Bill Text: NY S05593 | 2017-2018 | General Assembly | Amended
Bill Title: Authorizes members of the New York state and local employees' retirement system to repay the loan balance at any time.
Spectrum: Slight Partisan Bill (Republican 2-1)
Status: (Passed) 2018-12-21 - SIGNED CHAP.426 [S05593 Detail]
Download: New_York-2017-S05593-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 5593--A Cal. No. 301 2017-2018 Regular Sessions IN SENATE April 19, 2017 ___________ Introduced by Sens. GOLDEN, AVELLA -- read twice and ordered printed, and when printed to be committed to the Committee on Civil Service and Pensions -- recommitted to the Committee on Civil Service and Pensions in accordance with Senate Rule 6, sec. 8 -- reported favorably from said committee, ordered to first and second report, ordered to a third reading, passed by Senate and delivered to the Assembly, recalled, vote reconsidered, restored to third reading, amended and ordered reprinted, retaining its place in the order of third reading AN ACT to amend the retirement and social security law, in relation to loans to members of certain retirement systems The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivision i of section 517-c of the retirement and social 2 security law, as amended by chapter 511 of the laws of 2005, is amended 3 to read as follows: 4 i. Notwithstanding the provisions of section five hundred sixteen of 5 this article, whenever a member of such a retirement system, for whom a 6 loan is outstanding, retires, the retirement allowance payable without 7 optional modification shall be reduced by a life annuity which is actu- 8 arially equivalent to the amount of the outstanding loan (all outstand- 9 ing loans shall continue to accrue interest charges until retirement), 10 such life annuity being calculated utilizing the interest rate on thirty 11 year United States treasury bonds as of January first of the calendar 12 year of the effective date of retirement and the mortality tables for 13 options available under section five hundred fourteen of this article. A 14 retiree of the New York city employees' retirement system [or], board of 15 education retirement system of the city of New York, or the New York 16 state and local employees' retirement system whose benefit has been so 17 reduced may repay the outstanding balance of the loan at any time. Bene- 18 fits payable after the repayment of the loan shall not be subject to the 19 actuarial reduction required by this subdivision. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD11071-03-8S. 5593--A 2 1 § 2. Subdivision i of section 613-b of the retirement and social secu- 2 rity law, as amended by chapter 511 of the laws of 2005, is amended to 3 read as follows: 4 i. Notwithstanding the provisions of subdivision b of section six 5 hundred twelve of this article, whenever a member of such a retirement 6 system, for whom a loan is outstanding, retires, the retirement allow- 7 ance payable without optional modification shall be reduced by a life 8 annuity which is actuarially equivalent to the amount of the outstanding 9 loan (all outstanding loans shall continue to accrue interest charges 10 until retirement), such life annuity being calculated utilizing the 11 interest rate on thirty year United States treasury bonds as of January 12 first of the calendar year of the effective date of retirement and the 13 mortality tables for options available under section six hundred ten of 14 this article. A retiree of the New York city employees' retirement 15 system [or], board of education retirement system of the city of New 16 York, or the New York state and local employees' retirement system whose 17 benefit has been so reduced may repay the outstanding balance of the 18 loan at any time. Benefits payable after the repayment of the loan shall 19 not be subject to the actuarial reduction required by this subdivision. 20 § 3. This act shall take effect immediately. FISCAL NOTE.-- Pursuant to Legislative Law, Section 50: This bill would allow a retiree of the New York State and Local Employees' Retirement System (ERS) to repay the outstanding loan balance determined on the day of retirement, by making a lump sum payment after retirement. Upon receipt of such repayment, the future pension payments of such retirees shall be recalculated to be without actuarial reduction. Currently, member loans must be settled at retirement either by a lump sum payment or by an annual actuarial reduction to the pensions. If this bill is enacted, there would be a small administrative cost to implement this change. 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, 2017 actuarial valu- ation. Distributions and other statistics can be found in the 2017 Report of the Actuary and the 2017 Comprehensive Annual Financial Report. The actuarial assumptions and methods used are described in the 2015, 2016, and 2017 Annual Report to the Comptroller on Actuarial Assump- tions, 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, 2017 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 estimate, dated January 17, 2018, and intended for use only during the 2018 Legislative Session, is Fiscal Note No. 2018-30, prepared by the Actuary for the New York State and Local Retirement System.
