STATE OF NEW YORK
________________________________________________________________________
7602--A
2017-2018 Regular Sessions
IN ASSEMBLY
May 3, 2017
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Introduced by M. of A. ABBATE, SEPULVEDA -- read once and referred to
the Committee on Governmental Employees -- reported and referred to
the Committee on Ways and Means -- recommitted to the Committee on
Ways and Means 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 retirement and social security law, in relation to
loans to members of certain retirement systems
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision i of section 517-c of the retirement and social
2 security law, as amended by chapter 511 of the laws of 2005, is amended
3 to read as follows:
4 i. Notwithstanding the provisions of section five hundred sixteen of
5 this article, whenever a member of such a retirement system, for whom a
6 loan is outstanding, retires, the retirement allowance payable without
7 optional modification shall be reduced by a life annuity which is actu-
8 arially equivalent to the amount of the outstanding loan (all outstand-
9 ing loans shall continue to accrue interest charges until retirement),
10 such life annuity being calculated utilizing the interest rate on thirty
11 year United States treasury bonds as of January first of the calendar
12 year of the effective date of retirement and the mortality tables for
13 options available under section five hundred fourteen of this article. A
14 retiree of the New York city employees' retirement system [or], board of
15 education retirement system of the city of New York, or the New York
16 state and local employees' retirement system whose benefit has been so
17 reduced may repay the outstanding balance of the loan at any time. Bene-
18 fits payable after the repayment of the loan shall not be subject to the
19 actuarial reduction required by this subdivision.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD11071-02-8
A. 7602--A 2
1 § 2. Subdivision i of section 613-b of the retirement and social secu-
2 rity law, as amended by chapter 511 of the laws of 2005, is amended to
3 read as follows:
4 i. Notwithstanding the provisions of subdivision b of section six
5 hundred twelve of this article, whenever a member of such a retirement
6 system, for whom a loan is outstanding, retires, the retirement allow-
7 ance payable without optional modification shall be reduced by a life
8 annuity which is actuarially equivalent to the amount of the outstanding
9 loan (all outstanding loans shall continue to accrue interest charges
10 until retirement), such life annuity being calculated utilizing the
11 interest rate on thirty year United States treasury bonds as of January
12 first of the calendar year of the effective date of retirement and the
13 mortality tables for options available under section six hundred ten of
14 this article. A retiree of the New York city employees' retirement
15 system [or], board of education retirement system of the city of New
16 York, or the New York state and local employees' retirement system whose
17 benefit has been so reduced may repay the outstanding balance of the
18 loan at any time. Benefits payable after the repayment of the loan shall
19 not be subject to the actuarial reduction required by this subdivision.
20 § 3. This act shall take effect immediately.
FISCAL NOTE.-- Pursuant to Legislative Law, Section 50:
This bill would allow a retiree of the New York State and Local
Employees' Retirement System (ERS) to repay the outstanding loan balance
determined on the day of retirement, by making a lump sum payment after
retirement. Upon receipt of such repayment, the future pension payments
of such retirees shall be recalculated to be without actuarial
reduction. Currently, member loans must be settled at retirement either
by a lump sum payment or by an annual actuarial reduction to the
pensions.
If this bill is enacted, there would be a small administrative cost to
implement this change.
Summary of relevant resources:
The membership data used in measuring the impact of the proposed
change was the same as that used in the March 31, 2017 actuarial valu-
ation. Distributions and other statistics can be found in the 2017
Report of the Actuary and the 2017 Comprehensive Annual Financial
Report.
The actuarial assumptions and methods used are described in the 2015,
2016, and 2017 Annual Report to the Comptroller on Actuarial Assump-
tions, and the Codes Rules and Regulations of the State of New York:
Audit and Control.
The Market Assets and GASB Disclosures are found in the March 31, 2017
New York State and Local Retirement System Financial Statements and
Supplementary Information.
I am a member of the American Academy of Actuaries and meet the Quali-
fication Standards to render the actuarial opinion contained herein.
This estimate, dated January 17, 2018, and intended for use only
during the 2018 Legislative Session, is Fiscal Note No. 2018-30,
prepared by the Actuary for the New York State and Local Retirement
System.
