Grants service credit to members of the uniformed correction force of the New York city department of correction covered by provisions of law for over 25 years.
STATE OF NEW YORK
________________________________________________________________________
6133--A
2017-2018 Regular Sessions
IN SENATE
May 11, 2017
___________
Introduced by Sen. GOLDEN -- 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 amend the retirement and social security law, in relation to
retirement benefits for general members in the uniformed correction
force of the New York city department of correction
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision d of section 504 of the retirement and social
2 security law, as amended by chapter 18 of the laws of 2012, is amended
3 to read as follows:
4 d. The early service retirement benefit for general members in the
5 uniformed correction force of the New York city department of
6 correction, who are not entitled to an early service retirement benefit
7 pursuant to subdivision c of section five hundred four-a of this article
8 or subdivision c of section five hundred four-b of this article or
9 subdivision c of section five hundred four-d of this article, or for
10 general members in the uniformed personnel in institutions under the
11 jurisdiction of the department of corrections and community supervision,
12 as defined in subdivision i of section eighty-nine of this chapter,
13 shall be a pension equal to one-fiftieth of final average salary times
14 years of credited service at the completion of twenty-five years of
15 service, [but not in excess of fifty percent of final average salary]
16 plus one-sixtieth of final average salary times years of credited
17 service in excess of twenty-five, provided, however, that the provisions
18 of this section shall not apply to a New York city uniformed
19 correction/sanitation revised plan member.
20 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD11666-02-8
S. 6133--A 2
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: This proposed legislation would amend Retirement and
Social Security Law (RSSL) Section 504 to modify the service retirement
benefit calculation formula for uniformed employees of the New York City
Department of Correction (Correction) who are members of the New York
City Employees' Retirement System (NYCERS) and are subject to the Early
Service Retirement Benefit Plan for General Members pursuant to RSSL
Section 504 (CO-25 Plan). The CO-25 Plan is limited to Tier 3 Correction
members who joined NYCERS prior to December 19, 1990 (CO-25 Plan
Members).
Effective Date: Upon enactment.
IMPACT ON SERVICE RETIREMENT BENEFITS: Currently, upon reaching 25 or
more years of credited service, CO-25 Plan Members are entitled to a
service retirement pension benefit equal to:
* 1/50th of Final Average Salary (FAS) multiplied by 25 Years of
Service (not to exceed 50% of FAS).
Under the proposed legislation, if enacted, the service retirement
pension benefit for CO-25 Plan Members who retire for service under RSSL
Section 504(d) after the effective date of the proposed legislation with
25 or more years of credited service would be equal to:
* 1/50th of FAS multiplied by 25 years of credited service, plus
* 1/60th of FAS multiplied by the number of years of credited service
exceeding 25 (if any).
FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: Based on the census data
and actuarial assumptions and methods herein, the enactment of this
proposed legislation would increase the Actuarial Present Value (APV) of
Benefits (APVB) for NYCERS by approximately $11.2 million.
Under the Entry Age Normal cost method used to determine employer
contributions to NYCERS, there would be an increase in the Unfunded
Accrued Liability (UAL) of approximately $10.8 million and an increase
in the APV of future employer Normal Cost of $0.4 million.
FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with
the 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. As of June
30, 2017, the remaining working lifetime of the CO-25 Plan Members is
approximately seven years.
For the purposes of this Fiscal Note, the increase in UAL was amor-
tized over a seven-year period (six payments under the One-Year Lag
Methodology) using level dollar payments. This payment plus the increase
in the Normal Cost results in an increase in annual employer contrib-
utions of approximately $2.4 million for NYCERS.
OTHER COSTS: Not measured in this Fiscal Note is the impact on admin-
istrative costs or Other Postemployment Benefit (OPEB) costs.
CONTRIBUTION TIMING: For the purposes of this Fiscal Note, it is
assumed that the change in the annual employer contributions would be
reflected for the first time in the Final June 30, 2017 actuarial valu-
ation of NYCERS. In accordance with the One-Year Lag Methodology (OYLM)
used to determine employer contributions, the increase in employer
contributions would first be reflected in Fiscal Year 2019.
CENSUS DATA: The estimates presented herein are based on census data
used for the Preliminary June 30, 2017 actuarial valuation of NYCERS,
including 130 CO-25 Plan Members with average age of 49.3 years, average
service of 23.8 years and total salaries of approximately $13.9 million.
S. 6133--A 3
ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the UAL, APVB, and
annual employer contributions presented herein have been calculated
based on the same actuarial assumptions and methods in effect for the
June 30, 2017 (Lag) actuarial valuations used to determine the Prelimi-
nary Fiscal Year 2019 employer contributions of NYCERS with the excep-
tion of the probability of a CO-25 Plan member working beyond 25 years
of service, which was increased to recognize the impact the proposed
legislation, if enacted, would have on retirement behavior. Please note
these assumptions and methods are subject to change as this valuation is
not considered final until the end of Fiscal Year 2019.
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, and Enrolled
Actuary under the Employee Retirement Income and Security Act of 1974
(ERISA), a Member of the American Academy of Actuaries, and a Fellow of
the Conference of Consulting Actuaries. I meet the Qualification Stand-
ards of the American Academy of Actuaries to render the actuarial opin-
ion contained herein. To the best of my knowledge, the results contained
herein have been prepared in accordance with generally accepted actuari-
al principles and procedures and with the Actuarial Standards of Prac-
tice issued by the Actuarial Standards Board.
FISCAL NOTE IDENTIFICATION: This Fiscal Note 2018-42 dated June 20,
2018, was prepared by the Chief Actuary for the New York City Employees'
Retirement System. This estimate is intended for use only during the
2018 Legislative Session.