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S05593 Summary:

S05593 Actions:

S05593 Committee Votes:

S05593 Floor Votes:

S05593 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         5593--A
            Cal. No. 301
 
                               2017-2018 Regular Sessions
 
                    IN SENATE
 
                                     April 19, 2017
                                       ___________
 
        Introduced  by  Sens.  GOLDEN, AVELLA -- 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 --  reported  favorably  from
          said committee, ordered to first and second report, ordered to a third
          reading,  passed  by  Senate  and delivered to the Assembly, recalled,
          vote reconsidered, restored to  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
          loans to members of certain retirement systems
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section 1. Subdivision i of section 517-c of the retirement and social
     2  security  law, as amended by chapter 511 of the laws of 2005, is amended
     3  to read as follows:
     4    i. Notwithstanding the provisions of section five hundred  sixteen  of
     5  this  article, whenever a member of such a retirement system, for whom a
     6  loan is outstanding, retires, the retirement allowance  payable  without
     7  optional  modification shall be reduced by a life annuity which is actu-
     8  arially equivalent to the amount of the outstanding loan (all  outstand-
     9  ing  loans  shall continue to accrue interest charges until retirement),
    10  such life annuity being calculated utilizing the interest rate on thirty
    11  year United States treasury bonds as of January first  of  the  calendar
    12  year  of  the  effective date of retirement and the mortality tables for
    13  options available under section five hundred fourteen of this article. A
    14  retiree of the New York city employees' retirement system [or], board of
    15  education retirement system of the city of New York,  or  the  New  York
    16  state  and  local employees' retirement system whose benefit has been so
    17  reduced may repay the outstanding balance of the loan at any time. Bene-
    18  fits payable after the repayment of the loan shall not be subject to the
    19  actuarial reduction required by this subdivision.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11071-03-8
        S. 5593--A                          2
 
     1    § 2. Subdivision i of section 613-b of the retirement and social secu-
     2  rity law, as amended by chapter 511 of the laws of 2005, is  amended  to
     3  read as follows:
     4    i.  Notwithstanding  the  provisions  of  subdivision b of section six
     5  hundred twelve of this article, whenever a member of such  a  retirement
     6  system,  for  whom a loan is outstanding, retires, the retirement allow-
     7  ance payable without optional modification shall be reduced  by  a  life
     8  annuity which is actuarially equivalent to the amount of the outstanding
     9  loan  (all  outstanding  loans shall continue to accrue interest charges
    10  until retirement), such life  annuity  being  calculated  utilizing  the
    11  interest  rate on thirty year United States treasury bonds as of January
    12  first of the calendar year of the effective date of retirement  and  the
    13  mortality  tables for options available under section six hundred ten of
    14  this article. A retiree of  the  New  York  city  employees'  retirement
    15  system  [or],  board  of  education retirement system of the city of New
    16  York, or the New York state and local employees' retirement system whose
    17  benefit has been so reduced may repay the  outstanding  balance  of  the
    18  loan at any time. Benefits payable after the repayment of the loan shall
    19  not be subject to the actuarial reduction required by this subdivision.
    20    § 3. This act shall take effect immediately.
          FISCAL NOTE.-- Pursuant to Legislative Law, Section 50:
          This  bill  would  allow  a  retiree  of  the New York State and Local
        Employees' Retirement System (ERS) to repay the outstanding loan balance
        determined on the day of retirement, by making a lump sum payment  after
        retirement.  Upon receipt of such repayment, the future pension payments
        of  such  retirees  shall  be  recalculated  to  be  without   actuarial
        reduction.  Currently, member loans must be settled at retirement either
        by a lump sum payment  or  by  an  annual  actuarial  reduction  to  the
        pensions.
          If this bill is enacted, there would be a small administrative cost to
        implement this change.
          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, 2017  actuarial  valu-
        ation.    Distributions  and  other  statistics can be found in the 2017
        Report of the  Actuary  and  the  2017  Comprehensive  Annual  Financial
        Report.
          The  actuarial assumptions and methods used are described in the 2015,
        2016, and 2017 Annual Report to the  Comptroller  on  Actuarial  Assump-
        tions,  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, 2017
        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  estimate,  dated  January  17,  2018,  and intended for use only
        during the  2018  Legislative  Session,  is  Fiscal  Note  No.  2018-30,
        prepared  by  the  Actuary  for  the New York State and Local Retirement
        System.