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S07509 Summary:
BILL NO | S07509 |
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SAME AS | SAME AS A07668 |
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SPONSOR | JACKSON |
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COSPNSR | |
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MLTSPNSR | |
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Amd 488, 508 & 606, R & SS L | |
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Updates certain death benefit provisions of the New York city employees' retirement system, the New York city teachers' retirement system, and the board of education retirement system of New York city to ensure continued compliance with the federal older workers' benefit protection act. |
S07509 Actions:
BILL NO | S07509 | |||||||||||||||||||||||||||||||||||||||||||||||||
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06/02/2023 | REFERRED TO RULES | |||||||||||||||||||||||||||||||||||||||||||||||||
06/05/2023 | ORDERED TO THIRD READING CAL.1603 | |||||||||||||||||||||||||||||||||||||||||||||||||
06/09/2023 | HOME RULE REQUEST | |||||||||||||||||||||||||||||||||||||||||||||||||
06/09/2023 | PASSED SENATE | |||||||||||||||||||||||||||||||||||||||||||||||||
06/09/2023 | DELIVERED TO ASSEMBLY | |||||||||||||||||||||||||||||||||||||||||||||||||
06/09/2023 | referred to ways and means | |||||||||||||||||||||||||||||||||||||||||||||||||
06/10/2023 | substituted for a7668 | |||||||||||||||||||||||||||||||||||||||||||||||||
06/10/2023 | ordered to third reading rules cal.844 | |||||||||||||||||||||||||||||||||||||||||||||||||
06/10/2023 | home rule request | |||||||||||||||||||||||||||||||||||||||||||||||||
06/10/2023 | passed assembly | |||||||||||||||||||||||||||||||||||||||||||||||||
06/10/2023 | returned to senate | |||||||||||||||||||||||||||||||||||||||||||||||||
11/29/2023 | DELIVERED TO GOVERNOR | |||||||||||||||||||||||||||||||||||||||||||||||||
12/08/2023 | SIGNED CHAP.716 |
S07509 Committee Votes:
Go to topS07509 Floor Votes:
Yes
Alvarez
Yes
Carroll
Yes
Flood
Yes
Kim
Yes
Palmesano
Yes
Simpson
Yes
Anderson
Yes
Chandler-Waterm
Yes
Forrest
Yes
Lavine
Yes
Paulin
Yes
Slater
Yes
Angelino
Yes
Chang
Yes
Friend
Yes
Lee
Yes
Peoples-Stokes
Yes
Smith
Yes
Ardila
Yes
Clark
Yes
Gallagher
Yes
Lemondes
Yes
Pheffer Amato
Yes
Smullen
Yes
Aubry
Yes
Colton
ER
Gallahan
Yes
Levenberg
Yes
Pirozzolo
Yes
Solages
Yes
Barclay
Yes
Conrad
Yes ‡
Gandolfo
Yes ‡
Lucas
Yes
Pretlow
Yes
Steck
Yes
Barrett
Yes
Cook
Yes
Gibbs
Yes
Lunsford
Yes
Ra
Yes
Stern
Yes
Beephan
Yes
Cruz
Yes
Giglio JA
Yes
Lupardo
Yes
Raga
Yes
Stirpe
Yes
Bendett
Yes
Cunningham
Yes
Giglio JM
Yes
Magnarelli
Yes
Rajkumar
Yes
Tague
Yes
Benedetto
Yes
Curran
Yes
Glick
Yes
Maher
Yes
Ramos
ER
Tannousis
Yes
Bichotte Hermel
Yes
Darling
Yes
Gonzalez-Rojas
Yes
Mamdani
Yes
Reilly
Yes
Tapia
Yes
Blankenbush
Yes
Davila
Yes
Goodell
Yes
Manktelow
Yes
Reyes
Yes
Taylor
Yes
Blumencranz
Yes
De Los Santos
Yes
Gray
Yes
McDonald
Yes
Rivera
Yes
Thiele
Yes
Bores
Yes
DeStefano
Yes
Gunther
Yes ‡
McDonough
ER
Rosenthal D
Yes
Vanel
Yes
Brabenec
Yes
Dickens
Yes
Hawley
Yes
McGowan
Yes
Rosenthal L
Yes
Walker
Yes
Braunstein
Yes
Dilan
Yes ‡
Hevesi
Yes
McMahon
ER
Rozic
Yes
Wallace
ER
Bronson
Yes
Dinowitz
ER
Hunter
Yes
Meeks
Yes ‡
Santabarbara
Yes
Walsh
Yes
Brook-Krasny
Yes
DiPietro
Yes
Hyndman
Yes
Mikulin
Yes
Sayegh
Yes
Weinstein
Yes
Brown E
Yes
Durso
Yes
Jackson
Yes
Miller
Yes
Seawright
ER
Weprin
ER
Brown K
Yes
Eachus
Yes
Jacobson
Yes
Mitaynes
Yes
Septimo
ER
Williams
Yes
Burdick
ER
Eichenstein
Yes
Jean-Pierre
Yes
Morinello
Yes
Shimsky
Yes
Woerner
Yes
Burgos
Yes
Epstein
Yes
Jensen
Yes
Norris
Yes
Shrestha
Yes
Zaccaro
Yes
Burke
Yes
Fahy
Yes
Jones
Yes
Novakhov
Yes
Sillitti
Yes
Zebrowski
Yes
Buttenschon
Yes
Fall
Yes
Joyner
Yes
O'Donnell
Yes
Simon
Yes
Zinerman
Yes
Byrnes
Yes
Fitzpatrick
Yes
Kelles
Yes
Otis
Yes
Simone
Yes
Mr. Speaker
‡ Indicates voting via videoconference
S07509 Text:
Go to top STATE OF NEW YORK ________________________________________________________________________ 7509 2023-2024 Regular Sessions IN SENATE June 2, 2023 ___________ Introduced by Sen. JACKSON -- (at request of the NYC Actuary) -- 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 updating certain death benefit provisions of the New York city employ- ees' retirement system, the New York city teachers' retirement system, and the board of education retirement system of New York city to ensure continued compliance with the federal older workers' benefit protection act The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The closing paragraph of paragraph 2 of subdivision a of 2 section 448 of the retirement and social security law, as amended by 3 chapter 720 of the laws of 2022, is amended to read as follows: 4 In the case of a member of the New York state teachers' retirement 5 system, commencing upon attainment of age sixty-two if such member's 6 date of membership is prior to April first, two thousand twelve or 7 attainment of age sixty-three if such member's date of membership is on 8 or after April first, two thousand twelve, the benefit otherwise 9 provided pursuant to this paragraph shall be reduced while the member is 10 in service to ninety-six per centum of the benefit otherwise payable and 11 each year thereafter the benefit payable shall be reduced by an amount 12 equal to four per centum per year of the original benefit otherwise 13 payable, but not below sixty per centum of the original benefit other- 14 wise payable. In the case of a member of the New York city employees' 15 retirement system, the New York city board of education retirement 16 system or the New York city teachers' retirement system, commencing upon 17 attainment of age sixty-one, the benefit otherwise provided pursuant to 18 this paragraph shall be reduced while the member is in service to [nine-19ty-five] ninety-seven per centum of the benefit otherwise payable and 20 each year thereafter the benefit payable shall be reduced by an amount EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD11700-01-3S. 7509 2 1 equal to [five] three per centum per year of the original benefit other- 2 wise payable, but not below [fifty] seventy per centum of the original 3 benefit otherwise payable. In the case of any member of the New York 4 state and local employees' retirement system who is permitted to retire 5 without regard to age or a member of the New York state and local police 6 and fire retirement system, commencing upon attainment of age sixty-two 7 if such member's date of membership is prior to April first, two thou- 8 sand twelve or attainment of age sixty-three if such member's date of 9 membership is on or after April first, two thousand twelve, the benefit 10 otherwise provided pursuant to this paragraph shall be reduced while the 11 member is in service to ninety-seven per centum of the benefit otherwise 12 payable, and each year thereafter the benefit payable shall be reduced 13 by an amount equal to three per centum per year of the original benefit 14 otherwise payable, but not below seventy per centum of the original 15 benefit otherwise payable. In the case of any other member of the New 16 York state and local employees' retirement system, commencing upon 17 attainment of age sixty-two if such member's date of membership is prior 18 to April first, two thousand twelve or attainment of age sixty-three if 19 such member's date of membership is on or after April first, two thou- 20 sand twelve, the benefit otherwise provided pursuant to this paragraph 21 shall be reduced while the member is in service to ninety-six per centum 22 of the benefit otherwise payable, and each year thereafter the benefit 23 payable shall be reduced by an amount equal to four per centum per year 24 of the original benefit otherwise payable, but not below sixty per 25 centum of the original benefit otherwise payable. Upon retirement from 26 any retirement system, the benefit in force shall be reduced by fifty 27 per centum; upon completion of the first year of retirement, the benefit 28 in force at the time of retirement shall be reduced by an additional 29 twenty-five per centum, and upon commencement of the third year of 30 retirement, the benefit shall be ten per centum of the benefit in force 31 at age sixty, if any, or at the time of retirement if retirement 32 preceded such age; provided, however, the benefit in retirement shall 33 not be reduced below ten per centum of the benefit in force at age 34 sixty, if any, or at the time of retirement if retirement preceded such 35 age. Notwithstanding any other provision of this paragraph to the 36 contrary, the benefit for a retiree from the New York state and local 37 employees' retirement system [and], the New York state teachers' retire- 38 ment system, the New York city employees' retirement system, the New 39 York city board of education retirement system or the New York city 40 teachers' retirement system shall not be reduced below ten per centum of 41 the benefit in force at the time of retirement. 42 § 2. The closing paragraph of paragraph 2 of subdivision a of section 43 508 of the retirement and social security law, as amended by chapter 720 44 of the laws of 2022, is amended to read as follows: 45 Notwithstanding any other provision of this paragraph, in the case of 46 a member of the New York state teachers' retirement system, commencing 47 upon attainment of age sixty-two if such member's date of membership is 48 prior to April first, two thousand twelve or attainment of age sixty- 49 three if such member's date of membership is on or after April first, 50 two thousand twelve, the benefit otherwise provided pursuant to this 51 paragraph shall be reduced while the member is in service to ninety-six 52 per centum of the benefit otherwise payable, and each year thereafter 53 the benefit payable shall be reduced by an amount equal to four per 54 centum per year of the original benefit otherwise payable, but not below 55 sixty per centum of the original benefit otherwise payable. In the case 56 of a member of the New York city employees' retirement system, the NewS. 7509 3 1 York city board of education retirement system or the New York city 2 teachers' retirement system, commencing upon attainment of age sixty- 3 one, the benefit otherwise provided pursuant to this paragraph shall be 4 reduced while the member is in service to [ninety-five] ninety-seven per 5 centum of the benefit otherwise payable and each year thereafter the 6 benefit payable shall be reduced by an amount equal to [five] three per 7 centum per year of the original benefit otherwise payable, but not below 8 [fifty] seventy per centum of the original benefit otherwise payable. In 9 the case of any member of the New York state and local employees' 10 retirement system who is permitted to retire without regard to age, 11 commencing upon attainment of age sixty-two if such member's date of 12 membership is prior to April first, two thousand twelve or attainment of 13 age sixty-three if such member's date of membership is on or after April 14 first, two thousand twelve, the benefit otherwise provided pursuant to 15 this paragraph shall be reduced while the member is in service to nine- 16 ty-seven per centum of the benefit otherwise payable, and each year 17 thereafter the benefit payable shall be reduced by an amount equal to 18 three per centum per year of the original benefit otherwise payable, but 19 not below seventy per centum of the original benefit otherwise payable. 20 In the case of any other member of the New York state and local employ- 21 ees' retirement system, commencing upon attainment of age sixty-two if 22 such member's date of membership is prior to April first, two thousand 23 twelve or attainment of age sixty-three if such member's date of member- 24 ship is on or after April first, two thousand twelve, the benefit other- 25 wise provided pursuant to this paragraph shall be reduced while the 26 member is in service to ninety-six per centum of the benefit otherwise 27 payable, and each year thereafter the benefit payable shall be reduced 28 by an amount equal to four per centum per year of the original benefit 29 otherwise payable, but not below sixty per centum of the original bene- 30 fit otherwise payable. Upon retirement from any retirement system, the 31 benefit in force shall be reduced by fifty per centum; upon completion 32 of the first year of retirement, the benefit in force at the time of 33 retirement shall be reduced by an additional twenty-five per centum, and 34 upon commencement of the third year of retirement, the benefit shall be 35 ten per centum of the benefit in force at age sixty, if any, or at the 36 time of retirement if retirement preceded such age; provided, however, 37 the benefit in retirement shall not be reduced below ten per centum of 38 the benefit in force at age sixty, if any, or at the time of retirement 39 if retirement preceded such age. Notwithstanding any other provision of 40 this paragraph to the contrary, the benefit for a retiree from the New 41 York state and local employees' retirement system [and], the New York 42 state teachers' retirement system, the New York city employees' retire- 43 ment system, the New York city board of education retirement system or 44 the New York city teachers' retirement system shall not be reduced below 45 ten per centum of the benefit in force at the time of retirement. 46 § 3. The closing paragraph of paragraph 2 of subdivision a of section 47 606 of the retirement and social security law, as amended by chapter 720 48 of the laws of 2022, is amended to read as follows: 49 In the case of a member of the New York state teachers' retirement 50 system, commencing upon attainment of age sixty-two if such member's 51 date of membership is prior to April first, two thousand twelve or 52 attainment of age sixty-three if such member's date of membership is on 53 or after April first, two thousand twelve, the benefit otherwise 54 provided pursuant to this paragraph shall be reduced while the member is 55 in service to ninety-six per centum of the benefit otherwise payable, 56 and each year thereafter the benefit payable shall be reduced by anS. 7509 4 1 amount equal to four per centum per year of the original benefit other- 2 wise payable, but not below sixty per centum of the original benefit 3 otherwise payable. In the case of a member of the New York city employ- 4 ees' retirement system, the New York city board of education retirement 5 system or the New York city teachers' retirement system, commencing upon 6 attainment of age sixty-one, the benefit otherwise provided pursuant to 7 this paragraph shall be reduced while the member is in service to [nine-8ty-five] ninety-seven per centum of the benefit otherwise payable and 9 each year thereafter the benefit payable shall be reduced by an amount 10 equal to [five] three per centum per year of the original benefit other- 11 wise payable, but not below [fifty] seventy per centum of the original 12 benefit otherwise payable. In the case of any member of the New York 13 state and local employees' retirement system who is permitted to retire 14 without regard to age, commencing upon attainment of age sixty-two if 15 such member's date of membership is prior to April first, two thousand 16 twelve or attainment of age sixty-three if such member's date of member- 17 ship is on or after April first, two thousand twelve, the benefit other- 18 wise provided pursuant to this paragraph shall be reduced while the 19 member is in service to ninety-seven per centum of the benefit otherwise 20 payable, and each year thereafter the benefit payable shall be reduced 21 by an amount equal to three per centum per year of the original benefit 22 otherwise payable, but not below seventy per centum of the original 23 benefit otherwise payable. In the case of any other member of the New 24 York state and local employees' retirement system, commencing upon 25 attainment of age sixty-two if such member's date of membership is prior 26 to April first, two thousand twelve or attainment of age sixty-three if 27 such member's date of membership is on or after April first, two thou- 28 sand twelve, the benefit otherwise provided pursuant to this paragraph 29 shall be reduced while the member is in service to ninety-six per centum 30 of the benefit otherwise payable, and each year thereafter the benefit 31 payable shall be reduced by an amount equal to four per centum per year 32 of the original benefit otherwise payable, but not below sixty per 33 centum of the original benefit otherwise payable. Upon retirement, from 34 any retirement system, the benefit in force shall be reduced by fifty 35 per centum; upon completion of the first year of retirement, the benefit 36 in force at the time of retirement shall be reduced by an additional 37 twenty-five per centum, and upon commencement of the third year of 38 retirement, the benefit shall be ten per centum of the benefit in force 39 at age sixty, if any, or at the time of retirement if retirement 40 preceded such age; provided, however, the benefit in retirement shall 41 not be reduced below ten per centum of the benefit in force at age 42 sixty, if any, or at the time of retirement if retirement preceded such 43 age. Notwithstanding any other provision of this paragraph to the 44 contrary, the benefit for a retiree from the New York state and local 45 employees' retirement system [and], the New York state teachers' retire- 46 ment system, the New York city employees' retirement system, the New 47 York city board of education retirement system or the New York city 48 teachers' retirement system shall not be reduced below ten per centum of 49 the benefit in force at the time of retirement. 50 § 4. This act shall take effect immediately and shall be deemed to 51 have been in full force and effect on and after July 1, 2021, provided 52 that this act shall not apply to the payment of any death benefit based 53 upon a member's death which occurred prior to July 1, 2021. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: SUMMARY OF BILL: This proposed legislation (see Appendix) would amend certain death benefit provisions to ensure continued compliance with theS. 7509 5 requirements of the Federal Older Workers' Benefit Protection Act, Public Law 101-433 (OWBPA). In general, with respect to the New York City Employees' Retirement System (NYCERS), the New York City Teachers' Retirement System (NYCTRS), and the New York City Board of Education Retirement System (BERS), the bill would amend the Tier 2, 3, and 4/6 ordinary death benefit provisions set forth in Retirement and Social Security Law (RSSL) Articles 11, 14, and 15, respectively, to ensure that, on an actuarial basis, the costs of providing such benefits to older members are no less than the costs of providing such benefits to younger members. Effective Date: This bill would be effective immediately and be deemed to have been in force since July 1, 2021. IMPACT ON BENEFITS: Under the proposed legislation, if enacted, the Pre-retirement Ordinary Death Benefit for Active and Deferred Vested Members, and the Post-retirement Death Benefit for Tier 2, 3, and 4/6 NYCERS, NYCTRS, and BERS members, would be updated. Pre-retirement Ordinary Death Benefit The Tier 2, 3 and 4/6 Ordinary Death Benefit (for all members except police officers, firefighters, correction officers, or sanitation work- ers) is a lump sum payment equal to current pay multiplied by completed years of service (up to three years) and further reduced by a percentage based on age at date of death. Currently, the reduction is 0% for ages 60 and younger, and increases by 5% for every age over 60, up to the ultimate rate of 50% for ages 70 and older. Under the proposed legislation the reduction would remain 0% for ages 60 and younger, and increase by 3% for every age over age 60 up to the ultimate reduction of 30% for ages 70 and older. Post-retirement death benefit The changes to the reductions described above would also apply to the calculation of the post-retirement death benefit. In addition, the post- retirement death benefit in the third year of retirement and thereafter would be changed as follows: Current provision: 10% of the Pre-retirement death benefit that would have been payable had the member died on the earlier of (1) the day before they retired and (2) age 60. Proposed provision: Greater of the benefit payable under the current provision and 10% of the death benefit payable had the member died the day before they retired. FINANCIAL IMPACT: The increase in annual employer contributions asso- ciated with this proposed legislation has already been accounted for beginning with the June 30, 2020 actuarial valuations used to determine the Final Fiscal Year 2022 employer contributions of NYCERS, NYCTRS, and BERS. The estimated financial impact of updating ordinary death benefits to maintain compliance with OWBPA as described above is an increase in Present Value of Future Benefits of approximately $223.7 million, and an initial increase in the FY 2022 annual employer contributions of approx- imately $40.0 million ($26.8 million for New York City and $13.2 million for the other obligors). A breakdown of the FY 2022 annual contribution impact by System is shown in the table below. Impact on FY 2022 System Annual Employer Contributions ______ ($ Millions) _____________________________S. 7509 6 NYCERS $ 22.9 NYCTRS 12.5 BERS 4.6 Total $ 40.0 Long-term annual costs (after the initial increase in unfunded accrued liability is fully amortized in seven to eight years) are estimated to be less than $10 million for all three Systems combined. New Unfunded Accrued Liability (UAL) attributable to benefit changes are generally amortized over the remaining working lifetime of those impacted by the benefit changes. For purposes of this Fiscal Note, it had been assumed that increases in UAL would be amortized over periods ranging from seven to eight years depending on the System (six to seven 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, 2020 actuarial valuations of NYCERS, NYCTRS, and BERS to determine the Fiscal Year 2022 employer contributions. ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have been calculated based on the actuarial assumptions and methods used for the Fiscal Year 2022 employer contributions of NYCERS, NYCTRS, and BERS. 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. 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 2023-55 dated May 22, 2023 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 2023 Legislative Session.