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S04308 Summary:

S04308 Actions:

S04308 Committee Votes:

S04308 Floor Votes:

S04308 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         4308--A
            Cal. No. 316
 
                               2019-2020 Regular Sessions
 
                    IN SENATE
 
                                      March 7, 2019
                                       ___________
 
        Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
          printed to be committed to the Committee on Civil Service and Pensions
          -- reported favorably from said committee, ordered to first and second
          report,  ordered  to  a  third reading, amended and ordered reprinted,
          retaining its place in the order of third reading

        AN ACT to amend the retirement and social security law, in  relation  to
          criminal justice faculty employed by a community college
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Section 211 of the retirement and social  security  law  is
     2  amended by adding a new subdivision 9 to read as follows:
     3    9.  Any  person  employed  by  a community college as a faculty member
     4  under a criminal justice program of the state university of New York  or
     5  city  university  of New York who retired from public employment while a
     6  member of the New York  state  and  local  police  and  fire  retirement
     7  system, the New York city police pension fund, or the New York city fire
     8  department  pension  fund  and  who  is entitled to receive a retirement
     9  allowance from such retirement system prior to the commencement date  of
    10  such  employment by a community college shall automatically be deemed to
    11  have been granted a waiver of retirement earnings  limitation  and  such
    12  person  may  be employed by a community college without loss, suspension
    13  or diminution of his or her retirement allowance.   Any person  employed
    14  by  a  community  college  as  a faculty member under a criminal justice
    15  program of the state university of New York or city  university  of  New
    16  York  who  has  not  retired as a member of the New York state and local
    17  police and fire retirement system, the  New  York  city  police  pension
    18  fund,  or the New York city fire department pension fund shall not auto-
    19  matically be deemed to have been granted a waiver of retirement earnings
    20  limitation.
    21    § 2. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06636-03-9
        S. 4308--A                          2
 
          This bill will allow certain retirees of the New York State and  Local
        Police  and  Fire Retirement System (NYSLPFRS), the New York City Police
        Pension Fund (NYCPPF), and the New York  City  Fire  Department  Pension
        Fund  (NYCFDPF)  to work in a community college as a faculty member of a
        criminal  justice  program  of  the state university of New York or city
        university of New York to automatically be deemed to have been granted a
        waiver of retirement earnings limitation  without  loss,  suspension  or
        diminution  of his or her retirement allowance. Any such person employed
        who has not retired from the NYSLPFRS, NYCPPF or NYCFDPF shall not auto-
        matically be deemed to have been granted a waiver of retirement earnings
        limitation.
          If this bill is enacted, insofar as it will affect the New York  State
        and  Local  Police and Fire Retirement System, we expect few retirees to
        be affected. There would be negligible additional annual costs. However,
        if large numbers of retirees are hired into such positions, there  would
        be  additional  annual  costs  which would be shared by the state of New
        York and all of the participating employers in the 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, 2018 actuarial valu-
        ation.  Distributions and other statistics can  be  found  in  the  2018
        Report  of  the  Actuary  and  the  2018  Comprehensive Annual Financial
        Report.
          The actuarial assumptions and methods used are described in the  2015,
        2016,  2017  and  2018  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, 2018
        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 fiscal note does not constitute a legal opinion on the  viability
        of  the  proposed change nor is it intended to serve as a substitute for
        the professional judgment of an attorney.
          This estimate, dated March 5, 2019, and intended for use  only  during
        the  2019  Legislative  Session, is Fiscal Note No. 2019-87, prepared by
        the Actuary for the New York State and Local Retirement System.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY OF BILL: This proposed legislation would amend Retirement  and
        Social  Security  Law  (RSSL) Section 211 to permit eligible retirees of
        the New York City Police Pension Fund (POLICE) or the New York City Fire
        Pension Fund (FIRE) to serve as faculty members in the criminal  justice
        programs  of  the State University of New York (SUNY) or City University
        of New York (CUNY) by way of an automatic post-retirement earnings waiv-
        er pursuant to the provisions of RSSL Section 211.
          Effective Date: Upon enactment.
          IMPACT ON PENSION PAYMENTS:  Currently,  retirees  of  public  pension
        funds  and  retirement  systems  who return to public service within New
        York, and do not rejoin the applicable public fund or system, are gener-
        ally subject to various post-retirement  earnings  restrictions.  Police
        and  Fire  retirees  are subject to, among other things, post-retirement
        earnings restrictions as provided in RSSL Sections 211 and 212.
          Those who elect to be covered under the provisions of RSSL Section 212
        are permitted to earn post-retirement earnings from a public employer in
        an amount not exceeding a specific dollar limit in  each  calendar  year
        S. 4308--A                          3
 
        without  loss, suspension, or diminution of their retirement allowances.
        Once this dollar limit is reached, the retiree's retirement allowance is
        suspended for the remainder of that calendar year. Generally, there  are
        no earnings limitations in, or following, the calendar year in which the
        retiree  attains age 65. Currently, the RSSL Section 212 post-retirement
        earnings limitation in effect for calendar year 2007 and each year ther-
        eafter is $30,000.
          When certain exigent criteria are met and approval  is  given  to  the
        employer  by  a  specially  designated entity, a waiver pursuant to RSSL
        Section 211 may be granted, for a two-year period.  Under  RSSL  Section
        211, there is no salary restriction for reemployment with a public enti-
        ty that is not the former employer.
          Under the proposed legislation, if enacted, the RSSL Section 211 post-
        retirement  public service earnings waiver would be automatically grant-
        ed, without the need to satisfy the criteria currently required pursuant
        to RSSL Section 211, to retired Police and Fire members  employed  as  a
        faculty member in a SUNY or CUNY criminal justice program.
          For  purposes of this fiscal note, it has been assumed that Police and
        Fire retirees who are or would be employed as faculty members in a  SUNY
        or  CUNY  criminal  justice program would not be subject to any post-re-
        tirement earnings limitation pursuant to RSSL  Section  211  since  they
        would not be working for their former employer.
          For illustrative purposes only, the table below presents the estimated
        additional  retirement  allowances  paid if RSSL Section 211 waivers are
        granted in lieu of applying RSSL Section  212  post-retirement  earnings
        limitation  for  various  sample  combinations of post-retirement annual
        earnings and annual retirement allowance amounts.
 
           Annual Retirement   Annual Post-Retirement Earnings in Calendar Year
               Allowance            $40,000        $50,000         $60,000
           ____________________________________________________________________
                $30,000             $ 7,500        $12,000         $15,000
                $40,000             $10,000        $16,000         $20,000
                $50,000             $12,500        $20,000         $25,000
                $60,000             $15,000        $24,000         $30,000
                $70,000             $17,500        $28,000         $35,000
 
          FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In  accordance  with
        Administrative   Code   of   the   City  of  New  York  (ACCNY)  Section
        13-638.2(k-2), new UAL attributable to benefit changes are to  be  amor-
        tized  as  determined  by  the  Actuary but generally over the remaining
        working lifetime of those impacted  by  the  benefit  changes.  However,
        since changes in the applicable retirement allowances paid to Police and
        Fire  retirees under this proposed legislation are not known in advance,
        the increase in pension payments due to this legislation would be treat-
        ed as an actuarial loss. These actuarial losses would be amortized  over
        a 15-year period (14 payments under the One-Year Lag Methodology (OYLM))
        using level dollar payments.
          The  number  of  Police  and  Fire  retirees  who could potentially be
        impacted by this proposed  legislation  cannot  be  readily  determined.
        However,  the  Actuary believes the increase in pension payments, if the
        proposed legislation is enacted, would be approximately $1.5 million  to
        $2.0  million  per  year  for  each  100  faculty SUNY and CUNY criminal
        justice program positions created for eligible Police and  Fire  service
        retirees.   This would result in an increase in annual employer contrib-
        utions of $180,000 to $240,000 compounded each year  (e.g.  $240,000  in
        S. 4308--A                          4
 
        the first year, $480,000 in the second year, $720,000 in the third year,
        etc.)  for  14 years and then will remain level thereafter, assuming 100
        such faculty members are employed each year. Future years'  costs  would
        depend  on  factors  such as, but not limited to, the number of retirees
        that benefit under the legislation and the amount of their earnings  and
        retirement allowances.
          OTHER COSTS: Not measured in this Fiscal Note are the following:
          * The  initial,  additional  administrative  costs of POLICE, FIRE and
        other New York City agencies to implement the proposed legislation.
          * The impact of this  proposed  legislation  on  Other  Postemployment
        Benefit (OPEB) costs.
          CONTRIBUTION  TIMING:  For  the  purposes  of  this Fiscal Note, it is
        assumed that the  changes  in  the  Present  Value  of  future  employer
        contributions  and  annual employer contributions would be reflected for
        the first time in the June 30, 2020 actuarial valuations of  POLICE  and
        FIRE.  In  accordance  with the OYLM used to determine employer contrib-
        utions, the increase in employer contributions would first be  reflected
        in Fiscal Year 2022.
          CENSUS  DATA:  For  purposes  of  analyzing the impact of the proposed
        legislation, illustrative examples with various  salary  and  retirement
        allowance amounts have been provided above.
          ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the Present Value of
        future   employer   contributions   and  annual  employer  contributions
        presented herein have been calculated based on the actuarial assumptions
        and methods in effect for the June 30, 2018 (Lag)  actuarial  valuations
        used  to  determine  the  Preliminary Fiscal Year 2020 employer contrib-
        utions of POLICE and FIRE.
          RISK AND UNCERTAINTY: The costs presented in this Fiscal  Note  depend
        highly  on the actuarial assumptions and methods used and are subject to
        change based on the realization of  potential  investment,  demographic,
        contribution,  and other risks. If actual experience deviates from actu-
        arial assumptions, the actual costs could differ  from  those  presented
        herein.  Costs  are  also  dependent  on the actuarial methods used, and
        therefore different actuarial methods could produce  different  results.
        Quantifying these risks is beyond the scope of this Fiscal Note.
          STATEMENT  OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu-
        ary for, and independent of, the New York City  Retirement  Systems  and
        Pension  Funds.  I  am a Fellow of the Society of Actuaries, an Enrolled
        Actuary under the Employee Retirement Income and Security Act of 1974, a
        Member of the American Academy of Actuaries, and a Fellow of the Confer-
        ence of Consulting Actuaries. I meet the Qualification 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 Fiscal Note 2019-06 dated  April  11,
        2019  was  prepared  by  the  Chief Actuary for the New York City Police
        Pension Fund and the New York City Fire Pension Fund. This  estimate  is
        intended for use only during the 2019 Legislative Session.