Relates to providing a final average salary disability retirement benefit to certain participants in World Trade Center rescue, recovery, or cleanup operations.
STATE OF NEW YORK
________________________________________________________________________
6371--B
2017-2018 Regular Sessions
IN SENATE
May 11, 2017
___________
Introduced by Sens. AVELLA, HAMILTON, HOYLMAN, SAVINO, STAVISKY -- 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 commit-
tee -- 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
disability retirement benefits for certain participants in World Trade
Center rescue, recovery, or cleanup operations
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 4 of subdivision d of section 605 of the retire-
2 ment and social security law is renumbered paragraph 5 and a new para-
3 graph 4 is added to read as follows:
4 4. Notwithstanding any other law, rule or regulation to the contrary,
5 any member who had an active membership when such member participated in
6 World Trade Center rescue, recovery, or cleanup operations, as such
7 participation is defined in section two of this chapter, who incurred a
8 qualifying World Trade Center condition, as defined in section two of
9 this chapter, that is determined to have been incurred in the perform-
10 ance and discharge of duty and is the natural and proximate result of an
11 accident not caused by such member's own willful negligence, shall be
12 paid a performance of duty disability retirement allowance equal to
13 three-quarters of final average salary. The payment of such pension
14 shall be subject to the provisions of section sixty-four of this chap-
15 ter.
16 § 2. Section 507 of the retirement and social security law is amended
17 by adding a new subdivision h-1 to read as follows:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00930-16-8
S. 6371--B 2
1 h-1. Notwithstanding any other law, rule or regulation to the contra-
2 ry, any member who had an active membership when such member partic-
3 ipated in World Trade Center rescue, recovery, or cleanup operations, as
4 such participation is defined in section two of this chapter, who
5 incurred a qualifying World Trade Center condition, as defined in
6 section two of this chapter, that is determined to have been incurred in
7 the performance and discharge of duty and is the natural and proximate
8 result of an accident not caused by such member's own willful negli-
9 gence, shall be paid a performance of duty disability retirement allow-
10 ance equal to three-quarters of final average salary. The payment of
11 such pension shall be subject to the provisions of section sixty-four of
12 this chapter.
13 § 3. This act shall take effect immediately and apply to all active
14 members who are determined to have incurred a qualifying World Trade
15 Center condition in the performance and discharge of duty that is the
16 natural and proximate result of an accident not caused by such member's
17 own willful negligence prior to the effective date of this act.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would amend the benefits of certain members of public
retirement systems who are subject to the provisions of Article 14 or
Article 15 of the Retirement and Social Security Law who contract any
form of disease or disability related to exposure to any elements in
connection with the World Trade Center rescue, recovery or cleanup oper-
ations. The annual accidental disability benefit would be 75% of a
member's final average salary less workers compensation, regardless of a
member's plan coverage. Currently, eligible members receive the acci-
dental disability benefit specified in the plan under which they are
covered, which for most Article 14 and 15 member is 1/3 of a member's
final average salary. This improved benefit would be payable only to
current members or their beneficiaries, who must file for this benefit
prior to September 11, 2019. Current retirees and their beneficiaries
would not be affected by this bill.
If this bill is enacted, the cost of the revised benefit will depend
upon the applicant's age, service, salary, plan, and benefit type other-
wise payable, but is expected to cost up to 4 times final average salary
per individual.
Insofar as this bill would affect the New York State and Local Employ-
ees' Retirement System, there are currently 657 active members, with a
salary of $6.7 million, who have filed an Application for World Trade
Center Notice who could potentially receive benefits under this bill.
A precise cost for future years can't be determined at this time.
Pursuant to Section 25 of the Retirement and Social Security Law, the
increased cost would be borne entirely by the State of New York and
would require an itemized appropriation sufficient to pay the cost of
the provision. Every year a cost will be determined (and billed to the
state) based on those benefitting from this provision.
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.
S. 6371--B 3
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 June 5, 2018, and intended for use only during
the 2018 Legislative Session, is Fiscal Note No. 2018-97, prepared by
the Actuary for the New York State and Local Retirement System.
FISCAL NOTE.-- Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: With respect to the New York City Pension Funds
Retirement Systems (NYCRS), the proposed legislation would amend
provisions of the Retirement and Social Security Law (RSSL) to grant to
active NYCRS members, who are subject to RSSL Articles 14 or 15 and
incur a World Trade Center (WTC) Qualifying Condition, a performance of
duty disability retirement equivalent to 75% of the member's Final Aver-
age Salary (FAS). The proposed legislation would also require that
applicable members or beneficiaries of the proposed benefit file a WTC
Notice of Participation with the applicable NYCRS by September 11, 2018
to be eligible to receive the proposed benefit.
Effective Date: Upon enactment, and retroactive for qualifying members
who retired with a non-75% FAS WTC disability retirement.
IMPACT ON BENEFITS PAYABLE: Under the proposed legislation, the bene-
fits for WTC retirees would be revised to equal a retirement allowance
of:
* 75% multiplied by FAS,
Reduced by:
* 100% of Workers' Compensation benefits (if any) payable (as required
by RSSL Section 64).
Please note that, generally, uniformed WTC retirees are currently
entitled to a 75% of FAS benefit (i.e. members of the New York City
Police Pension Fund (POLICE), the New York City Fire Pension Fund
(FIRE), and Sanitation, Correction, EMT, and Deputy Sherriff members of
the New York City Employees' Retirement System (NYCERS)). Therefore, the
application of the proposed legislation would likely be limited to
active Tier 3 and 4 civilian members of NYCERS, the Teachers' Retirement
System of the City of New York (NYCTRS), and the New York City Board of
Education Retirement System (BERS).
Although certain NYCRS members are ineligible for Workers' Compen-
sation benefits and therefore would not have their benefit subject to an
offset, for purposes of this Fiscal Note, it is assumed that the Work-
ers' Compensation offset provisions cited in Sections 1 and 2 of the
proposed legislation would not apply to NYCRS members because such
members are not paid retirement benefits under RSSL Article 2, which is
a requirement for the application of the offset provision contained in
RSSL Section 64.
FINANCIAL IMPACT - ACTUARIAL PRESENT VALUE OF BENEFITS (APVB):
Although there are currently approximately 4,700 submitted qualified WTC
Notice of Participation Forms for applicable NYCERS, TRS, and BERS
members, the number of members from this group, and any additional
eligible members who timely file such Form by the extended September 11,
2018 date contained in this proposed legislation, who could potentially
benefit from this proposed legislation in the future cannot be readily
determined. Therefore, the ultimate impact of this proposed legislation
would depend on the number of members affected in the future as well as
other characteristics including the age, years of service, and salary
history of the member.
S. 6371--B 4
However, for purposes of this fiscal note, only those members who have
retired from active membership with a qualifying WTC-related condition
and receive a non-75% FAS WTC disability benefit have been considered.
Those members who have been reclassified as having a WTC-related disa-
bility after retirement from service, based on the proposed legis-
lation's limited application to active members, and the unknown number
of active members who may eventually retire in the future with a current
non-75% FAS WTC disability benefit, were not included in the below
calculation.
With respect to applicable NYCRS retirees currently in receipt of
non-75% FAS WTC disability benefits, under the actuarial assumptions
used in the Preliminary June 30, 2017 (Lag) actuarial valuations of
NYCRS, the enactment of this proposed legislation would increase the
APVB by approximately $23,003,000 as of June 30, 2017. This amount is
the sum of the amounts shown in the table below.
ESTIMATED FINANCIAL IMPACT ON NYCERS, TRS, AND BERS
IF CERTAIN CIVILIAN NYCRS WTC MEMBERS
RECEIVE A 75% PERFORMANCE OF DUTY DISABILITY BENEFIT
($ 000s)
APVB NYCERS TRS BERS Total
Retroactive* $ 8,438 $18 $0 $ 8,456
Prospective 14,503 44 0 14,547
Total $22,941 $62 $0 $23,003
* It has been assumed that no interest will be credited on these retro-
active payments.
FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS: In accordance with Adminis-
trative Code of the City of New York (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 generally over the remain-
ing working lifetime of those impacted by the benefit changes. For this
proposed legislation, since those that would benefit are retired, the
entire increase in UAL of $23,003,000 would be recognized in the first
year that the increased pension was paid.
OTHER COSTS: Not measured in this Fiscal Note are the following:
* Any additional costs related to future civilian NYCRS members who
retire due to a WTC qualifying condition and who would benefit from this
proposed legislation, if enacted.
* The initial, additional administrative costs of the NYCRS to imple-
ment the proposed legislation.
* The impact of this proposed legislation on Other Postemployment
Benefit (OPEB) costs.
CONTRIBUTION TIMING: For the purposes of this Fiscal Note, it is
assumed that the changes in the employer contributions would be
reflected for the first time in the June 30, 2018 actuarial valuation of
NYCERS, TRS, and BERS. In accordance with the One-Year Lag Methodology
(OYLM) used to determine employer contributions, the increase in employ-
er contributions would first be reflected in Fiscal Year 2020.
CENSUS DATA: The starting census data used for the calculations
presented herein is the census data used in the Preliminary June 30,
S. 6371--B 5
2017 (Lag) actuarial valuation of the NYCRS to determine the Preliminary
Fiscal Year 2019 employer contributions.
This data was supplemented by data provided by NYCERS, TRS, and BERS
that identified retirees currently in receipt of non-75% FAS WTC disa-
bility benefits. NYCERS identified 51 members with an average benefit of
$29,007, TRS identified one member with a benefit of $36,512, and BERS
did not identify any members currently receiving non-75% FAS WTC disa-
bility benefits.
ACTUARIAL ASSUMPTIONS AND METHODS: The additional employer contrib-
utions presented herein have been calculated based on the actuarial
assumptions and methods in effect for the Preliminary June 30, 2017
(Lag) actuarial valuations used to determine the Preliminary Fiscal Year
2019 employer contributions of NYCRS. 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, an 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: The Fiscal Note 2018-37 dated June 13,
2018, was prepared by the Chief Actuary for the New York City Employees'
Retirement System, the New York City Teachers' Retirement System, and
the New York City Board of Education Retirement System. This estimate is
intended for use only during the 2018 Legislative Session.
FISCAL NOTE.-- Pursuant to Legislative Law, Section 50:
This bill would amend Sections 2, 507, and 605 of the Retirement and
Social Security Law to allow any member of the New York State Teachers'
Retirement System who had an active membership when such member partic-
ipated in the World Trade Center rescue, recovery, or cleanup operations
and who incurred a qualifying World Trade Center condition determined to
have been incurred in the performance and discharge of duty to receive a
performance of duty disability retirement benefit equal to 75% of final
average salary. Currently an active member would receive an accidental
disability retirement benefit which is generally one-third of final
average salary. Members who become disabled or die as a result of a
qualifying World Trade Center condition are assumed to have become disa-
bled or died as a result of an accidental or on-the-job disability or
death. The deadline to apply for this performance of duty disability
retirement benefit for a member or an eligible beneficiary in the case
of a member's death would be September 11, 2019. This bill would take
effect immediately and apply to all members who are determined to have
incurred a qualifying World Trade Center condition in the performance
and discharge of duty prior to the effective date of this act.
The cost, or additional present value of benefits, is estimated to be,
on average, $300,000 for each member who receives this performance of
duty disability retirement benefit. Although the potential increase in
an affected member's benefit is estimated to be large, the additional
annual cost to the employers of members of the New York State Teachers'
Retirement System is estimated to be negligible if this bill is enacted
S. 6371--B 6
because it is anticipated there would be few applications received for
this performance of duty disability retirement benefit from our member-
ship.
Member data is from the System's most recent actuarial valuation
files, consisting of data provided by the employers to the Retirement
System. Data distributions and statistics can be found in the System's
Comprehensive Annual Financial Report (CAFR). System assets are as
reported in the System's financial statements, and can also be found in
the CAFR. Actuarial assumptions and methods are provided in the System's
Actuarial Valuation Report.
The source of this estimate is Fiscal Note 2018-31 dated June 14, 2018
prepared by the Actuary of the New York State Teachers' Retirement
System and is intended for use only during the 2018 Legislative Session.
I, Richard A. Young, am the Actuary for the New York State Teachers'
Retirement System. I am a member of the American Academy of Actuaries
and I meet the Qualification Standards of the American Academy of Actu-
aries to render the actuarial opinion contained herein.
