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A06914 Summary:

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A06914 Floor Votes:

A06914 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         6914--A
 
                               2013-2014 Regular Sessions
 
                   IN ASSEMBLY
 
                                     April 24, 2013
                                       ___________
 
        Introduced  by M. of A. ROSENTHAL, COLTON, PERRY, BENEDETTO -- read once
          and referred to the Committee on Governmental Employees -- recommitted
          to the Committee on Governmental Employees in accordance with Assembly
          Rule  3,  sec.  2  --  committee  discharged,  bill  amended,  ordered
          reprinted as amended and recommitted to said committee
 

        AN  ACT  to  amend  the  military  law,  in relation to non-contributory
          retirement service credit for members of the New York city  retirement
          systems  called  to  military duty on or after September eleventh, two
          thousand one
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1. Section 243-d of the military law, as added by chapter 326
     2  of the laws of 2005, is amended to read as follows:
     3    § 243-d. Non-contributory retirement service credit for members of the
     4  New York state and local retirement systems, the New York  city  retire-
     5  ment systems or the New York state teachers' retirement system called to
     6  active  military  duty on or after September eleventh, two thousand one.
     7  Notwithstanding any other provision of law, any member of the  New  York

     8  state  and local employees' retirement system, the New York city retire-
     9  ment systems, the New York state and local police  and  fire  retirement
    10  system,  or the New York state teachers' retirement system who is called
    11  to active military duty on or after September eleventh, two thousand one
    12  and prior to January first, two thousand six, who is not  receiving  his
    13  or her full salary from a participating employer and is otherwise eligi-
    14  ble  to receive retirement service credit in such system for such active
    15  military duty pursuant to section two hundred forty-two or  two  hundred
    16  forty-three  of  this  article,  shall  not  be  required to make member
    17  contributions to receive such credit.
    18    § 2. This act shall take effect immediately and  shall  be  deemed  to
    19  have been in full force and effect on and after September 11, 2001.
 

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD05024-04-4
        A. 6914--A                          2
 
          FISCAL NOTE.-- PROVISIONS OF PROPOSED LEGISLATION: The proposed legis-
        lation would amend Military Law Section 243-d to provide non-contributo-
        ry retirement service credit for any member of the New York City Retire-
        ment  Systems  ("NYCRS")  who  was  called to active military duty on or
        after  September  11,  2001  and  prior  to January 1, 2006, who did not
        receive his or her full salary from a  participating  employer  and  who
        otherwise  would be eligible to receive retirement service credit in the
        NYCRS for such  active  military  service.  Such  member  would  not  be

        required to make member contributions to receive such credit.
          It  is the understanding of the Actuary that the time period for which
        such member was not receiving his or her full salary from a  participat-
        ing  employer  would be the time period of such military service and not
        the time period after the return of such member to his or her employment
        with a participating employer of the NYCRS.
          The Effective Date of the proposed legislation would be  the  date  of
        enactment  and  would be deemed to have been in full force and effect on
        and after September 11, 2001.
          FINANCIAL IMPACT - SUMMARY: Enactment  of  this  proposed  legislation
        would  increase the Unfunded Actuarial Accrued Liability ("UAAL"), where
        such amount depends on the number  of  members  affected  and  upon  the
        amount  of  military  service being credited as well as other character-

        istics including the age and salary history of the affected members.
          Assuming that these affected  members  would  purchase  this  military
        service  if  this  legislation  were  not enacted, the enactment of this
        proposed legislation for each  member  affected  would  be  expected  to
        result  in  an increase in the UAAL reflecting the impact of making such
        purchases non-contributory.
          Under Military Law Section 243, captioned  "Provisions  applicable  to
        public  employees who are absent on military duty," members who purchase
        such service would contribute such  amount  as  he  or  she  would  have
        contributed had his or her employment been continuous.
          Under  Military  Law  Section  244-a,  captioned "Credit to members of
        public retirement systems for military service  performed  during  war,"
        members  who  purchase  such  service would pay in full the cost of such

        service (i.e., both the member cost and the employer cost).
          Under the Retirement and Social Security Law  ("RSSL")  Section  1000,
        captioned  "Military  service credit," members who purchase such service
        would contribute 3.0% of his or her compensation earned in the 12 months
        of credited service immediately  preceding  the  date  that  the  member
        purchases  this  service  times  the  number  of  years of service being
        purchased.
          However, RSSL Section  1000  also  provides  that  a  member  who  has
        purchased  military service pursuant to Military Law Section 244-a would
        be entitled to a refund of the difference between the amount paid by the
        member for such purchase and the amount that would be payable if service
        had been purchased under RSSL Section 1000.
          Thus, for purposes of this Fiscal Note, it has been assumed  that  the

        member would have purchased this service under RSSL Section 1000.
          Accordingly, the increase in the UAAL would be comparable to the value
        of member contributions of 3.0% of his or her compensation earned in the
        12  months  of  credited service immediately preceding the date that the
        member purchases this service times the number of years of service being
        purchased.
          For purposes of amortization of the increase in  UAAL,  in  accordance
        with  Administrative  Code  of  the  City  of  New York ("ACNY") Section
        13.638.2(k-2), the Actuary has roughly estimated the  remaining  working
        A. 6914--A                          3
 
        lifetimes  of  those  likely  to  utilize the provisions of the proposed
        legislation to be 10 years. Under the One-Year Lag Methodology  ("OYLM")
        used  to  finance  the  NYCRS,  an amortization period of 10 years would

        include  nine  annual  payments  beginning  one year after the actuarial
        valuation date.
          The following Table summarizes the estimated financial impact of  this
        proposed legislation on the NYCRS:
                                         Table 1
 
             Estimated Financial Impact to Provide Non-Contributory Service
              Credit for Certain Members Called to Active Military Duty on
                and after September 11, 2001 and prior to January 1,2006
 
                                      ($ Thousands)
 
                               Estimated Increase in
                               Unfunded Actuarial      Estimated Additional
        Retirement System{1}   Accrued Liability       Annual Employer Costs{2}
        NYCERS                         $459.2                   $72.9
        TRS                             0.0{3}                  0.0{3}
        BERS                            0.0{3}                  0.0{3}

        POLICE                        3,774.9                   599.4
        FIRE                            490.9                    77.9
         Total                       $4,725.0                  $750.2
 
        {1} New York City Employees' Retirement System ("NYCERS")
            New York City Teachers' Retirement System ("TRS")
            New York City Board of Education Retirement System ("BERS")
            New York City Police Pension Fund ("POLICE")
            New York City Fire Department Pension Fund ("FIRE")
        {2} Based on an amortization period of 10 years (9 payments under OYLM).
        {3} De minimis.
     1    Increases  in  employer  contributions  would  be  comparable  to  the
     2  increases in employer costs.
     3    If enacted during the 2014 Legislative Session and if  these  affected
     4  members  and their amounts of military service being credited were iden-
     5  tified on or before June 30, 2014, this proposed  legislation  would  be

     6  expected  to  increase  employer  contributions  to  the NYCRS beginning
     7  Fiscal Year 2016.
     8    OTHER COSTS: The enactment of this proposed legislation  would  result
     9  in some administrative expenses for the NYCRS.
    10    CENSUS  DATA:  The  calculation of estimated changes in UAAL, employer
    11  costs and employer contributions presented herein  is  based  upon  data
    12  provided  by  NYCERS,  POLICE and FIRE. NYCERS reported that 179 members
    13  were called to military duty between September 11, 2001 and December 31,
    14  2005. POLICE provided data on 1,121 members who were called to  military
    15  service between September 11, 2001 and December 31, 2005 along with each
    16  member's  length  of  military service during that period and their rank
    17  when called to duty. FIRE provided data on 185 members who were on mili-
    18  tary service as of the end of each calendar year from 2001 through  2005

    19  along  with their salary at the time they were called to duty. Estimates
    20  were made for similar information for TRS and BERS  based  on  the  data
    21  received from the other systems.
    22    STATEMENT  OF ACTUARIAL OPINION: I, Robert C. North, Jr., am the Chief
    23  Actuary for the New York City Retirement Systems. I am a Fellow  of  the
    24  Society  of Actuaries and a Member of the American Academy of Actuaries.
        A. 6914--A                          4
 
     1  I meet the Qualification Standards of the American Academy of  Actuaries
     2  to render the actuarial opinion contained herein.
     3    FISCAL  NOTE  IDENTIFICATION:  This  estimate is intended for use only
     4  during the 2014 Legislative Session. It is Fiscal  Note  2014-10,  dated
     5  April 2, 2014 prepared by the Chief Actuary of the New York City Retire-
     6  ment Systems.