Bill Text: NY S06976 | 2021-2022 | General Assembly | Introduced
Bill Title: Modifies the retirement program for Triborough bridge and tunnel members to a twenty-year retirement program.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Vetoed) 2021-12-29 - VETOED MEMO.88 [S06976 Detail]
Download: New_York-2021-S06976-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 6976 2021-2022 Regular Sessions IN SENATE May 20, 2021 ___________ Introduced by Sen. GOUNARDES -- 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 modifying the retirement program for Triborough bridge and tunnel members The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 604-c of the retirement and social security law, as 2 added by chapter 472 of the laws of 1995, paragraph 2 of subdivision c 3 and paragraph 7-a of subdivision e as amended by chapter 693 of the laws 4 of 2003, paragraph 1 and subparagraph (ii) of paragraph 2 of subdivision 5 d as amended by chapter 18 of the laws of 2012, paragraph 1 of subdivi- 6 sion e as amended by chapter 661 of the laws of 2002, subparagraph (iv) 7 of paragraph 3 of subdivision e as added by chapter 365 of the laws of 8 1999, subparagraph (i) of paragraph 8 of subdivision e as amended by 9 chapter 448 of the laws of 2018 and paragraph 9 of subdivision e as 10 amended by chapter 664 of the laws of 1996, is amended to read as 11 follows: 12 § 604-c. [Twenty-year/age fifty] Twenty-year retirement program for 13 Triborough bridge and tunnel members. a. Definitions. The following 14 words and phrases as used in this section shall have the following mean- 15 ings unless a different meaning is plainly required by the context. 16 1. "Triborough bridge and tunnel member" shall mean a member (as 17 defined in subdivision e of section six hundred one of this article) who 18 is employed by the Triborough bridge and tunnel authority as a bridge 19 and tunnel officer, sergeant, or lieutenant in a non-managerial posi- 20 tion. 21 2. ["Twenty-year/age fifty] "Twenty-year retirement program" shall 22 mean all the terms and conditions of this section. 23 3. "Starting date of the [twenty-year/age fifty] twenty-year retire- 24 ment program" shall mean the date of enactment of the act which added EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD11119-02-1S. 6976 2 1 this section, as such date is certified pursuant to section forty-one of 2 the legislative law. 3 4. "Participant in the [twenty-year/age fifty] twenty-year retirement 4 program" shall mean any Triborough bridge and tunnel member who, under 5 the applicable provisions of subdivision b of this section, is entitled 6 to the rights, benefits and privileges and is subject to the obligations 7 of the [twenty-year/age fifty] twenty-year retirement program, as appli- 8 cable to him or her. 9 5. "Discontinued member" shall mean a participant in the [twenty-10year/age fifty] twenty-year retirement program who, while he or she was 11 a Triborough bridge and tunnel member, discontinued service as such a 12 member and has a right to a deferred vested benefit under subdivision d 13 of this section. 14 6. "Administrative code" shall mean the administrative code of the 15 city of New York. 16 b. Participation in [twenty-year/age fifty] twenty-year retirement 17 program. 1. Subject to the provisions of paragraph six of this subdivi- 18 sion, any person who is a Triborough bridge and tunnel member on the 19 starting date of the [twenty-year/age fifty] twenty-year retirement 20 program and who, as such a bridge and tunnel member or otherwise, last 21 became subject to the provisions of this article prior to such starting 22 date, may elect to become a participant in the [twenty-year/age fifty] 23 twenty-year retirement program by filing, within one hundred eighty days 24 after the starting date of the [twenty-year/age fifty] twenty-year 25 retirement program, a duly executed application for such participation 26 with the retirement system of which such person is a member, provided he 27 or she is such a bridge and tunnel member on the date such application 28 is filed. 29 2. Subject to the provisions of paragraph six of this subdivision, any 30 person who becomes a Triborough bridge and tunnel member after the 31 starting date of the [twenty-year/age fifty] twenty-year retirement 32 program and who, as such a bridge and tunnel member or otherwise, last 33 became subject to the provisions of this article prior to such starting 34 date, may elect to become a participant in the [twenty-year/age fifty] 35 twenty-year retirement program by filing, within one hundred eighty days 36 after becoming such a bridge and tunnel member, a duly executed applica- 37 tion for such participation with the retirement system of which such 38 person is a member, provided he or she is such a bridge and tunnel 39 member on the date such application is filed. 40 3. Any election to be a participant in the [twenty-year/age fifty] 41 twenty-year retirement program shall be irrevocable. 42 4. Each Triborough bridge and tunnel member who becomes subject to the 43 provisions of this article on or after the starting date of the [twenty-44year/age fifty] twenty-year retirement program shall become a partic- 45 ipant in the [twenty-year/age fifty] twenty-year retirement program on 46 the date he or she becomes such a bridge and tunnel member. 47 5. Where any participant in the [twenty-year/age fifty] twenty-year 48 retirement program shall cease to be employed by the Triborough bridge 49 and tunnel authority as a bridge and tunnel member, he or she shall 50 cease to be such a participant and, during any period in which such 51 person is not so employed, he or she shall not be a participant in the 52 [twenty-year/age fifty] twenty-year retirement program and shall not be 53 eligible for the benefits of subdivision c of this section. 54 6. Where any participant in the [twenty-year/age fifty] twenty-year 55 retirement program terminates service as a Triborough bridge and tunnel 56 member and returns to such service as a Triborough bridge and tunnelS. 6976 3 1 member at a later date, he or she shall again become such a participant 2 on that date. 3 c. Service retirement benefits. 1. A participant in the [twenty-4year/age fifty] twenty-year retirement program: 5 (i) who has completed twenty or more years of credited service; and 6 (ii) [who has attained age fifty; and7(iii)] who has paid, before the effective date of retirement, all 8 additional member contributions and interest (if any) required by subdi- 9 vision e of this section; and 10 [(iv)] (iii) who files with the retirement system of which he or she 11 is a member an application for service retirement setting forth at what 12 time he or she desires to be retired; and 13 [(v)] (iv) who shall be a participant in the [twenty-year/age fifty] 14 twenty-year retirement program at the time so specified for his or her 15 retirement; shall be retired pursuant to the provisions of this section 16 affording early service retirement. 17 2. (i) Notwithstanding any other provision of law to the contrary, the 18 early service retirement benefit for participants in the [twenty-19year/age fifty] twenty-year retirement program who retire pursuant to 20 paragraph one of this subdivision shall be a pension consisting of: 21 (A) an amount, on account of the required minimum period of service, 22 equal to one-half of his or her final average salary; plus 23 (B) an amount of credited service, or fraction thereof, beyond such 24 required minimum period of service equal to one and one-half percent of 25 his or her final average salary. 26 (ii) The maximum pension computed without optional modification paya- 27 ble pursuant to subparagraph (i) of this paragraph shall equal that 28 payable upon completion of thirty years of service. 29 d. Vesting. 1. A participant in the [twenty-year/age fifty] twenty- 30 year retirement program [who] shall be entitled to receive a deferred 31 vested benefit as provided in this subdivision if such participant: 32 (i) discontinues service as a Triborough bridge and tunnel member, 33 other than by death or retirement; and 34 (ii) in the case of a participant who is not a New York city revised 35 plan member, prior to such discontinuance, completed five but less than 36 twenty years of credited service or, in the case of a participant who is 37 a New York city revised plan member, has completed ten but less than 38 twenty years of credited service; and 39 (iii) has paid, prior to such discontinuance, all additional member 40 contributions and interest (if any) required by subdivision e of this 41 section; and 42 (iv) does not withdraw in whole or in part his or her accumulated 43 member contributions pursuant to section six hundred thirteen of this 44 article unless such participant thereafter returns to public service and 45 repays the amounts so withdrawn, together with interest, pursuant to 46 such section six hundred thirteen[; shall be entitled to receive a47deferred vested benefit as provided in this subdivision]. 48 2. (i) Upon such discontinuance under the conditions and in compliance 49 with the provisions of paragraph one of this subdivision, such deferred 50 vested benefit shall vest automatically. 51 (ii) In the case of a participant who is not a New York city revised 52 plan member, such vested benefit shall become payable on the earliest 53 date on which such discontinued member could have retired for service if 54 such discontinuance had not occurred or, in the case of a participant 55 who is a New York city revised plan member, such vested benefit shall 56 become payable at age sixty-three.S. 6976 4 1 3. Such deferred vested benefit shall be a pension consisting of an 2 amount equal to two and one-half percent of such discontinued member's 3 final average salary, multiplied by the number of years of credited 4 service. 5 e. Additional member contributions. 1. In addition to the member 6 contributions required by section six hundred thirteen of this article, 7 each participant in the [twenty-year/age fifty] twenty-year retirement 8 program in the rank of bridge and tunnel officer shall contribute to the 9 retirement system of which he or she is a member (subject to the appli- 10 cable provisions of subdivision d of section six hundred thirteen of 11 this article) an additional five and fifty one-hundredths percent of his 12 or her compensation and each participant in the [twenty-year/age fifty] 13 twenty-year retirement program in the rank of sergeant or lieutenant 14 shall contribute to the retirement system an additional six percent of 15 his or her compensation earned from all allowable service as a Tribor- 16 ough bridge and tunnel member rendered on and after the date which is 17 one hundred eighty days prior to the starting date of the [twenty-18year/age fifty] twenty-year retirement program. A participant in the 19 [twenty-year/age fifty] twenty-year retirement program shall contribute 20 additional member contributions until the later of (i) the date as of 21 which he or she has twenty years of credited service as a bridge and 22 tunnel officer, or (ii) the third anniversary of the date that he or she 23 last became a participant in the [twenty-year/age fifty] twenty-year 24 retirement program. 25 2. Commencing with the first full payroll period after each person 26 becomes a participant in the [twenty-year/age fifty] twenty-year retire- 27 ment program, additional member contributions at the rate specified in 28 paragraph one of this subdivision shall be deducted (subject to the 29 applicable provisions of subdivision d of section six hundred thirteen 30 of this article) from the compensation of such participant on each and 31 every payroll of such participant for each and every payroll period. 32 3. (i) Subject to the provisions of subparagraph (ii) of this para- 33 graph, where any additional member contributions required by paragraph 34 one of this subdivision are not paid by deductions from a participant's 35 compensation pursuant to paragraph two of this subdivision: 36 (A) that participant shall be charged with a contribution deficiency 37 consisting of such unpaid amounts, together with interest thereon at the 38 rate of five percent per annum, compounded annually; and 39 (B) such interest on each amount of undeducted contributions shall 40 accrue from the end of the payroll period for which such amount would 41 have been deducted from compensation if he or she had been a participant 42 at the beginning of that payroll period, until such amount is paid to 43 the retirement system. 44 (ii) Except as provided in subparagraph (iii) of this paragraph, no 45 interest shall be due on any such unpaid additional contributions which 46 are not attributable to the period prior to the first full payroll peri- 47 od referred to in paragraph two of this subdivision. 48 (iii) Should any person who, pursuant to paragraph eight of this 49 subdivision, has withdrawn any additional member contributions (and any 50 interest paid thereon) again become a participant in the [twenty-51year/age fifty] twenty-year retirement program pursuant to paragraph six 52 of subdivision b of this section, an appropriate amount shall be 53 included in such participant's contribution deficiency (including inter- 54 est thereon as calculated pursuant to subparagraph (i) of this para- 55 graph) as if such additional contributions had never been made.S. 6976 5 1 (iv) Notwithstanding any other provisions of this paragraph, no 2 participant shall be charged interest for any period prior to March 3 twenty-fifth, nineteen hundred ninety-eight with respect to any contrib- 4 utions owed with respect to any payroll period beginning prior to such 5 date. 6 4. The head of a retirement system which includes participants in the 7 [twenty-year/age fifty] twenty-year retirement program in its membership 8 may, consistent with the provisions of this subdivision, promulgate 9 regulations for the payment of such additional member contributions, and 10 any interest thereon, by such participants (including the deduction of 11 such contributions, and any interest thereon, from the participant's 12 compensation). 13 5. Where a contribution deficiency chargeable to a participant pursu- 14 ant to paragraph three of this subdivision has not been paid in full 15 before the effective date of retirement, that participant shall not be 16 eligible to retire pursuant to subdivision c of this section. 17 6. Where a contribution deficiency chargeable to a participant pursu- 18 ant to paragraph three of this subdivision has not been paid in full 19 before the date of discontinuance of service, that participant shall not 20 be entitled to a deferred vested benefit pursuant to subdivision d of 21 this section. 22 7. Where a participant has not paid in full any contribution deficien- 23 cy chargeable to him or her pursuant to paragraph three of this subdivi- 24 sion, and a benefit, other than a refund of member contributions pursu- 25 ant to section six hundred thirteen of this article or a refund of 26 additional member contributions pursuant to paragraph eight of this 27 subdivision, becomes payable under this article to the participant or to 28 his or her designated beneficiary or estate, the actuarial equivalent of 29 any such unpaid amount shall be deducted from the benefit otherwise 30 payable. 31 7-a. Notwithstanding paragraph six or seven of this subdivision, where 32 a deficiency chargeable to a participant pursuant to paragraph three of 33 this subdivision has not been paid in full while the participant is a 34 Triborough bridge and tunnel member and such participant retires prior 35 to July first, two thousand eleven, such participant may elect to be 36 covered by this paragraph. Such participant shall be entitled to the 37 benefits provided in subdivision c of this section provided that partic- 38 ipant authorizes the retirement system to deduct from such benefits an 39 amount which will result in the deficiency, plus associated interest to 40 date of final payment, being paid in full no later than July first, two 41 thousand eleven or such earlier date as agreed to by the participant. 42 Such amount will be deducted in equal installments on a monthly basis. 43 Nothing in this paragraph shall prevent the participant from making a 44 partial payment of the amount of the deficiency at the time of retire- 45 ment so as to reduce the monthly payment nor to make a lump sum payment 46 equal to the amount of the total unpaid balance at any time during the 47 period of repayment. 48 8. (i) Such additional member contributions (and any interest thereon) 49 shall be paid into the contingent reserve fund of the retirement system 50 of which the participant is a member and shall not for any purpose be 51 deemed to be member contributions or accumulated contributions of a 52 member under section six hundred thirteen of this article or otherwise 53 while he or she is a participant in the [twenty-year/age fifty] twenty- 54 year retirement program or otherwise, except that, a surplus of such 55 additional member contributions that are paid into the retirementS. 6976 6 1 system's contingent reserve fund may be used for the sole purpose of 2 offsetting a deficit of basic member contributions. 3 (ii) Should a participant in the [twenty-year/age fifty] twenty-year 4 retirement program who has rendered less than fifteen years of allowable 5 service as a Triborough bridge and tunnel member cease to hold a posi- 6 tion as a Triborough bridge and tunnel member for any reason whatsoever, 7 his or her accumulated additional member contributions made pursuant to 8 this subdivision (together with any interest thereon paid to the retire- 9 ment system) may be withdrawn by him or her pursuant to procedures 10 promulgated in regulations of the board of trustees of the retirement 11 system, together with interest thereon at the rate of five percent per 12 annum, compounded annually. 13 (iii) Except as provided in subparagraph (ii) of this paragraph, no 14 member, while he or she is a participant or otherwise, shall have a 15 right to withdraw such additional member contributions or any interest 16 thereon from the retirement system. 17 9. A member who has made the additional contributions specified by 18 this subdivision may borrow a portion of such contributions, pursuant to 19 the provisions of section six hundred thirteen-b of this article. 20 § 2. This act shall take effect immediately. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: SUMMARY OF BILL: This proposed legislation would amend Section 604-c of the Retirement and Social Security Law (RSSL) to remove age 50 as an eligibility requirement for retirement for Tier 4 and Tier 6 members of the New York City Employees' Retirement System (NYCERS) who are members of the respective TBTA 20/50 Plans. Effective Date: Upon enactment. IMPACT ON BENEFITS: Currently, members of the Tier 4 and 6 TBTA 20/50 Plans are eligible to receive a service retirement benefit upon attain- ing 20 or more years of credited service and age 50. Tier 4 members who leave employment with at least five, but less than 20 years of service, are eligible to receive a vested retirement benefit payable on the date they would have attained 20 or more years of credited service and age 50. Tier 6 members who leave employment with at least 10, but less than 20 years of credited service are eligible to receive a vested retirement benefit payable at age 63. Under the proposed legislation, if enacted, affected members of the TBTA 20/50 Plans would be eligible to receive a service retirement bene- fit upon attaining 20 years of credited service, without regard to age. Tier 4 members who leave employment with at least five, but less than 20 years of credited service, would be eligible to receive a vested retire- ment benefit payable on the date the member would have completed 20 years of credited service, without regard to age. Tier 6 members who leave employment with at least 10, but less than 20 years of credited service would continue to be eligible to receive a vested retirement benefit payable at age 63. FINANCIAL IMPACT - PRESENT VALUES: Based on the anticipated group of members benefiting from the change in the eligibility requirement and the actuarial assumptions and methods described herein, the enactment of this proposed legislation would increase the Present Value of Future Benefits (PVFB) by approximately $6.1 million. Under the Entry Age Normal cost method used to determine the employer contributions to NYCERS, there would be an increase in the Unfunded Accrued Liability (UAL) of approximately $7.0 million offset by a decrease in the Present Value of future employer Normal Cost of $0.9 million.S. 6976 7 FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with Section 13-638.2(k-2) of the Administrative Code of the City of New York (ACCNY), new UAL attributable to benefit changes are to be amortized as determined by the Actuary but are generally amortized over the remaining working lifetime of those impacted by the benefit changes. As of June 30, 2020, the remaining working lifetime of the members who could poten- tially benefit from the change in the eligibility requirement for retirement is approximately eight years. For the purposes of this Fiscal Note, the increase in UAL was amor- tized over an eight-year period (seven payments under the One-Year Lag Methodology (OYLM)) using level dollar payments. This payment plus the increase in the Normal Cost results in an increase in annual employer contributions of approximately $1.6 million each year. CONTRIBUTION TIMING: For the purposes of this Fiscal Note, it is assumed that the changes in the PVFB and annual employer contributions would be reflected for the first time in the June 30, 2020 actuarial valuation of NYCERS. In accordance with the OYLM used to determine employer contributions, the increase in employer contributions would first be reflected in Fiscal Year 2022. CENSUS DATA: The estimates presented herein are based on the census data used in the June 30, 2020 (Lag) actuarial valuation of NYCERS to determine the Preliminary Fiscal Year 2022 employer contributions. The 116 NYCERS Tier 4 TBTA 20/50 Plan members as of June 30, 2020 who could potentially benefit from the change in the eligibility requirement for retirement had an average age of approximately 41.8 years, average service of approximately 15.7 years, and an average salary of approxi- mately $112,300. As of June 30, 2020, there are no members in the Tier 6 TBTA 20/50 Plan. ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the PVFB and annual employer contributions presented herein have been calculated based on the actuarial assumptions and methods in effect for the June 30, 2019 (Lag) actuarial valuations used to determine the Preliminary Fiscal Year 2021 employer contributions of NYCERS. The Actuary is proposing a set of changes for use beginning with the June 30, 2019 (Lag) actuarial valuations of NYCERS to determine the Final Fiscal Year 2021 Employer Contributions (2021 A&M). If the 2021 A&M is enacted, it is estimated that it would produce increases in the PVFB and annual employer contributions that are approximately 1% larger than the results shown above. RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend highly on the realization of the actuarial assumptions used, as well as certain demographic characteristics of NYCERS and other exogenous factors such as investment, contribution, and other risks. If actual experience deviates from actuarial assumptions, the actual costs could differ from those presented herein. Costs are also dependent on the actuarial methods used, and therefore different actuarial methods could produce different results. Quantifying these risks is beyond the scope of this Fiscal Note. Not measured in this Fiscal Note are the following: * The initial, additional administrative costs of NYCERS and other New York City agencies to implement the proposed legislation. * The impact of this proposed legislation on Other Postemployment Benefit (OPEB) costs. 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, an EnrolledS. 6976 8 Actuary under the Employee Retirement Income and Security Act of 1974, a Member of the American Academy of Actuaries, and a Fellow of the Confer- ence of Consulting Actuaries. I meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained herein. To the best of my knowledge, the results contained herein have been prepared in accordance with generally accepted actuarial principles and procedures and with the Actuarial Standards of Practice issued by the Actuarial Standards Board. FISCAL NOTE IDENTIFICATION: This Fiscal Note 2021-29 dated May 19, 2021 was prepared by the Chief Actuary for the New York City Employees' Retirement System. This estimate is intended for use only during the 2021 Legislative Session.
