STATE OF NEW YORK
________________________________________________________________________
8220
IN SENATE
December 19, 2016
___________
Introduced by Sen. HOYLMAN -- read twice and ordered printed, and when
printed to be committed to the Committee on Rules
AN ACT relating to granting Tier I status to Cynthia Falletta in the
Teachers' Retirement System of the City of New York with a membership
date of June 1, 1972
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Notwithstanding any inconsistent provision of law, Cynthia
2 Falletta, a member of the Teachers' Retirement System of the City of New
3 York (TRSNYC) with Tier IV status, who was employed by the City Univer-
4 sity of New York from June 1, 1972 until April 8, 1976 and from June 22,
5 1976 to October 28, 1976, and was a member of the Board of Education
6 Retirement System from December 12, 1990 until February 28, 1994 at
7 which point she became a member of the Teachers' Retirement System of
8 the City of New York, and who for reasons not ascribable to her own
9 negligence was retroactively enrolled as a Tier IV member, shall, upon
10 submission of an application filed with the Board of Trustees of TRSNYC
11 on or before the thirty-first day of December next succeeding the date
12 on which this act shall have become a law, be reclassified as a Tier I
13 member with June 1, 1972 as her date of membership and shall be entitled
14 to every right, benefit and privilege which would have been available to
15 her in accordance with Tier I status, and the City of New York shall be
16 responsible for all costs to provide the Tier I benefit to Cynthia
17 Falletta, provided, however that Cynthia Falletta shall be responsible
18 for contributing the required member contributions for Tier I member-
19 ship.
20 § 2. This act shall take effect immediately.
FISCAL NOTE. -- Pursuant to Legislative Law, Section 50:
PROVISIONS OF PROPOSED LEGISLATION: The proposed legislation would
permit Cynthia Falletta, a retired Tier 4 member of the New York City
Teachers' Retirement System (TRS), to elect, by filing an application
with the Board of Trustees of TRS within the end of the calendar year in
which the proposed legislation is passed, to be reclassified as a Tier 1
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD13729-05-6
S. 8220 2
member and have her retirement allowance recalculated and paid under
Tier 1 (Plan A) benefit calculation provisions.
The Effective Date of the proposed legislation would be the Date of
Enactment.
BACKGROUND - GENERAL: Ms. Falletta retired as a Tier 4 TRS member on
October 18, 2012. She currently receives an annual retirement allowance
of $48,243.
If the proposed legislation is passed, Ms. Falletta would be reclassi-
fied as a Tier 1 retired member and her retirement allowance would be
recalculated as if she had joined a public retirement system within the
state upon her commencement of part-time employment as a college assist-
ant with the City University of New York in 1972. The additional cost to
fund the increased retirement allowance associated with the proposed
legislation would fall upon the City of New York.
Because Tier 1 TRS members are generally permitted to take an actuari-
al reduction of their retirement allowance to account for deficits in
member contributions, for purposes of this fiscal note it is assumed
that Ms. Falletta would not pay any owed member contributions resulting
from the reclassification. Based on this assumption and application of
other Tier 1 benefit calculation provisions, it is estimated that Ms.
Falletta's annual retirement allowance would increase to $64,822. This
annual increase would apply prospectively as well as retroactively to
Ms. Falletta's October 18, 2012 date of retirement.
FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: The estimated financial
impact of this proposal has been calculated based on the difference
between the actuarial present value of (1) the Tier 1 benefits Ms.
Falletta would receive if this proposed legislation were enacted (retro-
active to October 18, 2012 retirement date) and (2) the Tier 4 benefits
that are currently being paid to Ms. Falletta.
Based on the actuarial assumptions and methods described herein, the
enactment of this proposed legislation would increase the Actuarial
Present Value of Benefits (APVB) and the Unfunded Actuarial Accrued
Liability (UAAL) of TRS by approximately $259,000 as of June 30, 2016.
FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with
Section 13-638.2(k-2) of the Administrative Code of the City of New
York, the amortization schedule for new UAAL attributable to benefit
changes is determined by the Actuary but is generally calculated over
the remaining working lifetime of those impacted by the benefit changes.
Since Ms. Falletta is retired and collecting a pension, the entire
increase in UAAL of $259,000 based on the Actuary's actuarial assump-
tions and methods in effect on June 30, 2015 would be recognized in the
first year.
CONTRIBUTION TIMING: If enacted during the 2016 Legislative, the
retirement allowance payable to Ms. Falletta would likely first be
reflected in the June 30, 2017 census data. In accordance with the One-
Year Lag methodology used to determine employer contributions, the
increase in employer contributions would first be reflected for Fiscal
Year 2019.
OTHER COSTS: This Fiscal Note does not measure administrative costs
associated with implementing this proposed legislation.
ACTUARIAL ASSUMPTIONS AND METHODS: Additional APVB, UAAL and employer
contributions presented herein have been calculated based on the
Actuary's actuarial assumptions and methods in effect for the Prelimi-
nary June 30, 2015 (Lag) actuarial valuation used to determine the
Preliminary Fiscal Year 2017 employer contributions of TRS.
S. 8220 3
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 2016-39 dated October 5,
2016, was prepared by the Chief Actuary for the New York City Teachers'
Retirement System. This estimate is intended for use only during the
2016 Legislative Session.
