxing title.
Under the proposed legislation, these members 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.
Eligible Carpenter Titles are participants in the New York City
Employees' Retirement System (NYCERS) or the Board of Education Retire-
ment System of the City of New York (BERS) in the physically taxing
titles of carpenter, supervisor carpenter, ship carpenter, supervisor
ship carpenter, rigger, dockbuilder, supervisor dockbuilder, and general
supervisor dockbuilder.
Participants 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 census data and the 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 $4.8
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 $2.2 million and an
increase in the Present Value of Future Employer Normal Cost of approxi-
mately $2.6 million. These results are summarized in the table below:
Change in ($ Thousands): NYCERS BERS Total
Actuarial Value of Assets (AVA) $(5,234) $ (89) $(5,323)
Accrued Liability (AL) $(3,093) $ (44) $(3,137)
Unfunded Accrued Liability (AL - AVA) $ 2,141 $ 45 $ 2,186
Present Value of Future
Employer Normal Cost $ 2,535 $ 61 $ 2,596
FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: The enactment of
this proposed legislation would result in an initial increase in annual
employer contributions of approximately $860,000 for NYCERS and $17,000
for BERS which is the result of an increase in the Normal Cost in addi-
tion to the UAL payment. The initial increase in the employer contrib-
utions is estimated to be $378,000 for New York City and $499,000 for
the non-New York City obligors.
New UAL attributable to benefit changes are generally amortized over
the remaining working lifetime of those impacted by the benefit changes.
The remaining working lifetime for this group is approximately seven
years for NYCERS and eight years for BERS and the increase in UAL was
therefore amortized over a seven-year period (six payments) for NYCERS
and over an eight-year period (seven payments) for BERS under the One-
Year Lag Methodology using level dollar payments.
CENSUS DATA: The estimates presented herein are based on the census
data used in the June 30, 2022 actuarial valuation of NYCERS and BERS to
determine the Preliminary Fiscal Year 2024 employer contributions.
A. 6651 3
NYCERS BERS NYCERS & BERS
Count 205 5 210
Average Age 57.7 years 58.4 years 57.7 years
Average Service 15.8 years 16.6 years 15.8 years
Average Salary $109,100 $105,200 $109,000
ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
been calculated based on the actuarial assumptions and methods used for
the Preliminary Fiscal Year 2024 employer contributions of NYCERS and
BERS.
For the purposes of this Fiscal Note, it is assumed that the changes
would be reflected for the first time in the June 30, 2022 actuarial
valuation of NYCERS and BERS used to determine employer contributions
for Fiscal Year 2024.
RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend
highly on the realization of the actuarial assumptions used, demograph-
ics of the impacted population and other factors such as investment,
contribution, and other risks. If actual experience deviates from actu-
arial 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 to implement the
proposed legislation.
STATEMENT OF ACTUARIAL OPINION: I, Marek Tyszkiewicz, am the Chief
Actuary for, and independent of, the New York City Retirement Systems
and Pension Funds. I am an Associate of the Society of Actuaries and a
Member of the American Academy of Actuaries. I am a member of NYCERS,
but do not believe it impairs my objectivity to estimate the costs here-
in, and 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 2023-14 dated March 27,
2023 was prepared by the 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 2023
Legislative Session.
