senate Bill S6904

Amended

Provides credit to members of public retirement systems of the state for military service rendered during certain periods; appropriation

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 09 / Apr / 2012
    • REFERRED TO CIVIL SERVICE AND PENSIONS
  • 14 / May / 2012
    • AMEND (T) AND RECOMMIT TO CIVIL SERVICE AND PENSIONS
  • 14 / May / 2012
    • PRINT NUMBER 6904A

Summary

Provides up to three years of service credit to members of public retirement systems of the state for military service rendered during times of peace; removes requirement that such military service occur during specified periods of hostilities; such members must have at least five years of credited service, not including military service.

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Bill Details

Versions:
S6904
S6904A
Legislative Cycle:
2011-2012
Current Committee:
Senate Civil Service And Pensions
Law Section:
Retirement and Social Security Law
Laws Affected:
Amd ยง1000, R & SS L
Versions Introduced in Previous Legislative Cycles:
2009-2010: A6663A
2007-2008: A6318C

Sponsor Memo

BILL NUMBER:S6904

TITLE OF BILL:
An act to amend the retirement and social security law, in relation to
providing credit to members of public retirement systems of the state
for military service

PURPOSE:
To extend the Veterans Service Credit Law of 2000 to all veterans who
have served in the military

SUMMARY OF PROVISIONS:
Section one amends section 1000 of the retirement and social services
law, as added by chapter 548 of the laws of 2000 and subdivision 9 as
added by chapter 547 of the laws of 2002, by deleting the specified
periods of time in which military service would had to have been
rendered in order to receive up to three years of service credit. Such
specified periods currently prevent a person who served in the military,
outside such periods, from obtaining service credit when applying to a
public retirement system of the state. This section also deletes other
restricting dates.

Section two provides the effective date.

JUSTIFICATION:
The United States now depends on a volunteer military. In order to
encourage citizens to become a member of the military, the state needs
to recognize all veterans by allowing them to access the veteran's
service credit buy back law. Currently, the Veterans Service Credit Law
of 2000 permits active public employees who served in the military
during only specified conflicts to purchase up to three years credit for
their military service. This legislation will extend this opportunity to
veterans who were in the military and served their country during peace
times as well.

LEGISLATIVE HISTORY:
A.6663-A, 2010 referred to ways and means. Same as S.4316-A, 2010
referred to civil service and pensions. A.6663, 2009 referred to govern-
mental employees. Same as S.4316, 2009 referred to civil service and
pensions. A.6318-C 2008, passed assembly. A.6318-C 2007, referred to
governmental employees committee. Same as S.5495 (Leibell).

FISCAL IMPLICATIONS:
See fiscal notes included at the end of the bill.

EFFECTIVE DATE:
This act shall take effect immediately.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6904

                            I N  S E N A T E

                              April 9, 2012
                               ___________

Introduced  by  Sen.  LARKIN -- 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
  providing  credit to members of public retirement systems of the state
  for military service

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. Section 1000 of the retirement and social security law, as
added by chapter 548 of the laws of 2000,  subdivision  9  as  added  by
chapter  547  of the laws of 2002 and subdivision 10 as added by chapter
18 of the laws of 2012, is amended to read as follows:
  S 1000. Military  service  credit.  Notwithstanding  any  law  to  the
contrary,  a  member  of  a  public  retirement  system of the state, as
defined in subdivision twenty-three of section five hundred one of  this
chapter, shall be eligible for credit for military service as hereinaft-
er provided:
  1.  A member, upon application to such retirement system, may obtain a
total not to exceed three years of service credit for up to three  years
of  military  duty, as defined in section two hundred forty-three of the
military law, if the member was honorably discharged from  the  military
[and  all  or  part  of  such  military  service was rendered during the
following periods: (a) commencing  December  seventh,  nineteen  hundred
forty-one   and  terminating  December  thirty-first,  nineteen  hundred
forty-six; (b) commencing June twenty-seventh,  nineteen  hundred  fifty
and  terminating  January  thirty-first, nineteen hundred fifty-five; or
(c) commencing February twenty-eighth, nineteen  hundred  sixty-one  and
terminating May seventh, nineteen hundred seventy-five;
  2.  A member, upon application to such retirement system, may obtain a
total not to exceed three years of service credit for up to three  years
of  military  duty, as defined in section two hundred forty-three of the
military law, if honorably discharged therefrom, if all or part of  such
services  was  rendered  in  the military conflicts referenced below, as
follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06279-07-2

S. 6904                             2

  (a) hostilities participated in by the military forces of  the  United
States  in Lebanon, from the first day of June, nineteen hundred eighty-
three to the first day of December, nineteen  hundred  eighty-seven,  as
established by receipt of the armed forces expeditionary medal, the navy
expeditionary medal, or the marine corps expeditionary medal;
  (b)  hostilities  participated in by the military forces of the United
States in Grenada,  from  the  twenty-third  day  of  October,  nineteen
hundred  eighty-three  to  the  twenty-first  day  of November, nineteen
hundred eighty-three, as established by  receipt  of  the  armed  forces
expeditionary  medal,  the navy expeditionary medal, or the marine corps
expeditionary medal;
  (c) hostilities participated in by the military forces of  the  United
States  in  Panama, from the twentieth day of December, nineteen hundred
eighty-nine to the thirty-first day of January, nineteen hundred ninety,
as established by receipt of the armed forces expeditionary  medal,  the
navy expeditionary medal, or the marine corps expeditionary medal; or
  (d)  hostilities  participated in by the military forces of the United
States, from the second day of August, nineteen hundred ninety,  to  the
end  of  such hostilities in case of a veteran who served in the theater
of operations including Iraq, Kuwait, Saudi Arabia, Bahrain, Qatar,  the
United  Arab  Emirates,  Oman,  the  Gulf of Aden, the Gulf of Oman, the
Persian Gulf, the Red Sea, and the airspace above these locations].
  [3] 2. A member must have at least five years of credited service (not
including service granted hereunder) to be eligible  to  receive  credit
under this section.
  [4]  3.  To  obtain  such  credit,  a member shall pay such retirement
system, for deposit in the fund used  to  accumulate  employer  contrib-
utions,  a  sum  equal to the product of the number of years of military
service being claimed and three percent of  such  member's  compensation
earned  during the twelve months of credited service immediately preced-
ing the date that the member made application  for  credit  pursuant  to
this  section.  If  permitted  by  rule  or regulation of the applicable
retirement system, the member may  pay  such  member  costs  by  payroll
deduction  for  a period which shall not exceed the time period of mili-
tary service to be credited pursuant to this section. In the  event  the
member leaves the employer payroll prior to completion of payment, he or
she  shall  forward  all  remaining required payments to the appropriate
retirement system prior to the effective date of retirement. If the full
amount of such member costs is not paid to  the  appropriate  retirement
system  prior to the member's retirement, the amount of service credited
shall be proportional to the total amount of the payments made prior  to
retirement.
  [5]  4. In no event shall the credit granted pursuant to this section,
when added to credit granted for military service  with  any  retirement
system  of  this  state  pursuant to this or any other provision of law,
exceed a total of three years.
  [6] 5. To be eligible to receive credit  for  military  service  under
this  section, a member must make application for such credit before the
effective date of retirement. [Notwithstanding the foregoing  provisions
of  this  subdivision,  an  individual  who retired on or after December
twenty-first, nineteen hundred ninety-eight  and  before  the  effective
date  of  this  section may make application for credit pursuant to this
section within one year following the effective date of this section, in
which event, the cost to the retiree would be based on the twelve  month
period immediately preceding retirement.]

S. 6904                             3

  [7]  6.  All  costs  for service credited to a member pursuant to this
section, other than the member costs set forth  in  subdivision  [three]
TWO  of this section, shall be paid by the state and all employers which
participate in the retirement system in which  such  member  is  granted
credit.
  [8]  7. A member who has purchased military service credit pursuant to
section two hundred forty-four-a of the military law shall  be  entitled
to  a refund of the difference between the amount paid by the member for
such purchase and the amount that would be payable if service  had  been
purchased pursuant to this section.
  [9]  8.  Notwithstanding  any  other provision of law, in the event of
death prior to retirement, amounts paid by the member for  the  purchase
of  military  service credit pursuant to this section shall be refunded,
with interest, to the extent the military service  purchased  with  such
amounts  does  not  produce a greater death benefit than would have been
payable had the member not purchased such credit.
  Notwithstanding any other provision of law, in the  event  of  retire-
ment,  amounts  paid  by the member for the purchase of military service
credit pursuant to this section shall be refunded, with interest, to the
extent the military service purchased with such amounts does not produce
a greater retirement allowance than would  have  been  payable  had  the
member not purchased such credit.
  [10.]  9. Anything to the contrary in subdivision [four] THREE of this
section notwithstanding, to obtain such credit, a member who first joins
a public retirement system of the state on or  after  April  first,  two
thousand  twelve  shall  pay  such retirement system, for deposit in the
fund used to accumulate employer contributions, a sum equal to the prod-
uct of the number of years of military service  being  claimed  and  six
percent of such member's compensation earned during the twelve months of
credited  service  immediately  preceding  the date that the member made
application for credit pursuant to this section.
  S 2. This act shall take effect immediately.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  This bill would allow up to three (3)  years  of  service  credit  for
military  duty  by removing all existing requirements that such military
service be performed during certain war periods, during certain  hostil-
ities  while  in  the  theater  of  operations or upon the receipt of an
expeditionary medal. However,  the  total  service  credit  granted  for
active  and peacetime military service shall not exceed three (3) years.
The member would be required to make  a  payment  of  three  percent  of
current  compensation  per  year of additional service credit granted by
this bill.   Members must have at  least  five  (5)  years  of  credited
service (not including military service).
  Insofar  as  this bill affects the New York State and Local Employees'
Retirement System and the New York  State  and  Local  Police  and  Fire
Retirement System, if this bill were enacted there would be an estimated
first  year cost of approximately $2.7 million to the State of New York,
$3.3 million to participating employers in the New York State and  Local
Employees'  Retirement  System  and  $1.7  million  to the participating
employers in the New York State and Local  Police  and  Fire  Retirement
System.
  In  addition  to  the above costs, there would be additional costs for
future members  of  the  Retirement  System's  who  have  such  military
service.
  This  estimate,  dated  December  13,  2011  and intended for use only
during the  2012  Legislative  Session,  is  Fiscal  Note  No.  2012-26,

S. 6904                             4

prepared  by  the  Actuary  for  the New York State and Local Employees'
Retirement System and the New York  State  and  Local  Police  and  Fire
Retirement System.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  PROVISIONS  OF  PROPOSED LEGISLATION: With respect to certain New York
City Retirement Systems ("NYCRS"), this proposed legislation would amend
New York State Retirement and Social Security Law ("RSSL") Section  1000
to  provide  certain  members of the New York City Employees' Retirement
System  ("NYCERS"),  the  New  York  City  Teachers'  Retirement  System
("NYCTRS"),  the  New  York  City  Board  of Education Retirement System
("BERS"), the New York City Police Pension Fund ("POLICE") and  the  New
York  City  Fire  Department  Pension  Fund  ("FIRE") the opportunity to
obtain  additional  retirement  service  credits  for  certain  Military
Service.
  This  proposed legislation would permit any NYCRS member, prior to the
effective date of retirement, to make application for  these  additional
service credits.
  To  obtain such Military Service credits, members would be required to
pay to  the  appropriate  NYCRS,  for  each  year  of  Military  Service
purchased,  a  sum  equal  to  3.0% of such member's compensation earned
during the twelve months of credited service immediately  preceding  the
date that the member makes application for credit.
  MEMBERS  IMPACTED: Insofar as this proposed legislation relates to the
NYCRS, the number of members who could  potentially  benefit  from  this
proposed legislation cannot be readily determined.
  IMPACT  ON BENEFITS: With respect to the NYCRS, a member who served in
the U.S. military and received an honorable discharge would  be  permit-
ted,  after  completing five years of credited service (exclusive of the
service credit that could be purchased under this proposed legislation),
to purchase a maximum of three years Military Service (inclusive of  any
prior purchases of Military Service credit).
  In  order  to  purchase  the Military Service credits provided in this
proposed legislation, a  member  must  have  been  honorably  discharged
following a period of "military duty" as defined in New York State Mili-
tary Law Section 243.
  If  a  member's  Military  Service  meets  these conditions, then that
member would be permitted to purchase a maximum of three years of  Mili-
tary  Service  (inclusive  of  any  previously-received Military Service
credit) attributable to any period of the member's military career.
  For purposes of the respective NYCRS, each year  of  Military  Service
credit  purchased would apply toward providing the member with a year of
benefit accrual  under  the  particular  benefit  formula  covering  the
member.
  In  certain  circumstances, the member also may be entitled to utilize
such Military Service as  qualifying  service  for  benefit  eligibility
purposes.
  For purposes of this Fiscal Note, it has been assumed that members who
purchase  Military  Service in accordance with this proposed legislation
would generally be entitled to count such service  for  benefit  accrual
purposes and for the purpose of qualifying for benefits.
  FINANCIAL IMPACT - OVERVIEW: With respect to an individual member, the
additional  cost of this proposed legislation would depend on the length
of all New York City service, age, salary history and Plan in which  the
member  participates,  as  well as the number of years of service credit
purchased.

S. 6904                             5

  With respect to employers participating in  the  NYCRS,  the  ultimate
employer  coast  of the this proposed legislation would be determined by
the increase in benefits to be paid,  the  impact  of  certain  benefits
commencing  earlier,  a  shorter  working  lifetime and the reduction in
certain future member contributions.
  FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: With respect to the NYCRS
and  based  on  the census data and assumptions herein, the enactment of
this proposed legislation would increase  the  Actuarial  Present  Value
("APV")  of benefits ("APVB") by approximately $201.7 million as of June
20, 2011.
  In addition, with respect to the  NYCRS,  the  APV  of  future  member
contributions (primarily attributable to the payments by members of 3.0%
of  salary  per  year  of  Military Service purchased) would increase by
approximately $31.9 million when measured as of June 30, 2011.
  Consequently, with respect to the NYCRS, the APV of net future employ-
er contributions would increase by approximately $169.8  million  as  of
June 20, 2011.
  FINANCIAL  IMPACT  -  ANNUAL EMPLOYER COST: With respect to the NYCRS,
based on the Actuary's actuarial assumptions and methods in effect as of
June 30, 2010, the enactment of this proposed legislation would increase
annual employer costs by approximately $23.6 million per year.
  FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS: With respect to the  NYCRS,
based on the Actuary's actuarial assumptions and methods in effect as of
June  30,  2010,  the enactment of this proposed legislation would ulti-
mately increase employer contributions by  approximately  the  estimated
additional annual employer costs.
  FINANCIAL  IMPACT  - SUMMARY: The following table summarizes the esti-
mated financial impact of this proposed legislation on the NYCRS.

Estimated Financial Impact to Allow Members of the NYCRS To Purchase  up
to Three Years of Military Service Credit{1}

                              ($ Millions)

________________________________________________________________________
                                                            Estimated
                                     Additional              First Year
                  Additional         APV of Future          Additional
Retirement        APV of             Employer                Employer
  System          Benefits         Contributions{2}          Costs{3}
________________________________________________________________________
NYCERS            $ 65.2             $ 54.2                   $ 7.6
NYCTRS            $ 25.6             $ 20.8                   $ 2.1
BERS              $  6.8             $  5.7                   $ 0.8
POLICE            $ 84.8             $ 72.5                   $11.1
FIRE              $ 19.3             $ 16.6                   $ 2.0
                  ______             ______                   ______
  TOTAL           $201.7             $169.8                   $23.6

______________________
  {1}  APV are determined as of June 30, 2010 and rolled forward to June
30 2011 based on the Actuary's actuarial assumptions and methods  as  of
June  30,  2010  used to determine Preliminary Fiscal Year 2012 employer
contributions.
  {2} Equals increase in APVB minus increase in  APV  of  future  member
contributions.

S. 6904                             6

  {3}  Estimated Additional Employer Costs are determined without regard
to the funded status of the Retirement Systems and  represent  the  best
estimates of the ultimate annual financial burden of the proposed legis-
lation.  Estimated  Additional  Employer  Contributions would ultimately
approximate Estimated Additional Employer Costs.
  ADDITIONAL  EMPLOYER COSTS - GENERAL: In general, the real cost of the
enactment of this proposed legislation would be the additional  benefits
paid.
  FINANCIAL  IMPACT  -  POTENTIAL  CHANGES  IN ACTUARIAL ASSUMPTIONS AND
METHODS: The impact of enactment of the proposed legislation provided in
this Fiscal Note has been based on the continued use of certain  current
actuarial assumptions and methods.
  However, this set of actuarial assumptions and methods does not repre-
sent the only possible approach for funding NYCRS.
  Historically,  actuarial assumptions and methods have been reviewed on
average every five years in  connection  with  an  actuarial  experience
study mandate by the New York City Charter Section 96.
  Following this review, the Actuary generally proposes changes in actu-
arial  assumptions  and  methods  that  he  believes are appropriate and
reasonably related to such experience period and future expectations.
  The most recent review was published  during  December  2011  and  the
Actuary  has  proposed new packages of actuarial assumptions and methods
to be effective for use in determining employer contributions  beginning
Fiscal Year 2012.
  These new actuarial assumptions are likely to result in increased APVB
and employer costs.
  The  estimated  financial impact of proposed legislation incorporating
those proposed actuarial assumptions and methods is expected to  differ,
possibly  significantly,  from  the  financial impact computed using the
actuarial assumptions and methods continued from Fiscal Year 2011.
  Further, the near certainty of payment of benefits from the NYCRS (due
to the substantive level of funding and New  York  State  Constitutional
Protection  of  benefits),  suggests  that it may be appropriate to also
consider a more economic-based, market-related estimate of the value  of
those  benefits  (i.e., an Economic Value estimate). Such value of bene-
fits would likely be based on an expected pattern of  benefits  payments
determined  using  discount  rates  consistent  with  those derived from
default-free securities of similar duration.
  Under current economic conditions, the APVB, employer cost and employ-
er contributions determined  under  Economic  Value  concepts  would  be
greater than those shown herein.
  OTHER  COSTS:  Not  measured in this Fiscal Note is the impact of this
proposed legislation on the Manhattan and Bronx Surface Transit  Operat-
ing Authority ("MaBSTOA") or on State or Local employers with respect to
their  participation  in the New York State and Local Retirement Systems
("NYSLRS") or the New York State Teachers' Retirement System ("NYSTRS").
  Also, this Fiscal Note does not include analyses of the impact of this
proposed legislation on the expected increases in  administrative  costs
or costs for Other Post-Employment Benefits ("OPEB").
  CENSUS DATA: The census data used for estimates of APV of benefits and
employer  contributions presented herein are the active members included
in the June 30, 2010 (Lag) actuarial valuations of NYCERS, NYCTRS, BERS,
POLICE and FIRE used to  determine  the  Preliminary  Fiscal  Year  2012
employer contributions.
  ACTUARIAL  ASSUMPTIONS  AND  METHODS:  Additional  APV of benefits, of
member contributions and of employer contributions have  been  estimated

S. 6904                             7

as  of  June 30, 2010 using various approximating techniques and assump-
tions by the Actuary, including, but not limited to:
  * A certain percentage of Veterans being honorably discharged.
  *  A  certain  percentage of honorably discharged Veterans being disa-
bled.
  * Different percentages of members by NYCRS would have prior  Military
Service.
  *  Each  eligible member would purchase an average of 2.5 years of the
Military Service.
  For purposes of this Fiscal Note, the additional APV have been rolled-
forward to July 30, 2011.
  Changes in employer contributions have  been  estimated  assuming  the
increase  in  the  APV  of future employer normal contributions would be
financed through future normal contributions without using the Actuary's
One-Year Lag methodology.
  As stated earlier, the Actuary has proposed new packages of  actuarial
assumptions  and methods to be effective for use in determining employer
contributions beginning Fiscal Year 2012. As such, not  all  assumptions
employed  in  determining  the results contained in this Fiscal Note for
Fiscal Years 2012 and later represent the Actuary's current  best  esti-
mate  of future experience. However, most of the assumptions and methods
used to determine the  results  contained  herein  are  generally  those
adopted  by the NYCRS Boards of Trustees and enacted by the State Legis-
lature and Governor, and provide consistency with the employer  contrib-
utions being presented.
  ECONOMIC  VALUES OF BENEFITS: The actuarial assumptions used to deter-
mine the financial impact of the proposed legislation discussed in  this
Fiscal  Note  are those appropriate for budgetary models and determining
annual employer contributions to the NYCRS.
  However, the economic assumptions (current and proposed) that are used
for determining employer  contributions  do  not  develop  risk-adjusted
economic  values  of  benefits.  Such  risk-adjusted, economic values of
benefits would likely differ significantly from those developed  by  the
budgetary models.
  STATEMENT  OF ACTUARIAL OPINION: I, Robert C. North, Jr., am the Chief
Actuary for the New York City Retirement Systems. 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.
  FISCAL  NOTE  IDENTIFICATION:  This  estimate is intended for use only
during the 2012 Legislative Session. It is Fiscal  Note  2012-07,  dated
March  15,  2012,  prepared  by  the Chief Actuary for the New York City
Employees' Retirement System, the New  York  City  Teachers'  Retirement
System,  the New York City Board of Education Retirement System, the New
York City Police Pension Fund and the  New  York  City  Fire  Department
Pension Fund.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  This bill would amend Article 20 of the Retirement and Social Security
Law  to  allow  active  members of public retirement systems of New York
State to claim service credit for up to three years of military service,
regardless of when it  was  performed.  Currently,  active  members  can
receive  service  credit for military service performed, but only during
specified periods of war. A member must have  at  least  five  years  of
credited  service  to  be  eligible and make application for such credit
before the effective date of retirement. To obtain such credit, a member
must deposit in the pension accumulation fund three percent  of  his  or

S. 6904                             8

her  current  annual full-time rate of compensation per year of military
service claimed.
  The  annual  cost  to  the  employers of members of the New York State
Teachers' Retirement System for this benefit is  estimated  to  be  $3.7
million or .03% of payroll if this bill is enacted.
  The source of this estimate is Fiscal Note 2012-21 dated March 7, 2012
prepared  by  the  Actuary  of  the  New York State Teachers' Retirement
System and is intended for use only during the 2012 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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