Provides for eligibility of certain participants in the New York City employees retirement system to opt into the twenty-five year retirement program for EMT members.
STATE OF NEW YORK
________________________________________________________________________
6976
2023-2024 Regular Sessions
IN SENATE
May 16, 2023
___________
Introduced by Sen. JACKSON -- read twice and ordered printed, and when
printed to be committed to the Committee on Civil Service and Pensions
AN ACT to amend the retirement and social security law, in relation to
the eligibility of certain participants in the New York city employ-
ees' retirement system to opt into the twenty-five year retirement
program for EMT members
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 3 of subdivision b of section 604-e of the
2 retirement and social security law, as added by chapter 577 of the laws
3 of 2000, is amended to read as follows:
4 3. Each EMT member, other than an EMT member subject to paragraph one
5 or two of this subdivision, who becomes subject to the provisions of
6 this article on or after the starting date of the twenty-five year
7 retirement program shall become a participant in the twenty-five year
8 retirement program on the date [he or she] such person becomes such an
9 EMT member. Provided, however, a person subject to this paragraph, and
10 who has exceeded age twenty-five upon employment as an EMT member, shall
11 be exempt from participation in the improved twenty-five year retirement
12 program if such person elects not to participate by filing a duly
13 executed form with the retirement system within one hundred eighty days
14 of becoming an EMT member. Provided further, however, that a person who
15 has opted to be exempt pursuant to this paragraph may become a partic-
16 ipant in the twenty-five year retirement program if such person files a
17 duly executed election form with the retirement system within one
18 hundred eighty days after the effective date of the chapter of the laws
19 of two thousand twenty-three that amended this paragraph, provided such
20 person is an EMT member on the date such election is filed, and such
21 person shall pay all additional member contributions required pursuant
22 to subdivision e of this section from the date that such person became
23 an EMT member to the date such person elects to become a participant in
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10284-03-3
S. 6976 2
1 the program together with interest computed in accordance with paragraph
2 four of subdivision e of this section.
3 § 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: This proposed legislation would amend provisions of
the Retirement and Social Security Law (RSSL) to allow eligible Tier 4
and Tier 6 EMT Members who opted out of the EMT 25-Year Plan pursuant to
RSSL section 604-e another opportunity to rejoin such Plan by filing an
application with the New York City Employee's Retirement System (NYCERS)
within 180 days of the effective date.
Effective Date: Upon enactment.
BACKGROUND: Eligible EMT Members who were employed in such position on
December 8, 2000 could elect to join the EMT 25-Year Plan by filing a
timely application with NYCERS or could remain in their existing plan.
New EMT Members were generally mandated into the EMT 25-Year Plan,
however, members who exceeded age 25 upon employment as an EMT were
eligible to opt out of participation in the Plan. Members who did not
initially join, or opted out of, EMT 25-Year Plan participation
remained, or became, applicable underlying basic plan members and are
currently ineligible to join the EMT 25-Year Plan.
IMPACT ON PAYABILITY: The anticipated group of members expected to
benefit from, and therefore expected to elect to join the EMT 25-Year
Plan if the proposed legislation is enacted, are Tier 4 57/5 Plan
members in employed in a physically taxing position. These members can
begin collecting an unreduced pension at age 57 with at least five years
of service, or as early as age 50 with 25 years of service. Electing the
EMT 25-Year Plan would allow such members to begin collecting an unre-
duced pension with 25 years of service. Members in other plans are not
expected to benefit from joining the EMT 25-Year Plan.
MEMBER CONTRIBUTIONS: Members of the EMT 25-Year Plan are required to
make, in addition to the basic member contributions, additional member
contributions (AMC) of 6.25% until the attainment of 30 years of credit-
ed service. Active members who join the EMT 25-Year Plan will be
required to contribute any AMC, with interest, from the date that such
person became an EMT member to the date such person elects to become a
participant in the EMT 25-Year Plan. For purposes of this fiscal note,
AMC balances, including physically taxing AMC, are assumed to offset the
AMC payment required to join the EMT 25-Year Plan.
FINANCIAL IMPACT - PRESENT VALUES: Based on the anticipated group of
members electing to join the EMT 25-Year Plan and the actuarial assump-
tions and methods described herein, the enactment of this proposed
legislation would result in an increase in the present value of future
employer contributions of approximately $343,000.
This net increase is a result of an increase in the Present Value of
Future Benefits (PVFB) of approximately $937,000 and an increase in the
present value of member contributions of approximately $594,000 which
includes the required retroactive AMCs.
Under the Entry Age Normal cost method used to determine the employer
contributions to NYCERS, there would be an increase in the Unfunded
Accrued Liability (UAL) of approximately $754,000 offset by a decrease
in the present value of future employer Normal Cost of approximately
$411,000.
FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: The enactment of
this proposed legislation would result in an initial increase in annual
employer contributions of approximately $284,000.
S. 6976 3
New UAL attributable to benefit changes are generally amortized over
the remaining working lifetime of those impacted by the benefit changes.
The remaining working lifetime for this group is approximately five
years and the increase in UAL was therefore amortized over a five-year
period (four payments under the One-Year Lag Methodology) using level
dollar payments.
CENSUS DATA: The estimates presented herein are based on the census
data used in the June 30, 2022 actuarial valuation of NYCERS to deter-
mine the Preliminary Fiscal Year 2024 employer contributions.
There are 22 EMT members assumed to elect the EMT 25-Year Plan as of
June 30, 2022. All 22 are members of the Tier 4 57/5 Plan in a phys-
ically taxing position. The active members had an average age of approx-
imately 49.4 years, average service of approximately 24.7 years, and an
average salary of approximately $94,200.
ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
been calculated based on the actuarial assumptions and methods used for
the Preliminary Fiscal Year 2024 employer contributions of NYCERS.
To determine the impact of the elective nature of the proposed legis-
lation, a subgroup of EMT members was developed based on who is assumed
to benefit actuarially by comparing the net present value of future
employer costs of each member's benefit under their current plan and
under the applicable EMT 25-Year Plan.
For the purposes of this Fiscal Note, it is assumed that the changes
would be reflected for the first time in the June 30, 2022 actuarial
valuation of NYCERS used to determine employer contributions for Fiscal
Year 2024.
RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend
highly on the realization of the actuarial assumptions used, demograph-
ics of the impacted population and other factors such as investment,
contribution, and other risks. If actual experience deviates from actu-
arial assumptions, the actual costs could differ from those presented
herein.
Costs are also dependent on the actuarial methods used, and therefore
different actuarial methods could produce different results. Quantifying
these risks is beyond the scope of this Fiscal Note.
Not measured in this Fiscal Note are the following:
* The initial additional administrative costs to implement the
proposed legislation.
* The impact of this proposed legislation on Other Postemployment
Benefit costs.
STATEMENT OF ACTUARIAL OPINION: I, Marek Tyszkiewicz, am the Chief
Actuary for, and independent of, the New York City Retirement Systems
and Pension Funds. I am an Associate of the Society of Actuaries and a
Member of the American Academy of Actuaries. I am a member of NYCERS but
do not believe it impairs my objectivity and I meet the Qualification
Standards of the American Academy of Actuaries to render the actuarial
opinion contained herein. To the best of my knowledge, the results
contained herein have been prepared in accordance with generally
accepted actuarial principles and procedures and with the Actuarial
Standards of Practice issued by the Actuarial Standards Board.
FISCAL NOTE IDENTIFICATION: This Fiscal Note 2023-48 dated May 12,
2023 was prepared by the Chief Actuary for the New York City Employees'
Retirement System. This estimate is intended for use only during the
2023 Legislative Session.
