S T A T E O F N E W Y O R K
________________________________________________________________________
6925
I N S E N A T E
April 13, 2012
___________
Introduced by Sen. DeFRANCISCO -- 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
the employment of retired persons
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivision 2 of section 212 of the retirement and social
security law, as amended by chapter 74 of the laws of 2006, is amended
to read as follows:
2. The earning limitations for retired persons in positions of public
service under this section shall be in accordance with the following
table:
For the year Earnings limitation
1996 $12,500
1997 $13,500
1998 $14,500
1999 $15,500
2000 $17,000
2001 $18,500
2002 $20,000
2003 $25,000
2004 $27,500
2005 and 2006 $27,500
2007 [and thereafter], $30,000
2008, 2009, 2010 AND 2011
2012 AND THEREAFTER $32,500
S 2. This act shall take effect immediately and shall be deemed to
have been in full force and effect on and after January 1, 2012.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would amend Section 212 of the Retirement and Social Securi-
ty Law to set the amount a retired person may earn in public employment
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02914-08-2
S. 6925 2
without reduction in retirement allowance during the year 2012 and ther-
eafter, to $32,500.
If this bill is enacted, insofar as it would affect the New York State
and Local Employees' Retirement System, we expect that a number of
members will retire earlier than they otherwise would have due to the
expectation of collecting both a pension and the salary they were
receiving before they retired. A significant number of members changing
their retirement dates will result in a shorter funding period and
greater annual employer contributions. The extent of the increase in
employer contributions will be determined by the number of members
retiring early to collect both salary and pension.
Insofar as this bill would affect the New York State and Local Police
and Fire Retirement System, there would be negligible additional annual
costs.
Summary of relevant resources:
Data: March 31, 2011 Actuarial Year End File with distributions of
membership and other statistics displayed in the 2011 Report of the
Actuary and 2011 Comprehensive Annual Financial Report.
Assumptions and Methods: 2010 and 2011 Annual Report to the Comp-
troller on Actuarial Assumptions, Codes Rules and Regulations of the
State of New York: Audit and Control.
Market Assets and GASB Disclosures: March 31, 2011 New York State and
Local Retirement System Financial Statements and Supplementary Informa-
tion.
Valuations of Benefit Liabilities and Actuarial Assets: summarized in
the 2011 Actuarial Valuations report.
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 November 21, 2011 and intended for use only
during the 2012 Legislative Session, is Fiscal Note No. 2012-25,
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 the New York City
Retirement Systems ("NYCRS"), this proposed legislation would amend
Retirement and Social Security Law ("RSSL") Section 212 to increase the
earnings limit of certain members who have returned to employment in
Public Service.
The Effective Date of the proposed legislation would be the date of
enactment retroactive to January 1, 2012.
IMPACT ON BENEFITS: Retired members of the NYCRS are permitted to
return to employment in "Public Service" where such term means employ-
ment in the service of New York State ("NYS") or any of its political
divisions including:
* A special district,
* District corporation,
* School district,
* Board of cooperative educational services,
* County vocational education and extension board,
* Public benefit corporation,
* Public authority created by or pursuant to NYS laws, or
* An agency or organization which contributes as a participating
employer in a retirement system or pension plan administered by NYS or
any of its political subdivisions.
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Retirees who return to Public Service and elect to be covered under
the provisions of RSSL Section 212 are permitted to earn in a calendar
year an amount not exceeding a specific dollar limit without loss,
suspension or diminution of their retirement allowances. Once a retiree
attains age 65 in a calendar year, there are no earnings limitations in
that calendar year or thereafter. Currently, the dollar limitation in
effect for Calendar Year 2007 and thereafter is $30,000.
Under the proposed legislation, the dollar limitation would be
increased to $32,500 for Calendar Year 2012 and thereafter.
FINANCIAL IMPACT - EMPLOYER COST: The ultimate cost of a pension plan
is the benefits it pays.
To the extent the current RSSL Section 212 earnings limitation applies
in Calendar Years 2012 and later, certain retirees would have their
retirement allowances suspended for the remainder of the calendar year
in which their earnings in Public Service exceed that earnings limita-
tion.
Enactment of the proposed legislation would raise the amount that
could be earned in Public Service. This would result in a slight
increase in benefits paid to retirees where their Public Service earn-
ings exceed the current RSSL Section 212 earnings limitation.
If a definite amount of change to the expected retirement allowances
to be paid in a calendar year were known, it would be reflected in the
fiscal year the legislation were enacted.
However, a change in the applicable retirement allowances paid to
NYCRS retired members in a calendar year under this proposed legislation
are not known in advance. These changes would be treated as actuarial
experience gains/losses recognized in the assets of the respective NYCRS
at the end of that fiscal year (i.e., a change in retirement allowances
paid during Calendar Year 2012 would be reflected in the NYCRS assets as
of June 30, 2013).
Under the Lag actuarial valuation methodology, adjustments in the June
30, 2013 asset values would first impact employer contributions to the
respective NYCRS for Fiscal Year 2015.
For those NYCRS reemployed retirees who have elected to become subject
to RSSL Section 212 and who have exceeded the limit, the Actuary esti-
mates that the annual potential impact of the proposed legislation would
be to increase payouts from the NYCRS by less than $150,000 and, over-
all, there would be a de minimis impact on the retirement allowances
otherwise payable.
FINANCIAL IMPACT: EMPLOYER CONTRIBUTIONS: If enacted during the 2012
Legislative Session, the impact on employer costs to the NYCRS would
begin Fiscal Year 2015.
Any changes in NYCRS assets that result in changes in the Actuarial
Present Values of Future Normal Costs would be financed through future
employer normal contributions.
Overall, the Actuary believes the changes in employer costs and
employer contributions to the NYCRS as a result of enactment of the
proposed legislation would be de minimis.
OTHER COSTS: Not measured in this Fiscal Note are any possible
increased administrative costs attributable to enactment of the proposed
legislation.
CENSUS DATA: For purposes of analyzing the impact of the proposed
legislation, data on retirees reemployed in Public Service were
furnished by the staffs of the NYCRS. This data was reviewed and consid-
ered illustrative of those who could potentially be impacted by this
proposed legislation. Where data was not final, a percentage of those
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retirees employed in Public Service under age 65 were assumed to exceed
the RSSL Section 212 limit.
Table 1
NYCRS Retirees Reemployed in Public Service
Who Elected to be Subject to
RSSL Section 212
(Based on the Latest Information Furnished to the OA)
Number Reemployed
Number Reemployed Under Age 65
All Ages Earnings in Excess
Retirement System{1} Any Earnings of $30,000
NYCERS{2} 444 37
TRS{2} 3,323 26
BERS{3} 40{4} 2
POLICE{2} 209 17
FIRE{2} 9 2{4}
Total 4,025 84
{1} New York City Employees' Retirement System ("NYCERS")
New York City Teachers' Retirement System ("TRS")
New York City Board of Education Retirement System ("BERS")
New York City Police Pension Fund ("POLICE")
New York City Fire Department Pension Fund ("FIRE")
{2} The reemployment period is Calendar Year 2010.
{3} The reemployment period is Calendar Year 2008.
{4} Estimated from information furnished.
ACTUARIAL ASSUMPTIONS AND METHODS: Any changes in employer contrib-
utions have been estimated based on the actuarial assumptions and meth-
ods used in the June 30, 2010 (Lag) actuarial valuations of the NYCRS.
For purposes of analyzing the impact of the proposed legislation, it
was assumed that the current number of reemployed NYCRS retirees in
Public Service under age 65 earning in excess of the RSSL Section 212
dollar limit would remain constant over time.
It was also assumed that the earnings in Public Service of such reem-
ployed retirees would also exceed the proposed new RSSL Section 212
dollar limit by amounts comparable to those being earned in excess of
the current dollar limit.
ACTUARIAL ASSUMPTIONS AND METHODS: Additional employer costs have been
calculated using the actuarial assumptions and methods currently in
effect for the June 30, 2010 (Lag) actuarial valuation of NYCRS to
determine employer contributions for Fiscal Year 2012.
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 the current actuarial assumptions and
methods.
However, the Actuary is currently in the process of proposing a new
package of actuarial assumptions and methods for use in determining
employer contributions to NYCRS for Fiscal Year 2012 and after, as the
current actuarial assumptions no longer represent the Actuary's best
estimates.
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It is anticipated that the proposed new package of actuarial assump-
tions and methods would likely result in a minimal difference in employ-
er contributions than the amount determined under the current actuarial
assumptions and methods. The overall increase in employer contributions
is still expected to be de minimis.
Hence, the estimated financial impact of proposed legislation incorpo-
rating the new package of actuarial assumptions and methods is expected
to differ, even if minimally, from the financial impact computed using
the actuarial assumptions and methods continued from Fiscal Year 2011.
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 NYCERS.
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 2012-04, dated
February 1, 2012 prepared by the Chief Actuary for the New York City
Retirement Systems.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would amend subdivision 2 of section 212 of the Retirement
and Social Security Law to increase the earnings limitation for retired
members in positions of public employment to $32,500 for the calendar
year 2012 and thereafter. The earnings limitation for the calendar year
2011 was $30,000.
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.
The source of this estimate is Fiscal Note 2012-15 dated February 22,
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.
