Bill Text: NY S09394 | 2021-2022 | General Assembly | Introduced
Bill Title: Grants retroactive tier IV membership in the New York city employees' retirement system to Ryan D. O'Connor.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2022-05-24 - REFERRED TO CIVIL SERVICE AND PENSIONS [S09394 Detail]
Download: New_York-2021-S09394-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 9394 IN SENATE May 24, 2022 ___________ Introduced by Sen. SKOUFIS -- read twice and ordered printed, and when printed to be committed to the Committee on Civil Service and Pensions AN ACT in relation to granting retroactive tier IV membership in the New York city employees' retirement system to Ryan D. O'Connor The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Notwithstanding any other provision of law to the contrary, 2 Ryan D. O'Connor, an employee of the New York city transit authority and 3 a member of the New York city employees' retirement system, who was 4 employed with the New York city transit authority on January 19, 2012, 5 who for reasons not ascribable to his own negligence, failed to become a 6 member of such retirement system during such employment with the New 7 York city transit authority until September 10, 2012, shall be deemed to 8 have joined the New York city employees' retirement system on January 9 19, 2012 and shall be granted Tier IV status in such retirement system, 10 if, within one year of the effective date of this act, he shall file a 11 written request with the New York city employees' retirement system. 12 § 2. No contributions made to the New York city employees' retirement 13 system by Ryan D. O'Connor shall be returned or refunded to him pursuant 14 to this act. 15 § 3. All past service costs of implementing the provisions of this act 16 shall be borne by the city of New York. 17 § 4. This act shall take effect immediately. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: SUMMARY OF BILL: This proposed legislation would permit Ryan D. O'Connor, an active Tier 6 member of the New York City Employees' Retirement System (NYCERS), to elect, by filing an application with NYCERS within one year of the effective date, membership in the Tier 4 NYCERS 57/5 Plan. Effective Date: Upon enactment. BACKGROUND: Mr. O'Connor commenced employment with the New York City Transit Authority (NYCTA) on January 19, 2012 and subsequently joined NYCERS in September 2012. In the nine-month period between the commence- ment of his employment and the date on which he joined NYCERS, Chapter EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD15063-04-2S. 9394 2 18 of the Laws of 2012, or Tier 6, was enacted. Therefore, Mr. O'Connor joined NYCERS as a Tier 6 member. The proposed legislation would allow Mr. O'Connor to apply for a retroactive NYCERS membership date of January 19, 2012, which would entitle him to Tier 4 membership, without a refund of past Tier 6 contributions, in the NYCERS 57/5 Plan. A change from Tier 6 to Tier 4 would result in an earlier date of retirement eligibility, lower overall prospective employee contribution rates, a larger benefit, and a three- year (as opposed to a five-year) final average salary. While the past service costs for this member would normally be borne by the NYCTA, the proposed legislation assigns such costs to City of New York. FINANCIAL IMPACT - PRESENT VALUES: The estimated financial impact of this proposed legislation has been calculated based on the difference between (1) the present value of benefits Mr. O'Connor would receive if the Tier 4 57/5 Plan were elected and (2) the present value of the bene- fits Mr. O'Connor would receive under the Tier 6 63/10 Plan. Based on the actuarial assumptions and methods described herein, and assuming that Mr. O'Connor timely elects the Tier 4 57/5 Plan, the enactment of this proposed legislation would increase the Present Value of Future Benefits (PVFB) by approximately $37,300 and decrease the Present Value of member contributions by approximately $59,900, result- ing in an increase in the Present Value of future employer contributions of approximately $97,200. 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 $43,400 and an increase in the Present Value of future employer Normal Cost of approximately $53,800. FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with Administrative Code of the City of New York (ACCNY) Section 13-638.2(k-2), new UAL attributable to benefit changes are to be amor- tized 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, 2021, the remaining working lifetime for Mr. O'Connor is approximately 21 years. For the purposes of this Fiscal Note, the increase in UAL was amor- tized over a 21-year period (20 payments under the One-Year Lag Method- ology (OYLM)) using level dollar payments. This payment plus the increase in the Normal Cost results in an increase in annual employer contributions of approximately $8,000 each year. CONTRIBUTION TIMING: For the purposes of this Fiscal Note, it is assumed that the changes in the Present Value of future employer contributions and annual employer contributions would be reflected for the first time in the Preliminary June 30, 2022 actuarial valuation of NYCERS. In accordance with the OYLM used to determine employer contrib- utions, the increase in employer contributions would first be reflected in Fiscal Year 2024. CENSUS DATA: As of June 30, 2021, Mr. O'Connor was approximately age 35, had approximately nine years of service, and a salary of approxi- mately $93,900. ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the Present Value of future employer contributions and annual employer contributions presented herein have been calculated based on the actuarial assumptions and methods in effect for the Preliminary June 30, 2021 (Lag) actuarial valuations used to determine the Preliminary Fiscal Year 2023 employer contributions of NYCERS.S. 9394 3 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, Michael J. Samet, am the Interim Chief Actuary for, and independent of, the New York City Retirement Systems and Pension Funds. 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. 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 2022-60 dated May 23, 2022 was prepared by the Interim Chief Actuary for the New York City Employees' Retirement System. This estimate is intended for use only during the 2022 Legislative Session.
