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S06591 Summary:

S06591 Actions:

S06591 Committee Votes:

S06591 Floor Votes:

S06591 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          6591
 
                               2017-2018 Regular Sessions
 
                    IN SENATE
 
                                      June 6, 2017
                                       ___________
 
        Introduced  by  Sen.  DILAN  -- read twice and ordered printed, and when
          printed to be committed to the Committee on Rules
 
        AN ACT to amend the retirement and social security law, in  relation  to
          allowing  members  of  the New York city transit authority twenty-five
          year and age fifty-five retirement plan to purchase credit  for  prior
          service

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Subdivision e of section 604-b of the retirement and social
     2  security law is amended by adding a new paragraph 11 to read as follows:
     3    11. Notwithstanding any provision of law, rule or  regulation  to  the
     4  contrary, any member who is a current member of the New York city trans-
     5  it authority twenty-five year and age fifty-five retirement plan author-
     6  ized in this section:
     7    (i)  whose  name  was included on a preferred eligible list during any
     8  period occurring on or after May eleventh, two thousand ten  and  on  or
     9  prior to July twenty-fifth, two thousand twelve, by reason of the aboli-
    10  tion  of  a  position  held by him or her with the New York city transit
    11  authority; and
    12    (ii) who was a member or former member at the time  when  his  or  her
    13  name was placed on such list;
    14  shall  be  permitted  to  contribute to such retirement plan, the amount
    15  which he or she would have contributed to such system for  the  duration
    16  of time his or her name was included on such list, together with regular
    17  interest  on  such  amount,  and  the  length of credited time for which
    18  contributions are made pursuant to this paragraph shall be  credited  as
    19  allowable  service  in the transit authority plan under this section for
    20  all purposes, including eligibility for benefits.
    21    § 2. This act shall take effect immediately.
          FISCAL NOTE.--PROVISIONS OF PROPOSED LEGISLATION: The proposed  legis-
        lation  would  amend  Retirement  and Social Security Law (RSSL) Section
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10265-02-7
        S. 6591                             2
 
        604-b to permit eligible New  York  City  Employees'  Retirement  System
        (NYCERS)  members  in  the  Tier  4  or  Tier 6 Twenty-Five Year and Age
        Fifty-Five Retirement  Program  for  New  York  City  Transit  Authority
        Members  (Transit  25/55  Plan)  to  purchase  certain furlough time for
        Allowable Service credit in the Plan.
          The Effective Date of the proposed legislation would be  the  date  of
        enactment.
          To be eligible to purchase furlough time, an individual must:
          * be a current NYCERS Transit 25/55 Plan member,
          *  have been on a preferred eligible list anytime on and after May 11,
        2010 to July 25, 2012, inclusive, because of the abolition of his or her
        position by the Transit Authority, and
          * have been a member or former member of the Transit 25/55 Plan at the
        time his or her name was placed on such list.
          In order to receive Allowable Service  credit  in  the  Transit  25/55
        Plan,  an  eligible  member  must  make  any applicable contributions to
        NYCERS, with interest, for the period of  eligible  furlough  time.  The
        period  of purchased furlough time shall be considered Allowable Service
        in the Transit Authority for all purposes in  the  Transit  25/55  Plan,
        including eligibility for and calculation of benefits.
          For  purposes of this Fiscal Note, it is assumed that eligible Transit
        25/55 Plan Members who purchase applicable furlough time would be ineli-
        gible to receive service credit in any public retirement  system  within
        the State including NYCERS, for the same period of time.
          FINANCIAL  IMPACT  -  ACTUARIAL PRESENT VALUES: With respect to NYCERS
        and based on the actuarial assumptions and methods described herein, the
        enactment of this proposed  legislation  would  increase  the  actuarial
        Present  Value  (APV) of Benefits (APVB) by approximately $1,180,000. In
        addition , there would be a decrease  in  the  APV  of  Future  Employee
        Contributions  of  $6,000, resulting in an increase in the APV of Future
        Employer Contributions of $1,186,000.
          FINANCIAL IMPACT - ANNUAL EMPLOYER  CONTRIBUTIONS:In  accordance  with
        the  Administrative  Code  of  the  City  of  New  York  (ACNY)  Section
        13.638.2(k-2), new UAAL 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,  2016,  the  remaining  working  lifetime  of  the transit Authority
        members that would be impacted by the proposed legislation  is  approxi-
        mately 13 years.
          With  respect to NYCERS based on the actuarial assumptions and methods
        used in the Preliminary June 30, 2016 valuations of NYCERS,  the  enact-
        ment  of  this  proposed  legislation  would  increase  annual  employer
        contributions by approximately $160,000 per  year  beginning  in  Fiscal
        Year 2019.
          OTHER  COSTS:  Not measured in this Fiscal Note are the initial, addi-
        tional administrative costs of NYCERS and other New York  City  agencies
        to implement the proposed legislation.
          CENSUS  DATA:  The  starting  census  data  used  for the calculations
        presented herein is the census data used in  the  Preliminary  June  30,
        2016  (Lag) actuarial valuation of NYCERS. This data was supplemented by
        additional service data provided by NYCERS  for  156  Transit  Authority
        employees  who  would  benefit under the proposed legislation. These 156
        members had an average age of approximately  46.7,  average  service  of
        approximately  10.3  years  (11.1  years  after  reflecting  purchase of
        furlough time if the proposed legislation is enacted),  and  an  average
        salary of approximately $68,000.
        S. 6591                             3
 
          ACTUARIAL  ASSUMPTIONS  AND  METHODS: The additional employer contrib-
        utions presented herein have been  calculated  based  on  the  actuarial
        assumptions  and  methods  used to determine the Preliminary Fiscal Year
        2018 employer contributions of NYCERS.
          Employer  contributions  under current methodology have been estimated
        assuming the additional APVB would be  financed  through  future  normal
        contributions  including an amortization of the new UAAL attributable to
        this proposed legislation over a 13-year period (12 payments  under  the
        One-Year Lag Methodology).
          STATEMENT  OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu-
        ary for, and independent of, the New York City Pension Funds and Retire-
        ment Systems. I am a Fellow of the Society of Actuaries, a Fellow of the
        Conference of Consulting Actuaries and a Member of the American  Academy
        of Actuaries. I meet the Qualification Standards of the American Academy
        of Actuaries to render the actuarial opinion contained herein.
          FISCAL  NOTE  IDENTIFICATION:  This  Fiscal  Note 2017-15 dated May 9,
        2017, was prepared by the Chief Actuary for the New York City Employees'
        Retirement System. This estimate is intended for  use  only  during  the
        2017 Legislative Session.