STATE OF NEW YORK
________________________________________________________________________
7229
2019-2020 Regular Sessions
IN ASSEMBLY
April 15, 2019
___________
Introduced by M. of A. EPSTEIN -- read once and referred to the Commit-
tee on Governmental Employees
AN ACT relating to granting Tier I status to Cynthia Falletta in the
Teachers' Retirement System of the City of New York with a membership
date of June 1, 1972
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Notwithstanding any inconsistent provision of law, Cynthia
2 Falletta, a member of the Teachers' Retirement System of the City of New
3 York (TRSNYC) with Tier IV status, who was employed by the City Univer-
4 sity of New York from June 1, 1972 until April 8, 1976 and from June 22,
5 1976 to October 28, 1976, and was a member of the Board of Education
6 Retirement System from December 12, 1990 until February 28, 1994 at
7 which point she became a member of the Teachers' Retirement System of
8 the City of New York, and who for reasons not ascribable to her own
9 negligence was retroactively enrolled as a Tier IV member, shall, upon
10 submission of an application filed with the Board of Trustees of TRSNYC
11 on or before the thirty-first day of December next succeeding the date
12 on which this act shall have become a law, be reclassified as a Tier I
13 member with June 1, 1972 as her date of membership and shall be entitled
14 to every right, benefit and privilege which would have been available to
15 her in accordance with Tier I status, and the City of New York shall be
16 responsible for all costs to provide the Tier I benefit to Cynthia
17 Falletta, provided, however that Cynthia Falletta shall be responsible
18 for contributing the required member contributions for Tier I member-
19 ship.
20 § 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: This proposed legislation would permit Cynthia
Falletta, a retired Tier 4 member of the New York City Teachers' Retire-
ment System (TRS), to elect, by filing an application with the Board of
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02534-02-9
A. 7229 2
Trustees of TRS within the end of the calendar year in which the
proposed legislation is passed, to be reclassified as a Tier 1 member
and have her retirement allowance recalculated and paid under Tier 1
(Plan A) benefit calculation provisions.
Effective Date: Upon enactment.
BACKGROUND: Ms. Falletta retired as a Tier 4 TRS member on October 18,
2012. She currently receives an annual retirement allowance of $48,459.
If the proposed legislation is passed, Ms. Falletta would be reclassi-
fied as Tier 1 retired member and her retirement allowance would be
recalculated as if she had joined a public retirement system within the
state upon her commencement of part-time employment as a college assist-
ant with the City University of New York in 1972. The additional cost,
less any required member contributions paid by Ms. Falletta, to fund
the increased retirement allowance associated with the proposed legis-
lation would fall upon the City of New York.
Because Tier 1 TRS members are generally permitted to take an actuari-
al reduction of their retirement allowance to account for deficits in
member contributions, for purposes of this fiscal note, it is assumed
that Ms. Falletta would not pay any owed member contributions resulting
from the reclassification. Based on this assumption and application of
other Tier 1 benefit calculation provisions, it is estimated that Ms.
Falletta's annual retirement allowance would increase to $65,038. This
annual increase would apply prospectively as well as retroactively,
adjusted for any COLA, less any payments previously made, as of Ms.
Falletta's October 18, 2012 date of retirement.
FINANCIAL IMPACT - PRESENT VALUES: The estimated financial impact of
this proposal has been calculated based on the difference between the
present value of (1) the Tier 1 benefits Ms. Falletta would receive if
this proposed legislation were enacted (retroactive to her October 18,
2012 retirement date) and (2) the Tier 4 benefits that are currently and
have been paid to Ms. Falletta.
Based on the actuarial assumptions and methods described herein, the
enactment of this proposed legislation would increase the Present Value
of Future Benefits (PVFB) and the Unfunded Accrued Liability (UAL) by
approximately $300,000.
FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with
Administrative Code of the City of New York (ACCNY) Section
13-638.2(k-2), new UAL attributable to benefit changes are to be amor-
tized as determined by the Actuary but generally over the remaining
working lifetime of those impacted by the benefit changes.
For purposes of this Fiscal Note, since Ms. Falletta is retired and
collecting a pension, and therefore has no remaining working lifetime,
the entire increase in UAL (or PVFB) would be recognized immediately.
OTHER COSTS: Not measured in this Fiscal Note are the following:
* The initial, additional administrative costs of TRS and other New
York City agencies to implement the proposed legislation.
CONTRIBUTION TIMING: For the purposes of this Fiscal Note, it is
assumed that the changes in the PVFB and annual employer contributions
would be reflected for the first time in the June 30, 2019 actuarial
valuation of TRS. In accordance with the One-Year Lag Methodology (OYLM)
used to determine employer contributions, the increase in employer
contributions would first be reflected in Fiscal Year 2021.
CENSUS DATA: As of June 30, 2018, Ms. Falletta was approximately age
69, and receiving a pension of $48,459 per year under the maximum
payment option.
A. 7229 3
ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the PVFB and annual
employer contributions presented herein have been calculated based on
the actuarial assumptions and methods in effect for the June 30, 2018
(Lag) actuarial valuations used to determine the Preliminary Fiscal Year
2020 employer contributions of TRS.
RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend
highly on the actuarial assumptions and methods used and are subject to
change based on the realization of potential investment, demographic,
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.
STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu-
ary for, and independent of, the New York City Retirement Systems and
Pension Funds. I am a Fellow of the Society of Actuaries, an Enrolled
Actuary under the Employee Retirement Income and Security Act of 1974, a
Member of the American Academy of Actuaries, and a Fellow of the Confer-
ence of Consulting Actuaries. 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 2019-05 dated April 11,
2019 was prepared by the Chief Actuary for the New York City Teachers'
Retirement System. This estimate is intended for use only during the
2019 Legislative Session.
