Extends the benefits of the variable supplements fund to New York city transit police who retired after October 1, 1968; amends the definition of a beneficiary.
STATE OF NEW YORK
________________________________________________________________________
6823--A
2017-2018 Regular Sessions
IN SENATE
June 21, 2017
___________
Introduced by Sens. LANZA, GOLDEN -- read twice and ordered printed, and
when printed to be committed to the Committee on Rules -- 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 committee
AN ACT to amend the administrative code of the city of New York, in
relation to extending the benefits of the variable supplements fund
for transit police members of the New York city employees' retirement
system
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph (c) of subdivision 1 of section 13-191 of the
2 administrative code of the city of New York, as amended by chapter 577
3 of the laws of 1992, is amended to read as follows:
4 (c) "Beneficiary". Any person who receives a retirement allowance by
5 reason of having retired, on or after [July first, nineteen hundred
6 eighty-seven] October first, nineteen hundred sixty-eight for service
7 (with credit for twenty or more years of service toward the minimum
8 period) as a transit police officer; provided, that no person who held a
9 rank or position as a transit police superior officer, as defined in
10 subdivision eighty-four of section 13-101 of this title who, on or after
11 May first, nineteen hundred ninety-two, subsequently became a transit
12 police officer shall be considered a beneficiary unless such person (1)
13 subsequently performed at least three years of service as a transit
14 police officer or (2) returned to service, from the position of
15 sergeant, as a transit police officer during the eighteen month proba-
16 tionary period, or such other probationary period as may be applicable
17 or (3) returned to service as a transit police officer during the three
18 year period specified in paragraph (e) of subdivision one of section
19 seventy-five of the civil service law, or (4) returned to service as a
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03869-07-8
S. 6823--A 2
1 transit police officer as the result of a hearing conducted pursuant to
2 applicable law.
3 § 2. Paragraph (b) of subdivision 1 of section 13-192 of the adminis-
4 trative code of the city of New York, as amended by chapter 720 of the
5 laws of 1994, is amended to read as follows:
6 (b) "Beneficiary". Any person who receives a retirement allowance by
7 reason of having retired, on or after [July first, nineteen hundred
8 eighty-seven,] October first, nineteen hundred sixty-eight, for service
9 (with credit for twenty or more years of service toward the minimum
10 period) as a transit police member and as a transit police superior
11 officer; provided, however, that where a person who held or holds a rank
12 or position as a transit police superior officer, subsequently and on or
13 after May first, nineteen hundred ninety-two became or becomes a transit
14 police officer, and while a transit police officer, retired or retires
15 for service under such circumstances that he or she would have qualified
16 as a beneficiary under the provisions of paragraph (c) of subdivision
17 one of section 13-191 of this title (other than the proviso thereof),
18 but did not or does not qualify as a beneficiary under such paragraph
19 (c) because he or she was or is disqualified by the terms of such provi-
20 so, such retiree shall nevertheless be deemed to be a beneficiary under
21 the provisions of this section.
22 § 3. This act shall take effect December 1, 2018.
FISCAL NOTE. -- Pursuant to Legislative Law, Section 50:
This proposed legislation would amend Administrative Code of the City
of New York (ACCNY) Sections 13-191 and 13-192, both enacted by Chapter
844 of the Laws of 1987, to extend the eligibility provisions providing
for the payment of Transit Police Officers' and Transit Police Superior
Officers' Variable Supplements Funds (VSF) benefits to certain retirees.
Specifically, this proposed legislation would provide for payments to
former New York City Employees' Retirement System (NYCERS) members who
are retired for service from the New York City Transit Police (TP)
between October 1, 1968 and June 30, 1987 (Prior Retirees) with 20 or
more years of service. These benefits would be paid from the following
VSFs (referred to hereafter as the Impacted VSFs):
* Transit Police Officers' Variable Supplements Fund (TPOVSF), and
* Transit Police Superior Officers' Variable Supplements Fund
(TPSOVSF).
Effective Date: December 1, 2018.
IMPACT ON BENEFITS - VSF PAYMENTS: Each of the Impacted VSFs currently
provides supplemental non-pension benefits to former NYCERS members who
retired for service on or after July 1, 1987 as TP with 20 or more years
of service.
The amount of VSF benefits paid is currently $12,000 per Calendar
Year.
These VSF benefits are payable on an annual basis around December 15th
to eligible former NYCERS members for their lifetimes. There are no
optional forms of payment. Upon the death of the NYCERS retiree, VSF
payments cease.
If the proposed legislation were to be enacted, all Prior Retirees
would become immediately eligible for VSF benefits on the December 15th
subsequent to the Effective Date and for each year thereafter.
For purposes of the fiscal note, the Actuary has assumed that benefits
payable under this proposed legislation are prospective only (i.e. there
would be no retroactive payments for VSF benefits due before the Effec-
tive Date for such Prior Retirees).
S. 6823--A 3
FINANCIAL IMPACT - ACTUARIAL PRESENT VALUE OF BENEFITS: Based on the
census data and the actuarial assumptions and methods noted herein, the
enactment of the proposed legislation would increase the Actuarial Pres-
ent Value (APV) of Benefits (APVB) of the Impacted VSFs by approximately
$34.9 million as of June 30, 2017.
There are no active TP members of NYCERS and therefore no mechanism in
place for funding the TP VSFs since the VSFs' funding allocation method
normally would be based on the ratio of active TP members salaries to
salaries of all active members in NYCERS. As a consequence, a transfer
from NYCERS to the Impacted VSFs would be necessary to fund the addi-
tional VSF benefit obligations.
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 all those who would be impacted
are retired and have no remaining working lifetime, the entire increase
in APVB of $34.9 million would be recognized in the first year.
CONTRIBUTION TIMING: For purposes of this Fiscal Note, it is assumed
that the changes in the APVB, and UAL would be reflected for the first
time in the June 30, 2017 actuarial valuation 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.
OTHER COSTS: Not measured in this Fiscal Note is the impact on admin-
istrative costs.
CENSUS DATA: The census data used for estimates of APVB and employer
contributions presented herein include 2,068 TP retirees and benefici-
aries who were included in the June 30, 2017 actuarial valuation of
NYCERS, where 1,510 of the TP retirees do not receive VSF benefits. Of
the 1,510 retirees, 457 retired between October 1, 1968 and June 30,
1987 and would become eligible to receive VSF benefits under the
proposed legislation.
ACTUARIAL ASSUMPTIONS AND METHODS: The additional employer contrib-
utions 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 Preliminary Fiscal Year 2019 employer
contributions of NYCERS. 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 2018-14 dated April 17,
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.
