STATE OF NEW YORK
________________________________________________________________________
6505--B
2017-2018 Regular Sessions
IN SENATE
May 26, 2017
___________
Introduced by Sens. LARKIN, CARLUCCI, GALLIVAN, JACOBS, VALESKY -- read
twice and ordered printed, and when printed to be committed to the
Committee on Civil Service and Pensions -- recommitted to the Commit-
tee 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 supplemental military retirement allowances for members of public
retirement systems of the state
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 1000 of the retirement and social security law is
2 amended by adding a new subdivision 8-a to read as follows:
3 8-a. A person who retired prior to May thirty-first, two thousand
4 sixteen and who would have been entitled to the provisions of this
5 section, may make application to such retirement system no later than
6 December thirty-first, two thousand nineteen for a supplemental military
7 retirement allowance pursuant to this subdivision. The supplemental
8 retirement allowance provided by this subdivision shall be in lieu of
9 any benefit otherwise provided pursuant to this section and any credit
10 granted for military service with any retirement system of this state
11 pursuant to any other section of law. Upon receipt of an application,
12 the retirement system shall determine the amount of service credit such
13 person would have been entitled to receive pursuant to subdivisions one
14 and two of this section, subject to the limitations contained in this
15 section. The supplemental military retirement allowance shall equal the
16 retirement allowance of such person, computed without optional modifica-
17 tion and not to exceed fifteen thousand dollars, multiplied by twenty-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08584-09-8
S. 6505--B 2
1 five one-hundredths of one percent per month of the service credit as
2 determined pursuant to this subdivision. One-twelfth of the supple-
3 mental military retirement allowance shall be added to the retirement
4 allowance of such person each month. The benefit payable pursuant to
5 this section shall commence on the next retirement allowance payable at
6 least thirty days after the receipt of an application from such person.
7 For the purposes of this subdivision, retirement allowance shall exclude
8 any annuity derived from voluntary contributions made by the individual,
9 except those made pursuant to elections under subdivision one of section
10 five hundred eleven-a or paragraph c of subdivision three of section
11 five hundred sixteen of the education law, but shall include any cost of
12 living adjustment derived from sections seventy-eight-a and three
13 hundred seventy-eight-a of this chapter or section five hundred thirty-
14 two-a of the education law, as applicable. The benefit payable pursuant
15 to this subdivision shall be payable for the life of the retired member
16 only, except that the surviving spouse of a deceased member who retired
17 under an option providing a benefit to be continued for life to the
18 surviving spouse after the death of the member shall be entitled to
19 receive fifty percent of the monthly benefit that the retired member
20 would be receiving pursuant to this subdivision, if living, commencing
21 with the next retirement allowance payable at least thirty days after
22 receipt of an application from the retired member for the benefit or
23 payable after the death of the retired member.
24 § 2. Subdivision b of section 78-a of the retirement and social secu-
25 rity law, as added by chapter 125 of the laws of 2000, is amended to
26 read as follows:
27 b. Said cost-of-living adjustment shall be a percentage of the annual
28 retirement allowance otherwise payable, computed without optional
29 modification, but including any benefit derived from subdivision f of
30 this section [and], any prior year's cost-of-living adjustment derived
31 from this section and the amount of any supplemental military retirement
32 allowance derived from subdivision eight-a of section one thousand of
33 this chapter. Said percentage is set forth in subdivision d of this
34 section.
35 § 3. Subdivision b of section 378-a of the retirement and social secu-
36 rity law, as added by chapter 125 of the laws of 2000, is amended to
37 read as follows:
38 b. Said cost-of-living adjustment shall be a percentage of the annual
39 retirement allowance otherwise payable, computed without optional
40 modification, but including any benefit derived from subdivision f of
41 this section [and], any prior year's cost-of-living adjustment derived
42 from this section and the amount of any supplemental military retirement
43 allowance derived from subdivision eight-a of section one thousand of
44 this chapter. Said percentage is set forth in subdivision d of this
45 section.
46 § 4. Subdivision b of section 532-a of the education law, as added by
47 chapter 125 of the laws of 2000, is amended to read as follows:
48 b. Said cost-of-living adjustment shall be a percentage of the annual
49 retirement allowance otherwise payable, computed without optional
50 modification, excluding any annuity derived from voluntary contributions
51 made by members, except those made pursuant to elections under subdivi-
52 sion one of section five hundred eleven-a or paragraph c of subdivision
53 three of section five hundred sixteen of this article, but including any
54 benefit derived from subdivision f of this section [and], any prior
55 year's cost-of-living adjustment derived from this section and the
56 amount of any supplemental military retirement allowance derived from
S. 6505--B 3
1 subdivision eight-a of section one thousand of the retirement and social
2 security law. Said percentage is set forth in subdivision d of this
3 section.
4 § 5. Subdivision b of section 13-696 of the administrative code of the
5 city of New York, as added by chapter 125 of the laws of 2000, is
6 amended to read as follows:
7 b. Said cost-of-living adjustment shall be a percentage of the annual
8 fixed retirement allowance otherwise payable, computed without optional
9 modification, but including any benefit derived from subdivision f of
10 this section [and], any prior year's cost-of-living adjustment derived
11 from this section and the amount of any supplemental military allowance
12 derived from subdivision eight-a of section one thousand of the retire-
13 ment and social security law. Said percentage is set forth in subdivi-
14 sion d of this section.
15 § 6. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would amend section 1000 of the Retirement and Social Secu-
rity Law by adding a new subdivision 8-a to allow eligible retired
members of public retirement systems of New York State to receive a
supplemental military retirement allowance based upon the retirement
allowance of such member and up to three years of military service cred-
it. This supplemental benefit would be in lieu of any benefit otherwise
provided by military service credit. The annual supplemental military
retirement allowance shall be equal to the retirement allowance of such
person, computed without optional modification and not to exceed fifteen
thousand dollars, multiplied by twenty-five one-hundredths of one
percent per month of military service claimed. The surviving spouse of a
deceased member who retired under an option which provides them with a
continuing lifetime benefit would be entitled to receive fifty percent
of the supplemental military retirement allowance that the retired
member would have received. A member must have retired prior to May 31,
2016 and make application no later than December 31, 2019. This benefit
is prospective only and shall commence with the next retirement allow-
ance payable at least 30 days after the receipt of said application.
There is no member cost for this benefit.
It is not possible to determine the total annual cost to the employers
of members of the New York State Teachers' Retirement System since the
number of retired members who would be eligible for the supplemental
military retirement allowance under this bill cannot be effectively
estimated. However, the cost is estimated to be, on average, approxi-
mately $12,300 for each retired member eligible for the supplemental
military retirement allowance provided under this bill if enacted.
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 2018-18 dated March 30,
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.
S. 6505--B 4
FISCAL NOTE.-- This bill would amend Section 1000 of the Retirement
and Social Security Law to give veterans who retired prior to May 31,
2016, a supplemental pension equal to their first $15,000 of single life
allowance together with any cost of living adjustment, multiplied by 3%
per year for up to three (3) years of such service credit for military
service that would have been eligible if the member retired on or after
such date. The surviving spouse of such a retired veteran who chose a
continued life benefit to the spouse shall receive half of what the
deceased member would have received. There would not be any payment
required by an affected retiree or surviving spouse for this supple-
mental pension. Such retiree may make application for the supplemental
pension no later than December 31, 2019 and the payment of the benefit
will begin with the next monthly pension payment payable at least 30
days after receipt of the application.
The exact number of retirees that could be affected by this legis-
lation cannot be readily determined.
ERS Costs: Pursuant to Section 25 of the Retirement and Social Securi-
ty Law, the increased cost to the New York State and Local Employees'
Retirement System would be borne entirely by the State of New York and
would require an itemized appropriation sufficient to pay the cost of
the provision. Once a retiree applies for this benefit a cost will be
generated, which will be billed to the State.
PFRS Costs: These costs would be shared by the State of New York and
the participating employers in the PFRS.
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 March 9, 2018, and intended for use only during
the 2018 Legislative Session, is Fiscal Note No. 2018-71, prepared by
the Actuary for the New York State and Local Retirement System.
FISCAL NOTE. -- The proposed legislation would amend Retirement and
Social Security Law (RSSL) Section 1000 by adding a new subdivision 8-a
to allow eligible retirees who retired from a public retirement system
within the State prior to May 31, 2016, and who would have had qualify-
ing military service had they been active members, to apply for a
prospective supplemental military retirement allowance (Supplemental
Retirement Allowance).
For purposes of this Fiscal Note, "NYCRS" refers to the New York City
Employees' Retirement System (NYCERS), the New York City Teachers'
Retirement System (TRS), 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).
With respect to the NYCERS, the proposed legislation would further
amend Administrative Code of the City of New York (ACCNY) Section 13-696
S. 6505--B 5
to include Cost-of-Living Adjustment (COLA) increases in the calculation
and payment of such Supplemental Retirement Allowance.
Effective Date: Upon enactment.
BACKGROUND: A NYCERS retiree would be eligible to receive the Supple-
mental Retirement Allowance (Eligible Recipient) if he or she:
*Retired prior to May 31, 2016,
*Would have otherwise met the current eligibility criteria of RSSL
Section 1000, and
*Files an application for such benefit by December 31, 2019.
The Supplemental Retirement Allowance would be in lieu of any other
retirement benefit provided for military service.
For purposes of this Fiscal Note, it is assumed that the Supplemental
Retirement Allowance is provided without cost to Eligible Recipients.
IMPACT ON BENEFITS PAYABLE: With respect to NYCRS Eligible Recipients,
the Supplemental Retirement Allowance would be payable as of the next
retirement allowance payment following 30 days from filing an applica-
tion for such benefit.
The Supplemental Retirement Allowance would be payable for the Eligi-
ble Recipient's lifetime, and payable, at 50% of the Eligible Recipi-
ent's Supplemental Retirement Allowance rate, for the lifetime of an
Eligible Recipient's surviving spouse who is eligible to receive a life-
time retirement allowance benefit under an existing option election.
The annual Supplemental Retirement Allowance would be equal to the
retirement allowance of the Eligible Recipient (computed without
optional modification, without certain annuities derived from voluntary
contributions and not to exceed $15,000) multiplied by 0.25% for each
month of qualifying military service (not to exceed 36 months). There-
fore, the initial maximum Supplemental Retirement Allowance would not
exceed $1,350 per year (i.e. $15,000 x 0.25% x 36 months = $1,350 per
year), and would thereafter be subject to the COLA provisions, to the
extent the total retirement allowance including Supplemental Retirement
Allowance is less than $18,000 per year, provided by ACCNY Section
13-696.
FINANCIAL IMPACT - OVERVIEW: The number of members who could poten-
tially benefit from this proposed legislation cannot be determined. For
illustrative purposes only, the table below presents the estimated
financial impact assuming that, (1) the percentage of retirees that
would benefit is the same percentage for each of the NYCRS as the
percentage of active members that have purchased military service under
Chapter 41 of the Laws of 2016 as of June 30, 2017, (2) that each member
purchased 2.5 years of military service, (3) that each retiree's pension
is equal to or greater than $15,000 per year, and (4) that the percent-
age of those retirees who are receiving their pension in the form of a
Joint and Survivor benefit is the same percentage as current retirees
for each of the NYCRS.
ESTIMATED FINANCIAL IMPACT FOR PROVIDING A SUPPLEMENTAL
RETIREMENT ALLOWANCE TO CERTAIN RETIREES
One-Time Increase
Retirement System in Employer Contributions
($ Millions)
NYCERS $ 3.8
TRS 0.8
BERS 0.1
POLICE 16.3
S. 6505--B 6
FIRE 2.1
Total $23.1*
*Any costs may be subject to State appropriation and reimbursement
pursuant to RSSL Section 25.
FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS: In accordance with the
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 remaining 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 would
be recognized in the first year that the increased pension was paid.
CONTRIBUTION TIMING: Increased pensions for the affected retirees
would commence on the next retirement allowance payable at least thirty
days after receipt of an application from such person. For purposes of
this Fiscal Note, it is assumed that increased pensions would be
reflected in the census data used in the June 30, 2018 actuarial valu-
ations of NYCRS. Under the One-Year Lag Methodology, the first fiscal
year in which these changes in benefits would impact employer contrib-
utions would be Fiscal Year 2020.
However, since Eligible Recipients have until December 31, 2019 to
file an application for the additional service credit, the increased
contributions would likely be spread out over Fiscal Years 2020, 2021,
and 2022.
OTHER COSTS: Not measured in the Fiscal Note are any possible
increased administrative costs attributable to enactment of the proposed
legislation.
ACTUARIAL ASSUMPTIONS AND METHODS: In addition to the assumptions
described in the Financial Impact - Overview section above, the changes
in employer contributions presented herein have been calculated based on
the same actuarial assumptions and methods in effect for the June 30,
2017 (Lag) actuarial valuation 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 the 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: This Fiscal Note 2018-24 dated May 2,
2018, 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 2018 Legislative Session.
