Bill Text: NY A05087 | 2011-2012 | General Assembly | Introduced

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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) 2012-01-30 - print number 5087a [A05087 Detail]

Download: New_York-2011-A05087-Introduced.html

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                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         5087
                              2011-2012 Regular Sessions
                                 I N  A S S E M B L Y
                                   February 11, 2011
                                      ___________
       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.
                                                                  LBD07929-01-1
       A. 5087                             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.
         This estimate, dated November 23, 2010,  and  intended  for  use  only
       during  the  2011  Legislative  Session,  is  Fiscal  Note  No. 2011-54,
       prepared by the Actuary for the New  York  State  and  Local  Employees'
       Retirement System.