Bill Text: NY S06133 | 2017-2018 | General Assembly | Amended
Bill Title: Grants service credit to members of the uniformed correction force of the New York city department of correction covered by provisions of law for over 25 years.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2018-06-25 - PRINT NUMBER 6133A [S06133 Detail]
Download: New_York-2017-S06133-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 6133--A 2017-2018 Regular Sessions IN SENATE May 11, 2017 ___________ Introduced by Sen. GOLDEN -- 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 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said commit- tee AN ACT to amend the retirement and social security law, in relation to retirement benefits for general members in the uniformed correction force of the New York city department of correction 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 504 of the retirement and social 2 security law, as amended by chapter 18 of the laws of 2012, is amended 3 to read as follows: 4 d. The early service retirement benefit for general members in the 5 uniformed correction force of the New York city department of 6 correction, who are not entitled to an early service retirement benefit 7 pursuant to subdivision c of section five hundred four-a of this article 8 or subdivision c of section five hundred four-b of this article or 9 subdivision c of section five hundred four-d of this article, or for 10 general members in the uniformed personnel in institutions under the 11 jurisdiction of the department of corrections and community supervision, 12 as defined in subdivision i of section eighty-nine of this chapter, 13 shall be a pension equal to one-fiftieth of final average salary times 14 years of credited service at the completion of twenty-five years of 15 service, [but not in excess of fifty percent of final average salary] 16 plus one-sixtieth of final average salary times years of credited 17 service in excess of twenty-five, provided, however, that the provisions 18 of this section shall not apply to a New York city uniformed 19 correction/sanitation revised plan member. 20 § 2. This act shall take effect immediately. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD11666-02-8S. 6133--A 2 FISCAL NOTE.--Pursuant to Legislative Law, Section 50: SUMMARY OF BILL: This proposed legislation would amend Retirement and Social Security Law (RSSL) Section 504 to modify the service retirement benefit calculation formula for uniformed employees of the New York City Department of Correction (Correction) who are members of the New York City Employees' Retirement System (NYCERS) and are subject to the Early Service Retirement Benefit Plan for General Members pursuant to RSSL Section 504 (CO-25 Plan). The CO-25 Plan is limited to Tier 3 Correction members who joined NYCERS prior to December 19, 1990 (CO-25 Plan Members). Effective Date: Upon enactment. IMPACT ON SERVICE RETIREMENT BENEFITS: Currently, upon reaching 25 or more years of credited service, CO-25 Plan Members are entitled to a service retirement pension benefit equal to: * 1/50th of Final Average Salary (FAS) multiplied by 25 Years of Service (not to exceed 50% of FAS). Under the proposed legislation, if enacted, the service retirement pension benefit for CO-25 Plan Members who retire for service under RSSL Section 504(d) after the effective date of the proposed legislation with 25 or more years of credited service would be equal to: * 1/50th of FAS multiplied by 25 years of credited service, plus * 1/60th of FAS multiplied by the number of years of credited service exceeding 25 (if any). FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: Based on the census data and actuarial assumptions and methods herein, the enactment of this proposed legislation would increase the Actuarial Present Value (APV) of Benefits (APVB) for NYCERS by approximately $11.2 million. Under the Entry Age Normal cost method used to determine employer contributions to NYCERS, there would be an increase in the Unfunded Accrued Liability (UAL) of approximately $10.8 million and an increase in the APV of future employer Normal Cost of $0.4 million. FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with the Administrative Code of the City of New York (ACCNY) Section 13-638.2(k-2), new UAL attributable to benefit changes are to be amor- tized as determined by the Actuary but generally over the remaining working lifetime of those impacted by the benefit changes. As of June 30, 2017, the remaining working lifetime of the CO-25 Plan Members is approximately seven years. For the purposes of this Fiscal Note, the increase in UAL was amor- tized over a seven-year period (six payments under the One-Year Lag Methodology) using level dollar payments. This payment plus the increase in the Normal Cost results in an increase in annual employer contrib- utions of approximately $2.4 million for NYCERS. OTHER COSTS: Not measured in this Fiscal Note is the impact on admin- istrative costs or Other Postemployment Benefit (OPEB) costs. CONTRIBUTION TIMING: For the purposes of this Fiscal Note, it is assumed that the change in the annual employer contributions would be reflected for the first time in the Final June 30, 2017 actuarial valu- ation of NYCERS. In accordance with the One-Year Lag Methodology (OYLM) used to determine employer contributions, the increase in employer contributions would first be reflected in Fiscal Year 2019. CENSUS DATA: The estimates presented herein are based on census data used for the Preliminary June 30, 2017 actuarial valuation of NYCERS, including 130 CO-25 Plan Members with average age of 49.3 years, average service of 23.8 years and total salaries of approximately $13.9 million.S. 6133--A 3 ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the UAL, APVB, and annual employer contributions presented herein have been calculated based on the same actuarial assumptions and methods in effect for the June 30, 2017 (Lag) actuarial valuations used to determine the Prelimi- nary Fiscal Year 2019 employer contributions of NYCERS with the excep- tion of the probability of a CO-25 Plan member working beyond 25 years of service, which was increased to recognize the impact the proposed legislation, if enacted, would have on retirement behavior. Please note these assumptions and methods are subject to change as this valuation is not considered final until the end of Fiscal Year 2019. 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, and Enrolled Actuary under the Employee Retirement Income and Security Act of 1974 (ERISA), a Member of the American Academy of Actuaries, and a Fellow of the Conference of Consulting Actuaries. I meet the Qualification Stand- ards of the American Academy of Actuaries to render the actuarial opin- ion contained herein. To the best of my knowledge, the results contained herein have been prepared in accordance with generally accepted actuari- al principles and procedures and with the Actuarial Standards of Prac- tice issued by the Actuarial Standards Board. FISCAL NOTE IDENTIFICATION: This Fiscal Note 2018-42 dated June 20, 2018, was prepared by the Chief Actuary for the New York City Employees' Retirement System. This estimate is intended for use only during the 2018 Legislative Session.
