Bill Text: NY A09116 | 2011-2012 | General Assembly | Amended
Bill Title: Increases certain special accidental death benefits paid to widows, widowers or the deceased member's children.
Spectrum: Partisan Bill (Democrat 26-1)
Status: (Passed) 2012-08-01 - signed chap.285 [A09116 Detail]
Download: New_York-2011-A09116-Amended.html
S T A T E O F N E W Y O R K ________________________________________________________________________ 9116--A I N A S S E M B L Y January 25, 2012 ___________ Introduced by M. of A. MARKEY, WEISENBERG, SWEENEY, STEVENSON, ZEBROW- SKI, GUNTHER, SCHIMEL, BENEDETTO, ORTIZ, COLTON, HIKIND, BRONSON, BOYLAND, JAFFEE, COOK, SCARBOROUGH, LAVINE, M. MILLER, ROBERTS -- Multi-Sponsored by -- M. of A. AUBRY, CUSICK, McENENY, REILLY, ROBIN- SON -- read once and referred to the Committee on Governmental Employ- ees -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the general municipal law and the retirement and social security law, in relation to increasing certain special accidental death benefits THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: 1 Section 1. Subdivision c of section 208-f of the general municipal 2 law, as amended by chapter 161 of the laws of 2011, is amended to read 3 as follows: 4 c. Commencing July first, two thousand [eleven] TWELVE the special 5 accidental death benefit paid to a widow or widower or the deceased 6 member's children under the age of eighteen or, if a student, under the 7 age of twenty-three, if the widow or widower has died, shall be esca- 8 lated by adding thereto an additional percentage of the salary of the 9 deceased member (as increased pursuant to subdivision b of this section) 10 in accordance with the following schedule: 11 calendar year of death 12 of the deceased member per centum 13 1977 or prior [173.2%] 181.4% 14 1978 [165.2%] 173.2% 15 1979 [157.5%] 165.2% 16 1980 [150.0%] 157.5% 17 1981 [142.7%] 150.0% 18 1982 [135.7%] 142.7% 19 1983 [128.8%] 135.7% 20 1984 [122.1%] 128.8% 21 1985 [115.7%] 122.1% 22 1986 [109.4%] 115.7% EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD13981-04-2 A. 9116--A 2 1 1987 [103.3%] 109.4% 2 1988 [97.4%] 103.3% 3 1989 [91.6%] 97.4% 4 1990 [86.0%] 91.6% 5 1991 [80.6%] 86.0% 6 1992 [75.4%] 80.6% 7 1993 [70.2%] 75.4% 8 1994 [65.3%] 70.2% 9 1995 [60.5%] 65.3% 10 1996 [55.8%] 60.5% 11 1997 [51.3%] 55.8% 12 1998 [46.9%] 51.3% 13 1999 [42.6%] 46.9% 14 2000 [38.4%] 42.6% 15 2001 [34.4%] 38.4% 16 2002 [30.5%] 34.4% 17 2003 [26.7%] 30.5% 18 2004 [23.0%] 26.7% 19 2005 [19.4%] 23.0% 20 2006 [15.9%] 19.4% 21 2007 [12.6%] 15.9% 22 2008 [9.3%] 12.6% 23 2009 [6.1%] 9.3% 24 2010 [3.0%] 6.1% 25 2011 [0.0%] 3.0% 26 2012 0.0% 27 S 2. Subdivision c of section 361-a of the retirement and social secu- 28 rity law, as amended by chapter 161 of the laws of 2011, is amended to 29 read as follows: 30 c. Commencing July first, two thousand [eleven] TWELVE the special 31 accidental death benefit paid to a widow or widower or the deceased 32 member's children under the age of eighteen or, if a student, under the 33 age of twenty-three, if the widow or widower has died, shall be esca- 34 lated by adding thereto an additional percentage of the salary of the 35 deceased member, as increased pursuant to subdivision b of this section, 36 in accordance with the following schedule: 37 calendar year of death 38 of the deceased member per centum 39 1977 or prior [173.2%] 181.4% 40 1978 [165.2%] 173.2% 41 1979 [157.5%] 165.2% 42 1980 [150.0%] 157.5% 43 1981 [142.7%] 150.0% 44 1982 [135.7%] 142.7% 45 1983 [128.8%] 135.7% 46 1984 [122.1%] 128.8% 47 1985 [115.7%] 122.1% 48 1986 [109.4%] 115.7% 49 1987 [103.3%] 109.4% 50 1988 [97.4%] 103.3% 51 1989 [91.6%] 97.4% 52 1990 [86.0%] 91.6% 53 1991 [80.6%] 86.0% 54 1992 [75.4%] 80.6% 55 1993 [70.2%] 75.4% 56 1994 [65.3%] 70.2% A. 9116--A 3 1 1995 [60.5%] 65.3% 2 1996 [55.8%] 60.5% 3 1997 [51.3%] 55.8% 4 1998 [46.9%] 51.3% 5 1999 [42.6%] 46.9% 6 2000 [38.4%] 42.6% 7 2001 [34.4%] 38.4% 8 2002 [30.5%] 34.4% 9 2003 [26.7%] 30.5% 10 2004 [23.0%] 26.7% 11 2005 [19.4%] 23.0% 12 2006 [15.9%] 19.4% 13 2007 [12.6%] 15.9% 14 2008 [9.3%] 12.6% 15 2009 [6.1%] 9.3% 16 2010 [3.0%] 6.1% 17 2011 [0.0%] 3.0% 18 2012 0.0% 19 S 3. This act shall take effect July 1, 2012. FISCAL NOTE.-- Pursuant to Legislative Law, Section 50: This bill would amend both the General Municipal Law and the Retire- ment and Social Security Law to increase the salary used in the computa- tion of the special accidental death benefit by 3% in cases where the date of death was before 2012. Insofar as this bill would amend the Retirement and Social Security Law, it is estimated that there would be an additional annual cost of approximately $390,000 above the approximately $8.7 million current annual cost of this benefit. This cost would be shared by the State of New York and all participating employers of the New York State and Local Police and Fire Retirement System. Summary of relevant resources: Data: March 31, 2011 Actuarial Year End File with distributions of membership and other statistics displayed in the 2011 Report of the Actuary and 2011 Comprehensive Annual Financial Report. Assumptions and Methods: 2010 and 2011 Annual Report to the Comp- troller on Actuarial Assumptions, Codes Rules and Regulations of the State of New York: Audit and Control. Market Assets and GASB Disclosures: March 31, 2011 New York State and Local Retirement System Financial Statements and Supplementary Informa- tion. Valuations of Benefit Liabilities and Actuarial Assets: summarized in the 2011 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. This estimate, dated January 6, 2012 and intended for use only during the 2012 Legislative Session, is Fiscal Note No. 2012-43, prepared by the Actuary for the New York State and Local Police and Fire Retirement System. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: PROVISIONS OF PROPOSED LEGISLATION - OVERVIEW: With respect to the City of New York (the "City"), this proposed legislation would amend General Municipal Law ("GML") Section 208-f.c to increase certain Special Accidental Death Benefits ("SADB") for line-of- duty widows/widowers and/or children of former uniformed employees of the City and the New York City Health and Hospitals Corporation and A. 9116--A 4 certain former employees of the Triborough Bridge and Tunnel Authority who were members of certain New York City Retirement Systems ("NYCRS"). In addition, the proposed legislation would amend Retirement and Social Security Law Section 361-a.c to cover such SADB for certain survivors of deceased members of the New York State and Local Police and Fire Retirement System. The Effective Date of the proposed legislation would be July 1, 2012. IMPACT ON BENEFITS - SADB RECIPIENTS: With respect to the NYCRS, the proposed legislation would impact the SADB payable to certain survivors of members of the: * New York City Employees' Retirement System ("NYCERS"), or * New York City Police Pension Fund ("POLICE"), or * New York City Fire Department Pension Fund ("FIRE"), and who were employed by one of the following employers in certain posi- tions: * New York City Police Department - Uniformed Position, * New York City Fire Department - Uniformed Position, * New York City Housing Authority - Uniformed Position, * New York City Transit Authority - Uniformed Position, * New York City Department of Correction - Uniformed Position, * New York City - Uniformed Position as Emergency Medical Technician ("EMT"), * New York City Health and Hospitals Corporation - Uniformed Position as EMT, or * Triborough Bridge and Tunnel Authority - Bridge and Tunnel Position. DESCRIPTION OF BENEFITS PAYABLE: Under the GML, the basic SADB is defined to equal: The salary of the deceased member at the date of death (or, in certain instances, a greater salary based on rank or other status) ("Final Sala- ry"), less: * Any death benefit is adjusted by any Supplementation or Cost-of-Liv- ing Adjustment ("COLA") paid by the NYCRS to the member's survivors, * Any death benefit paid by Social Security to the member's survivors, and * Any Worker's Compensation benefit paid to the member's survivors. The SADB is paid to the deceased member's surviving widow or widower, if alive. If the widow/widower is no longer alive, then the SADB is paid to the deceased member's children until age eighteen or while attending school until age twenty-three. The GML also provides that the SADB is subject to escalation based on the calendar year of death of the member. Each year since Calendar Year 1977 the SADB has been increased by an additional cumulative, incre- mental percentage of Final Salary. For example, for a covered member deceased in Calendar Year 1979, the SADB cumulative percentage is 157.5% of Final Salary as of July 1, 2011. Under the proposed legislation, the additional, incremental percentage of Final Salary to be effective July 1, 2012 would be 3.0%. FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES OF BENEFITS ("APVB"): With respect to NYCRS members under the actuarial assumptions and methods as noted herein, the enactment of this proposed legislation would increase APVB by approximately $25.4 million as of June 30, 2012. FINANCIAL IMPACT - EMPLOYER PAYMENTS: With respect to the NYCRS, as these SADB are provided on a pay-as-you-go basis, the additional annual employer payments expected to be paid during the first year, if the proposed legislation is enacted, would equal approximately $2.4 million. A. 9116--A 5 Note: These additional payments represent an increase of approximately 4.6% in the estimated SADB payments during the first year. The SADB payments are made by the NYCRS who are reimbursed by the City who is then reimbursed by the State of New York. OTHER COSTS: The enactment of this proposed legislation would also be expected to result in modest increases in administrative expenses of NYCERS, POLICE, FIRE, the employers and certain New York City agencies. CENSUS DATA: The financial impact of the proposed legislation is based upon the census data for such widows, widowers and children provided by the NYCRS and adjusted, as necessary, to prepare the computations and for consistency with other data. The following table shows, by Retirement System, the number of deceased members with eligible survivors as of June 30, 2011 and the estimated annual SADB rate prior to the increase proposed to be effec- tive as of July 1, 2012. Table 1 SADB Census Data as of June 30, 2011 ($ Millions) Number of Annual SADB Rate Deceased Members Prior to Proposed with Eligible July 1, 2012 Retirement System Survivors Increase NYCERS 31 $ 1.3 POLICE 306 15.0 FIRE 614 35.9 Total 951 $52.2 ACTUARIAL ASSUMPTIONS AND METHODS: Additional APVB have been computed based on the actuarial assumptions and methods in effect for the June 30, 2010 (Lag) actuarial valuations of NYCERS, POLICE and FIRE used to determine the Preliminary Fiscal Year 2012 employer contributions, including an Actuarial Interest Rate ("AIR") assumption of 8.0% per annum. The demographic actuarial assumptions were adopted by the Board of Trustees of each NYCRS during Fiscal Year 2006 and the AIR assumption was enacted by the New York State Legislature and Governor and continues in effect. POTENTIAL CHANGES IN ACTUARIAL ASSUMPTIONS AND METHODS: The impact of enactment of the proposed legislation provided in this Fiscal Note has been based on the current actuarial assumptions and methods used to determine employer contributions to the NYCRS. However, based, in part, on the results of experience studies mandated by the New York City Charter, the Actuary has proposed new packages of actuarial assumptions and methods for use in determining employer contributions to NYCRS for Fiscal Year 2012 and after. Therefore, current actuarial assumptions no longer represent the Actuary's best estimates of future experience. It is anticipated that the APVB determined under the proposed new packages of actuarial assumptions and methods will increase compared with the APVB determined under current actuarial assumptions and meth- ods. Finally, the actuarial assumptions currently employed for determining employer contributions do not represent risk-adjusted, economic evalu- ations. Such risk-adjusted, economic evaluations could, for certain A. 9116--A 6 components of the proposed legislation, produce results that differ significantly from the results shown herein. STATEMENT OF ACTUARIAL OPINION: I, Robert C. North, Jr., am the Chief Actuary for the New York City Retirement Systems. I am a Fellow of the Society of 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 continued herein. FISCAL NOTE IDENTIFICATION: This estimate is intended for use only during the 2012 Legislative Session. It is Fiscal Note 2012-05, dated February 29, 2012, prepared by the Chief Actuary for the New York City Employees' Retirement System, the New York City Police Pension Fund and the New York City Fire Department Pension Fund.