Bill Text: NY S08151 | 2019-2020 | General Assembly | Amended


Bill Title: Establishes a temporary retirement incentive for certain public employees who are above age fifty-five and with twenty-five years of service.

Spectrum: Partisan Bill (Democrat 6-0)

Status: (Introduced) 2020-06-16 - PRINT NUMBER 8151A [S08151 Detail]

Download: New_York-2019-S08151-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         8151--A

                    IN SENATE

                                      April 8, 2020
                                       ___________

        Introduced  by  Sens.  MARTINEZ,  HARCKHAM,  SKOUFIS  --  read twice and
          ordered printed, and when printed to be committed to the Committee  on
          Civil  Service  and  Pensions  --  committee discharged, bill amended,
          ordered reprinted as amended and recommitted to said committee

        AN ACT to provide temporary  retirement  incentive  for  certain  public
          employees

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. This act enacts into law  components  of  legislation  that
     2  would  establish  an  age  55/25  temporary incentive for certain public
     3  employees.
     4    § 2. Legislative findings. The legislature finds and declares that the
     5  retirement benefit for certain public employees who are above age 55 and
     6  with 25 years of service provided for in this act is intended only to be
     7  temporary in nature for employees who are eligible to receive and quali-
     8  fy for the applicable benefit during the applicable time periods  speci-
     9  fied  in  this  act.  Further, nothing in this act shall be construed to
    10  create an expectation of a future or continuing retirement  benefit  for
    11  any  public  employee who is not eligible to receive and qualify for the
    12  retirement benefits herein during the applicable time periods.
    13    § 3. Definitions. As used in this  act,  unless  the  context  clearly
    14  requires otherwise:
    15    (a)  "Retirement system" means the New York state and local employees'
    16  retirement system and the New York state teachers' retirement system.
    17    (b) "Teachers' retirement system" means the New York  state  teachers'
    18  retirement system.
    19    (c) "Participating employer" means an educational employer, the state-
    20  operated  institutions of the state university of New York, and a commu-
    21  nity college operating under a program of the state  university  of  New
    22  York,  and  which participates in a retirement system as defined in this
    23  section.
    24    (d) "Educational employer" means a participating employer which  is  a
    25  school  district,  a  board of cooperative educational services, a voca-
    26  tional education and extension board, an institution for the instruction

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14487-05-0

        S. 8151--A                          2

     1  of the deaf and of the blind as enumerated in section 4201 of the educa-
     2  tion law, or a school district as enumerated in section 1 of chapter 566
     3  of the laws of 1967, as amended; who employ members who  participate  in
     4  the  New  York  state teachers' retirement system and the New York state
     5  and local employees' retirement system.
     6    (e) "Eligible employee" means a person who is a member of the New York
     7  State teachers' retirement system  or  the  New  York  State  and  local
     8  employees  retirement system and who is an employee of an educational or
     9  participating employer as defined in subdivision  (c)  or  (d)  of  this
    10  section.
    11    (f)  "Active  service"  means service while being paid on the payroll,
    12  provided that (i) a leave of absence with pay  shall  be  deemed  active
    13  service;  (ii)  other  approved  leave  without pay not to exceed twelve
    14  weeks from February 1, 2020 and the commencement of the designated  open
    15  period;  and (iii) the period of time subsequent to the June 2020 school
    16  term and on or before August  31,  2020  for  an  eligible  employee  as
    17  defined  in this act who is otherwise in active service on the effective
    18  date of this act shall be deemed active service.
    19    (g) "Open period" means the period  beginning  with  the  commencement
    20  date  as  defined in subdivision (h) of this section; provided, however,
    21  for the state-operated institutions of the state university of New  York
    22  and  community  colleges,  the  open period shall be as specified by the
    23  appropriate board of trustees, and  shall  be  ninety  days  in  length;
    24  provided  however  that there shall be only one such open period and any
    25  such period shall not extend beyond September 11, 2020  for  educational
    26  employers  and  shall not extend beyond December 31, 2020 for the state-
    27  operated institutions of the state university of New York and  community
    28  colleges. For the purposes of retirement pursuant to this act, a service
    29  retirement  application  must  be  filed with the appropriate retirement
    30  system not less than fourteen days prior to the effective  date  of  the
    31  retirement, unless a shorter time period is permitted under law.
    32    (h)  "Commencement  date"  means  the first day the retirement benefit
    33  mandated by this act shall be made available, which shall mean a date or
    34  dates on or after the effective date of this act to be determined  by  a
    35  participating  employer;  provided,  however,  that  for  an educational
    36  employer, the commencement date shall be June 30, 2020.
    37    § 4. Notwithstanding any other provision of law, any eligible employee
    38  serving in an eligible title who (a) has been continuously in the active
    39  service of a participating employer from February 1, 2020  to  the  date
    40  immediately  prior to the commencement date of the applicable open peri-
    41  od, (b) files an application for service retirement  that  is  effective
    42  during  the  open  period,  and  (c) is otherwise eligible for a service
    43  retirement as of the effective date of the  application  for  retirement
    44  shall  be entitled to the retirement benefit provided in section five of
    45  this act.
    46    § 5. Notwithstanding any other provision of law, an eligible  employee
    47  who  is:  (a)  a  member  of  a retirement system, and (b) entitled to a
    48  retirement benefit pursuant to section  four  of  this  act  may  retire
    49  during  the  open  period without the reduction of his or her retirement
    50  benefit that would otherwise be imposed by  article  11  or  15  of  the
    51  retirement  and social security law if he or she has attained the age of
    52  55 and has completed at least 25 or more years of creditable service. An
    53  eligible employee who is covered by the provisions of articles 11 and 15
    54  of the retirement  and  social  security  law  shall  retire  under  the
    55  provisions  of  articles 11 and 15 of the retirement and social security
    56  law.

        S. 8151--A                          3

     1    § 6. Notwithstanding any other provision of law, this act  shall  have
     2  no  impact  on  retirement incentives, options or inducements offered as
     3  part of a contractual agreement between an eligible employee and  eligi-
     4  ble  employer  which were negotiated prior to the effective date of this
     5  act.
     6    § 7. Severability clause. If any clause, sentence, paragraph, subdivi-
     7  sion,  section  or  part  of  this act shall be adjudged by any court of
     8  competent jurisdiction to be invalid, such judgment  shall  not  affect,
     9  impair,  or  invalidate  the remainder thereof, but shall be confined in
    10  its operation to the clause, sentence, paragraph,  subdivision,  section
    11  or part thereof directly involved in the controversy in which such judg-
    12  ment shall have been rendered. It is hereby declared to be the intent of
    13  the  legislature  that  this  act  would  have been enacted even if such
    14  invalid provisions had not been included herein.
    15    § 8. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          This bill would eliminate the early retirement reductions for Tier  2,
        3, 4, 5 and 6 members of the New York State and Local Employees' Retire-
        ment  System (ERS) and the New York State Teachers Retirement System who
        have attained age 55 and have accrued 25 years  of  creditable  service,
        who are employed by educational institutions and who retire within their
        employer's  90  day  open  election  period, which may not extend beyond
        December 31, 2020.
          If this bill is enacted, insofar as it affects the New York State  and
        Local  Employees'  Retirement System (ERS), the additional cost for each
        member who receives these benefits will vary depending on  the  member's
        age,  years of service, plans and final average salary. We estimate that
        the per-member cost could average approximately 110% of a member's final
        average salary.
          The exact number of members who would be affected by  this  cannot  be
        readily determined.
          These  costs  would  be  borne  entirely  by  the State of New York. A
        precise cost cannot be determined until  each  member  is  approved  for
        retirement under the incentive. After the election deadline, a cost will
        be  calculated  (and billed to the State) based on those benefiting from
        this provision.
          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, 2019 actuarial valu-
        ation. Distributions and other statistics  can  be  found  in  the  2019
        Report  of  the  Actuary  and  the  2019  Comprehensive Annual Financial
        Report.
          The actuarial assumptions and methods used are described in the  2015,
        2016, 2017, 2018, and 2019 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, 2019
        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.

        S. 8151--A                          4

          This estimate, dated May 6, 2020, and intended for use only during the
        2020  Legislative  Session, is Fiscal Note No. 2020-112, prepared by the
        Actuary for the New York State and Local Retirement System.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          This bill would provide a temporary retirement incentive during fiscal
        year  2020-2021.  This incentive would permit eligible members to retire
        without an early retirement reduction upon attainment of at least age 55
        with 25 years of service. Currently 30 years of service are required  in
        order  to  retire without reduction. In order to receive this benefit, a
        member must retire during the designated open period, beginning on  June
        30,  2020  and  not  extending beyond September 11, 2020 for educational
        employers. In order to be eligible, a member must be an  employee  of  a
        participating  employer.  The  cost of this incentive will be socialized
        across all employers.
          The annual cost to the employers of members  of  the  New  York  State
        Teachers'  Retirement  System  for this benefit is estimated to be $42.1
        million or .24% 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
        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 2020-31 dated June 15, 2020
        prepared  by  the  Actuary  of  the  New York State Teachers' Retirement
        System and is intended for use only during the 2020 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.
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