Bill Text: NY S06446 | 2017-2018 | General Assembly | Introduced
Bill Title: Relates to member contributions to the New York city employees' retirement system.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2017-06-05 - RECOMMIT, ENACTING CLAUSE STRICKEN [S06446 Detail]
Download: New_York-2017-S06446-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 6446 2017-2018 Regular Sessions IN SENATE May 22, 2017 ___________ Introduced by Sen. SAVINO -- read twice and ordered printed, and when printed to be committed to the Committee on Civil Service and Pensions AN ACT to amend the retirement and social security law, in relation to member contributions to the New York city employees' retirement system The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraph 2 of subdivision a of section 613 of the retire- 2 ment and social security law, as amended by chapter 510 of the laws of 3 2015, is amended to read as follows: 4 2. A member of the New York city employees' retirement system who is 5 eligible to be a participant in the twenty-five-year and age fifty-five 6 retirement program, as defined by paragraph five of subdivision a of 7 section six hundred four-b of this article shall contribute two percent 8 of annual wages to such system effective on the starting date of the 9 elimination of additional member contributions, as defined in an 10 election made pursuant to paragraph ten of subdivision e of section six 11 hundred four-b of this article, except [that] beginning April first, two 12 thousand thirteen and ending on the December thirty-first next succeed- 13 ing the effective date of the chapter of the laws of two thousand seven- 14 teen that amended this paragraph for members who first become members of 15 the New York city employees' retirement system on or after April first, 16 two thousand twelve, the rate at which each such member shall contribute 17 in any current plan year (April first to March thirty-first, provided, 18 however, that plan year shall mean January first through December thir- 19 ty-first commencing with the January first next succeeding the effective 20 date of [the] chapter five hundred ten of the laws of two thousand 21 fifteen that amended this paragraph) shall be determined by reference to 22 the wages of such member in the second plan year (April first to March 23 thirty-first, provided, however, that plan year shall mean January first 24 through December thirty-first commencing with the January first next 25 succeeding the effective date of [the] chapter five hundred ten of the EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD06931-04-7S. 6446 2 1 laws of two thousand fifteen that amended this paragraph) preceding such 2 current plan year as follows: 3 (i) members with wages of forty-five thousand dollars per annum or 4 less shall contribute three per centum of annual wages; 5 (ii) members with wages greater than forty-five thousand per annum, 6 but not more than fifty-five thousand per annum shall contribute three 7 and one-half per centum of annual wages; 8 (iii) members with wages greater than fifty-five thousand per annum, 9 but not more than seventy-five thousand per annum shall contribute four 10 and one-half per centum of annual wages; 11 (iv) members with wages greater than seventy-five thousand per annum 12 but not more than one hundred thousand per annum shall contribute five 13 and three-quarters per centum of annual wages; and 14 (v) members with wages greater than one hundred thousand per annum 15 shall contribute six per centum of annual wages. 16 Notwithstanding the foregoing, during each of the first three plan 17 years (April first to March thirty-first, provided, however, that plan 18 year shall mean January first through December thirty-first commencing 19 with the January first next succeeding the effective date of [the] chap- 20 ter five hundred ten of the laws of two thousand fifteen that amended 21 this paragraph) in which such member has established membership in the 22 New York city employees' retirement system, such member shall contribute 23 a percentage of annual wages in accordance with the preceding schedule 24 based upon a projection of annual wages provided by the employer. 25 § 2. This act shall take effect immediately. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: PROVISIONS OF PROPOSED LEGISLATION: This proposed legislation would amend paragraph 2 of subdivision a of Section 613 of the Retirement and Social Security Law (RSSL) to modify the member contribution rate on a prospective basis for Tier 6 Transit Authority members who participate in the Transit 25-Year/Age 55 Retirement Plan from the current graded schedule of 3% to 6% based on the members' wages to a flat 2% of wages. The Effective Date of the proposed legislation would be the date of enactment. FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: Based on the actuarial assumptions and methods herein, the enactment of this proposed legis- lation would decrease the Actuarial Present Value of Benefits (APVB) for NYCERS by approximately $13.5 million (as a result of a reduction in the amount of refunds of member contributions upon termination of employ- ment) and decrease the Actuarial Present Value of member contributions by approximately $255.4 million as of June 30, 2016. Under the Entry Age Actuarial Cost Method (EAACM) used to determine employer contributions to NYCERS, there would be an increase in the Actuarial Present Value of Future Employer Normal Cost of $228.3 million and an increase in the Unfunded Actuarial Accrued Liability (UAAL) of approximately $13.6 million. FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with Section 13.638.2(k-2) of the Administrative Code of the City of New York (ACNY), new UAAL attributable to benefit changes are to be amortized as determined by the Actuary but generally over the remaining working life- time of those impacted by the benefit changes, which has been estimated to be approximately 17.9 years. Recognizing that this period will decrease over time as the group of Tier VI Members matures, the Actuary would likely choose to amortize the new UAAL attributable to this proposed legislation over a 15-year period.S. 6446 3 With respect to NYCERS, based on the Actuary's actuarial assumptions and methods used in the Preliminary June 30, 2016 valuations of the NYCERS and those described later in this Fiscal Note, the enactment of this proposed legislation would increase annual employer contributions by approximately $28.1 million per year. This increase in employer contributions has been estimated assuming that the increase in UAAL would be financed over a 15-year period (14 payments under One-Year Lag Methodology) using level dollar payments. If enacted into law during the 2017 Legislative Session, increased employer costs would be determined for Fiscal Year 2018. CENSUS DATA: Estimates of increases in APVB, employer costs and employer contributions are based on the active census data used for the Preliminary June 30, 2016 actuarial valuations of NYCERS, including 7,684 Tier 6 25/55 NYCTA members with salaries of approximately $507.2 million. ACTUARIAL ASSUMPTIONS AND METHODS: Additional APVB, UAAL and employer costs presented herein have been calculated based on the Actuary's actu- arial assumptions and methods in effect for the Preliminary June 30, 2016 (Lag) actuarial valuations used to determine the Preliminary Fiscal Year 2018 employer contributions of NYCERS. STATEMENT OF ACTUARIAL OPINION: I. Sherry S. Chan, am the Chief Actu- ary for, and independent of, the New York City Pension Funds and Retire- ment Systems. I Am a Fellow of the Society of Actuaries, a Fellow of the Conference of Consulting 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 Fiscal Note 2017-16 Dated May 12, 2017, was prepared by the Chief Actuary for the New York City Employees' Retirement System. This estimate is intended for use only during the 2017 Legislative Session.
