senate Bill S7769

Authorizes Thomas Steier to be reclassified as a Tier II member of the New York city retirement system

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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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  • 06 / Jun / 2014
    • REFERRED TO CIVIL SERVICE AND PENSIONS

Summary

Authorizes Thomas Steier to be reclassified as a Tier II member of the New York city employees' retirement system.

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Bill Details

See Assembly Version of this Bill:
A10001
Versions:
S7769
Legislative Cycle:
2013-2014
Current Committee:
Senate Civil Service And Pensions
Law Section:
Retirement

Sponsor Memo

BILL NUMBER:S7769

TITLE OF BILL: An act to allow Thomas Steier to be reclassified as a
Tier II member of the New York City Employees' Retirement System

TITLE OF BILL: An act to allow Thomas Steier to be reclassified as a
Tier II member of the New York City Employees' Retirement System

PURPOSE: To reclassify Thomas Steier as a member of Tier II of the New
York City retirement system.

SUMMARY OF PROVISIONS:Grants Thomas Steier membership in the New York
City Employees' Retirement System with Tier II Status.

JUSTIFICATION: Mr. Steier was advised to wait by his employer before
entering the New York City retirement system. By following those
instructions, Mr. Steier inadvertently allowed the deadline for Tier II
registration to pass. Because he was given inaccurate information and
was subsequently placed in to Tier III, it is appropriate that Mr. Stei-
er be allowed to be reclassified as a Tier II member of the New York
City retirement system.

LEGISLATIVE HISTORY: This bill has been previously introduced.

FISCAL IMPLICATIONS: The NYC Office of the Actuary estimates that, if
enacted, this legislation would result in an increase in $25,000 in
retroactive payments and $205,000 in prospective payments.

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
________________________________________________________________________

                                  7769

                            I N  S E N A T E

                              June 6, 2014
                               ___________

Introduced  by Sen. STAVISKY -- read twice and ordered printed, and when
  printed to be committed to the Committee on Civil Service and Pensions

AN ACT to allow Thomas Steier to be reclassified as a Tier II member  of
  the New York City Employees' Retirement System

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

  Section 1. Notwithstanding any inconsistent provision of  law,  Thomas
Steier,  a  member  of  the  New  York City Employees' Retirement System
(NYCERS) with Tier III status, who was employed with the New  York  City
Employees'  Retirement System (NYCERS) on July 6, 1976 until August 1978
and was employed with the New York city transit  authority  from  August
1978  to  February  2,  2013 when upon such date he retired, and who for
reasons not ascribable to his own negligence was not offered  membership
in  the  New York City Employees' Retirement System on July 6, 1976 as a
Tier II member, shall, upon application filed with the Board of Trustees
of NYCERS on or before the thirty-first day of December next  succeeding
the date on which this act shall have become a law, be reclassified as a
Tier  II member with July 6, 1976 as his date of membership and shall be
entitled to every right, benefit and privilege  which  would  have  been
available  to him in accordance with Tier II status, and the city of New
York, as Thomas Steier's employer from July 6, 1976 until  August  1978,
is  responsible for such error and shall be responsible for all costs to
provide the Tier II benefit to Thomas Steier, provided,  however  Thomas
Steier  shall  be  responsible  for  contributing  the  required  member
contributions for Tier II membership.
  S 2. This act shall take effect immediately.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  PROVISIONS OF PROPOSED LEGISLATION:  The  proposed  legislation  would
authorize  the  New York City Employees' Retirement System ("NYCERS") to
accept an application from Thomas Steier, a Tier IV NYCERS  member  with
Tier III rights, to be reclassified as a Tier II member.
  BACKGROUND:  Mr.  Steier  was originally employed by NYCERS on July 6,
1976 and would have been a Tier II member of NYCERS had  he  joined  the
system prior to the establishment of Tier III on July 27, 1976. However,

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14367-03-4

S. 7769                             2

since he joined NYCERS on July 29, 1976 he is a Tier IV member with Tier
III rights.
  Mr.  Steier  retired  on February 2, 2013 under the Tier IV basic 62/5
retirement plan and began his pension at that time under the 100%  Joint
and Survivor payment option with his wife as beneficiary.
  The proposed legislation, if enacted, would authorize NYCERS to accept
an  application from Mr. Steier on or before December 31 next succeeding
the date on which this proposed legislation is enacted that would  allow
him  to  be  reclassified  from  his current status as a retired Tier IV
member to a retired Tier II member.
  This reclassification would provide Mr. Steier with the pension  bene-
fits  that would have been available to him had he always been a Tier II
member of NYCERS.
  The Effective Date of the proposed legislation would be  the  Date  of
Enactment  but would allow for his retirement allowance to be recomputed
as if he had always had Tier II membership status.
  FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: The  estimated  financial
impact has been calculated based on the difference between (1) the bene-
fits  Mr.  Steier  would  receive  as  a  Tier II member in the Modified
Fifty-Five-Year Increased Service Fractional Plan ("ISF Plan")  if  this
proposed  legislation  were  enacted  and (2) the benefits Mr. Steier is
currently entitled to receive as a Tier IV member  in  the  NYCERS  62/5
plan.
  The  difference  in  estimated  costs (retroactive from his retirement
date to June 30, 2014 and prospective on and  after  July  1,  2014)  is
intended to provide a sense of the ultimate financial impact.
  If  the  legislation  is  enacted,  Mr.  Steier would be entitled to a
pension of approximately $56,534 per year beginning  on  his  retirement
date  of  February 2, 2013 under the 100% Joint and Survivor Option with
his wife as his beneficiary. If the  legislation  is  not  enacted,  Mr.
Steier  would  continue  to be entitled to an annual pension of $38, 955
under the 100% Joint and Survivor Option that he elected.
  Based on the actuarial assumptions and methods described  herein,  the
enactment  of  this  proposed  legislation  would increase the Actuarial
Present Value ("APV") of Benefits ("APVB") and  the  Unfunded  Actuarial
Accrued  Liability  ("UAAL")  of  NYCERS by approximately $230,000 as of
June 30, 2014. This amount was calculated as shown in Table 1 below:

                                 Table 1

    Estimated Financial Impact of Reclassification for Thomas Steier
           Retroactive from February 2, 2013 to June 30, 2014
                And Prospective On and After July 1, 2014

                          Retroactive    Prospective
APV of Pension if           Payments       Payments       Total

Legislation is Enacted      $80,000       $674,000      $754,000

Legislation is Not
Enacted                     (55,000)      (469,000)     (524,000)

Increase in APV             $25,000       $205,000      $230,000
  FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS AND  ANNUAL  EMPLOYER
COSTS:  In  accordance  with Section 13.638.2(k-2) of the Administrative
Code of the City of New York ("ACNY"), new UAAL attributable to  benefit

S. 7769                             3

changes  are  to be amortized as determined by the Actuary but generally
over the remaining working lifetime of those  impacted  by  the  benefit
changes.
  For  this  proposed  legislation, Mr. Steier is inactive and therefore
the entire increase in UAAL based on the Actuary's actuarial assumptions
and methods in effect on June 30, 2013 rolled forward to June  30,  2014
of $230,000 should be recognized immediately for contribution purposes.
  The  increase in employer costs would be comparable to the increase in
employer contributions.
  CONTRIBUTION TIMING: If enacted during the  2014  Legislative  Session
and  if his application for reclassification to Tier II were received by
NYCERS on or before June 30, 2014, his status as a Tier II retiree would
likely first be reflected in the June 30, 2014 census data.  In  accord-
ance  with  the  One-Year  Lag  methodology  used  to determine employer
contributions, increased employer contributions would be consistent with
the increased employer costs and would be  determined  for  Fiscal  Year
2016.
  If enacted during the 2014 Legislative Session, and if his application
for  reclassification  to Tier II were received by NYCERS after June 30,
2014 but on or before June 30, 2015, his status as  a  Tier  II  retiree
would  likely  first  be  reflected in the June 30, 2015 census data and
increased employer contributions would be  determined  for  Fiscal  Year
2017.
  ACTUARIAL  ASSUMPTIONS  AND  METHODS:  The  additional  APVB  and UAAL
presented herein have been calculated based on the actuarial assumptions
and methods in effect for the June 30, 2013 (Lag)  actuarial  valuations
used to determine Fiscal Year 2015 employer contributions of NYCERS.
  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  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 2014 Legislative Session. It is Fiscal  Note  2014-26,  dated
June 4, 2014 prepared by the Chief Actuary for the New York City Employ-
ees' Retirement System.

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