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A09200 Summary:

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A09200 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         9200--A
 
                   IN ASSEMBLY
 
                                    February 3, 2016
                                       ___________
 
        Introduced  by  M.  of  A.  MARKEY,  SIMANOWITZ,  CERETTO, MILLER, COOK,
          MOSLEY, KAMINSKY, COLTON, RUSSELL, SOLAGES, DenDEKKER, SKOUFIS, BLAKE,
          ROBINSON, ZEBROWSKI, GUNTHER, SALADINO,  McDONOUGH,  MONTESANO,  RAIA,
          GRAF,  BRABENEC  --  Multi-Sponsored  by  -- M. of A. BRENNAN, CROUCH,
          HYNDMAN, LUPINACCI, MAGEE, PEOPLES-STOKES,  RAMOS,  SIMON,  THIELE  --
          read  once  and referred to the Committee on Governmental Employees --
          reported and referred to the Committee on Ways and Means --  committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to said committee
 
        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 23 of the laws of 2015, is amended to read as
     3  follows:
     4    c.  Commencing  July first, two thousand [fifteen] sixteen 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                  [207.5%] 216.7%
    14            1978                           [198.5%] 207.5%
    15            1979                           [189.8%] 198.5%
    16            1980                           [181.4%] 189.8%
    17            1981                           [173.2%] 181.4%
    18            1982                           [165.2%] 173.2%
    19            1983                           [157.5%] 165.2%
    20            1984                           [150.0%] 157.5%
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD13853-04-6
        A. 9200--A                          2
 
     1            1985                           [142.7%] 150.0%
     2            1986                           [135.7%] 142.7%
     3            1987                           [128.8%] 135.7%
     4            1988                           [122.1%] 128.8%
     5            1989                           [115.7%] 122.1%
     6            1990                           [109.4%] 115.7%
     7            1991                           [103.3%] 109.4%
     8            1992                            [97.4%] 103.3%
     9            1993                            [91.6%] 97.4%
    10            1994                            [86.0%] 91.6%
    11            1995                            [80.6%] 86.0%
    12            1996                            [75.4%] 80.6%
    13            1997                            [70.2%] 75.4%
    14            1998                            [65.3%] 70.2%
    15            1999                            [60.5%] 65.3%
    16            2000                            [55.8%] 60.5%
    17            2001                            [51.3%] 55.8%
    18            2002                            [46.9%] 51.3%
    19            2003                            [42.6%] 46.9%
    20            2004                            [38.4%] 42.6%
    21            2005                            [34.4%] 38.4%
    22            2006                            [30.5%] 34.4%
    23            2007                            [26.7%] 30.5%
    24            2008                            [23.0%] 26.7%
    25            2009                            [19.4%] 23.0%
    26            2010                            [15.9%] 19.4%
    27            2011                            [12.6%] 15.9%
    28            2012                             [9.3%] 12.6%
    29            2013                             [6.1%] 9.3%
    30            2014                             [3.0%] 6.1%
    31            2015                             [0.0%] 3.0%
    32            2016                             0.0%
    33    § 2. Subdivision c of section 361-a of the retirement and social secu-
    34  rity  law,  as  amended by chapter 23 of the laws of 2015, is amended to
    35  read as follows:
    36    c. Commencing July first, two thousand [fifteen] sixteen  the  special
    37  accidental  death  benefit  paid  to  a widow or widower or the deceased
    38  member's children under the age of eighteen or, if a student, under  the
    39  age  of  twenty-three,  if the widow or widower has died, shall be esca-
    40  lated by adding thereto an additional percentage of the  salary  of  the
    41  deceased member, as increased pursuant to subdivision b of this section,
    42  in accordance with the following schedule:
    43       calendar year of death
    44       of the deceased member              per centum
    45            1977 or prior                    [207.5%] 216.7%
    46            1978                             [198.5%] 207.5%
    47            1979                             [189.8%] 198.5%
    48            1980                             [181.4%] 189.8%
    49            1981                             [173.2%] 181.4%
    50            1982                             [165.2%] 173.2%
    51            1983                             [157.5%] 165.2%
    52            1984                             [150.0%] 157.5%
    53            1985                             [142.7%] 150.0%
    54            1986                             [135.7%] 142.7%
    55            1987                             [128.8%] 135.7%
    56            1988                             [122.1%] 128.8%
        A. 9200--A                          3

     1            1989                             [115.7%] 122.1%
     2            1990                             [109.4%] 115.7%
     3            1991                             [103.3%] 109.4%
     4            1992                              [97.4%] 103.3%
     5            1993                              [91.6%]  97.4%
     6            1994                              [86.0%]  91.6%
     7            1995                              [80.6%]  86.0%
     8            1996                              [75.4%]  80.6%
     9            1997                              [70.2%]  75.4%
    10            1998                              [65.3%]  70.2%
    11            1999                              [60.5%]  65.3%
    12            2000                              [55.8%]  60.5%
    13            2001                              [51.3%]  55.8%
    14            2002                              [46.9%]  51.3%
    15            2003                              [42.6%]  46.9%
    16            2004                              [38.4%]  42.6%
    17            2005                              [34.4%]  38.4%
    18            2006                              [30.5%]  34.4%
    19            2007                              [26.7%]  30.5%
    20            2008                              [23.0%]  26.7%
    21            2009                              [19.4%]  23.0%
    22            2010                              [15.9%]  19.4%
    23            2011                              [12.6%]  15.9%
    24            2012                               [9.3%]  12.6%
    25            2013                               [6.1%]   9.3%
    26            2014                               [3.0%]   6.1%
    27            2015                               [0.0%]   3.0%
    28            2016                               0.0%
    29    § 3. This act shall take effect July 1, 2016.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          This  bill  would amend both the General Municipal Law and the Retire-
        ment and Social Security Law to increase the salary used in the computa-
        tion of the special accidental death benefit by 3% in  cases  where  the
        date of death was before 2016.
          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  $462,000  above  the  approximately $10.6 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  date  used  in  measuring  the impact of the proposed
        change was the same as that used in the March 31, 2015  actuarial  valu-
        ation.    Distributions  and  other  statistics can be found in the 2015
        Report of the  Actuary  and  the  2015  Comprehensive  Annual  Financial
        Report.
          The  actuarial  assumptions and methods used are described in the 2015
        Annual Report to the Comptroller on Actuarial Assumptions, 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, 2015
        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.
        A. 9200--A                          4
 
          This estimate, dated January 28, 2016 and intended for use only during
        the  2016  Legislative  Session, is Fiscal Note No. 2016-51, prepared by
        the Actuary for the New York State and Local Retirement System.
          Fiscal Note. -- Pursuant to Legislative Law, Section 50:
          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 widows/widowers, chil-
        dren, 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  Tribor-
        ough  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, 2016.
          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),
          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
        positions:
          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-Living
        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
        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 189.8%
        of Final Salary as of July 1, 2015.
        A. 9200--A                          5
 
          Under the proposed legislation, the additional, incremental percentage
        of Final Salary to be effective July 1, 2016 would 3.0%.
          FINANCIAL IMPACT - EMPLOYER PAYMENTS: With respect to the NYCRS, since
        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 $2.9 million.
          These  additional payments represent an increase of approximately 4.4%
        in the estimated SADB payments during the first year.
          The SADB payments made by the NYCRS who are reimbursed by the City.
          Historically, the State of New York (the State)  reimbursed  the  City
        for most GML Section 208.f payments. However, it is the understanding of
        the Actuary that since 2009 the State has limited its reimbursement 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  (APBV):  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, 2015 (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 $34.6 million as of June 30, 2016.
          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 Beneficiaries as reported by the NYCRS
        and the estimated annual SADB rate prior to the increase proposed to  be
        effective as of July 1, 2016.
 
                                         Table 1
                        SADB Census Data as Reported by the NYCRS
                                      ($ Millions)
 
        Retirement System    Number of Deceased     Annual SADB Rate Prior
                            Members with Eligible  To Proposed July 1, 2016
                                 Survivors              Increase
          NYCERS                  32                    $1.9
          POLICE                  331                   20.6
          FIRE                    621                   43.8
          Total                   984                  $66.3

        ACTUARIAL  ASSUMPTIONS  AND  METHODS: Additional APVB have been computed
        based on the actuarial assumptions and methods in effect  for  the  June
        30,  2015 (Lag) actuarial valuations of NYCERS, POLICE, and FIRE used to
        determine the  Preliminary  Fiscal  Year  2017  employer  contributions,
        including  an Actuarial Interest Rate (AIR) assumption of 7.0% per annum
        (net of Investment Expenses).
          STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief  Actu-
        ary  for  the New York City Retirement Systems. I am an Associate of the
        Society of Actuaries, a Fellow of the Conference of  Consulting  Actuar-
        ies, and a Member of the American Academy of Actuaries. I meet the Qual-
        A. 9200--A                          6
 
        ification  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 estimate is  intended  for  use  only
        during  the  2016  Legislative Session. It is Fiscal Note 2016-13, dated
        March 29, 2016, 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.