senate Bill S4186

Amended

Provides for the refund of certain member contributions

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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

  • 13 / Mar / 2013
    • REFERRED TO CIVIL SERVICE AND PENSIONS
  • 21 / May / 2013
    • AMEND AND RECOMMIT TO CIVIL SERVICE AND PENSIONS
  • 21 / May / 2013
    • PRINT NUMBER 4186A
  • 20 / Jun / 2013
    • COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • 20 / Jun / 2013
    • ORDERED TO THIRD READING CAL.1526
  • 20 / Jun / 2013
    • SUBSTITUTED BY A6578A

Summary

Provides to certain New York city transit authority members of the New York city employees' retirement system a refund of additional member contributions that were paid while participants of one of the chapter 96 of 1995 retirement programs.

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Bill Details

Versions:
S4186
S4186A
Legislative Cycle:
2013-2014
Law Section:
Retirement and Social Security Law
Laws Affected:
Amd §§604-c & 604-d, R & SS L
Versions Introduced in 2011-2012 Legislative Cycle:
S7090

Sponsor Memo

BILL NUMBER:S4186

TITLE OF BILL: An act to amend the retirement and social security
law, in relation to refunding contributions made to the twenty-five
year early retirement program and the age fifty-seven retirement
program by New York city transit authority members

PURPOSE: This bill provides for the refund of certain member
contributions made under the transit 57/25 program.

SUMMARY OF PROVISIONS:

Section1- Amends subdivision d of section 604-c of the retirement and
social security law by adding a new paragraph 15.

Section 2- Amends section 604-d of the retirement and social security
law by adding a new paragraph 15.

In both amendments, paragraph 15 entitles eligible former participants
to a refund of a portion of his/her additional member contributions,
including accrued interest at a rate of 5% per annum, upon completion
of an application to be established by the New York State Employees'
Retirement System's Board of Trustees. Defines this eligible
participant as someone who is or was employed in a title represented
for purposes of collective bargaining by an employee organization
representing a majority of supervisory employees in the NYCTA's
stations department, recognized or certified pursuant to Article 14 of
the civil service law, and who, on October 1, 2006 was employed by the
NYCTA in such title and who was a participant in the 25 year early
retirement program prior to the starting date of elimination of
additional member contributions for said program.

JUSTIFICATION: To correct the inequity to members who originally
opted into the Chapter 96 of the Laws of 1995 (Chapter 96/95) 55/25
pension program who paid an additional member contribution (AMC) from
the time they opted into until January 3, 2001. Then as a result of
Chapter 10 of the Laws of 2000, members who didn't opt into the 55/25
pension program were put into the 55/25 pension program without having
to make any additional member contributions

Members who made the additional member contributions are not being
given any additional benefit for their contributions. It is only fair
and equitable to refund the additional contributions back to these
members. Members of the 1994 25/55 pension program have already been
refunded their additional member contributions.

LEGISLATIVE HISTORY: New Bill.

FISCAL IMPLICATIONS: See Fiscal Note 2012-02, prepared by Chief
Actuary for the New York City Employees' Retirement System on January
20, 2012.

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
________________________________________________________________________

                                  4186

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                             March 13, 2013
                               ___________

Introduced  by  Sen.  DILAN  -- 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
  refunding  contributions made to the twenty-five year early retirement
  program and the age fifty-seven retirement program by  New  York  city
  transit authority members

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

  Section 1. Subdivision d of section 604-c of the retirement and social
security law, as added by chapter 96 of the laws of 1995, is amended  by
adding a new paragraph 15 to read as follows:
  15.  AN  ELIGIBLE  FORMER  PARTICIPANT,  AS DEFINED IN THIS PARAGRAPH,
SHALL BE ENTITLED TO A REFUND OF THE EMPLOYEE  PORTION  OF  HIS  OR  HER
ADDITIONAL  MEMBER CONTRIBUTIONS MADE PURSUANT TO THIS SUBDIVISION WHICH
SHALL INCLUDE ANY AND ALL INTEREST THEREON AT THE RATE OF  FIVE  PERCENT
PER  ANNUM,  COMPOUNDED  ANNUALLY AND SUCH REFUND SHALL BE PAYABLE, UPON
SUCH PARTICIPANT'S APPLICATION PURSUANT  TO  PROCEDURES  PROMULGATED  IN
REGULATIONS OF THE BOARD OF TRUSTEES OF THE RETIREMENT SYSTEM. AN ELIGI-
BLE  FORMER PARTICIPANT SHALL BE A PARTICIPANT WHO IS OR WAS EMPLOYED IN
A TITLE REPRESENTED FOR PURPOSES OF COLLECTIVE BARGAINING BY AN EMPLOYEE
ORGANIZATION REPRESENTING A MAJORITY OF SUPERVISORY EMPLOYEES IN THE NEW
YORK CITY TRANSIT AUTHORITY'S STATIONS DEPARTMENT, RECOGNIZED OR  CERTI-
FIED  PURSUANT TO ARTICLE FOURTEEN OF THE CIVIL SERVICE LAW, AND WHO, ON
OCTOBER FIRST, TWO THOUSAND SIX, WAS EMPLOYED BY THE NEW YORK CITY TRAN-
SIT AUTHORITY IN SUCH TITLE AND WHO WAS A PARTICIPANT IN THE TWENTY-FIVE
YEAR EARLY RETIREMENT PROGRAM PRIOR TO THE STARTING DATE OF  THE  ELIMI-
NATION OF ADDITIONAL MEMBER CONTRIBUTIONS, AS SUCH DATE IS DEFINED IN AN
ELECTION  MADE PURSUANT TO PARAGRAPH TEN OF SUBDIVISION E OF SECTION SIX
HUNDRED FOUR-B OF THIS ARTICLE.
  S 2. Subdivision f of section 604-d of the retirement and social secu-
rity law is amended by adding a new paragraph 15 to read as follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09787-01-3

S. 4186                             2

  15. AN ELIGIBLE FORMER PARTICIPANT,  AS  DEFINED  IN  THIS  PARAGRAPH,
SHALL  BE  ENTITLED  TO  A  REFUND OF THE EMPLOYEE PORTION OF HIS OR HER
ADDITIONAL MEMBER CONTRIBUTIONS MADE PURSUANT TO THIS SUBDIVISION  WHICH
SHALL  INCLUDE  ANY AND ALL INTEREST THEREON AT THE RATE OF FIVE PERCENT
PER  ANNUM,  COMPOUNDED  ANNUALLY AND SUCH REFUND SHALL BE PAYABLE, UPON
SUCH PARTICIPANT'S APPLICATION PURSUANT  TO  PROCEDURES  PROMULGATED  IN
REGULATIONS OF THE BOARD OF TRUSTEES OF THE RETIREMENT SYSTEM. AN ELIGI-
BLE  FORMER PARTICIPANT SHALL BE A PARTICIPANT WHO IS OR WAS EMPLOYED IN
A TITLE REPRESENTED FOR PURPOSES OF COLLECTIVE BARGAINING BY AN EMPLOYEE
ORGANIZATION REPRESENTING A MAJORITY OF SUPERVISORY EMPLOYEES IN THE NEW
YORK CITY TRANSIT AUTHORITY'S STATIONS DEPARTMENT, RECOGNIZED OR  CERTI-
FIED  PURSUANT TO ARTICLE FOURTEEN OF THE CIVIL SERVICE LAW, AND WHO, ON
OCTOBER FIRST, TWO THOUSAND SIX, WAS EMPLOYED BY THE NEW YORK CITY TRAN-
SIT AUTHORITY IN SUCH TITLE AND WHO WAS A PARTICIPANT IN THE AGE  FIFTY-
SEVEN  RETIREMENT  PROGRAM PRIOR TO THE STARTING DATE OF THE ELIMINATION
OF ADDITIONAL MEMBER CONTRIBUTIONS,  AS  SUCH  DATE  IS  DEFINED  IN  AN
ELECTION  MADE PURSUANT TO PARAGRAPH TEN OF SUBDIVISION E OF SECTION SIX
HUNDRED FOUR-B OF THIS ARTICLE.
  S 3. This act shall take effect immediately.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  PROVISIONS OF PROPOSED LEGISLATION: This  proposed  legislation  would
amend  New  York  State  Retirement  and  Social  Security  Law ("RSSL")
Sections 604-c and 604-d to provide to certain  New  York  City  Transit
Authority  ("NYCTA")  members of the New York City Employees' Retirement
System ("NYCERS") a refund of Additional  Member  Contributions  ("AMC")
that  were  paid while participants of one of the Chapter 96 of the Laws
of 1995 ("Chapter 96/95") Retirement Programs.
  The Effective Date of the proposed legislation would be  the  date  of
enactment.
  This  Fiscal Note assumes that the proposed legislation is intended to
refund interest on AMC in accordance with NYCERS procedures for  credit-
ing interest on member contributions.
  IMPACT  ON  PLAN  PROVISIONS  - ADDITIONAL MEMBER CONTRIBUTIONS: Under
Chapter 96/95, AMC were required under  each  of  the  Early  Retirement
Programs:
  * The Twenty-Five-Year Early Retirement Program ("55/25 Program") and
  * The Age Fifty-Seven Retirement Program ("57/5 Program").
  Those  NYCERS members who participated in either of such Programs paid
AMC of:
  * 4.35% of salary for service on and after January 1, 1995 until Janu-
ary 1, 1998,
  * 2.85% of salary for service on  and  after  January  1,  1998  until
December 2, 2001, and
  * 1.85% of salary for service on and after December 2, 2001.
  In addition, if such member's job title was considered Physically-Tax-
ing  ("PT"),  an  additional Physically-Taxing AMC ("PTAMC") of 1.98% of
salary was required for all service on and after January 1, 1995.
  As a result of Chapter 10 of the Laws of 2000, many of the NYCTA  Tier
IV  members  of  NYCERS who participated in the Chapter 96/95 Retirement
Programs were transferred into  the  Transit  Twenty-Five-Year  and  Age
Fifty-Five Retirement Program ("Transit 55/25 Program") effective Decem-
ber  15, 2000.  For these members, the AMC and PTAMC that had been paya-
ble under the Chapter 96/95 Retirement Programs were no longer  required
after  January  3,  2001  (i.e.,  the effective implementation date, the
first payroll period following the transfer date).

S. 4186                             3

  This proposed legislation would refund, on  and  after  the  Effective
Date, to certain Transit 55/25 Program participants with initial Program
participation  dates on or before December 15, 2000 who were employed by
the Transit Authority as Station Supervisors Level 2 as  of  October  1,
2006, including those who are currently retired, the employee portion of
the  AMC  and PTAMC, if any, paid for participation in the Chapter 96/95
Retirement Programs, including accrued interest at 5.0% per  annum.  For
those  who are currently retired, interest would accrue until retirement
date.
  Note: Under the Chapter 96/95 Retirement Programs, 50% of the AMC  and
PTAMC  paid  into  such  Programs is considered an employer contribution
while the other 50% is  considered  to  be  the  employee  portion.  The
employee portion of the AMC and PTAMC is refunded to members who decease
prior  to  retirement  or who retire at age 62 or later. If the proposed
legislation were enacted, those impacted Transit 55/25  Program  partic-
ipants  would receive the balance of the accumulated employee portion of
AMC and PTAMC.
  To receive such refund, those eligible participants would be  required
to complete a form and follow procedures to be established by the NYCERS
Board of Trustees.
  FINANCIAL  IMPACT  -  OVERVIEW:  If enacted into the law, the ultimate
employer cost of this proposed legislation would be  determined  by  the
reduction  in  expected  benefits  paid  (due to there no longer being a
requirement to refund  AMC  on  a  future  withdrawal),  offset  by  the
reduction in Fund assets due to the current refund of AMC.
  FINANCIAL  IMPACT - UNFUNDED ACTUARIAL ACCRUED LIABILITY: With respect
to NYCERS and based on the census data  and  actuarial  assumptions  and
methods  described  herein,  the  enactment of this proposed legislation
would result in a decrease in the Actuarial Accrued Liability ("AAL") of
approximately $40,000 as of June 30, 2011.
  In addition, there would be a reduction in Actuarial Asset Value as of
June 30, 2011 to reflect the expected refund of the employee portion  of
accumulated  Chapter 96/95 Retirement Program AMC and PTAMC, if any, for
those impacted  Transit  55/25  Program  participants  of  approximately
$320,000.
  Together,  the enactment of the proposed legislation would result in a
net increase in the Unfunded Actuarial  Accrued  Liability  ("UAAL")  to
NYCERS of approximately $280,000 as of June 30, 2011.
  FINANCIAL IMPACT - ADDITIONAL ANNUAL EMPLOYER COSTS AND CONTRIBUTIONS:
With respect to NYCERS, the enactment of this proposed legislation would
increase  annual  employer costs by approximately $70,000 per year for 5
years.
  Increases in employer contributions would be comparable to  the  esti-
mated increases in employer costs.
  If  enacted  on  or  before June 30, 2013, increased employer contrib-
utions to NYCERS would begin Fiscal Year 2013.
  If enacted after June 30,  2013  and  on  or  before  June  30,  2014,
increased employer contributions to NYCERS would begin Fiscal Year 2014.
  OTHER  COSTS:  Not  measured  in  this  Fiscal Note are any additional
administrative costs or the impact of this proposed legislation  on  the
Manhattan and Bronx Surface Transit Operating Authority ("MaBSTOA").
  CENSUS  DATA:  The  census  data  used  for estimates of AAL, UAAL and
employer contributions presented herein  are  the  187  Tier  IV  active
members  of  NYCERS who participate in the Transit 55/25 Program and who
were employed by the Transit Authority as Station Supervisors Level 2 as
of June 30, 2006.

S. 4186                             4

  Of these 187 Tier IV members of NYCERS who participate in the  Transit
55/25  Program and who were employed by the Transit Authority as Station
Supervisors Level 2 as of June 30, 2006, 57 members have  AMC  (and,  in
certain cases, PTAMC) account balances from contributions made under the
Chapter  96/95 Retirement Programs. Two of the 57 retired prior to Octo-
ber 1, 2006 making them ineligible for a refund. The  remaining  130  of
these members do not have such AMC or PTAMC account balances.
  Of  the 55 members eligible for a refund, 33 were active members as of
June 30, 2011 and 19 retired before age 62.  In  addition,  two  members
deceased before retirement and one member retired after age 62 and these
three  members  were  already refunded the employee portion of their AMC
and PTAMC.
  ACTUARIAL ASSUMPTIONS AND METHODS: Estimates of changes in  AAL,  UAAL
and  employer costs have been calculated using the actuarial assumptions
and methods adopted by the NYCERS Board of Trustees during  Fiscal  Year
2012  and  enacted  as  Chapter  3  of the Laws of 2013 ("2012 A&M") for
determining employer contributions for fiscal  years  beginning  on  and
after July 1, 2011 (i.e., Fiscal Years 2012 and after).
  In  accordance  with Section 13.638.2 (k-2) of the Administrative Code
of the City of New York ("ACNY") as enacted  by  Chapter  3/13,  as  one
component  of the 2012 A&M, new UAAL attributable to benefit changes are
to be amortized as determined by the  Actuary  but  generally  over  the
remaining working lifetimes of those impacted by these benefit changes.
  For  this proposed legislation, the average remaining working lifetime
is estimated to equal approximately three years from June 30,  2013  for
the  entire  group  impacted and approximately five years for just those
estimated to still be active members as of June 30, 2013.
  Similar legislations for Transit Operating  non-supervisory  employees
were  enacted  as Chapter 734 of the Laws of 2006 ("Chapter 734/06") and
as Chapter 379 of the Laws of 2007 ("Chapter 379/07") and the additional
UAAL was amortized for each legislation under the actuarial  assumptions
and  methods then in effect, implicitly over the average remaining work-
ing lifetimes of all NYCERS active members.
  The Actuary believes that the ideal financing period for this proposed
legislation would be the  average  remaining  working  lifetime  of  the
entire group impacted.
  However,  given  the  history of the financing of similar legislations
(e.g., Chapter 734/06 and Chapter 379/07), the Actuary  is  inclined  to
amortize  the proposed legislation over five years that approximates the
current  average  remaining  working  lifetime  of  the  active  members
impacted.  Essentially, this is a compromise between the remaining aver-
age working lifetime of  the  entire  group  impacted  and  the  average
remaining lifetime of all NYCERS members.
  For  this  particular  legislation, the Actuary would likely treat the
five years of amortization as the  payment  period  beginning  one  year
after  the  establishment of the UAAL.  This approach is consistent with
the One-Year Lag Methodology ("OYLM") where the UAAL is considered to be
amortized over six years with five years of payments  beginning  in  the
second year.
  Also  note  that,  historically, other legislation impacting primarily
retired or soon-to-be-retired members  was  often  amortized  over  five
years   (Retirement   Incentive  Programs)  or  10  years  (Supplemental
Programs).
  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.

S. 4186                             5

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 2013 Legislative Session. It is Fiscal  Note  2013-04,  dated
March  6,  2013,  prepared  by  the  Chief Actuary for the New York City
Employees' Retirement System.

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