Bill Text: NY A10612 | 2011-2012 | General Assembly | Introduced
Bill Title: Allows a change in retirement options for certain retired members with the consent of the nominated survivor beneficiary.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2012-06-08 - referred to governmental employees [A10612 Detail]
Download: New_York-2011-A10612-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
10612
I N A S S E M B L Y
June 8, 2012
___________
Introduced by COMMITTEE ON RULES -- (at request of M. of A. Abbate) --
read once and referred to the Committee on Governmental Employees
AN ACT to amend the retirement and social security law and the education
law, in relation to permitting certain retired members of the New York
State Teachers' Retirement System or the New York City Teachers'
Retirement System to change their retirement options with the consent
of the nominated survivor beneficiary
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Section 514 of the retirement and social security law is
2 amended by adding a new subdivision e to read as follow:
3 E. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, WHERE A RETIRED MEMBER
4 OF THE NEW YORK CITY TEACHERS' RETIREMENT SYSTEM HAS NOMINATED HIS OR
5 HER SPOUSE AS THE SURVIVOR BENEFICIARY UNDER OPTION ONE, TWO OR FIVE
6 PROVIDED FOR IN SUBDIVISION A OF THIS SECTION, AND SUCH PERSON SO NOMI-
7 NATED CEASES BY CAUSES OTHER THAN DEATH TO BE HIS OR HER SPOUSE OR IS
8 SEPARATED FROM HIM OR HER, OR IF SUCH OPTION WAS SELECTED IN CONTEM-
9 PLATION OF MARRIAGE WHICH HAS NOT TAKEN PLACE, THEN THE BOARD OF TRUS-
10 TEES OF SUCH RETIREMENT SYSTEM SHALL HAVE THE AUTHORITY TO PERMIT THE
11 CHANGE OF SUCH OPTION TO THE MAXIMUM BENEFIT THAT IS THE ACTUARIAL
12 EQUIVALENT BY AND WITH THE CONSENT OF ALL PARTIES.
13 S 2. Section 610 of the retirement and social security law is amended
14 by adding a new subdivision g to read as follows:
15 G. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, WHERE A RETIRED MEMBER
16 OF THE NEW YORK CITY TEACHERS' RETIREMENT SYSTEM HAS NOMINATED HIS OR
17 HER SPOUSE AS THE SURVIVOR BENEFICIARY UNDER OPTION ONE, TWO OR FIVE
18 PROVIDED FOR IN SUBDIVISION A OF THIS SECTION, AND SUCH PERSON SO NOMI-
19 NATED CEASES BY CAUSES OTHER THAN DEATH TO BE HIS OR HER SPOUSE OR IS
20 SEPARATED FROM HIM OR HER, OR IF SUCH OPTION WAS SELECTED IN CONTEM-
21 PLATION OF MARRIAGE WHICH HAS NOT TAKEN PLACE, THEN THE BOARD OF TRUS-
22 TEES OF SUCH RETIREMENT SYSTEM SHALL HAVE THE AUTHORITY TO PERMIT THE
23 CHANGE OF SUCH OPTION TO THE MAXIMUM BENEFIT THAT IS THE ACTUARIAL
24 EQUIVALENT BY AND WITH THE CONSENT OF ALL PARTIES.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD16074-01-2
A. 10612 2
1 S 3. Section 539 of the education law is amended by adding a new
2 subdivision 8 to read as follows:
3 8. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, A RETIREE SUBJECT TO
4 THIS ARTICLE OR ARTICLE FOURTEEN OR FIFTEEN OF THE RETIREMENT AND SOCIAL
5 SECURITY LAW WHO AT RETIREMENT HAD DULY SELECTED AN OPTION FORM OF
6 RETIREMENT PROVIDING FOR THE PAYMENT OF A LESSER RETIREMENT ALLOWANCE
7 OVER THE LIFE OF THE RETIREE WITH THE PROVISION THAT UPON THE RETIREE'S
8 DEATH ALL OR A PORTION OF SUCH ALLOWANCE SHALL BE CONTINUED FOR THE LIFE
9 OF AND PAID TO A BENEFICIARY DULY NOMINATED BY THE RETIREE AT RETIRE-
10 MENT, SHALL BE PERMITTED TO RESCIND SUCH SELECTION WITHIN ONE YEAR AFTER
11 SUCH BENEFICIARY HAS CEASED TO BE THE RETIREE'S SPOUSE BY REASON OF A
12 FINAL JUDGMENT OR DECREE OF DIVORCE ISSUED BY A COURT OF COMPETENT
13 JURISDICTION. IN ORDER TO RESCIND SUCH SELECTION, THE RETIREE AND BENE-
14 FICIARY MUST EACH FILE A WRITTEN CONSENT TO SUCH CHANGE WITH THE SYSTEM
15 ON A FORM PRESCRIBED BY THE SYSTEM. UPON SATISFACTORILY RECEIVING SUCH
16 JUDGMENT OR DECREE OF DIVORCE AND SUCH CONSENTS, ANY AND ALL OBLIGATIONS
17 OF THE SYSTEM TO THE BENEFICIARY UNDER THE RETIREE'S OPTION SELECTION
18 SHALL BE TOTALLY DISCHARGED AND THE RETIREE SHALL THEREAFTER BE PAID FOR
19 THE REMAINDER OF SUCH RETIREE'S LIFE THE MAXIMUM SINGLE LIFE BENEFIT
20 WHICH WOULD HAVE BEEN PAYABLE, HAD THE RETIREE MADE NO OPTION SELECTION
21 AT THE TIME OF RETIREMENT. THE RETIREMENT BOARD IS AUTHORIZED TO ADOPT
22 SUCH RULES AND REGULATIONS AS MAY BE NECESSARY TO IMPLEMENT THIS SUBDI-
23 VISION.
24 S 4. This act shall take effect on June 30, 2012, except that if this
25 act shall have become law on or after June 30, 2012, this act shall take
26 effect immediately and shall be deemed to have been in full force and
27 effect on or after June 30, 2012.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This proposed legislation would amend Retirement and Social Security
Law ("RSSL") Sections 514 and 610 to allow certain Tier III and Tier IV
retirees of the New York City Teachers' Retirement System ("TRS") the
opportunity to change certain optional forms of benefit after retirement
similar to the provisions set forth in Administrative Code of the City
of New York ("ACNY") Section 565(c).
ACNY Section 565(c) covers only Tier I and Tier II members of TRS.
In addition, for purposes of this Fiscal Note, the references herein
to Tier IV include those TRS members whose dates of membership are on or
after April 1, 2012 (a.k.a., Tier VI members).
Specifically, this proposed legislation would permit a Tier III or
Tier IV retiree of TRS who has nominated his or her spouse as the survi-
vor beneficiary to change, under certain optional forms of benefit and
with the consent of his or her spouse and the TRS Retirement Board, from
the optional form of benefit originally chosen to the maximum benefit
that is the actuarial equivalent, if such person:
(1) ceases by causes other than death to be his or her spouse, or
(2) is separated from him or her, or
(3) if such option was selected in contemplation of marriage which has
not taken place.
The Effective Date of the proposed legislation would be the date of
enactment.
FINANCIAL IMPACT - ACTUARIAL PRESENT VALUE OF BENEFITS AND EMPLOYER
CONTRIBUTIONS: To the extent that the probabilities of survival of the
retiree and the beneficiary designated under the optional form of bene-
fit have not changed significantly since such optional form of benefit
was instituted, then the enactment of this proposed legislation is
A. 10612 3
expected to result in little or no change in the Actuarial Present Value
of Benefits ("APVB") or employer contributions to TRS.
OTHER COSTS: The enactment of this proposed legislation would result
in some administrative expenses for TRS.
This estimate is intended for use only during the 2012 Legislative
Session. It is Fiscal Note 2012-10, dated May 18, 2012 prepared by the
Chief Actuary of the New York City Teachers' Retirement System.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would amend Section 539 of the Education Law to allow a
retired member of the New York State Teachers' Retirement System
(NYSTRS) who selects an optional form of retirement benefit that
provides that upon the retired member's death, all, or a percentage of,
such optional form of retirement benefit shall be continued for the life
of a beneficiary, to rescind the selection of such option within one
year after such beneficiary ceases to be the retired member's spouse by
reason of a final judgment or decree of divorce. In order to rescind
such optional form of retirement benefit, the retired member and benefi-
ciary must each file a written consent with respect to such change with
NYSTRS. Upon NYSTRS' receipt of the judgment or decree of divorce and
the written consents, the retired member would receive the maximum
single-life retirement benefit for the remainder of his or her lifetime,
as if no option had been selected at retirement. Any and all obligations
of NYSTRS to the beneficiary under the option selection shall be consid-
ered totally discharged. This bill shall apply to retirement benefits
payable on or after June 30, 2012.
The annual cost to the employers of members of the New York State
Teachers' Retirement System for this benefit is estimated to be very
low, likely less than $200,000 per year. Allowing retired members to
change the terms of their option after retirement creates the potential
for anti-selection however.
The source of this estimate is Fiscal Note 2012-31 dated May 24, 2012
prepared by the Actuary of the New York State Teachers' Retirement
System and is intended for use only during the 2012 Legislative Session.
I, Richard A. Young, am the Actuary for the New York State Teachers'
Retirement System. I am a member of the American Academy of Actuaries
and I meet the Qualification Standards of the American Academy of Actu-
aries to render the actuarial opinion contained herein.
