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A08484 Summary:

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A08484 Floor Votes:

A08484 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         8484--A
 
                   IN ASSEMBLY
 
                                    January 17, 2014
                                       ___________
 
        Introduced  by M. of A. MARKEY, SKOUFIS, JAFFEE, WEISENBERG, SIMANOWITZ,
          MOSLEY,   ZEBROWSKI,   COOK,   DenDEKKER,   SCARBOROUGH,    GOTTFRIED,
          BROOK-KRASNY,  RAMOS  -- Multi-Sponsored by -- M. of A. CAMARA, MAGEE,
          PERRY, RIVERA, SCHIMEL, SWEENEY, THIELE -- read once and  referred  to
          the  Committee on Governmental Employees -- committee discharged, bill

          amended, ordered reprinted as amended and recommitted to said  commit-
          tee
 
        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 196 of the laws of 2013, is amended to read
     3  as follows:
     4    c. Commencing July first, two thousand [thirteen] fourteen 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                  [189.8%] 198.5%
    14            1978                           [181.4%] 189.8%
    15            1979                           [173.2%] 181.4%
    16            1980                           [165.2%] 173.2%
    17            1981                           [157.5%] 165.2%
    18            1982                           [150.0%] 157.5%
    19            1983                           [142.7%] 150.0%

    20            1984                           [135.7%] 142.7%
    21            1985                           [128.8%] 135.7%
    22            1986                           [122.1%] 128.8%
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD13494-03-4
        A. 8484--A                          2
 
     1            1987                           [115.7%] 122.1%
     2            1988                           [109.4%] 115.7%
     3            1989                           [103.3%] 109.4%
     4            1990                            [97.4%] 103.3%

     5            1991                            [91.6%] 97.4%
     6            1992                            [86.0%] 91.6%
     7            1993                            [80.6%] 86.0%
     8            1994                            [75.4%] 80.6%
     9            1995                            [70.2%] 75.4%
    10            1996                            [65.3%] 70.2%
    11            1997                            [60.5%] 65.3%
    12            1998                            [55.8%] 60.5%
    13            1999                            [51.3%] 55.8%
    14            2000                            [46.9%] 51.3%

    15            2001                            [42.6%] 46.9%
    16            2002                            [38.4%] 42.6%
    17            2003                            [34.4%] 38.4%
    18            2004                            [30.5%] 34.4%
    19            2005                            [26.7%] 30.5%
    20            2006                            [23.0%] 26.7%
    21            2007                            [19.4%] 23.0%
    22            2008                            [15.9%] 19.4%
    23            2009                            [12.6%] 15.9%
    24            2010                             [9.3%] 12.6%

    25            2011                             [6.1%] 9.3%
    26            2012                             [3.0%] 6.1%
    27            2013                             [0.0%] 3.0%
    28            2014                             0.0%
    29    § 2. Subdivision c of section 361-a of the retirement and social secu-
    30  rity  law,  as amended by chapter 196 of the laws of 2013, is amended to
    31  read as follows:
    32    c. Commencing July first, two thousand [thirteen] fourteen the special
    33  accidental death benefit paid to a widow  or  widower  or  the  deceased
    34  member's  children under the age of eighteen or, if a student, under the
    35  age of twenty-three, if the widow or widower has died,  shall  be  esca-
    36  lated  by  adding  thereto an additional percentage of the salary of the

    37  deceased member, as increased pursuant to subdivision b of this section,
    38  in accordance with the following schedule:
    39       calendar year of death
    40       of the deceased member              per centum
    41            1977 or prior                    [189.8%] 198.5%
    42            1978                             [181.4%] 189.8%
    43            1979                             [173.2%] 181.4%
    44            1980                             [165.2%] 173.2%
    45            1981                             [157.5%] 165.2%
    46            1982                             [150.0%] 157.5%
    47            1983                             [142.7%] 150.0%
    48            1984                             [135.7%] 142.7%

    49            1985                             [128.8%] 135.7%
    50            1986                             [122.1%] 128.8%
    51            1987                             [115.7%] 122.1%
    52            1988                             [109.4%] 115.7%
    53            1989                             [103.3%] 109.4%
    54            1990                              [97.4%] 103.3%
    55            1991                              [91.6%] 97.4%
    56            1992                              [86.0%] 91.6%
        A. 8484--A                          3
 
     1            1993                              [80.6%] 86.0%

     2            1994                              [75.4%] 80.6%
     3            1995                              [70.2%] 75.4%
     4            1996                              [65.3%] 70.2%
     5            1997                              [60.5%] 65.3%
     6            1998                              [55.8%] 60.5%
     7            1999                              [51.3%] 55.8%
     8            2000                              [46.9%] 51.3%
     9            2001                              [42.6%] 46.9%
    10            2002                              [38.4%] 42.6%
    11            2003                              [34.4%] 38.4%

    12            2004                              [30.5%] 34.4%
    13            2005                              [26.7%] 30.5%
    14            2006                              [23.0%] 26.7%
    15            2007                              [19.4%] 23.0%
    16            2008                              [15.9%] 19.4%
    17            2009                              [12.6%] 15.9%
    18            2010                              [9.3%] 12.6%
    19            2011                              [6.1%] 9.3%
    20            2012                              [3.0%] 6.1%
    21            2013                              [0.0%] 3.0%

    22            2014                              0.0%
    23    § 3. This act shall take effect July 1, 2014.
          FISCAL NOTE.--This bill would amend both the General Municipal Law and
        the  Retirement  and  Social Security Law to increase the salary used in
        the computation of the special accidental death benefit by 3%  in  cases
        where the date of death was before 2014.
          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  $438,000  above  the  approximately  $9.7 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:

          The  membership  data  used  in  measuring  the impact of the proposed
        change was the same as that used in the March 31, 2013  actuarial  valu-
        ation.    Distributions  and  other  statistics can be found in the 2013
        Report of the  Actuary  and  the  2013  Comprehensive  Annual  Financial
        Report.
          The Market Assets and GASB Disclosures are found in the March 31, 2013
        New  York  State  and  Local  Retirement System Financial Statements and
        Supplementary Information.
          The actuarial assumptions and methods used are described in the  2010,
        2011,  2012  and  2013  Annual  Report  to  the Comptroller on Actuarial
        Assumptions, and the Codes Rules and Regulations of  the  State  of  New
        York: Audit and Control.
          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 13, 2014 and intended for use only during
        the  2014  Legislative  Session, is Fiscal Note No. 2014-55, prepared by
        the Actuary for the New York State and Local Police and Fire  Retirement
        System.
          FISCAL  NOTE.--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
        A. 8484--A                          4
 
        widows/widowers   and/or   children  and/or  certain  other  individuals
        ("Eligible Beneficiaries") of former uniformed employees of the City and
        the New York City Health  and  Hospitals  Corporation  and  for  certain
        former  employees of the Triborough Bridge and Tunnel Authority who were

        members of certain New York City Retirement Systems ("NYCRS").
          The Effective Date of the proposed legislation would be July 1, 2014.
          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 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 date of  death  (or,  in  certain
        instances, a greater salary based on rank or other status) ("Final Sala-
        ry"), less:
          * Any death benefit as 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. If neither a widow/widower nor a child is
        alive,  then the SADB may be paid to certain other individuals if eligi-
        ble in accordance with certain laws related to the  World  Trade  Center
        ("WTC") attack.
          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 173.2%
        of Final Salary as of July 1, 2013.
          Under the proposed legislation, the additional, incremental percentage

        of Final Salary to be effective July 1, 2014 would be 3.0%.
          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 $2.7 million.
          NOTE: These additional payments represent an increase of approximately
        4.5% in the estimated SADB payments during the first year.
        A. 8484--A                          5
 
          The SADB payments are made by the NYCRS  who  are  reimbursed  by  the
        City.
          NOTE: Historically, the State of New York (the "State") reimbursed the
        City for most GML Section 208.f payments. However, it is the understand-
        ing  of the Actuary that since 2009 the State has limited its reimburse-

        ment to a fixed amount. Should this amount not be  increased,  then  the
        additional  cost of this proposed legislation would be borne entirely by
        the City of New York.
          FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES OF BENEFITS ("APVB"): With
        respect to the Eligible Beneficiaries  of  deceased  NYCRS  members  who
        would  be  impacted  by  this  proposed legislation, under the actuarial
        assumptions used in the June 30, 2013 (Lag) actuarial valuations of  the
        NYCRS,  including  an Actuarial Interest Rate ("AIR") assumption of 7.0%
        per annum, the enactment of this  proposed  legislation  would  increase
        APVB by approximately $30.9 million as of June 30, 2014.
          Based  on  the same demographic actuarial assumptions  but with an AIR
        assumption of 4.0% per annum, the enactment of this proposed legislation
        would increase APVB by approximately $41.9 million as of June 30, 2014.

          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 Eligible  Beneficiaries  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 reported by the NYCRS and
        the estimated annual SADB rate prior to  the  increase  proposed  to  be
        effective as of July 1, 2014.
                                         Table 1
                        SADB Census Data as Reported by the NYCRS
                                      ($ Millions)

                                 Number of Deceased       Annual SADB Rate Prior
                                 Members with Eligible    to Proposed July 1, 2014
        Retirement System        Survivors                Increase
        NYCERS                       30                       $1.3
        POLICE                      320                       17.8
        FIRE                        618                       39.8
          Total                     968                      $58.9
          ACTUARIAL  ASSUMPTIONS AND METHODS: Additional APVB have been computed
        based on the actuarial assumptions and methods in effect  for  the  June
        30,  2013  (Lag) actuarial valuations of NYCERS, POLICE and FIRE used to
        determine the  Preliminary  Fiscal  Year  2015  employer  contributions,
        including  an  AIR  assumption  of  7.0%  per  annum  (net of Investment
        Expenses).

          The demographic actuarial assumptions were adopted  by  the  Board  of
        Trustees  of  each  NYCRS during Fiscal Year 2012 and the AIR assumption
        was enacted by the New York State Legislature and Governor as Chapter  3
        of the Laws of 2013 ("Chapter 3/13").
          Additional  APVB  have  also been developed using an AIR assumption of
        4.0% per annum that could be more consistent with the potential cost  of
        debt  issued  by  the  State of New York or the City of New York under a
        long-term Consumer Price Inflation ("CPI") assumption of 2.5% per year.
          ECONOMIC VALUE OF BENEFITS: The actuarial assumptions used in the June
        30, 2013 (Lag) actuarial valuations of the  NYCRS  are  appropriate  for
        A. 8484--A                          6
 
        budgetary  models  and  for determining annual employer contributions to
        the NYCRS.

          However,  these  actuarial  assumptions  used  to  determine  employer
        contributions do not develop risk-adjusted, economic values of benefits.
        In the current  economic  environment  of  low  U.S.  Treasury  security
        yields, such risk-adjusted, economic values of benefits could be signif-
        icantly greater than the APVB developed 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
        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 contained herein.
          FISCAL  NOTE  IDENTIFICATION:  This  estimate is intended for use only
        during the 2014 Legislative Session. It is Fiscal  Note  2014-09,  dated

        March  18,  2014,  prepared  by  the Chief Actuary for the New York City
        Employees' Retirement System, the New York City Police Pension Fund  and
        the New York Fire Department Pension Fund.