S T A T E   O F   N E W   Y O R K
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                                  5359

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                              May 13, 2015
                               ___________

Introduced  by  Sen.  SAVINO -- 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 in the title transit manager

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

  Section 1. Paragraph 15 of subdivision  d  of  section  604-c  of  the
retirement  and social security law, as added by chapter 522 of the laws
of 2013, is amended 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 OR THE TITLE TRANSIT MANAG-
ER, 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. Paragraph 15 of subdivision f of section 604-d of the retirement
and social security law, as added by chapter 522 of the laws of 2013, is
amended to read as follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10181-01-5

              

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  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 OR THE TITLE TRANSIT MANAG-
ER, 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  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 payable
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

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the Transit Authority as Transit Managers as of October 1, 2006, includ-
ing 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 Fund assets due to the current refund of AMC, offset by the
reduction  in  expected  benefits  paid  (due to there no longer being a
requirement to refund AMC on a future withdrawal).
  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 reduction in Actuarial Asset Value as of June 30, 2014
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 $1,455,000.
  In  addition,  there  would  be  a  decrease  in the Actuarial Accrued
Liability ("AAL") of approximately $120,000 as of June 30, 2014.
  Together, the enactment of the proposed legislation would result in  a
net  increase  in  the  Unfunded Actuarial Accrued Liability ("UAAL") to
NYCERS of approximately $1,335,000 as of June 30, 2014.
  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 $340,000 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,  2015,  increased  employer  contrib-
utions to NYCERS would begin Fiscal Year 2017.
  If  enacted  after  June  30,  2015  and  on  or before June 30, 2016,
increased employer contributions to NYCERS would begin Fiscal Year 2018.
  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  841 Tier IV active
members of NYCERS who participate in the Transit 55/25 Program  and  who
were  employed  by  the Transit Authority as Transit Managers as of June
30, 2006.
  Of these 841 Tier IV members of NYCERS who participate in the  Transit
55/25  Program and who were employed by the Transit Authority as Transit
Managers as of June 30, 2006, 230  members  had  AMC  (and,  in  certain
cases, PTAMC) account balances from contributions made under the Chapter

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96/95  Retirement  Programs  as  of June 30, 2013.  The remaining 611 of
these members do not have such AMC or PTAMC account balances.
  Of  the 230 members eligible for a refund as of June 30, 2013, 91 were
active members and 115 retired before age 62. In  addition,  11  members
deceased before retirement and 13 members retired after age 62 and these
24  members  were already refunded the employee portion of their AMC and
PTAMC.
  This census data was then rolled forward to June 30, 2014 by crediting
interest of 5.0% on active members account balances and assuming that no
member retired or died during the period.
  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 two years from June 30, 2015 for the
entire group impacted and approximately five years for just those  esti-
mated to still be active members as of June 30, 2015.
  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.
  Similar  legislation  was  also  enacted as Chapter 522 of the Laws of
2013 ("Chapter 522/13") and an additional UAAL was  amortized  for  this
legislation for cost purposes over a five year period.
  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, Chapter 379/07 and Chapter 522/13), 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  average 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

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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 2015 Legislative Session. It is Fiscal  Note  2015-13,  dated
March  10,  2015,  prepared  by  the Chief Actuary for the New York City
Employees' Retirement System.