senate Bill S4257B

Increases certain special accidental death benefits

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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

  • 15 / Mar / 2013
    • REFERRED TO CIVIL SERVICE AND PENSIONS
  • 20 / Mar / 2013
    • AMEND AND RECOMMIT TO CIVIL SERVICE AND PENSIONS
  • 20 / Mar / 2013
    • PRINT NUMBER 4257A
  • 01 / Apr / 2013
    • AMEND AND RECOMMIT TO CIVIL SERVICE AND PENSIONS
  • 01 / Apr / 2013
    • PRINT NUMBER 4257B
  • 22 / Apr / 2013
    • 1ST REPORT CAL.382
  • 23 / Apr / 2013
    • 2ND REPORT CAL.
  • 24 / Apr / 2013
    • ADVANCED TO THIRD READING
  • 12 / Jun / 2013
    • SUBSTITUTED BY A5576B

Summary

Increases certain special accidental death benefits paid to widows, widowers or the deceased member's children.

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Bill Details

See Assembly Version of this Bill:
A5576B
Versions:
S4257
S4257A
S4257B
Legislative Cycle:
2013-2014
Law Section:
General Municipal Law
Laws Affected:
Amd §208-f, Gen Muni L; amd §361-a, R & SS L

Votes

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absent
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Sponsor Memo

BILL NUMBER:S4257B

PURPOSE:

This legislation extends the escalation of a cost of living increase
of approximately 3% for all line-of-duty widows or widowers for fiscal
year 2013-14.

SUMMARY OF PROVISIONS:

This bill amends subdivision c of section 208-f of the General
Municipal Law as amended by Chapter 285 of the Laws of 2012 and
subdivision c of section 361-a of the Retirement and Social Security
Law, as amended by Chapter 285 of the Laws of 2012.

EXISTING LAW:

Currently, line-of-duty widows or widowers receive a cost of living
adjustment that is based upon the year that the widow or widower's
spouse died.

JUSTIFICATION:

Since 1978, the Legislature has passed and the Governor signed into
law a cost of living increase and a one-year escalation for all New
York State widows and widowers of police officers and firefighters
killed in the line-of-duty. The intent of the original 1978 law was to
increase their benefits to an amount that would reflect the impact of
inflation. However, the law did not provide for any new cost of living
increase after July 1, 1979.

Since that date, the cost of living has increased well over 3% each
year, including some periods of double-digit inflation. These same
widows and widowers are no longer receiving adequate benefits. This
Legislation does not totally cover the present inflation spiral, but
it at least provides some increased relief to the widows and widowers
of New York State's bravest citizens, who gave their lives in service
to the people of New York State. In the past, these brave families
have faced a poverty stricken existence. This legislation would
prevent the return of that deplorable state of affairs. As with
previous legislation, there is no cost to the localities, as the state
would reimburse them for this small increase.

LEGISLATIVE HISTORY:

2012: S.6438A/A.9116 - Chapter 285

FISCAL IMPLICATIONS:

See Fiscal Note included with the bill.

EFFECTIVE DATE:

This act shall take effect July 1, 2013.

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

                                 4257--B

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                             March 15, 2013
                               ___________

Introduced  by  Sen.  GOLDEN -- 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  --  committee  discharged, bill
  amended, ordered reprinted as amended and recommitted to said  commit-
  tee

AN  ACT to amend the general municipal law and the retirement and social
  security law, in relation to  increasing  certain  special  accidental
  death benefits

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

  Section 1. Subdivision c of section 208-f  of  the  general  municipal
law,  as  amended by chapter 285 of the laws of 2012, is amended to read
as follows:
  c. Commencing July first, two thousand [twelve] THIRTEEN  the  special
accidental  death  benefit  paid  to  a widow or widower or the deceased
member's children under the age of eighteen or, if a student, under  the
age  of  twenty-three,  if the widow or widower has died, shall be esca-
lated by adding thereto an additional percentage of the  salary  of  the
deceased member (as increased pursuant to subdivision b of this section)
in accordance with the following schedule:
     calendar year of death
     of the deceased member              per centum
          1977 or prior                    [181.4%] 189.8%
          1978                             [173.2%] 181.4%
          1979                             [165.2%] 173.2%
          1980                             [157.5%] 165.2%
          1981                             [150.0%] 157.5%
          1982                             [142.7%] 150.0%
          1983                             [135.7%] 142.7%
          1984                             [128.8%] 135.7%

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08382-06-3

S. 4257--B                          2

          1985                             [122.1%] 128.8%
          1986                             [115.7%] 122.1%
          1987                             [109.4%] 115.7%
          1988                             [103.3%] 109.4%
          1989                              [97.4%] 103.3%
          1990                              [91.6%]  97.4%
          1991                              [86.0%]  91.6%
          1992                              [80.6%]  86.0%
          1993                              [75.4%]  80.6%
          1994                              [70.2%]  75.4%
          1995                              [65.3%]  70.2%
          1996                              [60.5%]  65.3%
          1997                              [55.8%]  60.5%
          1998                              [51.3%]  55.8%
          1999                              [46.9%]  51.3%
          2000                              [42.6%]  46.9%
          2001                              [38.4%]  42.6%
          2002                              [34.4%]  38.4%
          2003                              [30.5%]  34.4%
          2004                              [26.7%]  30.5%
          2005                              [23.0%]  26.7%
          2006                              [19.4%]  23.0%
          2007                              [15.9%]  19.4%
          2008                              [12.6%]  15.9%
          2009                               [9.3%]  12.6%
          2010                               [6.1%]   9.3%
          2011                               [3.0%]   6.1%
          2012                               [0.0%]   3.0%
          2013                                        0.0%
  S 2. Subdivision c of section 361-a of the retirement and social secu-
rity  law,  as amended by chapter 285 of the laws of 2012, is amended to
read as follows:
  c. Commencing July first, two thousand [twelve] THIRTEEN  the  special
accidental  death  benefit  paid  to  a widow or widower or the deceased
member's children under the age of eighteen or, if a student, under  the
age  of  twenty-three,  if the widow or widower has died, shall be esca-
lated by adding thereto an additional percentage of the  salary  of  the
deceased member, as increased pursuant to subdivision b of this section,
in accordance with the following schedule:
     calendar year of death
     of the deceased member              per centum
          1977 or prior                    [181.4%] 189.8%
          1978                             [173.2%] 181.4%
          1979                             [165.2%] 173.2%
          1980                             [157.5%] 165.2%
          1981                             [150.0%] 157.5%
          1982                             [142.7%] 150.0%
          1983                             [135.7%] 142.7%
          1984                             [128.8%] 135.7%
          1985                             [122.1%] 128.8%
          1986                             [115.7%] 122.1%
          1987                             [109.4%] 115.7%
          1988                             [103.3%] 109.4%
          1989                              [97.4%] 103.3%
          1990                              [91.6%]  97.4%
          1991                              [86.0%]  91.6%

S. 4257--B                          3

          1992                              [80.6%]  86.0%
          1993                              [75.4%]  80.6%
          1994                              [70.2%]  75.4%
          1995                              [65.3%]  70.2%
          1996                              [60.5%]  65.3%
          1997                              [55.8%]  60.5%
          1998                              [51.3%]  55.8%
          1999                              [46.9%]  51.3%
          2000                              [42.6%]  46.9%
          2001                              [38.4%]  42.6%
          2002                              [34.4%]  38.4%
          2003                              [30.5%]  34.4%
          2004                              [26.7%]  30.5%
          2005                              [23.0%]  26.7%
          2006                              [19.4%]  23.0%
          2007                              [15.9%]  19.4%
          2008                              [12.6%]  15.9%
          2009                               [9.3%]  12.6%
          2010                               [6.1%]   9.3%
          2011                               [3.0%]   6.1%
          2012                               [0.0%]   3.0%
          2013                                        0.0%
  S 3. This act shall take effect July 1, 2013.
  FISCAL  NOTE.--Insofar  as  this  bill  would amend the Retirement and
Social Security Law, it is estimated that there would be  an  additional
annual  cost of approximately $43,000 above the approximately $9 million
current annual cost of this benefit. This cost would be  shared  by  the
State  of New York and all participating employers of the New York State
and Local Police and Fire Retirement System.
  Summary of relevant resources:
  Data: March 31, 2012 Actuarial Year End  File  with  distributions  of
membership  and  other  statistics  displayed  in the 2012 Report of the
Actuary and 2012 Comprehensive Annual Financial Report.
  Assumptions and Methods: 2010, 2011 and  2012  Annual  Report  to  the
Comptroller on Actuarial Assumptions, Codes Rules and Regulations of the
State of New York: Audit and Control.
  Market  Assets and GASB Disclosures: March 31, 2012 New York State and
Local Retirement System Financial Statements and Supplementary  Informa-
tion.
  Variations  of Benefit Liabilities and Actuarial Assets: summarized in
the 2012 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.
  This estimate, dated January 7, 2013 and intended for use only  during
the  2013  Legislative  Session, is Fiscal Note No. 2013-37, prepared by
the Actuary for the New York State and Local Police and Fire  Retirement
System.
  FISCAL  NOTE.--  PROVISIONS  OF PROPOSED LEGISLATION - OVERVIEW:  With
respect to the City of New York (the "City"), this proposed  legislation
would  amend  General  Municipal Law ("GML") Section 208-f.c to increase
certain Special Accidental  Death  Benefits  ("SADB")  for  line-of-duty
widows/widowers  and/or  children  of  former uniformed employees of the
City and the New York City Health and Hospitals Corporation and  certain
former  employees of the Triborough Bridge and Tunnel Authority who were
members of certain New York City Retirement Systems ("NYCRS").
  The Effective Date of the proposed legislation would be July 1, 2013.

S. 4257--B                          4

  IMPACT ON BENEFITS - SADB RECIPIENTS: With respect to the  NYCRS,  the
proposed  legislation would impact the SADB payable to certain survivors
of members of the:
  * New York City Employees' Retirement System ("NYCERS"), or
  * New York City Police Pension Fund ("POLICE"), or
  * New York City Fire Department Pension Fund ("FIRE"), and
who  were  employed  by  one of the following employers in certain posi-
tions:

  * New York City Police Department - Uniformed Position,
  * New York City Fire Department - Uniformed Position,
  * New York City Housing Authority - Uniformed Position,
  * New York City Transit Authority - Uniformed Position,
  * New York City Department of Correction - Uniformed Position,
  * New York City - Uniformed Position as Emergency  Medical  Technician
("EMT"),
  *  New York City Health and Hospitals Corporation - Uniformed Position
as EMT, or
  * Triborough Bridge and Tunnel Authority - Bridge and Tunnel Position.
  DESCRIPTION OF BENEFITS PAYABLE: Under the  GML,  the  basic  SADB  is
defined to equal:
  The  salary  of  the  deceased member at date of death (or, in certain
instances, a greater salary based on rank or other status) ("Final Sala-
ry"), less:
  * Any death benefit as adjusted by any Supplementation or Cost-of-Liv-
ing Adjustment ("COLA") paid by the NYCRS to the member's survivors,
  * Any death benefit paid by Social Security to the member's survivors,
and
  * Any Worker's Compensation benefit paid to the member's survivors.
  The SADB is paid to the deceased member's surviving widow or  widower,
if alive. If the widow/widower is no longer alive, then the SADB is paid
to  the deceased member's children until age eighteen or while attending
school until age twenty-three.
  The GML also provides that the SADB is subject to escalation based  on
the  calendar year of death of the member. Each year since Calendar Year
1977 the SADB has been increased by  an  additional  cumulative,  incre-
mental  percentage  of  Final  Salary. For example, for a covered member
deceased in Calendar Year 1979, the SADB cumulative percentage is 165.2%
of Final Salary as of July 1, 2012.
  Under the proposed legislation, the additional, incremental percentage
of Final Salary to be effective July 1, 2013 would be 3.0%.
  FINANCIAL IMPACT - EMPLOYER PAYMENTS: With respect to  the  NYCRS,  as
these  SADB are provided on a pay-as-you-go basis, the additional annual
employer payments expected to be paid during  the  first  year,  if  the
proposed legislation is enacted, would equal approximately $2.5 million.
  Note: These additional payments represent an increase of approximately
4.6% in the estimated SADB payments during the first year.
  The  SADB  payments  are  made  by the NYCRS who are reimbursed by the
City.
  Where previously the State of New York (the  "State")  reimbursed  the
City for most GML 208.f payments, it is the understanding of the Actuary
that  since  2009  the  State  has  limited its reimbursement to a fixed
amount.  Should this amount not be increased, then the  additional  cost
of  this proposed legislation would be borne entirely by the City of New
York.

S. 4257--B                          5

  FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES OF BENEFITS ("APVB"): With
respect to the survivors of deceased NYCRS members who would be impacted
by this proposed legislation, under the actuarial  assumptions  used  in
the  June 30, 2011 (Lag) actuarial valuations of the NYCRS, including an
Actuarial Interest Rate ("AIR") assumption of 7.0% per annum, the enact-
ment  of  this proposed legislation would increase APVB by approximately
$29.5 million as of June 30, 2013.
  Based on the same demographic actuarial assumptions but  with  an  AIR
assumption of 4.0% per annum, the enactment of this proposed legislation
would increase APVB by approximately $40.1 million as of June 30, 2013.
  OTHER  COSTS: The enactment of this proposed legislation would also be
expected to result in modest increases  in  administrative  expenses  of
NYCERS, POLICE, FIRE, the employers and certain New York City agencies.
  CENSUS DATA: The financial impact of the proposed legislation is based
upon  the census data for such widows, widowers and children provided by
the NYCRS and adjusted, as necessary, to prepare  the  computations  and
for consistency with other data.
  The  following  table  shows,  by  Retirement  System,  the  number of
deceased members with eligible survivors as of June  30,  2012  and  the
estimated  annual  SADB rate prior to the increase proposed to be effec-
tive as of July 1, 2013.

                                 Table 1

                  SADB Census Data as of June 30, 2012

                              ($ Millions)

________________________________________________________________________
                         Number of Deceased    Annual SADB Rate Prior
                       Members with Eligible  to Proposed July 1, 2013
Retirement System         Survivors                 Increase
________________________________________________________________________
NYCERS                        27                    $  1.1
POLICE                       310                      16.1
FIRE                         607                      37.5
  Total                      944                    $ 54.7
________________________________________________________________________

  ACTUARIAL ASSUMPTIONS AND METHODS: Additional APVB have been  computed
based  on  the  actuarial assumptions and methods in effect for the June
30, 2011 (Lag) actuarial valuations of NYCERS, POLICE and FIRE  used  to
determine  the  Preliminary  Fiscal  Year  2013  employer contributions,
including an AIR  assumption  of  7.0%  per  annum  (net  of  Investment
Expenses).
  The  demographic  actuarial  assumptions  were adopted by the Board of
Trustees of each NYCRS during Fiscal Year 2012 and  the  AIR  assumption
was  enacted by the New York State Legislature and Governor as Chapter 3
of the Laws of 2013 ("Chapter 3/13").
  Additional APVB have also been developed using an  AIR  assumption  of
4.0%  per annum that could be more consistent with the potential cost of
debt issued by the State of New York or the City of  New  York  under  a
long-term Consumer Price Inflation ("CPI") assumption of 2.5% per year.
  ECONOMIC VALUE OF BENEFITS: The actuarial assumptions used in the June
30,  2011  (Lag)  actuarial  valuations of the NYCRS are appropriate for

S. 4257--B                          6

budgetary models and for determining annual  employer  contributions  to
the NYCRS.
  However,  these  actuarial  assumptions  used  to  determine  employer
contributions do not develop risk-adjusted, economic values of benefits.
In the current  economic  environment  of  low  U.S.  Treasury  security
yields, such risk-adjusted, economic values of benefits could be signif-
icantly greater than the APVB developed herein.
  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 2013 Legislative Session. It is Fiscal Note  2013-05R,  dated
March  19,  2013,  prepared  by  the Chief Actuary for the New York City
Employees' Retirement System, the New York City Police Pension Fund  and
the New York City Fire Department Pension Fund.

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