Bill Text: NY S07386 | 2015-2016 | General Assembly | Amended

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Bill Title: Eliminates restrictions upon transferring between public retirement systems.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2016-11-14 - SIGNED CHAP.438 [S07386 Detail]

Download: New_York-2015-S07386-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                         7386--A
            Cal. No. 744
                    IN SENATE
                                     April 25, 2016
                                       ___________
        Introduced  by  Sen.  SAVINO -- read twice and ordered printed, and when
          printed to be committed to the Committee on Civil Service and Pensions
          -- reported favorably from said committee, ordered to first and second
          report, ordered to a third reading,  amended  and  ordered  reprinted,
          retaining its place in the order of third reading
        AN  ACT  to amend the retirement and social security law, in relation to
          the transfer of members between  public  retirement  systems;  and  to
          repeal subdivisions g and i of section 43 of such law relating thereto
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. Subdivisions b and d of section 43 of  the  retirement  and
     2  social security law, subdivision b as amended by chapter 724 of the laws
     3  of 1959 and subdivision d as amended by chapter 905 of the laws of 1971,
     4  are amended to read as follows:
     5    b.  In  order  to effect such a transfer, a member must give notice to
     6  the administrative head of the retirement system of which he or she is a
     7  member, prior to his or her withdrawal therefrom, of his or  her  inten-
     8  tion to enter such other retirement system [within one year. In the case
     9  of  a  person  who  has  withdrawn from a retirement system and has been
    10  entitled to at least thirty  years  of  total  service  credit  in  such
    11  system,  however,  such  notice may be given within three years from the
    12  time of such withdrawal.  In the case of a person who was a member of  a
    13  retirement  system,  and who while under such status becomes a member of
    14  such second retirement system, and who has not  withdrawn  his  contrib-
    15  utions  to  the  first  such  retirement  system,  any provisions of law
    16  notwithstanding, such notice may be given on or before  June  thirtieth,
    17  nineteen  hundred fifty-nine]. A person so transferring from one retire-
    18  ment system to another shall be deemed to have  been  a  member  of  the
    19  system  to  which  he or she has transferred during the entire period of
    20  membership service credited to him or her in the system from which he or
    21  she has transferred. Such transferee, however, shall  not  receive  more
    22  than three per cent interest on his or her contributions and accumulated
    23  contributions  unless he or she has continuously been a member in either
    24  the system from which or to which he or she is transferring since a date
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD15108-04-6
        S. 7386--A                          2
     1  prior to July first, nineteen hundred forty-three.  This  shall  not  be
     2  construed to prevent a change in the interest rate to such member if the
     3  interest  rate payable to other members of the system to which he or she
     4  has  transferred  is changed. Any member who heretofore transferred from
     5  one retirement system to another shall, commencing  with  the  effective
     6  date  of  [this  act] chapter nine hundred three of the laws of nineteen
     7  hundred fifty-seven, be entitled to  the  same  rights,  privileges  and
     8  benefits,  and shall be subject to the same obligations, as a transferee
     9  who [hereafter] thereafter transfers. He or she shall receive no  credit
    10  for  prior  service,  except as hereinafter provided. He or she shall be
    11  permitted to deposit in the second retirement system the total amount of
    12  his contributions withdrawn from the first retirement system. [Upon such
    13  deposit within one year or within three years,  or  on  or  before  June
    14  thirtieth,  nineteen  hundred  fifty-nine, as the case may be, he or the
    15  administrative head of the system to which he desires to transfer, shall
    16  request the administrative head of the first retirement system to trans-
    17  fer to the second retirement system a credit on account of  his  member-
    18  ship in such system.]
    19    d.  Such  reserve  shall  be  transferred from the appropriate fund or
    20  funds of the first system to the appropriate fund or funds of the second
    21  system [within one year from the date of the request for a  transfer  of
    22  credit]. Such member, thereupon, shall be given such status and credited
    23  with  such  service in the second retirement system as he was allowed in
    24  the first retirement system. Such contributor, notwithstanding any other
    25  provision of law, shall on  retirement  [after  three  years  of  member
    26  service  in the second retirement system] be entitled to a pension based
    27  on salary earned during member service [in either retirement system, or]
    28  in both retirement systems together, [whichever may produce the  greater
    29  pension] pursuant to the statutory requirements of the second retirement
    30  system.  [No  such contributor, however, shall be entitled on retirement
    31  within three years of the date of his transfer, to a greater  or  lesser
    32  pension for such service rendered before his transfer than he would have
    33  received  had  he  remained  under  the  pension provisions of the first
    34  retirement system.]
    35    § 2. Subdivisions g and i of section 43 of the retirement  and  social
    36  security law are REPEALED.
    37    § 3. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law Section 50:
          PROVISIONS  OF  PROPOSED  LEGISLATION: This proposed legislation would
        amend subdivisions b and d of Section 43 of the  Retirement  and  Social
        Security  Law (RSSL) to simplify the administration of transfers between
        the retirement systems within New York State. The  proposed  legislation
        would  also  repeal  subdivisions  g  and i of Section 43 of the RSSL to
        simplify the statute  by  removing  outdated  language  that  no  longer
        affects members of any of the retirement systems.
          The  effective  date  of the proposed legislation would be the date of
        enactment.
          IMPACT ON BENEFITS: The proposed change to subdivision b of Section 43
        of the RSSL would eliminate the one-year time limit for members to  give
        notice  of  their  intent  to  transfer  between retirement systems. The
        proposed change to subdivision d of Section 43 of the RSSL would  elimi-
        nate  the  requirement that a transferee acquire at least three years of
        service in the second retirement system in order to have  their  pension
        calculated  using  service  credit  and  salary  history as if they were
        always in the second retirement system.
        S. 7386--A                          3
          FINANCIAL IMPACT: The number of members expected  to  be  impacted  by
        this  proposed legislation cannot be readily determined.  However, based
        on the small number of members who would  have  been  affected  by  this
        change  in  the past, enactment of this proposed legislation is expected
        to  result  in  an  increase  in  employer contributions of no more than
        $25,000 per year, in total, to the New York City  Employees'  Retirement
        System,  the  New York City Teachers' Retirement System and the New York
        City Board of Education Retirement System.
          FINANCIAL IMPACT - ADMINISTRATIVE  EXPENSES:  The  enactment  of  this
        legislation  is expected to serve to alleviate administrative burdens by
        reducing multiple transfers by members  who  change  employment  several
        times.
          STATEMENT  OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu-
        ary for the New York City Retirement Systems. I am an Associate  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 Qualifica-
        tion  Standards of the American Academy of Actuaries to render the actu-
        arial opinion contained herein.
          FISCAL NOTE IDENTIFICATION: This estimate is  intended  for  use  only
        during  the  2016  Legislative Session. It is Fiscal Note 2016-16, dated
        April 5, 2016 prepared by the  Chief  Actuary  for  the  New  York  City
        Employees'  Retirement  System,  the  New York City Teachers' Retirement
        System and the New York City Board of Education Retirement System.
          FISCAL NOTE.--Pursuant to Legislative Law Section 50:
          This bill will remove the one year time  limit  for  members  to  give
        notice  of their intent to transfer between public retirement systems in
        New York State. In addition this bill will remove the  requirement  that
        the  transferee  attain  at  least  three years of service credit in the
        second system in order to have their pension  calculated  using  service
        credit  and  salary history as if they were always in the second system.
        Lastly, this bill repeals subdivisions g and i  of  Section  43  of  the
        Retirement  and Social Security Law that no longer affect members of the
        retirement system.
          If this legislation is enacted during the 2016 legislative session, we
        estimate that the annual cost will be negligible.
          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, 2015 actuarial valu-
        ation. Distributions and other statistics  can  be  found  in  the  2015
        Report  of  the  Actuary  and  the  2015  Comprehensive Annual Financial
        Report.
          The actuarial assumptions and methods used are described in  the  2015
        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, 2015
        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 estimate, dated June 7, 2016, and intended for  use  only  during
        the  2016  Legislative Session, is Fiscal Note No. 2016-113, 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 43 of the Retirement and Social Security
        Law to remove the one year time limit for  members  to  give  notice  of
        their  intent  to  transfer  between retirement systems. This bill would
        S. 7386--A                          4
        also remove the restriction on a member who transfers  that  he/she  may
        not  retire  within  three  years  and receive a greater benefit for the
        service rendered before transfer than he/she would have  received  under
        the prior retirement system. Additionally, this bill would repeal subdi-
        visions g and i of Section 43.
          The  annual  cost  to  the  employers of members of the New York State
        Teachers' Retirement System is estimated to be negligible if  this  bill
        is enacted.
          Employee  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
        Comprehensive Annual Financial  Report  (CAFR).  System  assets  are  as
        reported  in the System's financial statements, and can also be found in
        the CAFR. Actuarial assumptions and methods are provided in the System's
        Actuarial Valuation Report.
          The source of this estimate is Fiscal Note 2016-27 dated June 9,  2016
        prepared  by  the  Actuary  of  the  New York State Teachers' Retirement
        System and is intended for use only during the 2016 Legislative Session.
        I, Richard A. Young, am the Actuary for the  New  York  State  Teachers'
        Retirement  System.  I  am a member of the American Academy of Actuaries
        and I meet the Qualification Standards of the American Academy of  Actu-
        aries to render the actuarial opinion contained herein.