Bill Text: NY A09921 | 2011-2012 | General Assembly | Introduced
Bill Title: Provides for the refund of certain member contributions.
Spectrum: Partisan Bill (Democrat 5-0)
Status: (Engrossed - Dead) 2012-06-20 - REFERRED TO RULES [A09921 Detail]
Download: New_York-2011-A09921-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
9921
I N A S S E M B L Y
April 24, 2012
___________
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
refunding contributions made to the twenty-five year early retirement
program and the age fifty-seven retirement program by New York city
transit authority members
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Subdivision d of section 604-c of the retirement and social
2 security law, as added by chapter 96 of the laws of 1995, is amended by
3 adding a new paragraph 15 to read as follows:
4 15. AN ELIGIBLE FORMER PARTICIPANT, AS DEFINED IN THIS PARAGRAPH,
5 SHALL BE ENTITLED TO A REFUND OF THE EMPLOYEE PORTION OF HIS OR HER
6 ADDITIONAL MEMBER CONTRIBUTIONS MADE PURSUANT TO THIS SUBDIVISION WHICH
7 SHALL INCLUDE ANY AND ALL INTEREST THEREON AT THE RATE OF FIVE PERCENT
8 PER ANNUM, COMPOUNDED ANNUALLY AND SUCH REFUND SHALL BE PAYABLE, UPON
9 SUCH PARTICIPANT'S APPLICATION PURSUANT TO PROCEDURES PROMULGATED IN
10 REGULATIONS OF THE BOARD OF TRUSTEES OF THE RETIREMENT SYSTEM. AN ELIGI-
11 BLE FORMER PARTICIPANT SHALL BE A PARTICIPANT WHO IS OR WAS EMPLOYED IN
12 A TITLE REPRESENTED FOR PURPOSES OF COLLECTIVE BARGAINING BY AN EMPLOYEE
13 ORGANIZATION REPRESENTING A MAJORITY OF SUPERVISORY EMPLOYEES IN THE NEW
14 YORK CITY TRANSIT AUTHORITY'S STATIONS DEPARTMENT, RECOGNIZED OR CERTI-
15 FIED PURSUANT TO ARTICLE FOURTEEN OF THE CIVIL SERVICE LAW, AND WHO, ON
16 OCTOBER FIRST, TWO THOUSAND SIX, WAS EMPLOYED BY THE NEW YORK CITY TRAN-
17 SIT AUTHORITY IN SUCH TITLE AND WHO WAS A PARTICIPANT IN THE TWENTY-FIVE
18 YEAR EARLY RETIREMENT PROGRAM PRIOR TO THE STARTING DATE OF THE ELIMI-
19 NATION OF ADDITIONAL MEMBER CONTRIBUTIONS, AS SUCH DATE IS DEFINED IN AN
20 ELECTION MADE PURSUANT TO PARAGRAPH TEN OF SUBDIVISION E OF SECTION SIX
21 HUNDRED FOUR-B OF THIS ARTICLE.
22 S 2. Subdivision f of section 604-d of the retirement and social secu-
23 rity law is amended by adding a new paragraph 15 to read as follows:
24 15. AN ELIGIBLE FORMER PARTICIPANT, AS DEFINED IN THIS PARAGRAPH,
25 SHALL BE ENTITLED TO A REFUND OF THE EMPLOYEE PORTION OF HIS OR HER
26 ADDITIONAL MEMBER CONTRIBUTIONS MADE PURSUANT TO THIS SUBDIVISION WHICH
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD15340-01-2
A. 9921 2
1 SHALL INCLUDE ANY AND ALL INTEREST THEREON AT THE RATE OF FIVE PERCENT
2 PER ANNUM, COMPOUNDED ANNUALLY AND SUCH REFUND SHALL BE PAYABLE, UPON
3 SUCH PARTICIPANT'S APPLICATION PURSUANT TO PROCEDURES PROMULGATED IN
4 REGULATIONS OF THE BOARD OF TRUSTEES OF THE RETIREMENT SYSTEM. AN ELIGI-
5 BLE FORMER PARTICIPANT SHALL BE A PARTICIPANT WHO IS OR WAS EMPLOYED IN
6 A TITLE REPRESENTED FOR PURPOSES OF COLLECTIVE BARGAINING BY AN EMPLOYEE
7 ORGANIZATION REPRESENTING A MAJORITY OF SUPERVISORY EMPLOYEES IN THE NEW
8 YORK CITY TRANSIT AUTHORITY'S STATIONS DEPARTMENT, RECOGNIZED OR CERTI-
9 FIED PURSUANT TO ARTICLE FOURTEEN OF THE CIVIL SERVICE LAW, AND WHO, ON
10 OCTOBER FIRST, TWO THOUSAND SIX, WAS EMPLOYED BY THE NEW YORK CITY TRAN-
11 SIT AUTHORITY IN SUCH TITLE AND WHO WAS A PARTICIPANT IN THE AGE FIFTY-
12 SEVEN RETIREMENT PROGRAM PRIOR TO THE STARTING DATE OF THE ELIMINATION
13 OF ADDITIONAL MEMBER CONTRIBUTIONS, AS SUCH DATE IS DEFINED IN AN
14 ELECTION MADE PURSUANT TO PARAGRAPH TEN OF SUBDIVISION E OF SECTION SIX
15 HUNDRED FOUR-B OF THIS ARTICLE.
16 S 3. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
PROVISIONS OF PROPOSED LEGISLATION: This proposed legislation would
amend New York State Retirement and Social Security Law ("RSSL")
Sections 604-c and 604-d to provide to certain New York City Transit
Authority ("NYCTA") members of the New York City Employees' Retirement
System ("NYCERS") a refund of Additional Member Contributions ("AMC")
that were paid while participants of one of the Chapter 96 of the Laws
of 1995 ("Chapter 96/95") Retirement Programs.
The Effective Date of the proposed legislation would be the date of
enactment.
This Fiscal Note assumes that the proposed legislation is intended to
refund interest on AMC in accordance with NYCERS procedures for credit-
ing interest on member contributions.
IMPACT ON PLAN PROVISIONS - ADDITIONAL MEMBER CONTRIBUTIONS: Under
Chapter 96/95, AMC were required under each of the Early Retirement
Programs:
* The Twenty-Five-Year Early Retirement Program ("55/25 Program") and
* The Age-Fifty-Seven Retirement Program ("57/5 Program").
Those NYCERS members who participated in either of such Programs paid
AMC of:
4.35% of salary for service on and after January 1, 1995 until January
1, 1998,
2.85% of salary for service on and after January 1, 1998 until Decem-
ber 2, 2001, and
1.85% of salary for service on and after December 2, 2001.
In addition, if such member's job title was considered Physically-Tax-
ing ("PT"), an additional Physically-Taxing AMC ("PTAMC") of 1.98% of
salary was required for all service on and after January 1, 1995.
As a result of Chapter 10 of the Laws of 2000, many of the NYCTA Tier
IV members of NYCERS who participated in the Chapter 96/95 Retirement
Program were transferred into the Transit Twenty-Five-Year and Age
Fifty-Five Retirement Program ("Transit 55/25 Program") effective Decem-
ber 15, 2000. For these members, the AMC and PTAMC that had been payable
under the Chapter 96/95 Retirement Programs were no longer required
after January 3, 2001 (i.e., the effective implementation date, the
first payroll period following the transfer date).
This proposed legislation would refund, on and after the Effective
Date, to certain Transit 55/25 Program participants with initial Program
participation dates on or before December 15, 2000 who were employed by
the Transit Authority as Station Supervisors Level 2 as of October 1,
A. 9921 3
2006, including those who are currently retired, the employee portion of
the AMC and PTAMC, if any, paid for participation in the Chapter 96/95
Retirement Programs, including accrued interest at 5.0% per annum. For
those who are currently retired, interest would accrue until retirement
date.
Note, under the Chapter 96/95 Retirement Programs, 50% of the AMC and
PTAMC paid into such Programs is considered an employer contribution
while the other 50% is considered to be the employee portion. The
employee portion of the AMC and PTAMC is refunded to members who decease
prior to retirement or who retire at age 62 or later. If the proposed
legislation were enacted, those impacted Transit 55/25 Program partic-
ipants would receive the balance of the accumulated employee portion of
AMC and PTAMC.
To receive such refund, those eligible participants would be required
to complete a form and follow procedures to be established by the NYCERS
Board of Trustees.
FINANCIAL IMPACT - OVERVIEW: If enacted into the law, the ultimate
employer cost of this proposed legislation would be determined by the
reduction in expected benefits paid (due to there no longer being a
requirement to refund AMC on a future withdrawal), offset by the
reduction in Fund assets due to the current refund of AMC.
FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: With respect to NYCERS
and based on the census data and actuarial assumptions and methods
described herein, the enactment of this proposed legislation would
result in a decrease in the Actuarial Present Value ("APV") of Benefits
("APVB") of approximately $10,000 as of June 30, 2010.
In addition, there would be a reduction in Actuarial Asset Value as of
June 30, 2010 to reflect the expected refund of the employee portion of
accumulated Chapter 96/95 Retirement Program AMC and PTAMC, if any, for
those impacted Transit 55/25 Program participants of approximately
$320,000.
Together, the enactment of the proposed legislation would result in a
net increase in the APV of Future Employer Normal Costs to NYCERS of
approximately $310,000 as of June 30, 2010.
FINANCIAL IMPACT - ADDITIONAL ANNUAL EMPLOYER COSTS AND CONTRIBUTIONS:
With respect to NYCERS, the enactment of this proposed legislation would
increase annual employer costs by approximately $40,000 per year.
Increases in employer contributions would be comparable to the esti-
mated increases in employer costs.
If enacted on or before June 30, 2012, increased employer contrib-
utions to NYCERS would begin Fiscal Year 2012.
If enacted after June 30, 2012 and on or before June 30, 2013,
increased employer contributions to NYCERS would begin Fiscal Year 2013.
OTHER COSTS: Not measured in this Fiscal Note are any additional
administrative costs or the impact of this proposed legislation on the
Manhattan and Bronx Surface Transit Operating Authority ("MaBSTOA").
CENSUS DATA: The census data used for estimates of APVB, APV of Future
Employer Normal Costs and employer contributions presented herein are
the 187 Tier IV active members of NYCERS who participate in the transit
55/25 Program and who were employed by the Transit Authority as Station
Supervisors Level 2 as of June 30, 2006 with annual salaries of approxi-
mately $15.7 million included in the June 30, 2006 actuarial valuation
of NYCERS.
Of these 187 Tier IV members of NYCERS who participate in the Transit
55/25 Program and who were employed by the Transit Authority as Station
Supervisors Level 2 as of June 30, 2006, 57 members with annual salaries
A. 9921 4
of approximately $4.7 million have AMC (and, in certain cases, PTAMC)
account balances from contributions made under the Chapter 96/95 Retire-
ment Programs. The remaining 130 of these members do not have such AMC
or PTAMC account balances.
Of the 57 members, 36 were active members as of June 30, 2010 and 18
retired before age 62. In addition, two members deceased before retire-
ment and one member retired after age 62 and these three members were
already refunded the employee portion of their AMC and PTAMC.
ACTUARIAL ASSUMPTIONS AND METHODS: Additional APVB, APV of Future
Employer Normal Costs and employer costs have been calculated using the
actuarial assumptions and methods currently in effect for the June 30,
2010 (Lag) actuarial valuation of NYCERS to determine employer contrib-
utions for Fiscal Year 2012.
Additional annual employer costs have been estimated assuming the
additional APV of Future Normal Costs would be financed through future
normal contributions.
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 continued use of the current actuarial assumptions and
methods.
However, the Actuary is currently in the process of proposing a new
package of actuarial assumptions and methods for use in determining
employer contributions to NYCERS for Fiscal Year 2012 and after, as the
current actuarial assumptions no longer represent the Actuary's best
estimates.
It is anticipated that the proposed new package of actuarial assump-
tions and methods would likely result in a greater increase in APVB than
the amount determined under the current actuarial assumptions and meth-
ods. Annual employer costs and contributions would increase similarly
assuming that the prior service obligation associated with this increase
in APVB were amortized over a period comparable to that required under
the current actuarial methodology.
Hence, the estimated financial impact of proposed legislation incorpo-
rating the new package of actuarial assumptions and methods is expected
to differ from the financial impact computed using the actuarial assump-
tions and methods continued from Fiscal Year 2011.
ECONOMIC VALUES OF BENEFITS: The actuarial assumptions used to deter-
mine the financial impact of the proposed legislation discussed in this
Fiscal Note are those appropriate for budgetary models and determining
annual employer contributions to NYCERS.
However, the economic assumptions (current and proposed) that are used
for determining employer contributions do not develop risk-adjusted,
economic values of benefits. Such risk-adjusted, economic values of
benefits would likely differ significantly from those developed by the
budgetary models.
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 contained herein.
FISCAL NOTE IDENTIFICATION: This estimate is intended for use only
during the 2012 Legislative Session. It is Fiscal Note 2012-02, dated
January 20, 2012, prepared by the Chief Actuary for the New York City
Employees' Retirement System.
