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

                                  9418

                          I N  A S S E M B L Y

                             April 29, 2014
                               ___________

Introduced by M. of A. ABBATE -- read once and referred to the Committee
  on Governmental Employees

AN  ACT  to amend the retirement and social security law, in relation to
  members of the twenty-year/age fifty retirement program for Triborough
  bridge and tunnel members

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

  Section  1.  Paragraph  1  of  subdivision  e  of section 604-c of the
retirement and social security law, as amended by  chapter  661  of  the
laws of 2002, is amended to read as follows:
  1.  In  addition  to  the member contributions required by section six
hundred thirteen of  this  article,  each  participant  in  the  twenty-
year/age fifty retirement program in the rank of bridge and tunnel offi-
cer  shall  contribute  to the retirement system of which he or she is a
member (subject to the applicable provisions of subdivision d of section
six hundred thirteen of this article) an additional five and fifty  one-
hundredths  percent  of  his or her compensation and each participant in
the twenty-year/age fifty retirement program in the rank of sergeant  or
lieutenant  shall  contribute to the retirement system an additional six
percent of his or her compensation earned [from] FOR (A)  all  allowable
service  as  a Triborough bridge and tunnel member rendered on and after
the date which is one hundred eighty days prior to the starting date  of
the  twenty-year/age  fifty  retirement  program,  AND  (B) ALL CREDITED
SERVICE AFTER SUCH PERSON CEASES TO BE A PARTICIPANT BUT  BEFORE  HE  OR
SHE AGAIN BECOMES A PARTICIPANT PURSUANT TO PARAGRAPH SIX OF SUBDIVISION
B OF THIS SECTION. A participant in the twenty-year/age fifty retirement
program shall contribute additional member contributions until the later
of  (i)  the  date  as  of  which he or she has twenty years of credited
service as a bridge and tunnel officer, or (ii) the third anniversary of
the date that he or she last became a participant in the twenty-year/age
fifty retirement program.
  S 2. This act shall take effect immediately.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13878-02-4
              

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  PROVISIONS OF PROPOSED LEGISLATION: This proposed legislation, revised
as described below, would  amend  Retirement  and  Social  Security  Law
("RSSL")  Section  604-c.e(1) to require Additional Member Contributions
("AMC") for a period of non-participation be made by  a  member  of  the
Triborough  Bridge  and Tunnel Authority ("TBTA") 20-Year/Age 50 Retire-
ment Plan ("TBTA 20/50 Plan") who ceases to be a participant  and  later
again becomes a participant.
  The Actuary has a concern that the impact of this proposed legislation
may be reduced due to Constitutional Protection under Article V, Section
7 of the New York State Constitution.
  Note:  The  analysis  presented  in  the Fiscal Note presumes that the
proposed legislation could be administered as written.
  The effective date of the proposed legislation would be  the  date  of
enactment.
  BACKGROUND:  Members in the New York City Employees' Retirement System
("NYCERS") TBTA 20/50 Plan must be employed in a TBTA Eligible  Position
to  be  eligible  to participate. A TBTA Eligible Position is a position
held by a Tier 4 member who is employed as  a  TBTA  Bridge  and  Tunnel
Officer, Sergeant or Lieutenant in a non-managerial position. To partic-
ipate in the TBTA 20/50 Plan, in addition to Basic Member Contributions,
AMC  must  be  made  at the rate of 5.5% of gross wages for Officers and
6.0% of gross wages for Sergeants and Lieutenants until the later of (1)
20 years of Credited Service in a TBTA Eligible  Position,  or  (2)  the
third anniversary of participation in the TBTA 20/50 Plan.
  If a TBTA 20/50 Plan member gets promoted to a managerial position, he
or  she is no longer eligible to participate in that Plan. Subsequently,
if the member is reassigned to a  non-managerial  position,  making  the
member  once  again  eligible to participate in the TBTA 20/50 Plan, the
member is then able to retire with full TBTA 20/50 Plan benefits despite
not having contributed AMC during the period the  member  spent  in  the
managerial position.
  This  proposed  legislation,  if  enacted,  would require a member who
spends a portion of his or her career in a non-participating  managerial
position  and then returns to a TBTA Eligible Position to contribute AMC
for the period of time that the member was in that managerial position.
  For purposes of  developing  the  analysis  herein,  the  Actuary  has
assumed  that  the  required  AMC  rate  for this period of time will be
deemed to be equal to the AMC rate last  paid  by  the  member  while  a
participant in the TBTA 20/50 Plan.
  FINANCIAL  IMPACT  - ACTUARIAL PRESENT VALUE OF BENEFITS: Enactment of
this legislation would result in a reduction in  the  Actuarial  Present
Value  of  Benefits  ("APVB")  and  employer contributions to NYCERS and
would be based on the number of members affected, the  number  of  years
that  they  were  in  non-participating  positions and their gross wages
during those periods. Based on the assumptions herein,  the  savings  in
the APVB, if this legislation is enacted, would be approximately $60,000
per member at the date of retirement.
  Although  the  exact  number  of affected members cannot be known with
certainty, there are approximately 20 members who are currently in mana-
gerial positions who could potentially be reassigned  to  non-managerial
positions just prior to retirement, and therefore, avoid the requirement
to  contribute AMC for a portion of their career. If all 20 members were
to be affected by this proposed legislation, the total savings would  be
approximately  $1,200,000 for this current group of managerial employees
if the legislation were to be enacted.

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  FINANCIAL IMPACT - EMPLOYER COSTS: Enactment of this  proposed  legis-
lation could decrease employer costs, where such amounts would depend on
the  number of members affected, upon the number of years that they were
in non-participating positions and their gross wages during those  years
and would equal the value of the additional AMC paid.
  The increase in the assets of NYCERS as a result of the additional AMC
paid  in any year would be treated as an actuarial gain and be amortized
over 15 years. Based on the assumptions herein, should 20 members  repay
$1,200,000  at  the  same  time, the cost savings would be approximately
$140,000 per year.
  FINANCIAL IMPACT  -  EMPLOYER  CONTRIBUTIONS:  Decreases  in  employer
contributions would ultimately be comparable to the decreases in employ-
er costs.
  ACTUARIAL  ASSUMPTIONS AND METHODS: The approximate savings per member
in the APVB has been estimated assuming that:
  * The member has been in a managerial position for 10 years
  * The member's gross wages at  the  end  of  the  10-year  period  was
$100,000
  *  The  member  had received increases in gross wages of 4.0% per year
during the 10-year period
  * The AMC rate was 6.0% of gross wages, and
  * AMC are accumulated at the rate of 5.0% per year.
  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  2014  Legislative Session. It is Fiscal Note 2014-15, dated
April 18, 2014 prepared by the  Chief  Actuary  of  the  New  York  City
Employees' Retirement System.