Bill Text: NY A09084 | 2023-2024 | General Assembly | Introduced

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Bill Title: Allows a beneficiary of a member whose death occurs on or after July 1, 2024 and who would have been entitled to a service credit at the time of such member's death to elect to receive a lump sum payment equal to the pension reserve that would have been established had the member retired on the date of such member's death.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed) 2024-06-04 - RETURNED TO ASSEMBLY [A09084 Detail]

Download: New_York-2023-A09084-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          9084

                   IN ASSEMBLY

                                    February 6, 2024
                                       ___________

        Introduced  by M. of A. JONES -- read once and referred to the Committee
          on Governmental Employees

        AN ACT to amend the retirement and social security law, in  relation  to
          allowing beneficiaries of certain deceased members to elect to receive
          death benefits in a lump sum

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Subdivision b of section 448 of the retirement  and  social
     2  security law is amended by adding a new paragraph 3 to read as follows:
     3    3. Provided further, notwithstanding any other provision of this arti-
     4  cle to the contrary, where the member is in a title as defined in subdi-
     5  vision  i  of  section  eighty-nine of this chapter, and would have been
     6  entitled to a service retirement benefit at the time  of  such  member's
     7  death  and  where such member's death occurs on or after July first, two
     8  thousand twenty-four, the beneficiary or beneficiaries nominated for the
     9  purposes of this subdivision may elect to receive, in  a  lump  sum,  an
    10  amount  payable  which  shall be equal to the pension reserve that would
    11  have been established had  the  member  retired  on  the  date  of  such
    12  member's  death,  or the value of the death benefit and the reserve-for-
    13  increased-take-home-pay, if any, whichever is greater.
    14    § 2. Subdivision b of section 508 of the retirement and social securi-
    15  ty law, as amended by chapter 476 of the laws of  2018,  is  amended  to
    16  read as follows:
    17    b.  A  member of a retirement system subject to the provisions of this
    18  article who is a police officer, firefighter, correction officer, inves-
    19  tigator revised plan member or sanitation worker and is in a plan  which
    20  permits  immediate  retirement  upon completion of a specified period of
    21  service without regard to age or who is subject  to  the  provisions  of
    22  section  five  hundred  four or five hundred five of this article, shall
    23  upon completion of ninety days  of  service  be  covered  for  financial
    24  protection  in  the  event of death in service pursuant to this subdivi-
    25  sion.
    26    1. Such death benefit shall be equal to three times the member's sala-
    27  ry raised to the next highest multiple of one thousand dollars,  but  in

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD04951-04-4
        A. 9084                             2

     1  no  event  shall  it  exceed three times the maximum salary specified in
     2  section one hundred thirty of the civil service law or, in the case of a
     3  member of a retirement system other than the New  York  city  employees'
     4  retirement  system,  or  in  the  case  of a member of the New York city
     5  employees'  retirement  system  who  is  a  New  York   city   uniformed
     6  correction/sanitation  revised  plan  member  or an investigator revised
     7  plan member, the specific limitations specified for age of entrance into
     8  service contained in subparagraphs (b), (c), (d), (e) and (f)  of  para-
     9  graph two of subdivision a of this section.
    10    2. Provided further, notwithstanding any other provision of this arti-
    11  cle to the contrary, where the member is in a title as defined in subdi-
    12  vision  i  of  section  eighty-nine of this chapter, and would have been
    13  entitled to a service retirement benefit at the time  of  such  member's
    14  death  and  where such member's death occurs on or after July first, two
    15  thousand twenty-four, the beneficiary or beneficiaries nominated for the
    16  purposes of this subdivision may elect to receive, in  a  lump  sum,  an
    17  amount  payable  which  shall be equal to the pension reserve that would
    18  have been established had  the  member  retired  on  the  date  of  such
    19  member's  death,  or the value of the death benefit and the reserve-for-
    20  increased-take-home-pay, if any, whichever is greater.
    21    § 3. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          This bill would modify the in-service  death  benefit  for  retirement
        eligible  members  of the New York State and Local Employees' Retirement
        System who are employed by New York State  as  correction  officers  and
        security  hospital  treatment  assistants.  The in-service death benefit
        will be the value of the pension reserve as if the member had retired on
        their date of death.
          If this bill is enacted during the 2024 Legislative Session, we antic-
        ipate that there will be an increase of approximately  $1.7  million  in
        the  annual  contributions  of the State of New York for the fiscal year
        ending March 31, 2025. In future  years  this  cost  will  vary  but  is
        expected to average 0.1% of salary annually.
          In addition to the annual contributions discussed above, there will be
        an immediate past service cost of approximately $10.4 million which will
        be  borne  by the State of New York as a one-time payment. This estimate
        assumes that payment will be made on March 1, 2025.
          These estimated costs are based on 17,000 affected members employed by
        the State of New York, with annual salary of approximately $1.6  billion
        as of March 31, 2023.
          Summary of relevant resources:
          Membership  data as of March 31, 2023 was used in measuring the impact
        of the proposed change, the same data used in the April 1, 2023 actuari-
        al valuation.  Distributions and other statistics can be  found  in  the
        2023  Report  of the Actuary and the 2023 Annual Comprehensive Financial
        Report.
          The actuarial assumptions and methods used are described in  the  2023
        Annual  Report  to  the  Comptroller  on  Actuarial Assumptions, and the
        Codes, Rules and Regulations  of  the  State  of  New  York:  Audit  and
        Control.
          The Market Assets and GASB Disclosures are found in the March 31, 2023
        New  York  State  and  Local  Retirement System Financial Statements and
        Supplementary Information.
          I am a member of the American Academy of Actuaries and meet the Quali-
        fication Standards to render the actuarial opinion contained herein.
        A. 9084                             3

          This fiscal note does not constitute a legal opinion on the  viability
        of  the  proposed change nor is it intended to serve as a substitute for
        the professional judgment of an attorney.
          This  estimate,  dated  January  25,  2024,  and intended for use only
        during the  2024  Legislative  Session,  is  Fiscal  Note  No.  2024-97,
        prepared  by  the  Actuary  for  the New York State and Local Retirement
        System.