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S04888 Summary:

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S04888 Floor Votes:

S04888 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         4888--A
 
                               2013-2014 Regular Sessions
 
                    IN SENATE
 
                                     April 30, 2013
                                       ___________
 
        Introduced  by  Sen.  STEWART-COUSINS -- read twice and ordered printed,
          and when printed to be committed to the Committee on Civil Service and
          Pensions -- recommitted to the Committee on Civil Service and Pensions
          in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill
          amended, ordered reprinted as amended and recommitted to said  commit-

          tee
 
        AN  ACT  to  authorize the New York city employees' retirement system to
          consider the application for disability retirement benefits from Peter
          DiMario
 
          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, the application
     2  for disability retirement benefits of Peter DiMario, who was employed by
     3  the  New  York  city  off-track betting corporation from June 1984 until
     4  December 2010 when such corporation closed, and is a member of  the  New
     5  York city employees' retirement system, which for reasons not ascribable
     6  to  his  own negligence has been denied a disability retirement from the
     7  New York city  employees'  retirement  system,  shall  be  accepted  for
     8  consideration  by  the  New York city employees' retirement system as if

     9  such application had been filed in a timely manner on March 7, 2011.
    10    § 2. All costs associated with the implementation of this act shall be
    11  borne by the state.
    12    § 3. This act shall take effect immediately.
          FISCAL NOTE.--PROVISIONS OF PROPOSED LEGISLATION:  The proposed legis-
        lation would authorize the New York City  Employees'  Retirement  System
        ("NYCERS")  to  accept  for  consideration an application for Disability
        Retirement benefits from Peter DiMario.
          BACKGROUND: Mr. DiMario became a Tier IV member of NYCERS on June  18,
        1984  and is covered under the provisions of Retirement and Social Secu-
        rity Law ("RSSL") Article 15.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD01789-03-4

        S. 4888--A                          2
 
          RSSL Article 15, Section 605 provides that an application for Disabil-
        ity Retirement must be filed either:
          (a)  By  a  vested  member incapacitated as the result of a qualifying
        World Trade Center condition as defined in RSSL Section 2, at any  time,
        or
          (b)  Within  three months from the last date the member was being paid
        on the payroll or,
          (c) In the case of a member who was placed on a leave of  absence  for
        medical reasons without pay, either voluntarily or involuntarily, at the
        time  he/she  ceased  being paid, not later than twelve months after the
        date the employee receives notice that  his/her  employment  status  has
        been terminated.
          In  the  case  of Mr. DiMario, under current law, he would have had to

        file pursuant to the preceding basis (b) (i.e., within three  months  of
        his last day of pay). His last day of pay was December 7, 2010.
          However,  Mr.  DiMario  filed for Disability Retirement on October 25,
        2011, more than three months after his last day of pay. Since his appli-
        cation was not timely filed, NYCERS informed Mr. DiMario that  it  could
        not be processed.
          The proposed legislation, if enacted, would authorize NYCERS to accept
        for consideration his application for Disability Retirement as if it had
        been filed in a timely manner on March 7, 2011.
          All  costs  associated with the implementation of this proposed legis-
        lation would be borne by New York State.
          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 (1) the bene-
        fits Mr. DiMario would receive if this proposed legislation were enacted
        and his application for Disability Retirement were approved and (2)  the
        benefits Mr. DiMario would otherwise be entitled to receive.
          The  difference  in  estimated costs is intended to provide a sense of
        the ultimate financial impact.
          The difference in first year employer contributions reflects both  the
        difference  in  costs  and the impact of the actuarial valuation assump-
        tions initially in use.
          Based on the actuarial assumptions and methods described herein, on an
        estimated cost basis, the enactment of this proposed  legislation  would
        increase  the  Actuarial  Present  Value  of  Benefits  ("APVB") and the
        Unfunded Actuarial Accrued Liability ("UAAL") of NYCERS by approximately
        $245,000 as of June 30, 2013.

          On an actuarial valuation basis Mr. DiMario is currently considered to
        be entitled to a Vested Benefit and assumed to have  a  life  expectancy
        similar  to  a  Service (rather than Disability) retiree. If Mr. DiMario
        were treated as a Disability Retiree with life expectancy of a Disabili-
        ty Retiree (assuming he were approved), the  APVB  and  UAAL  of  NYCERS
        would increase by approximately $215,000 as of June 30, 2013.
          FINANCIAL  IMPACT - ANNUAL EMPLOYER COSTS AND ANNUAL EMPLOYER CONTRIB-
        UTIONS: 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, Mr. DiMario is inactive  and  therefore

        the entire increase in UAAL based on the Actuary's actuarial assumptions
        S. 4888--A                          3
 
        and methods in effect on June 30, 2013 of $245,000 (on an estimated cost
        basis) should be recognized in the first year.
          Similarly,  as  of  June  30,  2013,  based on the actuarial valuation
        assumptions and methods then in effect, the proposed  legislation  would
        increase  the  first  year's  employer  contributions  by  approximately
        $215,000.
          CONTRIBUTION TIMING: If enacted during the  2014  Legislative  Session
        and  if  his  application  for Disability Retirement were approved on or
        before June 30, 2014, his status as a Disability  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 his application
        for Disability Retirement were approved after June 30, 2014  but  on  or
        before  June  30,  2015, his status as a Disability 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 for
        employer contribution purposes presented herein have been calculated  by
        comparing the APVB of a Vested Benefit as determined for actuarial valu-
        ation  purposes  (i.e., using a Service Retirement mortality table) with
        the APVB of a Disability Retirement benefit as determined for  actuarial

        valuation  purposes  (i.e.,  using  a  Disability  Retirement  mortality
        table).
          The additional APVB for employer cost purposes (i.e.,  additional  APV
        of  future  employer costs and additional annual employer costs) reflect
        an assumption that Mr. DiMario's life expectancy is more consistent with
        a Disability Retirement mortality table.
          For purposes of determining the APVB of a Disability Retirement  bene-
        fit,  we  have  assumed that Mr. DiMario would elect to have his benefit
        paid in the form of a 100% joint & survivor benefit which is the  option
        he elected on his Disability Retirement application.
          In  addition to the actuarial assumptions described above, all results
        presented herein have been calculated based on the actuarial assumptions
        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 (current and proposed) 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  2014-05,  dated
        February  4,  2014  prepared  by the Chief Actuary for the New York City
        Employees' Retirement System.