Bill Text: NY A10897 | 2019-2020 | General Assembly | Amended


Bill Title: Enables public employers to offer an age fifty-five with ten years of service or age fifty with twenty-five years of service temporary retirement incentives for certain public employees.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced) 2020-10-07 - print number 10897a [A10897 Detail]

Download: New_York-2019-A10897-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                        10897--A

                   IN ASSEMBLY

                                     August 17, 2020
                                       ___________

        Introduced by COMMITTEE ON RULES -- (at request of M. of A. Buttenschon,
          Ramos)  --  read  once  and  referred to the Committee on Governmental
          Employees -- committee discharged, bill amended, ordered reprinted  as
          amended and recommitted to said committee

        AN  ACT in relation to enabling public employers to offer certain tempo-
          rary retirement incentives for certain public employees

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

     1    Section  1.  Legislative  findings. The legislature finds and declares
     2  that the state is experiencing economic difficulties  and  in  order  to
     3  avoid  layoffs of public employees, a retirement incentive is necessary.
     4  However, nothing in this act shall be construed to create an expectation
     5  of a future or continuing retirement benefit for any public employee who
     6  is not eligible to receive and qualify for the  retirement  benefits  in
     7  this act during the applicable time periods.
     8    §  2. Definitions. For purposes of this act, the following terms shall
     9  have the following meanings:
    10    (a) "Retirement system" means the New York state and local  employees'
    11  retirement  system,  the New York state teachers' retirement system, the
    12  New York city teachers' retirement system, the New York  city  board  of
    13  education  retirement  system or the New York city employees' retirement
    14  system, exclusive  of  the  retirement  plans  established  pursuant  to
    15  sections 13-156 and 13-157 of the administrative code of the city of New
    16  York.
    17    (b) "State employer" means:
    18    (1) the executive branch of the state;
    19    (2)  the  state-operated  institutions  of the state university of New
    20  York;
    21    (3) the statutory and contract colleges operated pursuant  to  section
    22  357 of the education law;
    23    (4) the state university construction fund (hereinafter referred to in
    24  this act as the "fund");
    25    (5)  a  cooperative  extension association (hereinafter referred to in
    26  this act as the "association");

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD16883-05-0

        A. 10897--A                         2

     1    (6) the city university of New York as defined  in  subdivision  2  of
     2  section 6202 of the education law;
     3    (7) the unified court system;
     4    (8) the senate;
     5    (9) the assembly; and
     6    (10) joint legislative employers.
     7    (c)  "Participating  employer"  means  an employer, other than a state
     8  employer, which participates in a retirement  system.  Such  term  shall
     9  include a community college operating under the program of state univer-
    10  sity of New York.
    11    (d)  "Educational  employer" means a participating employer which is a
    12  school district, a board of cooperative educational  services,  a  voca-
    13  tional education and extension board, an institution for the instruction
    14  of  the  deaf and of the blind pursuant to section 4201 of the education
    15  law, or a school district pursuant to section 1 of chapter  566  of  the
    16  laws of 1967, as amended.
    17    (e)  (1)  "Eligible  employee"  means  a  person  who is a member of a
    18  retirement system who is an employee in the executive branch of a  state
    19  employer  or an employee of a state employer or a participating employer
    20  who has attained fifty years of age and has at least  twenty-five  years
    21  of creditable service or has attained fifty-five years of age and has at
    22  least  ten  years of creditable service in a retirement system, but such
    23  term shall not include the following persons:
    24    (i) elected officials, judges or justices appointed to or serving in a
    25  court of record and acting village justices;
    26    (ii) chief administrative officers of  participating  employers  which
    27  participate in a teachers' retirement system;
    28    (iii)  officers  described  in sections 4, 41-a, 46, 61, 70, 70-a, 169
    29  (including those officers whose salary is established pursuant to salary
    30  plans described in subdivision 3 of section 169), 180 and subdivision  1
    31  of  section  41  of  the executive law and any agency or department head
    32  appointed by the governor, comptroller or attorney general;
    33    (iv) appointed members of boards or commissions, any of whose  members
    34  are appointed by the governor or by another state officer or body;
    35    (v)  nonjudicial  officers  and employees of the unified court system,
    36  unless the chief administrator of the courts elects as provided  herein,
    37  which election shall cover only nonjudicial officers and employees hold-
    38  ing  positions  in  any  title  in the classified service of the unified
    39  court system;
    40    (vi) officers or employees of the senate unless the  senate  adopts  a
    41  resolution  authorizing  the temporary president to file the election as
    42  provided in this subdivision;
    43    (vii) officers or employees of the assembly unless the assembly adopts
    44  a resolution authorizing  the  speaker  of  the  assembly  to  file  the
    45  election as provided in this subdivision; and
    46    (viii) officers or employees of joint legislative employers unless:
    47    a.  with  respect to officers or employees of the legislative library,
    48  legislative messenger service, legislative health  service,  legislative
    49  ethics  committee,  the  legislative  bill  drafting commission, and the
    50  joint line of the legislative task force  on  demographic  research  and
    51  reapportionment,  the  senate and assembly adopt a concurrent resolution
    52  authorizing the temporary president of the senate and the speaker of the
    53  assembly to jointly file an election as provided in this subdivision;
    54    b. with respect to officers or employees of components of  the  senate
    55  as  identified pursuant to section 90 of the legislative law, the senate
    56  adopts a resolution authorizing  the  temporary  president  to  file  an

        A. 10897--A                         3

     1  election  for  officers  or  employees of those components designated in
     2  such resolution; and
     3    c. with respect to officers or employees of components of the assembly
     4  as  identified pursuant to section 90 of the legislative law, the assem-
     5  bly adopts a resolution authorizing the speaker of the assembly to  file
     6  an  election for officers or employees of those components designated in
     7  such resolution.
     8    (2) Any election under subparagraphs (v) through (viii)  of  paragraph
     9  one  of  this  subdivision  to  make  available the retirement incentive
    10  provided by this act shall be in writing and filed with the state  comp-
    11  troller not later than ninety days after the effective date of this act.
    12  Notwithstanding  any other provision of this act, each such filing shall
    13  specify the commencement date of the open period.
    14    (3) For the purposes of paragraph (vi), (vii) or (viii)  of  paragraph
    15  one of this subdivision, an employee of the legislature shall be as such
    16  term  is defined in section 7-a, 7-b or 7-d of the legislative law or by
    17  any other provision of law which classifies employees of an entity to be
    18  legislative employees for all purposes, but shall not  include  senators
    19  or  members of the assembly. The term "joint legislative employer" shall
    20  mean legislative commissions, committees, task forces, councils or simi-
    21  lar bodies whose membership is comprised of both senators  and  assembly
    22  members,  or  which  consist  of commissioners, or the majority of whose
    23  membership is appointed by one or more of the following:  the  temporary
    24  president of the senate, the speaker of the assembly, the minority lead-
    25  er of the senate, and/or the minority leader of the assembly. The tempo-
    26  rary  president  of  the senate and the speaker of the assembly shall be
    27  the joint legislative employer  of  the  employees  of  the  legislature
    28  referred to in sections 7-a and 7-b of the legislative law.
    29    (f)  "College  faculty"  means  an  employee,  not  in  the classified
    30  service, of a state employer described in paragraphs 2, 3, 4, 5 and 6 of
    31  subdivision (b) of this section or of  a  community  college  who  is  a
    32  member of a teachers' retirement system, or the New York state and local
    33  employees' retirement system.
    34    (g)  "Active  service"  means service while being paid on the payroll,
    35  provided that:
    36    (1) a leave of absence with pay shall be deemed active service;
    37    (2) other approved leave without pay not to exceed twelve  weeks  from
    38  February 1, 2020 and the commencement of the designated open period; and
    39    (3)  the period of time subsequent to the June 2020 school term and on
    40  or before August 31, 2020 for a teacher (or other employee employed on a
    41  school-year basis) who is otherwise in active service on  the  effective
    42  date of this act shall be deemed active service.
    43    (h)  "Open  period"  means  the period beginning with the commencement
    44  date as defined in subdivision (i) of this section and shall  be  ninety
    45  days  in length, provided however that there shall be only one such open
    46  period and any such period shall not extend beyond  September  30,  2020
    47  for a state employer and December 31, 2020 for a participating employer.
    48  For  educational  employers  who  make election after July 15, 2020, the
    49  open period shall begin immediately after such election, and  shall  not
    50  extend  beyond October 15, 2020. For the purposes of retirement pursuant
    51  to this act, a service retirement application shall be  filed  with  the
    52  appropriate  retirement  system not less than fourteen days prior to the
    53  effective date of retirement to become effective, unless a shorter peri-
    54  od of time is permitted under law.
    55    (i) "Commencement date" means the first  day  the  retirement  benefit
    56  mandated by this act shall be made available, which shall mean a date or

        A. 10897--A                         4

     1  dates on or after the effective date of this act to be determined by the
     2  director  of  state operations for the executive branch of the state, or
     3  for any other state employer or any participating employer which  elects
     4  to  participate pursuant to section four of this act, a date on or after
     5  the effective date of this act, provided, however, that  for  an  educa-
     6  tional  employer which elects to participate pursuant to subdivision (d)
     7  of this section, the commencement date shall be July 15, 2020  or  imme-
     8  diately  after  election  of  the  retirement  incentive for educational
     9  employers who elect after July 15, 2020 and provided, further  that  for
    10  participating  employers  which elect to participate pursuant to section
    11  four of this act, except the city of New York and participating  employ-
    12  ers  which  are not empowered to act by local law, the commencement date
    13  shall be November 1, 2020. The director of state operations shall notify
    14  the head of the appropriate retirement system of the date  of  the  open
    15  period  applicable  to  employees  of the executive branch or of a state
    16  employer prior to the commencement date.
    17    § 3. (a) A state employer which  elects  to  participate  pursuant  to
    18  section  four  of  this  act,  a  participating  employer  which  is not
    19  empowered to act by local law which elects to  participate  pursuant  to
    20  section  four  of  this  act,  or  the city of New York, if it elects to
    21  participate pursuant to section four  of  this  act  shall  establish  a
    22  commencement  date  for the retirement benefit established under section
    23  six of this act in the following manner:
    24    (1) for the executive branch, the director of state  operations  shall
    25  establish the commencement date in writing to the appropriate retirement
    26  system;
    27    (2)  for  state  employers described in paragraphs 2, 3, 4, 5 and 6 of
    28  subdivision (b) of section two of this act and  participating  employers
    29  that  are  not  empowered  to act by local law, its governing body shall
    30  adopt a resolution establishing a commencement date;
    31    (3) for state employers described in paragraphs 7,  8,  9  and  10  of
    32  subdivision  (b)  of  section two of this act, the person or persons who
    33  make the election to offer the retirement incentive  shall  establish  a
    34  commencement date in writing to the appropriate retirement system; and
    35    (4)  for the city of New York, the chief executive officer shall issue
    36  an executive order establishing the commencement date, provided,  howev-
    37  er,  no  executive  order,  in  the  case of the city of New York issued
    38  pursuant to this section, shall in any manner supersede any local  char-
    39  ter.    A  copy of any such resolution or executive order in the case of
    40  the city of New York establishing a commencement  date  shall  be  filed
    41  with  the  appropriate retirement system or systems, and, if applicable,
    42  on forms provided by such system. The resolution or executive  order  in
    43  the  case  of the city of New York shall be accompanied by the affidavit
    44  of the chief executive officer or other comparable  official  certifying
    45  the commencement date.
    46    (b) A state employer, participating employer which is not empowered to
    47  act by local law which elects to participate pursuant to section four of
    48  this  act,  or the city of New York if it elects to participate pursuant
    49  to section four of this act shall be required to establish  a  commence-
    50  ment date under subdivision (a) of this section for the retirement bene-
    51  fit established under section six of this act. In the event that a state
    52  employer,  a  participating  employer  which  is not empowered to act by
    53  local law which elects to participate pursuant to section four  of  this
    54  act,  or  the  city  of New York if it elects to participate pursuant to
    55  section four of this act fails to establish a commencement date for  the
    56  retirement  benefit  established  under  section  six  of  this act, the

        A. 10897--A                         5

     1  commencement date for the eligible employees of a state  employer  shall
     2  be  July  15,  2020. The commencement date for the eligible employees of
     3  all other employers referenced in this subdivision shall be September 1,
     4  2020.
     5    §  4.  On  or  before September 1, 2020, a participating employer or a
     6  state employer described in paragraphs 2, 3, 4, 5 and 6  of  subdivision
     7  (b)  of  section  two of this act may elect to provide its employees the
     8  retirement incentive authorized by this act by:
     9    (a) the enactment of a local law; or
    10    (b) in the case of a participating employer which is not so  empowered
    11  to act by local law or a state employer described in paragraphs 2, 3, 4,
    12  5  and  6 of subdivision (b) of section two of this act, by the adoption
    13  of a resolution of its governing body, provided however, no local law or
    14  resolution enacted pursuant to this section shall in any  manner  super-
    15  sede  any  local  charter,  provided  further,  that  for an educational
    16  employer such election shall be made thirty  days  after  the  effective
    17  date  of  this act.  For a community college operating under the program
    18  of state university of New York, such election  shall  be  made  by  the
    19  board  of  trustees of such community college subject to the approval of
    20  its sponsor. A copy of such law or resolution shall be  filed  with  the
    21  appropriate  retirement  system or systems, and, if applicable, on forms
    22  provided by such system. The local law or resolution shall  be  accompa-
    23  nied by the affidavit of the chief executive officer or other comparable
    24  official  certifying  the  validity of such local law or resolution. The
    25  executive branch of the state shall be deemed to have made  an  election
    26  under this section upon its enactment.
    27    § 5. Notwithstanding any other provision of law, any eligible employee
    28  who  has  been continuously in the active service of a state employer or
    29  of a participating employer from February 1, 2020 to the date immediate-
    30  ly prior to the commencement date of the applicable open  period,  files
    31  an  application for service retirement that is effective during the open
    32  period, and is eligible for a service retirement pursuant  to  this  act
    33  because  he  or she has attained the age of fifty and has at least twen-
    34  ty-five years of creditable service or has attained the  age  of  fifty-
    35  five  and has at least ten years of creditable service, as of the effec-
    36  tive date of the application for retirement shall  be  entitled  to  the
    37  retirement benefit provided in section six of this act.
    38    §  6.  (a)  Notwithstanding  any  other  provision of law, an eligible
    39  employee who is a member of a retirement system and who is entitled to a
    40  retirement benefit pursuant to section  five  of  this  act  may  retire
    41  during  the  open  period without the reduction of his or her retirement
    42  benefit that would otherwise be imposed by  article  11  or  15  of  the
    43  retirement  and social security law if he or she has attained the age of
    44  fifty and has completed at least twenty-five years of creditable service
    45  or has attained the age of fifty-five and has  completed  at  least  ten
    46  years  of creditable service. An eligible employee who is covered by the
    47  provisions of articles 11 and 15 of the retirement and  social  security
    48  law  shall  retire  under  the  provisions  of articles 11 and 15 of the
    49  retirement and social security law.
    50    (b) The director of state operations, the chief executive  officer  of
    51  the  city of New York, or chief executive officer or governing board, as
    52  appropriate, of the participating employer may deny participation in the
    53  retirement benefit provided by subdivision (a) of this  section  if  the
    54  director  of  state  operations, the chief executive officer of New York
    55  city or the chief executive officer or governing board  of  the  partic-
    56  ipating  employer  makes a determination that the employee holds a posi-

        A. 10897--A                         6

     1  tion that is deemed critical to the maintenance  of  public  health  and
     2  safety.
     3    (c)  The  action of the director of state operations, the chief execu-
     4  tive officer of the city of New York,  or  chief  executive  officer  or
     5  governing  board, as appropriate, of the participating employer in deny-
     6  ing the retirement benefit provided  for  in  subdivision  (a)  of  this
     7  section  to  any  individual  shall  be  subject to review in the manner
     8  provided for in article 78 of the civil practice  law  and  rules.  Such
     9  action  for  review pursuant to article 78 of the civil practice law and
    10  rules shall only be commenced by the  individual  that  was  denied  the
    11  retirement benefit provided by subdivision (a) of this section.
    12    (d)  After making any such determination under subdivision (b) of this
    13  section, the director of state operations, the chief  executive  officer
    14  of  the  city  of  New York and the chief executive officer or governing
    15  board, as appropriate, of the participating employer  shall  notify  the
    16  appropriate  retirement  system  or  teachers'  retirement system of its
    17  determination.
    18    § 7. The pension benefit costs of section six of  this  act  shall  be
    19  paid  by  employers  as  provided  by applicable law for each retirement
    20  system covered by this act over  a  period  not  to  exceed  five  years
    21  commencing in the state fiscal year ending March 31, 2022.
    22    § 8. Severability clause. If any clause, sentence, paragraph, subdivi-
    23  sion,  section  or  part  of  this act shall be adjudged by any court of
    24  competent jurisdiction to be invalid, such judgment  shall  not  affect,
    25  impair,  or  invalidate  the remainder thereof, but shall be confined in
    26  its operation to the clause, sentence, paragraph,  subdivision,  section
    27  or part thereof directly involved in the controversy in which such judg-
    28  ment shall have been rendered. It is hereby declared to be the intent of
    29  the  legislature  that  this  act  would  have been enacted even if such
    30  invalid provisions had not been included herein.
    31    § 9. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          This bill would provide a temporary retirement incentive to retirement
        system  members  throughout  the  state  and  NYC  during  fiscal   year
        2020-2021.    This fiscal note concerns its impact on the New York State
        Teachers'  Retirement  System.  This  incentive  would  permit  eligible
        members  to retire without an early retirement reduction upon attainment
        of at least age 50 with 25 years of service, or at least age 55 with  10
        years of service.  Currently attainment of at least age 55 with 30 years
        of  service,  or at least age 62 with five years of service are required
        in order to retire without reduction for Tiers 2, 3 and 4 members.  Tier
        5 members currently must be at least age 57 with 30 years of service, or
        at  least  age  62  with ten years of service in order to retire without
        reduction. Currently Tier 6 members are required to attain age  63  with
        ten  years  of service in order to retire without reduction. In order to
        receive this benefit, a member of an employer who has elected to partic-
        ipate must retire during the designated open  period,  beginning  on  or
        after  July 15, 2020 and not extending beyond October 15, 2020. In order
        to participate in this retirement incentive,  the  educational  employer
        must  be a school district, a board of cooperative educational services,
        a vocational education and  extension  board,  an  institution  for  the
        instruction  of  the deaf and of the blind as enumerated in Section 4201
        of the Education Law or a school district as enumerated in Section 1  of
        Chapter  566  of  the  Laws  of 1967.   Chief administrative officers of
        educational employers are not eligible to participate in this retirement
        incentive. Employers who elect to participate would pay the cost of  the

        A. 10897--A                         7

        retirement  incentive  over a period not to exceed five years, beginning
        in the state fiscal year ending March 31, 2022.
          The  estimated  increase  in the present value of benefits due to this
        temporary retirement incentive  is  approximately  $1.025  billion.  The
        estimated  annual  cost,  over  a five-year period, to the participating
        employers of members of the New York State Teachers'  Retirement  System
        for this retirement incentive benefit is estimated to be $274.0 million,
        or  1.61%  of  payroll  if  this bill is enacted. Employers who elect to
        participate in this retirement incentive will be billed for their  indi-
        vidual members who retire under the incentive.
          Member  data  is  from  the  System's  most recent actuarial valuation
        files, consisting of data provided by the employers  to  the  Retirement
        System.   Data distributions and statistics can be found in the System's
        Comprehensive Annual Financial  Report  (CAFR).  System  assets  are  as
        reported  in the System's financial statements, and can also be found in
        the CAFR. Actuarial assumptions and methods are provided in the System's
        Actuarial Valuation Report.
          The source of this estimate is Fiscal Note  2020-33  dated  August  4,
        2020  prepared by the Actuary of the New York State Teachers' Retirement
        System and is intended for use only during the 2020 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.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          This  bill would allow retirement at age 50 for certain members of the
        New York State and Local Employees' Retirement System,  New  York  State
        Teachers  Retirement  System,  New York City Teachers Retirement System,
        New York City Board of  Education  and  the  New  York  City  Employees'
        Retirement  System  who  have  accrued  at  least 25 years of creditable
        service. It would also eliminate the  early  retirement  reductions  for
        members  who  have attained age 55 and have accrued at least 10 years of
        creditable service.
          The exact number of members who would be affected by  this  cannot  be
        readily determined.
          If  this  bill  is  enacted,  the  additional cost for each member who
        receives these benefits will vary depending on the member's  age,  years
        of  service,  plans  and final average salary. Eliminating the early age
        reductions for members retiring after attaining age 55 with at least  10
        years  of service credit is estimated to cost (on average for the group)
        130% of the member's final average salary. Extending  retirement  eligi-
        bility  to  members  who  have attained age 50 with at least 25 years of
        service credit is estimated to cost (on average for the group)  130%  of
        the  member's  final  average salary. The estimated costs are identical.
        The final costs will be borne by each employer electing the incentive.
          Summary of relevant resources:
          The membership data used in  measuring  the  impact  of  the  proposed
        change  was  the same as that used in the March 31, 2019 actuarial valu-
        ation.  Distributions and other statistics can  be  found  in  the  2019
        Report  of  the  Actuary  and  the  2019  Comprehensive Annual Financial
        Report.
          The actuarial assumptions and methods used are described in the  2015,
        2016, 2017, 2018, and 2019 Annual Report to the Comptroller on Actuarial
        Assumptions,  and  the  Codes, Rules and Regulations of the State of New
        York: Audit and Control.

        A. 10897--A                         8

          The Market Assets and GASB Disclosures are found in the March 31, 2019
        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.
          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 July 13, 2020, and intended for use only during
        the 2020 Legislative Session, is Fiscal Note No. 2020-128,  prepared  by
        the Actuary for the New York State and Local Retirement System.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY  OF  BILL: This proposed legislation, as it relates to the New
        York City Retirement Systems (NYCRS),  would  provide  for  a  temporary
        Early  Retirement  Incentive  Program  (ERI  Program)  to  allow certain
        members of the New York City Employees' Retirement System (NYCERS),  the
        New  York  City Teachers' Retirement System (TRS), and the New York City
        Board of Education Retirement System (BERS), who meet enumerated  crite-
        ria, to elect immediate unreduced retirement.
          The  ERI  Program is contingent upon a participating employer electing
        the ERI on or before September 1, 2020, but no later than 90 days  after
        the  effective  date of the proposed legislation. Eligible NYCRS members
        would have a 90-day open  period  following  the  commencement  date  to
        retire under the ERI Program which would remove the application of early
        retirement  reduction factors contained in Articles 11 and 15 for quali-
        fying members.
          A member is eligible to participate in the ERI Program if he or she is
        age 50 or older and has at least 25 years of service, or is  age  55  or
        older  and  has  at least 10 years of service. In addition, members must
        also:
          * Be in continuous active service from February 1, 2020  to  the  date
        immediately preceding the commencement date of the open period;
          *  File for service retirement that is effective within the open peri-
        od.
          For purposes of this Fiscal Note, members covered by  Article  14  are
        assumed  to not benefit from the proposed legislation and have therefore
        been excluded.
          Effective Date: Upon enactment
          FINANCIAL IMPACT - OVERVIEW: There is no credible  data  available  to
        estimate the number of members who will retire under the ERI Program and
        potentially benefit from this proposed legislation. Therefore, the esti-
        mated financial impact has been calculated on a per event basis equal to
        the  average  increase  in the Present Value of future employer contrib-
        utions and in the annual employer contributions for  members  who  would
        benefit from the proposed legislation.
          The  Present  Value of future employer contributions is the net result
        of the increase in the Present Value of Future Benefits (PVFB)  and  the
        decrease in the Present Value of future member contributions.
          For the purposes of this Fiscal Note, the increase in Present Value of
        future  employer  contributions  was  amortized  over a five-year period
        (four payments under the One-Year Lag Methodology  (OYLM))  using  level
        dollar  payments, the maximum allowable period under the proposed legis-
        lation. This amortized value is the estimated increase in annual employ-
        er contributions.

        A. 10897--A                         9

          There will also be future savings in Employer  Contributions  assuming
        that  these  members  are  not  replaced. This additional savings is not
        included here.
          With  respect  to  an  individual  member, the additional cost of this
        proposed legislation could vary greatly depending on the member's length
        of service, age, and salary history.
          FINANCIAL IMPACT - SUMMARY: Based on the census data and the actuarial
        assumptions and methods described herein, the enactment of this proposed
        legislation would result in an increase in the Present Value of Employer
        Contributions and annual employer contributions. The  estimated  pension
        financial impact has been calculated as the average increase per person.
        A  breakdown  of  the  financial  impact  by NYCRS is shown in the table
        below:
                                 Additional
                                 Present Value of    Estimated Annual
                       NYCRS     Future Employer     Employer
                                 Contributions       Contributions
                                 ($ Per Person)      ($ Per Person)
                       NYCERS        $98,200              $30,000
                       TRS            49,800               15,200
                       BERS           76,800               23,400
                       Average       $86,500              $26,400
          CONTRIBUTION TIMING: For the purposes  of  this  Fiscal  Note,  it  is
        assumed  that  the  changes  in  the  Present  Value  of future employer
        contributions and annual employer contributions would be  reflected  for
        the  first  time  in  the  Final  June  30, 2019 actuarial valuations of
        NYCERS, TRS, and BERS. In accordance with the  OYLM  used  to  determine
        employer  contributions,  the  increase  in employer contributions would
        first be reflected in Fiscal Year 2021.
          CENSUS DATA: The estimates presented herein are based  on  the  census
        data used in the Preliminary June 30, 2019 (Lag) actuarial valuations of
        NYCERS,  TRS,  and  BERS  to  determine the Preliminary Fiscal Year 2021
        employer contributions.
          The table below contains the census data  for  members  who  meet  the
        eligibility  requirements  and  would be impacted by the proposed legis-
        lation (Potential Elections), and for a  subset  of  those  members  who
        would benefit actuarially (Assumed to Elect).
                                      Census Data
          Potential Elections    Count     AvgAge    AvgSvc    AvgSalary
          NYCERS                 24,764     56.8      23.7      $86,900
          TRS                    12,554     56.5      20.2       99,600
          BERS                    2,147     57.1      20.1       63,300
          Total                  39,465     56.7      22.4      $89,700

          Assumed to Elect       Count     AvgAge    AvgSvc    AvgSalary
          NYCERS                 18,185     56.7      26.8      $88,000
          TRS                     5,529     55.1      25.2      109,500
          BERS                    1,031     57.5      25.8       67,600
          Total                  24,745     56.4      26.4      $92,000
          ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the Present Value of
        future   employer   contributions   and  annual  employer  contributions
        presented herein have been calculated based on the actuarial assumptions
        and methods in effect for the June 30, 2019 (Lag)  actuarial  valuations
        used  to  determine  the  Preliminary Fiscal Year 2021 employer contrib-
        utions of NYCERS, TRS, and BERS.

        A. 10897--A                        10

          To determine the impact of the elective nature of the proposed  legis-
        lation,  a  subgroup  based on who could potentially benefit actuarially
        was used. The Present Value of future employer costs  (i.e.    the  PVFB
        less  the Present Value of future member contributions) of each member's
        benefit was determined under their current plan and as if retiring imme-
        diately  under  the ERI Program. If the Present Value of future employer
        cost under the ERI Program was greater than  or  equal  to  the  Present
        Value  of future employer cost under the member's current plan, then the
        member was deemed to benefit actuarially.
          Based on this analysis, the costs presented in this  Fiscal  Note  are
        borne only from current NYCERS, TRS, and BERS members who are assumed to
        benefit from, and thus opt to retire under the ERI Program.
          RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
        highly on the realization of the actuarial assumptions used, as well  as
        certain  demographic characteristics of NYCERS, TRS, and BERS, and other
        exogenous factors such as investment, contribution, and other risks.  If
        actual  experience deviates from actuarial assumptions, the actual costs
        could differ from those presented herein. Costs are  also  dependent  on
        the  actuarial  methods  used, and therefore different actuarial methods
        could produce different results. Quantifying these risks is  beyond  the
        scope of this Fiscal Note.
          Not measured in this Fiscal Note are the following:
          *  The  offsetting reduction in salary due to retirements earlier than
        expected.
          * The impact of potential new hires replacing members who  retire  due
        to the ERI Program.
          *  The  initial,  additional  administrative  costs  to  implement the
        proposed legislation.
          * The impact of this  proposed  legislation  on  Other  Postemployment
        Benefit (OPEB) costs.
          STATEMENT  OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu-
        ary for, and independent of, the New York City  Retirement  Systems  and
        Pension  Funds.  I  am a Fellow of the Society of Actuaries, an Enrolled
        Actuary under the Employee Retirement Income and Security Act of 1974, a
        Member of the American Academy of Actuaries, and a Fellow of the Confer-
        ence of Consulting Actuaries. I meet the Qualification Standards of  the
        American  Academy of Actuaries to render the actuarial opinion contained
        herein. To the best of my knowledge, the results contained  herein  have
        been prepared in accordance with generally accepted actuarial principles
        and  procedures  and  with the Actuarial Standards of Practice issued by
        the Actuarial Standards Board.
          FISCAL NOTE IDENTIFICATION: This Fiscal Note 2020-58 dated August  13,
        2020  was prepared by the Chief Actuary for the New York City Employees'
        Retirement System, the New York City Teachers'  Retirement  System,  and
        the New York City Board of Education Retirement System. This estimate is
        intended for use only during the 2020 Legislative Session.
feedback