STATE OF NEW YORK
________________________________________________________________________
4257--B
2013-2014 Regular Sessions
IN SENATE
March 15, 2013
___________
Introduced by Sen. GOLDEN -- read twice and ordered printed, and when
printed to be committed to the Committee on Civil Service and Pensions
-- committee discharged, bill amended, ordered reprinted as amended
and recommitted to said committee -- 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 285 of the laws of 2012, is amended to read
3 as follows:
4 c. Commencing July first, two thousand [twelve] thirteen 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 [181.4%] 189.8%
14 1978 [173.2%] 181.4%
15 1979 [165.2%] 173.2%
16 1980 [157.5%] 165.2%
17 1981 [150.0%] 157.5%
18 1982 [142.7%] 150.0%
19 1983 [135.7%] 142.7%
20 1984 [128.8%] 135.7%
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08382-06-3
S. 4257--B 2
1 1985 [122.1%] 128.8%
2 1986 [115.7%] 122.1%
3 1987 [109.4%] 115.7%
4 1988 [103.3%] 109.4%
5 1989 [97.4%] 103.3%
6 1990 [91.6%] 97.4%
7 1991 [86.0%] 91.6%
8 1992 [80.6%] 86.0%
9 1993 [75.4%] 80.6%
10 1994 [70.2%] 75.4%
11 1995 [65.3%] 70.2%
12 1996 [60.5%] 65.3%
13 1997 [55.8%] 60.5%
14 1998 [51.3%] 55.8%
15 1999 [46.9%] 51.3%
16 2000 [42.6%] 46.9%
17 2001 [38.4%] 42.6%
18 2002 [34.4%] 38.4%
19 2003 [30.5%] 34.4%
20 2004 [26.7%] 30.5%
21 2005 [23.0%] 26.7%
22 2006 [19.4%] 23.0%
23 2007 [15.9%] 19.4%
24 2008 [12.6%] 15.9%
25 2009 [9.3%] 12.6%
26 2010 [6.1%] 9.3%
27 2011 [3.0%] 6.1%
28 2012 [0.0%] 3.0%
29 20130.0%
30 § 2. Subdivision c of section 361-a of the retirement and social secu-
31 rity law, as amended by chapter 285 of the laws of 2012, is amended to
32 read as follows:
33 c. Commencing July first, two thousand [twelve] thirteen the special
34 accidental death benefit paid to a widow or widower or the deceased
35 member's children under the age of eighteen or, if a student, under the
36 age of twenty-three, if the widow or widower has died, shall be esca-
37 lated by adding thereto an additional percentage of the salary of the
38 deceased member, as increased pursuant to subdivision b of this section,
39 in accordance with the following schedule:
40 calendar year of death
41 of the deceased member per centum
42 1977 or prior [181.4%] 189.8%
43 1978 [173.2%] 181.4%
44 1979 [165.2%] 173.2%
45 1980 [157.5%] 165.2%
46 1981 [150.0%] 157.5%
47 1982 [142.7%] 150.0%
48 1983 [135.7%] 142.7%
49 1984 [128.8%] 135.7%
50 1985 [122.1%] 128.8%
51 1986 [115.7%] 122.1%
52 1987 [109.4%] 115.7%
53 1988 [103.3%] 109.4%
54 1989 [97.4%] 103.3%
55 1990 [91.6%] 97.4%
56 1991 [86.0%] 91.6%
S. 4257--B 3
1 1992 [80.6%] 86.0%
2 1993 [75.4%] 80.6%
3 1994 [70.2%] 75.4%
4 1995 [65.3%] 70.2%
5 1996 [60.5%] 65.3%
6 1997 [55.8%] 60.5%
7 1998 [51.3%] 55.8%
8 1999 [46.9%] 51.3%
9 2000 [42.6%] 46.9%
10 2001 [38.4%] 42.6%
11 2002 [34.4%] 38.4%
12 2003 [30.5%] 34.4%
13 2004 [26.7%] 30.5%
14 2005 [23.0%] 26.7%
15 2006 [19.4%] 23.0%
16 2007 [15.9%] 19.4%
17 2008 [12.6%] 15.9%
18 2009 [9.3%] 12.6%
19 2010 [6.1%] 9.3%
20 2011 [3.0%] 6.1%
21 2012 [0.0%] 3.0%
22 20130.0%
23 § 3. This act shall take effect July 1, 2013.
FISCAL NOTE.--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 $43,000 above the approximately $9 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:
Data: March 31, 2012 Actuarial Year End File with distributions of
membership and other statistics displayed in the 2012 Report of the
Actuary and 2012 Comprehensive Annual Financial Report.
Assumptions and Methods: 2010, 2011 and 2012 Annual Report to the
Comptroller on Actuarial Assumptions, Codes Rules and Regulations of the
State of New York: Audit and Control.
Market Assets and GASB Disclosures: March 31, 2012 New York State and
Local Retirement System Financial Statements and Supplementary Informa-
tion.
Variations of Benefit Liabilities and Actuarial Assets: summarized in
the 2012 Actuarial Valuations report.
I am a member of the American Academy of Actuaries and meet the Quali-
fication Standards to render the actuarial opinion contained.
This estimate, dated January 7, 2013 and intended for use only during
the 2013 Legislative Session, is Fiscal Note No. 2013-37, 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
widows/widowers and/or children of former uniformed employees of the
City and the New York City Health and Hospitals Corporation and 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, 2013.
S. 4257--B 4
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 City 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.
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 165.2%
of Final Salary as of July 1, 2012.
Under the proposed legislation, the additional, incremental percentage
of Final Salary to be effective July 1, 2013 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 $2.5 million.
Note: These additional payments represent an increase of approximately
4.6% in the estimated SADB payments during the first year.
The SADB payments are made by the NYCRS who are reimbursed by the
City.
Where previously the State of New York (the "State") reimbursed the
City for most GML 208.f payments, 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.
S. 4257--B 5
FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES OF BENEFITS ("APVB"): With
respect to the survivors of deceased NYCRS members who would be impacted
by this proposed legislation, under the actuarial assumptions used in
the June 30, 2011 (Lag) actuarial valuations of the NYCRS, including an
Actuarial Interest Rate ("AIR") assumption of 7.0% per annum, the enact-
ment of this proposed legislation would increase APVB by approximately
$29.5 million as of June 30, 2013.
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 $40.1 million as of June 30, 2013.
OTHER COSTS: The enactment of this proposed legislation would also be
expected to result in modest increases in administrative expenses of
NYCERS, POLICE, FIRE, the employers and certain New York City agencies.
CENSUS DATA: The financial impact of the proposed legislation is based
upon the census data for such widows, widowers and children provided by
the NYCRS and adjusted, as necessary, to prepare the computations and
for consistency with other data.
The following table shows, by Retirement System, the number of
deceased members with eligible survivors as of June 30, 2012 and the
estimated annual SADB rate prior to the increase proposed to be effec-
tive as of July 1, 2013.
Table 1
SADB Census Data as of June 30, 2012
($ Millions)
________________________________________________________________________
Number of Deceased Annual SADB Rate Prior
Members with Eligible to Proposed July 1, 2013
Retirement System Survivors Increase
________________________________________________________________________
NYCERS 27 $ 1.1
POLICE 310 16.1
FIRE 60737.5
Total 944 $ 54.7
________________________________________________________________________
ACTUARIAL ASSUMPTIONS AND METHODS: Additional APVB have been computed
based on the actuarial assumptions and methods in effect for the June
30, 2011 (Lag) actuarial valuations of NYCERS, POLICE and FIRE used to
determine the Preliminary Fiscal Year 2013 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, 2011 (Lag) actuarial valuations of the NYCRS are appropriate for
S. 4257--B 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 2013 Legislative Session. It is Fiscal Note 2013-05R, dated
March 19, 2013, prepared by the Chief Actuary for the New York City
Employees' Retirement System, the New York City Police Pension Fund and
the New York City Fire Department Pension Fund.
