Bill Text: NY S06467 | 2013-2014 | General Assembly | Amended


Bill Title: Increases certain special accidental death benefits paid to widows, widowers or the deceased member's children.

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2014-06-11 - SUBSTITUTED BY A8484A [S06467 Detail]

Download: New_York-2013-S06467-Amended.html
                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                        6467--A
                                   I N  S E N A T E
                                   January 28, 2014
                                      ___________
       Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
         printed to be committed  to  the  Committee  on  Local  Government  --
         committee  discharged,  bill amended, ordered reprinted as amended and
         recommitted to said committee
       AN ACT to amend the general municipal law and the retirement and  social
         security  law,  in  relation  to increasing certain special accidental
         death benefits
         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section  1.  Subdivision  c  of section 208-f of the general municipal
    2  law, as amended by chapter 196 of the laws of 2013, is amended  to  read
    3  as follows:
    4    c. Commencing July first, two thousand [thirteen] FOURTEEN the special
    5  accidental  death  benefit  paid  to  a widow or widower or the deceased
    6  member's children under the age of eighteen or, if a student, under  the
    7  age  of  twenty-three,  if the widow or widower has died, shall be esca-
    8  lated by adding thereto an additional percentage of the  salary  of  the
    9  deceased member (as increased pursuant to subdivision b of this section)
   10  in accordance with the following schedule:
   11       calendar year of death
   12       of the deceased member              per centum
   13            1977 or prior                  [189.8%] 198.5%
   14            1978                           [181.4%] 189.8%
   15            1979                           [173.2%] 181.4%
   16            1980                           [165.2%] 173.2%
   17            1981                           [157.5%] 165.2%
   18            1982                           [150.0%] 157.5%
   19            1983                           [142.7%] 150.0%
   20            1984                           [135.7%] 142.7%
   21            1985                           [128.8%] 135.7%
   22            1986                           [122.1%] 128.8%
   23            1987                           [115.7%] 122.1%
   24            1988                           [109.4%] 115.7%
   25            1989                           [103.3%] 109.4%
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD13687-02-4
       S. 6467--A                          2
    1            1990                            [97.4%] 103.3%
    2            1991                            [91.6%] 97.4%
    3            1992                            [86.0%] 91.6%
    4            1993                            [80.6%] 86.0%
    5            1994                            [75.4%] 80.6%
    6            1995                            [70.2%] 75.4%
    7            1996                            [65.3%] 70.2%
    8            1997                            [60.5%] 65.3%
    9            1998                            [55.8%] 60.5%
   10            1999                            [51.3%] 55.8%
   11            2000                            [46.9%] 51.3%
   12            2001                            [42.6%] 46.9%
   13            2002                            [38.4%] 42.6%
   14            2003                            [34.4%] 38.4%
   15            2004                            [30.5%] 34.4%
   16            2005                            [26.7%] 30.5%
   17            2006                            [23.0%] 26.7%
   18            2007                            [19.4%] 23.0%
   19            2008                            [15.9%] 19.4%
   20            2009                            [12.6%] 15.9%
   21            2010                             [9.3%] 12.6%
   22            2011                             [6.1%] 9.3%
   23            2012                             [3.0%] 6.1%
   24            2013                             [0.0%] 3.0%
   25            2014                             0.0%
   26    S 2. Subdivision c of section 361-a of the retirement and social secu-
   27  rity  law,  as amended by chapter 196 of the laws of 2013, is amended to
   28  read as follows:
   29    c. Commencing July first, two thousand [thirteen] FOURTEEN the special
   30  accidental death benefit paid to a widow  or  widower  or  the  deceased
   31  member's  children under the age of eighteen or, if a student, under the
   32  age of twenty-three, if the widow or widower has died,  shall  be  esca-
   33  lated  by  adding  thereto an additional percentage of the salary of the
   34  deceased member, as increased pursuant to subdivision b of this section,
   35  in accordance with the following schedule:
   36       calendar year of death
   37       of the deceased member              per centum
   38            1977 or prior                    [189.8%] 198.5%
   39            1978                             [181.4%] 189.8%
   40            1979                             [173.2%] 181.4%
   41            1980                             [165.2%] 173.2%
   42            1981                             [157.5%] 165.2%
   43            1982                             [150.0%] 157.5%
   44            1983                             [142.7%] 150.0%
   45            1984                             [135.7%] 142.7%
   46            1985                             [128.8%] 135.7%
   47            1986                             [122.1%] 128.8%
   48            1987                             [115.7%] 122.1%
   49            1988                             [109.4%] 115.7%
   50            1989                             [103.3%] 109.4%
   51            1990                              [97.4%] 103.3%
   52            1991                              [91.6%] 97.4%
   53            1992                              [86.0%] 91.6%
   54            1993                              [80.6%] 86.0%
   55            1994                              [75.4%] 80.6%
   56            1995                              [70.2%] 75.4%
       S. 6467--A                          3
    1            1996                              [65.3%] 70.2%
    2            1997                              [60.5%] 65.3%
    3            1998                              [55.8%] 60.5%
    4            1999                              [51.3%] 55.8%
    5            2000                              [46.9%] 51.3%
    6            2001                              [42.6%] 46.9%
    7            2002                              [38.4%] 42.6%
    8            2003                              [34.4%] 38.4%
    9            2004                              [30.5%] 34.4%
   10            2005                              [26.7%] 30.5%
   11            2006                              [23.0%] 26.7%
   12            2007                              [19.4%] 23.0%
   13            2008                              [15.9%] 19.4%
   14            2009                              [12.6%] 15.9%
   15            2010                              [9.3%] 12.6%
   16            2011                              [6.1%] 9.3%
   17            2012                              [3.0%] 6.1%
   18            2013                              [0.0%] 3.0%
   19            2014                              0.0%
   20    S 3. This act shall take effect July 1, 2014.
         FISCAL NOTE.--This bill would amend both the General Municipal Law and
       the  Retirement  and  Social Security Law to increase the salary used in
       the computation of the special accidental death benefit by 3%  in  cases
       where the date of death was before 2014.
         Insofar  as  this  bill would amend the Retirement and Social Security
       Law, it is estimated that there would be an additional  annual  cost  of
       approximately  $438,000  above  the  approximately  $9.7 million current
       annual cost of this benefit. This cost would be shared by the  State  of
       New York and all participating employers of the New York State and Local
       Police and Fire Retirement System.
         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, 2013  actuarial  valu-
       ation.    Distributions  and  other  statistics can be found in the 2013
       Report of the  Actuary  and  the  2013  Comprehensive  Annual  Financial
       Report.
         The Market Assets and GASB Disclosures are found in the March 31, 2013
       New  York  State  and  Local  Retirement System Financial Statements and
       Supplementary Information.
         The actuarial assumptions and methods used are described in the  2010,
       2011,  2012  and  2013  Annual  Report  to  the Comptroller on Actuarial
       Assumptions, and the Codes Rules and Regulations of  the  State  of  New
       York: Audit and Control.
         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 13, 2014 and intended for use only during
       the  2014  Legislative  Session, is Fiscal Note No. 2014-55, prepared by
       the Actuary for the New York State and Local Police and Fire  Retirement
       System.
         FISCAL  NOTE.--PROVISIONS  OF  PROPOSED  LEGISLATION-  OVERVIEW:  With
       respect to the City of New York (the "City"), this proposed  legislation
       would  amend  General  Municipal Law ("GML") Section 208-f.c to increase
       certain Special Accidental  Death  Benefits  ("SADB")  for  line-of-duty
       widows/widowers   and/or   children  and/or  certain  other  individuals
       ("Eligible Beneficiaries") of former uniformed employees of the City and
       the New York City Health  and  Hospitals  Corporation  and  for  certain
       S. 6467--A                          4
       former  employees of the Triborough Bridge and Tunnel Authority who were
       members of certain New York City Retirement Systems ("NYCRS").
         The Effective Date of the proposed legislation would be July 1, 2014.
         IMPACT  ON  BENEFITS - SADB RECIPIENTS: With respect to the NYCRS, the
       proposed legislation would impact the SADB payable to certain  survivors
       of members of the:
         * New York City Employees' Retirement System ("NYCERS"), or
         * New York City Police Pension Fund ("POLICE"), or
         * New York Fire Department Pension Fund ("FIRE"), and
         who  were  employed by one of the following employers in certain posi-
       tions;
         * New York City Police Department - Uniformed Position,
         * New York City Fire Department - Uniformed Position,
         * New York City Housing Authority - Uniformed Position,
         * New York City Transit Authority - Uniformed Position,
         * New York City Department of Correction - Uniformed Position,
         * New York City - Uniformed Position as Emergency  Medical  Technician
       ("EMT"),
         *  New York City Health and Hospitals Corporation - Uniformed Position
       as EMT, or
         * Triborough Bridge and Tunnel Authority - Bridge and Tunnel Position.
         DESCRIPTION OF BENEFITS PAYABLE: Under the  GML,  the  basic  SADB  is
       defined to equal:
         The  salary  of  the  deceased member at date of death (or, in certain
       instances, a greater salary based on rank or other status) ("Final Sala-
       ry"), less:
         * Any death benefit as adjusted by any Supplementation or Cost-of-Liv-
       ing Adjustment ("COLA") paid by the NYCRS to the member's survivors,
         * Any death benefit paid by Social Security to the member's survivors,
       and
         * Any Worker's Compensation benefit paid to the member's survivors.
         The SADB is paid to the deceased member's surviving widow or  widower,
       if alive. If the widow/widower is no longer alive, then the SADB is paid
       to  the deceased member's children until age eighteen or while attending
       school until age twenty-three. If neither a widow/widower nor a child is
       alive, then the SADB may be paid to certain other individuals if  eligi-
       ble  in  accordance  with certain laws related to the World Trade Center
       ("WTC") attack.
         The GML also provides that the SADB is subject to escalation based  on
       the  calendar year of death of the member. Each year since Calendar Year
       1977 the SADB has been increased by  an  additional  cumulative,  incre-
       mental  percentage  of  Final  Salary. For example, for a covered member
       deceased in Calendar Year 1979, the SADB cumulative percentage is 173.2%
       of Final Salary as of July 1, 2013.
         Under the proposed legislation, the additional, incremental percentage
       of Final Salary to be effective July 1, 2014 would be 3.0%.
         FINANCIAL IMPACT - EMPLOYER PAYMENTS: With respect to  the  NYCRS,  as
       these  SADB are provided on a pay-as-you-go basis, the additional annual
       employer payments expected to be paid during  the  first  year,  if  the
       proposed legislation is enacted, would equal approximately $2.7 million.
         NOTE: These additional payments represent an increase of approximately
       4.5% in the estimated SADB payments during the first year.
         The  SADB  payments  are  made  by the NYCRS who are reimbursed by the
       City.
         NOTE: Historically, the State of New York (the "State") reimbursed the
       City for most GML Section 208.f payments. However, it is the understand-
       S. 6467--A                          5
       ing of the Actuary that since 2009 the State has limited its  reimburse-
       ment  to  a  fixed amount. Should this amount not be increased, then the
       additional cost of this proposed legislation would be borne entirely  by
       the City of New York.
         FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES OF BENEFITS ("APVB"): With
       respect  to  the  Eligible  Beneficiaries  of deceased NYCRS members who
       would be impacted by this  proposed  legislation,  under  the  actuarial
       assumptions  used in the June 30, 2013 (Lag) actuarial valuations of the
       NYCRS, including an Actuarial Interest Rate ("AIR") assumption  of  7.0%
       per  annum,  the  enactment  of this proposed legislation would increase
       APVB by approximately $30.9 million as of June 30, 2014.
         Based on the same demographic actuarial assumptions  but with  an  AIR
       assumption of 4.0% per annum, the enactment of this proposed legislation
       would increase APVB by approximately $41.9 million as of June 30, 2014.
         OTHER  COSTS: The enactment of this proposed legislation would also be
       expected to result in modest increases  in  administrative  expenses  of
       NYCERS, POLICE, FIRE, the employers and certain New York City agencies.
         CENSUS DATA: The financial impact of the proposed legislation is based
       upon  the  census  data  for such Eligible Beneficiaries provided by the
       NYCRS and adjusted, as necessary, to prepare the  computations  and  for
       consistency with other data.
         The  following  table  shows,  by  Retirement  System,  the  number of
       deceased members with eligible survivors as reported by  the  NYCRS  and
       the  estimated  annual  SADB  rate  prior to the increase proposed to be
       effective as of July 1, 2014.
                                        Table 1
                       SADB Census Data as Reported by the NYCRS
                                     ($ Millions)
                                Number of Deceased       Annual SADB Rate Prior
                                Members with Eligible    to Proposed July 1, 201
       Retirement System        Survivors                Increase
       NYCERS                       30                       $1.3
       POLICE                      320                       17.8
       FIRE                        618                       39.8
         Total                     968                      $58.9
         ACTUARIAL ASSUMPTIONS AND METHODS: Additional APVB have been  computed
       based  on  the  actuarial assumptions and methods in effect for the June
       30, 2013 (Lag) actuarial valuations of NYCERS, POLICE and FIRE  used  to
       determine  the  Preliminary  Fiscal  Year  2015  employer contributions,
       including an AIR  assumption  of  7.0%  per  annum  (net  of  Investment
       Expenses).
         The  demographic  actuarial  assumptions  were adopted by the Board of
       Trustees of each NYCRS during Fiscal Year 2012 and  the  AIR  assumption
       was  enacted by the New York State Legislature and Governor as Chapter 3
       of the Laws of 2013 ("Chapter 3/13").
         Additional APVB have also been developed using an  AIR  assumption  of
       4.0%  per annum that could be more consistent with the potential cost of
       debt issued by the State of New York or the City of  New  York  under  a
       long-term Consumer Price Inflation ("CPI") assumption of 2.5% per year.
         ECONOMIC VALUE OF BENEFITS: The actuarial assumptions used in the June
       30,  2013  (Lag)  actuarial  valuations of the NYCRS are appropriate for
       budgetary models and for determining annual  employer  contributions  to
       the NYCRS.
         However,  these  actuarial  assumptions  used  to  determine  employer
       contributions do not develop risk-adjusted, economic values of benefits.
       In the current  economic  environment  of  low  U.S.  Treasury  security
       S. 6467--A                          6
       yields, such risk-adjusted, economic values of benefits could be signif-
       icantly greater than the APVB developed herein.
         STATEMENT  OF ACTUARIAL OPINION: I, Robert C. North, Jr., am the Chief
       Actuary for the New York City Retirement Systems. I am a Fellow  of  the
       Society  of 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  estimate is intended for use only
       during the 2014 Legislative Session. It is Fiscal  Note  2014-09,  dated
       March  18,  2014,  prepared  by  the Chief Actuary for the New York City
       Employees' Retirement System, the New York City Police Pension Fund  and
       the New York Fire Department Pension Fund.
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