Bill Text: NY S06619 | 2021-2022 | General Assembly | Amended
Bill Title: Delays reductions in the ordinary death benefit payable to members of the New York State and Local Retirement and the New York State and Local Police and Fire Retirement System to ensure that no reduction before a member becomes retirement eligible for an unreduced retirement from age 61 to 62 for members in Tiers 1-5 and 63 for members in Tier 6.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Passed) 2022-12-16 - SIGNED CHAP.720 [S06619 Detail]
Download: New_York-2021-S06619-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 6619--B 2021-2022 Regular Sessions IN SENATE May 10, 2021 ___________ Introduced by Sen. GOUNARDES -- (at request of the State Comptroller) -- read twice and ordered printed, and when printed to be committed to the Committee on Civil Service and Pensions -- reported favorably from said committee and committed to the Committee on Finance -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- 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 committee AN ACT to amend the retirement and social security law, in relation to the ordinary death benefit The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The closing paragraph of paragraph 2 of subdivision a of 2 section 448 of the retirement and social security law, as amended by 3 chapter 376 of the laws of 2021, is amended to read as follows: 4 In the case of a member of the New York state teachers' retirement 5 system, commencing upon attainment of age [sixty-one] sixty-two if such 6 member's date of membership is prior to April first, two thousand twelve 7 or attainment of age sixty-three if such member's date of membership is 8 on or after April first, two thousand twelve, the benefit otherwise 9 provided pursuant to this paragraph shall be reduced while the member is 10 in service to ninety-six per centum of the benefit otherwise payable and 11 each year thereafter the benefit payable shall be reduced by an amount 12 equal to four per centum per year of the original benefit otherwise 13 payable, but not below sixty per centum of the original benefit other- 14 wise payable. In the case of a member of the New York city employees' 15 retirement system, the New York city board of education retirement 16 system or the New York city teachers' retirement system, commencing upon 17 attainment of age sixty-one, the benefit otherwise provided pursuant to 18 this paragraph shall be reduced while the member is in service to nine- EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD10525-07-2S. 6619--B 2 1 ty-five per centum of the benefit otherwise payable and each year there- 2 after the benefit payable shall be reduced by an amount equal to five 3 per centum per year of the original benefit otherwise payable, but not 4 below fifty per centum of the original benefit otherwise payable. In the 5 case of any member of the New York state and local employees' retirement 6 system who is permitted to retire without regard to age or a member of 7 the New York state and local police and fire retirement system, commenc- 8 ing upon attainment of age [sixty-one] sixty-two if such member's date 9 of membership is prior to April first, two thousand twelve or attainment 10 of age sixty-three if such member's date of membership is on or after 11 April first, two thousand twelve, the benefit otherwise provided pursu- 12 ant to this paragraph shall be reduced while the member is in service to 13 ninety-seven per centum of the benefit otherwise payable, and each year 14 thereafter the benefit payable shall be reduced by an amount equal to 15 three per centum per year of the original benefit otherwise payable, but 16 not below seventy per centum of the original benefit otherwise payable. 17 In the case of any other member of the New York state and local employ- 18 ees' retirement system, commencing upon attainment of age [sixty-one] 19 sixty-two if such member's date of membership is prior to April first, 20 two thousand twelve or attainment of age sixty-three if such member's 21 date of membership is on or after April first, two thousand twelve, the 22 benefit otherwise provided pursuant to this paragraph shall be reduced 23 while the member is in service to ninety-six per centum of the benefit 24 otherwise payable, and each year thereafter the benefit payable shall be 25 reduced by an amount equal to four per centum per year of the original 26 benefit otherwise payable, but not below sixty per centum of the 27 original benefit otherwise payable. Upon retirement from any retirement 28 system, the benefit in force shall be reduced by fifty per centum; upon 29 completion of the first year of retirement, the benefit in force at the 30 time of retirement shall be reduced by an additional twenty-five per 31 centum, and upon commencement of the third year of retirement, the bene- 32 fit shall be ten per centum of the benefit in force at age sixty, if 33 any, or at the time of retirement if retirement preceded such age; 34 provided, however, the benefit in retirement shall not be reduced below 35 ten per centum of the benefit in force at age sixty, if any, or at the 36 time of retirement if retirement preceded such age. Notwithstanding any 37 other provision of this paragraph to the contrary, the benefit for a 38 retiree from the New York state and local employees' retirement system 39 and the New York state teachers' retirement system shall not be reduced 40 below ten per centum of the benefit in force at the time of retirement. 41 § 2. The closing paragraph of paragraph 2 of subdivision a of section 42 508 of the retirement and social security law, as amended by chapter 376 43 of the laws of 2021, is amended to read as follows: 44 Notwithstanding any other provision of this paragraph, in the case of 45 a member of the New York state teachers' retirement system, commencing 46 upon attainment of age [sixty-one] sixty-two if such member's date of 47 membership is prior to April first, two thousand twelve or attainment of 48 age sixty-three if such member's date of membership is on or after April 49 first, two thousand twelve, the benefit otherwise provided pursuant to 50 this paragraph shall be reduced while the member is in service to nine- 51 ty-six per centum of the benefit otherwise payable, and each year there- 52 after the benefit payable shall be reduced by an amount equal to four 53 per centum per year of the original benefit otherwise payable, but not 54 below sixty per centum of the original benefit otherwise payable. In the 55 case of a member of the New York city employees' retirement system, the 56 New York city board of education retirement system or the New York cityS. 6619--B 3 1 teachers' retirement system, commencing upon attainment of age sixty- 2 one, the benefit otherwise provided pursuant to this paragraph shall be 3 reduced while the member is in service to ninety-five per centum of the 4 benefit otherwise payable and each year thereafter the benefit payable 5 shall be reduced by an amount equal to five per centum per year of the 6 original benefit otherwise payable, but not below fifty per centum of 7 the original benefit otherwise payable. In the case of any member of the 8 New York state and local employees' retirement system who is permitted 9 to retire without regard to age, commencing upon attainment of age 10 [sixty-one] sixty-two if such member's date of membership is prior to 11 April first, two thousand twelve or attainment of age sixty-three if 12 such member's date of membership is on or after April first, two thou- 13 sand twelve, the benefit otherwise provided pursuant to this paragraph 14 shall be reduced while the member is in service to ninety-seven per 15 centum of the benefit otherwise payable, and each year thereafter the 16 benefit payable shall be reduced by an amount equal to three per centum 17 per year of the original benefit otherwise payable, but not below seven- 18 ty per centum of the original benefit otherwise payable. In the case of 19 any other member of the New York state and local employees' retirement 20 system, commencing upon attainment of age [sixty-one] sixty-two if such 21 member's date of membership is prior to April first, two thousand twelve 22 or attainment of age sixty-three if such member's date of membership is 23 on or after April first, two thousand twelve, the benefit otherwise 24 provided pursuant to this paragraph shall be reduced while the member is 25 in service to ninety-six per centum of the benefit otherwise payable, 26 and each year thereafter the benefit payable shall be reduced by an 27 amount equal to four per centum per year of the original benefit other- 28 wise payable, but not below sixty per centum of the original benefit 29 otherwise payable. Upon retirement from any retirement system, the bene- 30 fit in force shall be reduced by fifty per centum; upon completion of 31 the first year of retirement, the benefit in force at the time of 32 retirement shall be reduced by an additional twenty-five per centum, and 33 upon commencement of the third year of retirement, the benefit shall be 34 ten per centum of the benefit in force at age sixty, if any, or at the 35 time of retirement if retirement preceded such age; provided, however, 36 the benefit in retirement shall not be reduced below ten per centum of 37 the benefit in force at age sixty, if any, or at the time of retirement 38 if retirement preceded such age. Notwithstanding any other provision of 39 this paragraph to the contrary, the benefit for a retiree from the New 40 York state and local employees' retirement system and the New York state 41 teachers' retirement system shall not be reduced below ten per centum of 42 the benefit in force at the time of retirement. 43 § 3. The closing subparagraph of paragraph 2 of subdivision a of 44 section 606 of the retirement and social security law, as amended by 45 chapter 376 of the laws of 2021, is amended to read as follows: 46 In the case of a member of the New York state teachers' retirement 47 system, commencing upon attainment of age [sixty-one] sixty-two if such 48 member's date of membership is prior to April first, two thousand twelve 49 or attainment of age sixty-three if such member's date of membership is 50 on or after April first, two thousand twelve, the benefit otherwise 51 provided pursuant to this paragraph shall be reduced while the member is 52 in service to ninety-six per centum of the benefit otherwise payable, 53 and each year thereafter the benefit payable shall be reduced by an 54 amount equal to four per centum per year of the original benefit other- 55 wise payable, but not below sixty per centum of the original benefit 56 otherwise payable. In the case of a member of the New York city employ-S. 6619--B 4 1 ees' retirement system, the New York city board of education retirement 2 system or the New York city teachers' retirement system, commencing upon 3 attainment of age sixty-one, the benefit otherwise provided pursuant to 4 this paragraph shall be reduced while the member is in service to nine- 5 ty-five per centum of the benefit otherwise payable and each year there- 6 after the benefit payable shall be reduced by an amount equal to five 7 per centum per year of the original benefit otherwise payable, but not 8 below fifty per centum of the original benefit otherwise payable. In the 9 case of any member of the New York state and local employees' retirement 10 system who is permitted to retire without regard to age, commencing upon 11 attainment of age [sixty-one] sixty-two if such member's date of member- 12 ship is prior to April first, two thousand twelve or attainment of age 13 sixty-three if such member's date of membership is on or after April 14 first, two thousand twelve, the benefit otherwise provided pursuant to 15 this paragraph shall be reduced while the member is in service to nine- 16 ty-seven per centum of the benefit otherwise payable, and each year 17 thereafter the benefit payable shall be reduced by an amount equal to 18 three per centum per year of the original benefit otherwise payable, but 19 not below seventy per centum of the original benefit otherwise payable. 20 In the case of any other member of the New York state and local employ- 21 ees' retirement system, commencing upon attainment of age [sixty-one] 22 sixty-two if such member's date of membership is prior to April first, 23 two thousand twelve or attainment of age sixty-three if such member's 24 date of membership is on or after April first, two thousand twelve, the 25 benefit otherwise provided pursuant to this paragraph shall be reduced 26 while the member is in service to ninety-six per centum of the benefit 27 otherwise payable, and each year thereafter the benefit payable shall be 28 reduced by an amount equal to four per centum per year of the original 29 benefit otherwise payable, but not below sixty per centum of the 30 original benefit otherwise payable. Upon retirement, from any retirement 31 system, the benefit in force shall be reduced by fifty per centum; upon 32 completion of the first year of retirement, the benefit in force at the 33 time of retirement shall be reduced by an additional twenty-five per 34 centum, and upon commencement of the third year of retirement, the bene- 35 fit shall be ten per centum of the benefit in force at age sixty, if 36 any, or at the time of retirement if retirement preceded such age; 37 provided, however, the benefit in retirement shall not be reduced below 38 ten per centum of the benefit in force at age sixty, if any, or at the 39 time of retirement if retirement preceded such age. Notwithstanding any 40 other provision of this paragraph to the contrary, the benefit for a 41 retiree from the New York state and local employees' retirement system 42 and the New York state teachers' retirement system shall not be reduced 43 below ten per centum of the benefit in force at the time of retirement. 44 § 4. Notwithstanding any other provision of law to the contrary, the 45 provisions of this act shall not be subject to section 25 of the retire- 46 ment and social security law. 47 § 5. This act shall take effect on the first of April next succeeding 48 the date on which it shall have become a law. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: This bill would delay reductions in the ordinary death benefits paya- ble to beneficiaries of the New York State and Local Employees' Retire- ment System (NYSLERS) and New York State and Local Police and Fire Retirement System (NYSLPFRS), ensuring that no reduction applies before a member becomes eligible for an unreduced retirement benefit. Current- ly, annual reductions of 4% (NYSLERS age-based plans) or 3% (all other plans) are applied to ordinary death benefits immediately when a memberS. 6619--B 5 attains age 61. This bill would delay the reductions until age 62 for members in Tiers 1-5, and age 63 for members in Tier 6. Insofar as this bill affects the NYSLERS, if this legislation is enacted during the 2022 legislative session, there would be an increase in the present value of future costs of approximately $33 million which would be shared by the State of New York and all of the Local partic- ipating employers in the NYSLERS. The estimated first year cost would be approximately $1.5 million to the State of New York and approximately $2.1 million to the Local participating employers in the NYSLERS. Insofar as this bill affects NYSLPFRS, if this legislation is enacted during the 2022 legislative session, we anticipate that the cost would be negligible. Summary of relevant resources: Membership data as of March 31, 2021 was used in measuring the impact of the proposed change, the same data used in the April 1, 2021 actuari- al valuation. Distributions and other statistics can be found in the 2021 Report of the Actuary and the 2021 Comprehensive Annual Financial Report. The actuarial assumptions and methods used are described in the 2020 and 2021 Annual Report to the Comptroller on Actuarial Assumptions, 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, 2021 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 fiscal note does not constitute a legal opinion on the viability of the proposed change nor is it intended to serve as a substitute for the professional judgment of an attorney. This estimate, dated December 21, 2021, and intended for use only during the 2022 Legislative Session, is Fiscal Note No. 2022-25, prepared by the Actuary for the New York State and Local Retirement System. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: This bill would amend Section 448, Section 508 and Section 606 of the Retirement and Social Security Law to change the age at which reductions to the ordinary death benefit commence for active members of the New York State Teachers' Retirement System. Currently, the ordinary death benefit is reduced by four percent per year commencing at age 61. This bill would change the age at which reductions commence to age 62 for members with a date of membership prior to April 1, 2012 and to age 63 for members with a date of membership on or after April 1, 2012. The post-retired death benefit for affected members, which is based on the ordinary death benefit, would be increased as well. The annual cost to the employers of members of the New York State Teachers' Retirement System for this benefit is estimated to be $1.0 million or .01% of payroll if this bill is enacted. Member data is from the System's most recent actuarial valuation files, consisting of data provided by the employers to the Retirement System. Data distributions and statistics can be found in the System's Annual Report. System assets are as reported in the System's financial statements and can also be found in the System's Annual Report. Actuari- al assumptions and methods are provided in the System's Actuarial Valu- ation Report and the Actuarial Assumptions 2021 report.S. 6619--B 6 The source of this estimate is Fiscal Note 2022-11 dated January 21, 2022 prepared by the Actuary of the New York State Teachers' Retirement System and is intended for use only during the 2022 Legislative Session. I, Richard A. Young, am the Chief Actuary for the New York State Teach- ers' Retirement System. I am a member of the American Academy of Actuar- ies and I meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained herein.