senate Bill S4186A

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

See Assembly Version of this Bill:
A6578A
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, A9921

Sponsor Memo

BILL NUMBER:S4186A

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 55/25 program.

SUMMARY OF PROVISIONS:

Section 1- 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 subdivision f 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 City 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 or the age 57 retirement program prior to the
starting date of elimination of additional member contributions for
said programs.

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, prepared by Chief Actuary for the New York City
Employees' Retirement System on March 6, 2013.

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--A

                       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
  -- committee discharged, bill amended, ordered  reprinted  as  amended
  and recommitted to said committee

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
THE  TITLE  SUPERVISOR (STATIONS) IN ASSIGNMENT LEVEL II IN THE NEW YORK
CITY TRANSIT AUTHORITY'S STATIONS DEPARTMENT, AND WHO, ON OCTOBER FIRST,
TWO THOUSAND SIX, WAS EMPLOYED BY THE NEW YORK CITY TRANSIT AUTHORITY IN
SUCH TITLE AND WHO WAS A  PARTICIPANT  IN  THE  TWENTY-FIVE  YEAR  EARLY
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 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.
                                                           LBD09787-03-3

S. 4186--A                          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
THE TITLE SUPERVISOR (STATIONS) IN ASSIGNMENT LEVEL II IN THE  NEW  YORK
CITY TRANSIT AUTHORITY'S STATIONS DEPARTMENT, AND WHO, ON OCTOBER FIRST,
TWO THOUSAND SIX, WAS EMPLOYED BY THE NEW YORK CITY TRANSIT 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 PURSU-
ANT  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).
  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

S. 4186--A                          3

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.
  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

S. 4186--A                          4

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.
I  meet the Qualification Standards of the American Academy of Actuaries
to render the actuarial opinion contained herein.

S. 4186--A                          5

  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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