STATE OF NEW YORK
________________________________________________________________________
5902--E
2019-2020 Regular Sessions
IN SENATE
May 16, 2019
___________
Introduced by Sen. GOUNARDES -- 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 -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee -- 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 committee -- committee discharged,
bill amended, ordered reprinted as amended and recommitted to said
committee
AN ACT to amend the retirement and social security law, the education
law and the administrative code of the city of New York, in relation
to providing cost-of-living adjustments
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision a of section 78-a of the retirement and social
2 security law, as added by chapter 125 of the laws of 2000, is amended to
3 read as follows:
4 a. [A] Effective on the first day of September, two thousand twenty, a
5 cost-of-living adjustment shall be payable on the basis provided for in
6 this section to: (i) all pensioners who have attained age [sixty-two]
7 fifty-five and have been retired for five years; (ii) [all pensioners
8 who have attained age fifty-five and have been retired for ten years;
9 (iii)] all disability pensioners regardless of age who have been retired
10 for five years; and [(iv)] (iii) all recipients of an accidental death
11 benefit regardless of age who have been receiving such benefit for five
12 years.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07921-08-0
S. 5902--E 2
1 § 2. Subdivision a of section 378-a of the retirement and social secu-
2 rity law, as added by chapter 125 of the laws of 2000, is amended to
3 read as follows:
4 a. [A] Effective on the first day of September, two thousand twenty, a
5 cost-of-living adjustment shall be payable on the basis provided for in
6 this section to: (i) all pensioners who have attained age [sixty-two]
7 fifty-five and have been retired for five years; and (ii) [all pension-
8 ers who have attained age fifty-five and have been retired for ten
9 years; and (iii)] all disability pensioners regardless of age who have
10 been retired for five years.
11 § 3. Subdivision a of section 532-a of the education law, as added by
12 chapter 125 of the laws of 2000, is amended to read as follows:
13 a. [A] Effective on the first day of September, two thousand twenty, a
14 cost-of-living adjustment shall be payable on the basis provided for in
15 this section to: (i) all pensioners who have attained age [sixty-two]
16 fifty-five and have been retired for five years; (ii) [all pensioners
17 who have attained age fifty-five and have been retired for ten years;
18 (iii)] all disability pensioners regardless of age who have been retired
19 for five years; and [(iv)] (iii) all recipients of an accidental death
20 benefit regardless of age who have been receiving such benefit for five
21 years.
22 § 4. Subdivision a of section 13-696 of the administrative code of the
23 city of New York, as amended by chapter 288 of the laws of 2001, is
24 amended to read as follows:
25 a. [A] Effective on the first day of September, two thousand twenty, a
26 cost-of-living adjustment shall be payable to retired members of the New
27 York city employees' retirement system, the New York city teachers'
28 retirement system, the New York city police pension fund, the New York
29 city fire department pension fund, the New York city board of education
30 retirement system or the relief and pension fund of the department of
31 street cleaning provided for in subchapter one of this chapter on the
32 basis provided for in this section to: (i) all retired members who have
33 attained age [sixty-two] fifty-five and have been retired for five
34 years; (ii) [all retired members who have attained age fifty-five and
35 have been retired for ten years; (iii)] all members who retired for
36 disability regardless of age who have been retired for five years; and
37 [(iv)] (iii) all recipients of an accidental death benefit regardless of
38 age who have been receiving such benefit for five years.
39 § 5. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: This proposed legislation would amend Section 13-696
of the Administrative Code of the City of New York (ACCNY) to reduce the
age of eligibility for the Cost-of-Living Adjustment (COLA) from 62 to
55 for service and vested retirees who have been retired for five years
from the New York City Employees' Retirement System (NYCERS), the New
York City Teachers' Retirement System (NYCTRS), the New York City Board
of Education Retirement System (BERS), the New York City Police Pension
Fund (POLICE), and the New York City Fire Pension Fund (FIRE), collec-
tively known as the New York City Retirement Systems and Pension Funds
(NYCRS).
Effective Date: Upon enactment.
BACKGROUND: Currently, COLA is payable to service and vested retirees
who have:
(1) attained age 62 and have been retired for five years or
(2) attained age 55 and have been retired for ten years.
S. 5902--E 3
Under this proposed legislation, if enacted, the COLA would be payable
to such retirees who have attained age 55 and have been retired for five
years.
The COLA for disability retirement and death is payable after having
been retired for five years and is not affected by the proposed legis-
lation.
FINANCIAL IMPACT - SUMMARY: The estimated financial impact to NYCRS
for reducing the age of eligibility for COLA from 62 to 55 for service
and vested retirees who have been retired for five years as described
above is an increase in Present Value of Future Benefits (PVFB) of
$194.9 million and an increase in the annual employer contributions of
$115.3 million. A breakdown of the financial impact by System is shown
in the table below.
Additional Estimated First Year
NYCRS Present Value of Future Annual Employer
Benefits ($ Millions) Contributions*
($ Millions)
NYCERS $ 72.8 $ 47.4
NYCTRS 51.0 28.0
BERS 0.9 0.6
POLICE 64.3 36.6
FIRE 5.9 2.7
Total $194.9 $115.3
* Employer contributions after the first year are estimated to be $11 -
$12 million per year.
In accordance with ACCNY Section 13-638.2(k-2), new Unfunded Accrued
Liability (UAL) attributable to benefit changes are to be amortized as
determined by the Actuary, but are generally amortized over the remain-
ing working lifetime of those impacted by the benefit changes.
For the purposes of this Fiscal Note it has been assumed that
increases in UAL attributable to current retirees would be recognized
immediately and that increases in UAL attributable to active members
would be amortized over periods ranging from 12 to 15 years depending on
NYCRS (11 to 14 payments, respectively, under the One-Year Lag Methodol-
ogy (OYLM)).
CONTRIBUTION TIMING: For the purposes of this Fiscal Note, it is
assumed that the changes in the PVFB and annual employer contributions
would be reflected for the first time in the June 30, 2019 actuarial
valuations of NYCRS. In accordance with the OYLM used to determine
employer contributions, the increase in employer contributions would
first be reflected in Fiscal Year 2021.
CENSUS DATA: The estimates presented herein are based on the census
data used in the Preliminary June 30, 2019 (Lag) actuarial valuations of
NYCRS to determine the Preliminary Fiscal Year 2021 employer contrib-
utions.
ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the PVFB and annual
employer contributions presented herein have been calculated based on
the same actuarial assumptions and methods in effect for the June 30,
2019 (Lag) actuarial valuations used to determine the Preliminary Fiscal
Year 2021 employer contributions of NYCRS.
RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend
highly on the realization of the actuarial assumptions used, as well as
certain demographic characteristics of NYCRS and other exogenous factors
such as investment, contribution, and other risks. If actual experience
deviates from actuarial assumptions, the actual costs could differ from
those presented herein. Costs are also dependent on the actuarial meth-
S. 5902--E 4
ods used, and therefore different actuarial methods could produce
different results. Quantifying these risks is beyond the scope of this
Fiscal Note.
Not measured in this Fiscal Note are the following:
* The initial, additional administrative costs to implement the
proposed legislation.
* The impact of this proposed legislation on Other Postemployment
Benefit (OPEB) costs.
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 2020-38 dated May 15,
2020 was prepared by the Chief Actuary for the New York City Employees'
Retirement System, the New York City Teachers' Retirement System, the
New York City Board of Education Retirement System, the New York City
Police Pension Fund, and the New York City Fire Pension Fund. This esti-
mate is intended for use only during the 2020 Legislative Session.