Bill Text: NY A04908 | 2013-2014 | General Assembly | Introduced
Bill Title: Allows members of the New York state and local employees retirement system who have at least ten years of credited service to purchase and obtain up to five years of additional service credit.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-01-08 - referred to governmental employees [A04908 Detail]
Download: New_York-2013-A04908-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
4908
2013-2014 Regular Sessions
I N A S S E M B L Y
February 13, 2013
___________
Introduced by M. of A. ABBATE -- read once and referred to the Committee
on Governmental Employees
AN ACT to amend the retirement and social security law, in relation to
the purchase of service credit
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. The retirement and social security law is amended by adding
2 a new section 809 to read as follows:
3 S 809. PURCHASE OF ADDITIONAL SERVICE CREDIT. NOTWITHSTANDING ANY
4 OTHER PROVISION OF LAW, A MEMBER OF THE NEW YORK STATE AND LOCAL EMPLOY-
5 EES' RETIREMENT SYSTEM WHO HAS RENDERED A MINIMUM OF TEN YEARS OF CRED-
6 ITED SERVICE SHALL BE ELIGIBLE TO PURCHASE UP TO FIVE YEARS OF ADDI-
7 TIONAL SERVICE CREDIT AND MAY OBTAIN SUCH CREDIT UPON APPLICATION TO THE
8 SAID RETIREMENT SYSTEM. IN ORDER TO OBTAIN SERVICE CREDIT PURSUANT TO
9 THIS SECTION, THE MEMBER SHALL PAY INTO THE PENSION ACCUMULATION FUND
10 THE CONTRIBUTION AMOUNT AS DETERMINED BY THE COMPTROLLER, EITHER IN A
11 LUMP SUM OR IN INSTALLMENTS, NECESSARY TO PAY IN FULL THE COST OF SUCH
12 SERVICE CREDIT. IF SUCH PAYMENT IS MADE IN INSTALLMENTS, THE SAME SHALL
13 BE PAID WITHIN A PERIOD NO GREATER THAN THE NUMBER OF MONTHS OF SUCH
14 MEMBER SERVICE PURCHASED. THE PROVISIONS OF THIS SECTION SHALL NOT APPLY
15 TO ANY MEMBER WHO IS A MEMBER OF A RETIREMENT PLAN THAT PROVIDES FOR
16 RETIREMENT AT HALF PAY AFTER TWENTY OR TWENTY-FIVE YEARS OF SERVICE
17 WITHOUT REGARD TO AGE. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, IN
18 THE EVENT OF DEATH PRIOR TO RETIREMENT, AMOUNTS PAID BY THE MEMBER FOR
19 THE PURCHASE OF SERVICE CREDIT PURSUANT TO THIS SECTION SHALL BE
20 REFUNDED, WITH INTEREST, TO THE EXTENT THAT SERVICE CREDIT PURCHASED
21 WITH SUCH AMOUNTS DOES NOT PRODUCE A GREATER DEATH BENEFIT THAN WOULD
22 HAVE BEEN PAYABLE HAD THE MEMBER NOT PURCHASED SUCH CREDIT. NOTWITH-
23 STANDING ANY OTHER PROVISION OF LAW, IN THE EVENT OF RETIREMENT, AMOUNTS
24 PAID BY THE MEMBER FOR THE PURCHASE OF SERVICE CREDIT PURSUANT TO THIS
25 SECTION SHALL BE REFUNDED, WITH INTEREST, TO THE EXTENT THE SERVICE
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08239-01-3
A. 4908 2
1 CREDIT PURCHASED WITH SUCH AMOUNTS DOES NOT PRODUCE A GREATER RETIREMENT
2 ALLOWANCE THAN WOULD HAVE BEEN PAYABLE HAD THE MEMBER NOT PURCHASED SUCH
3 CREDIT.
4 S 2. This act shall take effect on the ninetieth day after it shall
5 have become a law.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would allow certain members in the New York State and Local
Employees' Retirement System (NYS&LERS) who have rendered a minimum of
ten years of creditable service to purchase a maximum of five years of
additional service credit for a period of time during which no actual
service was rendered. This type of service is commonly referred to as
"air time". The full cost of such service will be paid by the member.
The purchase of "air time" will not be available to any member who may
retire at half pay after completion of 20 or 25 years of creditable
service without regard to age.
If this bill is enacted, the cost to purchase "air time" will depend
on the member's plan, tier, age, salary, current service and the amount
of "air time" that will be purchased. There could be costs to the
NYS&LERS on behalf of members whose salary increases subsequent to
purchasing this "service" exceed our expectations, or for members who
survive beyond their life expectancy. There will also be administrative
costs to the NYS&LERS.
This bill would provide members with a favorable alternative to
purchasing annuities in the private market. The NYS&LERS would, effec-
tively, be providing 7.5% annual interest.
Summary of relevant resources:
Data: March 31, 2012 Actuarial Year End File with distributions of
membership and other statistics displayed in the 2012 Report of the
Actuary and 2012 Comprehensive Annual Financial Report.
Assumptions and Methods: 2010, 2011 and 2012 Annual Report to the
Comptroller on Actuarial Assumptions, Codes Rules and Regulations of the
State of New York: Audit and Control.
Market Assets and GASB Disclosures: March 31, 2012 New York State and
Local Retirement System Financial Statements and Supplementary Informa-
tion.
Valuations of Benefit Liabilities and Actuarial Assets: summarized in
the 2012 Actuarial Valuations report.
I am a member of the American Academy of Actuaries and meet the Quali-
fication Standards to render the actuarial opinion contained herein.
This estimate, dated December 17, 2012, and intended for use only
during the 2013 Legislative Session, is Fiscal Note No. 2013-26,
prepared by the Actuary for the New York State and Local Employees'
Retirement System.
