STATE OF NEW YORK
________________________________________________________________________
9994
IN ASSEMBLY
June 6, 2014
___________
Introduced by COMMITTEE ON RULES -- (at request of M. of A. Palumbo) --
read once and referred to the Committee on Governmental Employees
AN ACT in relation to granting tier II retirement benefits in the New
York city retirement system to Elisabeth Beavan
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Notwithstanding any other provision of law, Elisabeth
2 Beavan, formerly Elisabeth Uellendahl, who joined the New York City
3 Employees' Retirement System as a Tier II, Plan C member on July 6, 1982
4 and who when added to her prior credited service of 6.54 years that was
5 transferred from the New York State Employees' Retirement System, earned
6 a total of 12.05 years of credited service, but for reasons not ascriba-
7 ble to her own negligence failed to file the appropriate form to with-
8 draw from Plan C and switch to Plan D to become eligible for a vested
9 retirement benefit. She will have one year from the date of enactment
10 to file the appropriate form to effect the switch from Plan C to Plan D.
11 § 2. This act shall take effect immediately.
FISCAL NOTE.--The proposed legislation would authorize the New York
City Employees' Retirement System ("NYCERS") to accept an application
from Elisabeth Beavan to switch from the Modified Career Pension Plan
("Plan C") to the Modified 55-Year Increased Service Fractional Plan
("Plan D").
BACKGROUND: Ms. Beavan became a member of NYCERS on July 6, 1982. She
became a Tier 2 member as a result of a transfer of 6.54 years of
service earned while a member of the New York State and Local Employees'
Retirement System and elected to participate in NYCERS Plan C.
Administrative Code of the City of New York ("ACNY") Section 13-173
provides that an individual must be a member of Plan D at the time of
discontinuance from city-service in order to be eligible for a vested
benefit under Plan D. Since Ms. Beavan never filed the appropriate form
to withdraw from Plan C and switch to Plan D, she is not eligible for a
vested benefit and she is only eligible to receive a return of her accu-
mulated member contributions.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD13576-03-4
A. 9994 2
The proposed legislation, if enacted, would authorize NYCERS to accept
an application from Ms. Beavan within one year from the date of enact-
ment to switch from Plan C to Plan D as if it had been filed prior to
her date of resignation.
The Effective Date of the proposed legislation would be the Date of
Enactment.
FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: The estimated financial
impact has been calculated based on the difference between the sum of
(1) the prospective benefits plus (2) the retroactive benefits Ms.
Beavan would receive if this proposed legislation were enacted and (3)
the benefits Ms. Beavan would otherwise be entitled to receive.
The difference in estimated costs is intended to provide a sense of
the ultimate financial impact.
If the legislation were to be enacted, Ms. Beavan would be entitled to
a pension of $11,930 per year beginning September 18, 2012 (age 62)
under the maximum payout option. If the legislation were not enacted,
Ms. Beavan would only be entitled to a refund of her accumulated member
contributions.
Based on the actuarial assumptions and methods described herein, the
enactment of this proposed legislation would increase the Actuarial
Present Value ("APV") of Benefits ("APVB") and the Unfunded Actuarial
Accrued Liability ("UAAL") of NYCERS by approximately $153,000 as of
June 30, 2014, calculated as (1) plus (2) less (3);
(1) APV of future pension payments beginning July 2014 of approximate-
ly $139,000
(2) Accumulated value of retroactive pension payments from September
2012 through June 2014 of approximately $21,000
(3) Refund of accumulated member contributions of approximately
$7,000.
FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS AND ANNUAL EMPLOYER
COSTS: In accordance with Section 13.638.2(k-2) of the Administrative
Code of the City of New York ("ACNY"), new UAAL attributable to benefit
changes are to be amortized as determined by the Actuary but generally
over the remaining working lifetime of those impacted by the benefit
changes.
For this proposed legislation, Ms. Beavan is inactive and therefore
the entire increase in UAAL based on the Actuary's actuarial assumptions
and methods in effect on June 30, 2014 of $153,000 should be recognized
in the first year for contribution purposes.
The increase in employer costs would be comparable to the increase in
employer contributions.
CONTRIBUTION TIMING: If enacted during the 2014 Legislative Session
and if her application for switching to Plan D were filed on or before
June 30, 2014, her status as a Plan D Retiree would likely first be
reflected in the June 30, 2014 census data. In accordance with the One-
Year Lag methodology used to determine employer contributions, increased
employer contributions would be consistent with the increased employer
costs and would be determined for Fiscal Year 2016.
If enacted during the 2014 Legislative Session, and if her application
for switching to Plan D were filed after June 30, 2014 but on or before
June 30, 2015, her status as a Plan D Retiree would likely first be
reflected in the June 30, 2015 census data and increased employer
contributions would be determined for Fiscal Year 2017.
ACTUARIAL ASSUMPTIONS AND METHODS: The additional APVB and UAAL
presented herein have been calculated based on the actuarial assumptions
A. 9994 3
and methods in effect for the June 30, 2013 (Lag) actuarial valuations
used to determine Fiscal Year 2015 employer contributions of NYCERS.
ECONOMIC VALUES OF BENEFITS: The actuarial assumptions used to deter-
mine the financial impact of the proposed legislation discussed in this
Fiscal Note are those appropriate for budgetary models and determining
annual employer contributions to NYCERS.
However, the economic assumptions that are used for determining
employer contributions do not develop risk-adjusted, economic values of
benefits. Such risk-adjusted, economic values of benefits would likely
differ significantly from those developed by the budgetary models.
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 2014-22, dated
May 14, 2014 prepared by the Chief Actuary for the New York City Employ-
ees' Retirement System.
