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.