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S06097 Summary:

S06097 Actions:

S06097 Committee Votes:

S06097 Floor Votes:

S06097 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          6097
 
                               2023-2024 Regular Sessions
 
                    IN SENATE
 
                                     March 29, 2023
                                       ___________
 
        Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
          printed to be committed to the Committee on Civil Service and Pensions
 
        AN  ACT  to amend the retirement and social security law, in relation to
          additional member contributions for  certain  members  under  the  age
          fifty-seven retirement program

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Paragraph 1 of  subdivision  f  of  section  604-d  of  the
     2  retirement  and  social security law is amended by adding a new subpara-
     3  graph (iv) to read as follows:
     4    (iv) notwithstanding the provisions of subparagraph (ii) of this para-
     5  graph, a participant holding the title of carpenter, supervisor  carpen-
     6  ter,  ship  carpenter,  supervisor  ship carpenter, rigger, dockbuilder,
     7  supervisor dockbuilder and  general  supervisor  dockbuilder  who  is  a
     8  participant  in the age fifty-seven retirement program and whose age and
     9  allowable service are such that he or she could not possibly be able  to
    10  accumulate  at  least twenty-five years of service by the time he or she
    11  reaches age fifty-seven, shall not be required to  make  the  additional
    12  member  contribution  pursuant  to  subparagraph (ii) of this paragraph.
    13  Any participant in the titles listed in this subparagraph who  has  made
    14  additional  member  contributions  pursuant to subparagraph (ii) of this
    15  paragraph prior to the effective date of the chapter of the laws of  two
    16  thousand  twenty-three  that  added  this  subparagraph  shall receive a
    17  refund of the employee  portion  of  such  contributions  plus  interest
    18  provided  that  their  age and allowable service are such that he or she
    19  could not possibly be able to accumulate at least twenty-five  years  of
    20  service by the time he or she reaches age fifty-seven.
    21    § 2. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY  OF  BILL:  This  proposed  legislation  would  amend New York
        Retirement and Social  Security  Law  (RSSL)  Section  604-d  to  exempt
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08433-02-3
        S. 6097                             2
 
        certain  Tier  4 carpenter titles from the physically taxing provisions,
        which permit retirement at age 50 (with 25 years of credited service).
          Participants  in  Eligible  Carpenter Titles who started in the Age 57
        Retirement Program (57/5 Plan), but will not reach 25 years of  credited
        service  in  a physically taxing title by age 57, would be ineligible to
        take advantage of the early  retirement  provisions  of  the  physically
        taxing title.
          Under  the  proposed  legislation,  these  members would no longer pay
        physically taxing  Additional  Member  Contributions  (AMCs)  and  would
        receive an immediate refund of the employee portion (i.e., 50%) of their
        physically taxing AMCs plus interest.
          Eligible  Carpenter  Titles  are  participants  in  the  New York City
        Employees' Retirement System (NYCERS) or the Board of Education  Retire-
        ment  System  of  the  City  of New York (BERS) in the physically taxing
        titles of carpenter, supervisor carpenter,  ship  carpenter,  supervisor
        ship carpenter, rigger, dockbuilder, supervisor dockbuilder, and general
        supervisor dockbuilder.
          Participants  would  remain  responsible  for  applicable basic member
        contributions and applicable non-physically taxing  AMCs  for  continued
        57/5 Plan participation.
          Effective Date: Upon enactment.
          FINANCIAL  IMPACT - PRESENT VALUES: Based on census data and the actu-
        arial assumptions and methods described herein, the  enactment  of  this
        proposed legislation would result in an increase in the present value of
        future  employer contributions for NYCERS and BERS of approximately $4.8
        million.
          Under the Entry Age Normal cost method used to determine the  employer
        contributions  to  NYCERS  and  BERS,  there would be an increase in the
        Unfunded Accrued Liability (UAL) of approximately $2.2  million  and  an
        increase in the Present Value of Future Employer Normal Cost of approxi-
        mately $2.6 million. These results are summarized in the table below:

          Change in ($ Thousands):                NYCERS     BERS     Total
          Actuarial Value of Assets (AVA)         $(5,234)  $ (89)    $(5,323)
          Accrued Liability (AL)                  $(3,093)  $ (44)    $(3,137)
          Unfunded Accrued Liability (AL - AVA)   $ 2,141   $  45     $ 2,186
          Present Value of Future
          Employer Normal Cost                    $ 2,535   $  61     $ 2,596
 
          FINANCIAL  IMPACT  -  ANNUAL  EMPLOYER CONTRIBUTIONS: The enactment of
        this proposed legislation would result in an initial increase in  annual
        employer  contributions of approximately $860,000 for NYCERS and $17,000
        for BERS which is the result of an increase in the Normal Cost in  addi-
        tion  to  the UAL payment. The initial increase in the employer contrib-
        utions is estimated to be $378,000 for New York City  and  $499,000  for
        the non-New York City obligors.
          New  UAL  attributable to benefit changes are generally amortized over
        the remaining working lifetime of those impacted by the benefit changes.
        The remaining working lifetime for this  group  is  approximately  seven
        years  for  NYCERS  and eight years for BERS and the increase in UAL was
        therefore amortized over a seven-year period (six payments)  for  NYCERS
        and  over  an eight-year period (seven payments) for BERS under the One-
        Year Lag Methodology using level dollar payments.
          CENSUS DATA: The estimates presented herein are based  on  the  census
        data used in the June 30, 2022 actuarial valuation of NYCERS and BERS to
        determine the Preliminary Fiscal Year 2024 employer contributions.
        S. 6097                             3
 
                                   NYCERS           BERS        NYCERS & BERS
          Count                      205              5              210
          Average Age            57.7 years      58.4 years      57.7 years
          Average Service        15.8 years      16.6 years      15.8 years
          Average Salary          $109,100        $105,200        $109,000
 
          ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
        been  calculated based on the actuarial assumptions and methods used for
        the Preliminary Fiscal Year 2024 employer contributions  of  NYCERS  and
        BERS.
          For  the  purposes of this Fiscal Note, it is assumed that the changes
        would be reflected for the first time in the  June  30,  2022  actuarial
        valuation  of  NYCERS  and BERS used to determine employer contributions
        for Fiscal Year 2024.
          RISK AND UNCERTAINTY: The costs presented in this Fiscal  Note  depend
        highly  on the realization of the actuarial assumptions used, demograph-
        ics of the impacted population and other  factors  such  as  investment,
        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.
          Not measured in this Fiscal Note are the following:
          *  The  initial  additional  administrative  costs  to  implement  the
        proposed legislation.
          STATEMENT  OF  ACTUARIAL  OPINION:  I, Marek Tyszkiewicz, am the Chief
        Actuary for, and independent of, the New York  City  Retirement  Systems
        and  Pension  Funds. I am an Associate of the Society of Actuaries and a
        Member of the American Academy of Actuaries. I am a  member  of  NYCERS,
        but do not believe it impairs my objectivity to estimate the costs here-
        in,  and  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 2023-14 dated  March  27,
        2023  was prepared by the Chief Actuary for the New York City Employees'
        Retirement System and the Board of Education Retirement  System  of  the
        City of New York. This estimate is intended for use only during the 2023
        Legislative Session.