Assembly Bill A8224

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

                                 8224--A

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                              May 11, 2009
                               ___________

Introduced by M. of A. ABBATE -- read once and referred to the Committee
  on  Governmental  Employees -- recommitted to the Committee on Govern-
  mental Employees in accordance with Assembly Rule 3, sec. 2 -- commit-
  tee discharged, bill amended, ordered reprinted as amended and  recom-
  mitted to said committee

AN  ACT  to amend the retirement and social security law, in relation to
  the purchase of service credit

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

  Section 1. The retirement and social security law is amended by adding
a new section 809 to read as follows:
  S  809.  PURCHASE  OF  ADDITIONAL  SERVICE CREDIT. NOTWITHSTANDING ANY
OTHER PROVISION OF LAW, A MEMBER OF THE NEW YORK STATE AND LOCAL EMPLOY-
EES' RETIREMENT SYSTEM WHO HAS RENDERED A MINIMUM OF FIVE YEARS OF CRED-
ITED SERVICE SHALL BE ELIGIBLE TO PURCHASE UP TO  FIVE  YEARS  OF  ADDI-
TIONAL SERVICE CREDIT AND MAY OBTAIN SUCH CREDIT UPON APPLICATION TO THE
SAID  RETIREMENT  SYSTEM.  IN ORDER TO OBTAIN SERVICE CREDIT PURSUANT TO
THIS SECTION, THE MEMBER SHALL PAY INTO THE  PENSION  ACCUMULATION  FUND
THE  CONTRIBUTION  AMOUNT  AS DETERMINED BY THE COMPTROLLER, EITHER IN A
LUMP SUM OR IN INSTALLMENTS, NECESSARY TO PAY IN FULL THE COST  OF  SUCH
SERVICE  CREDIT. IF SUCH PAYMENT IS MADE IN INSTALLMENTS, THE SAME SHALL
BE PAID WITHIN A PERIOD NO GREATER THAN THE NUMBER  OF  MONTHS  OF  SUCH
MEMBER SERVICE PURCHASED. THE PROVISIONS OF THIS SECTION SHALL NOT APPLY
TO  ANY  MEMBER  WHO  IS A MEMBER OF A RETIREMENT PLAN THAT PROVIDES FOR
RETIREMENT AT HALF PAY AFTER TWENTY  OR  TWENTY-FIVE  YEARS  OF  SERVICE
WITHOUT  REGARD  TO  AGE. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, IN
THE EVENT OF DEATH PRIOR TO RETIREMENT, AMOUNTS PAID BY THE  MEMBER  FOR
THE  PURCHASE  OF  SERVICE  CREDIT  PURSUANT  TO  THIS  SECTION SHALL BE
REFUNDED, WITH INTEREST, TO THE EXTENT  THAT  SERVICE  CREDIT  PURCHASED
WITH  SUCH  AMOUNTS  DOES NOT PRODUCE A GREATER DEATH BENEFIT THAN WOULD
HAVE BEEN PAYABLE HAD THE MEMBER NOT PURCHASED SUCH  CREDIT.    NOTWITH-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11782-02-0
              

A. 8224--A                          2

STANDING ANY OTHER PROVISION OF LAW, IN THE EVENT OF RETIREMENT, AMOUNTS
PAID  BY  THE MEMBER FOR THE PURCHASE OF SERVICE CREDIT PURSUANT TO THIS
SECTION SHALL BE REFUNDED, WITH INTEREST,  TO  THE  EXTENT  THE  SERVICE
CREDIT PURCHASED WITH SUCH AMOUNTS DOES NOT PRODUCE A GREATER RETIREMENT
ALLOWANCE THAN WOULD HAVE BEEN PAYABLE HAD THE MEMBER NOT PURCHASED SUCH
CREDIT.
  S  2.  This  act shall take effect on the ninetieth day after it shall
have become a law.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  This bill would allow certain members in the New York State and  Local
Employees'  Retirement  System (NYS&LERS) who have rendered a minimum of
five years of creditable service to purchase a maximum of five years  of
additional  service  credit  for a period of time during which no actual
service was rendered. This type of service is commonly  referred  to  as
"air  time".  The  full cost of such service will be paid by the member.
The purchase of "air time" will not be available to any member  who  may
retire  at  half  pay  after  completion of 20 or 25 years of creditable
service without regard to age.
  If this bill is enacted, the cost to purchase "air time"  will  depend
on  the member's plan, tier, age, salary, current service and the amount
of "air time" that will be  purchased.  There  could  be  costs  to  the
NYS&LERS  on  behalf  of  members  whose  salary increases subsequent to
purchasing this "service" exceed our expectations, or  for  members  who
survive  beyond their life expectancy. There will also be administrative
costs to the NYS&LERS.
  This bill would  provide  members  with  a  favorable  alternative  to
purchasing  annuities  in the private market. The NYS&LERS would, effec-
tively, be providing 8% annual interest.
  This estimate, dated December 15, 2009,  and  intended  for  use  only
during  the  2010  Legislative  Session,  is  Fiscal  Note  No. 2010-42,
prepared by the Actuary for the New  York  State  and  Local  Employees'
Retirement System.

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

                                 8224--B

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                              May 11, 2009
                               ___________

Introduced by M. of A. ABBATE -- read once and referred to the Committee
  on  Governmental  Employees -- recommitted to the Committee on Govern-
  mental Employees in accordance with Assembly Rule 3, sec. 2 -- commit-
  tee discharged, bill amended, ordered reprinted as amended and  recom-
  mitted  to  said  committee -- again reported from said committee with
  amendments, ordered reprinted  as  amended  and  recommitted  to  said
  committee

AN  ACT  to amend the retirement and social security law, in relation to
  the purchase of service credit

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

  Section 1. The retirement and social security law is amended by adding
a new section 809 to read as follows:
  S  809.  PURCHASE  OF  ADDITIONAL  SERVICE CREDIT. NOTWITHSTANDING ANY
OTHER PROVISION OF LAW, A MEMBER OF THE NEW YORK STATE AND LOCAL EMPLOY-
EES' RETIREMENT SYSTEM WHO HAS RENDERED A MINIMUM OF TEN YEARS OF  CRED-
ITED  SERVICE  SHALL  BE  ELIGIBLE TO PURCHASE UP TO FIVE YEARS OF ADDI-
TIONAL SERVICE CREDIT AND MAY OBTAIN SUCH CREDIT UPON APPLICATION TO THE
SAID RETIREMENT SYSTEM. IN ORDER TO OBTAIN SERVICE  CREDIT  PURSUANT  TO
THIS  SECTION,  THE  MEMBER SHALL PAY INTO THE PENSION ACCUMULATION FUND
THE CONTRIBUTION AMOUNT AS DETERMINED BY THE COMPTROLLER,  EITHER  IN  A
LUMP  SUM  OR IN INSTALLMENTS, NECESSARY TO PAY IN FULL THE COST OF SUCH
SERVICE CREDIT. IF SUCH PAYMENT IS MADE IN INSTALLMENTS, THE SAME  SHALL
BE  PAID  WITHIN  A  PERIOD NO GREATER THAN THE NUMBER OF MONTHS OF SUCH
MEMBER SERVICE PURCHASED. THE PROVISIONS OF THIS SECTION SHALL NOT APPLY
TO ANY MEMBER WHO IS A MEMBER OF A RETIREMENT  PLAN  THAT  PROVIDES  FOR
RETIREMENT  AT  HALF  PAY  AFTER  TWENTY OR TWENTY-FIVE YEARS OF SERVICE
WITHOUT REGARD TO AGE. NOTWITHSTANDING ANY OTHER PROVISION  OF  LAW,  IN
THE  EVENT  OF DEATH PRIOR TO RETIREMENT, AMOUNTS PAID BY THE MEMBER FOR
THE PURCHASE OF  SERVICE  CREDIT  PURSUANT  TO  THIS  SECTION  SHALL  BE
REFUNDED,  WITH  INTEREST,  TO  THE EXTENT THAT SERVICE CREDIT PURCHASED

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11782-04-0
              

A. 8224--B                          2

WITH SUCH AMOUNTS DOES NOT PRODUCE A GREATER DEATH  BENEFIT  THAN  WOULD
HAVE  BEEN  PAYABLE  HAD THE MEMBER NOT PURCHASED SUCH CREDIT.  NOTWITH-
STANDING ANY OTHER PROVISION OF LAW, IN THE EVENT OF RETIREMENT, AMOUNTS
PAID  BY  THE MEMBER FOR THE PURCHASE OF SERVICE CREDIT PURSUANT TO THIS
SECTION SHALL BE REFUNDED, WITH INTEREST,  TO  THE  EXTENT  THE  SERVICE
CREDIT PURCHASED WITH SUCH AMOUNTS DOES NOT PRODUCE A GREATER RETIREMENT
ALLOWANCE THAN WOULD HAVE BEEN PAYABLE HAD THE MEMBER NOT PURCHASED SUCH
CREDIT.
  S  2.  This  act shall take effect on the ninetieth day after it shall
have become a law.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  This bill would allow certain members in the New York State and  Local
Employees  Retirement  System  (NYS&LERS) who have rendered a minimum of
ten years of creditable service to purchase a maximum of five  years  of
additional  service  credit  for a period of time during which no actual
service was rendered. This type of service is commonly  referred  to  as
"air  time".  The  full cost of such service will be paid by the member.
The purchase of "air time" will not be available to any member  who  may
retire  at  half  pay  after  completion of 20 or 25 years of creditable
service without regard to age.
  If this bill is enacted, the cost to purchase "air time"  will  depend
on  the member's plan, tier, age, salary, current service and the amount
of "air time" that will be  purchased.  There  could  be  costs  to  the
NYS&LERS  on  behalf  of  members  whose  salary increases subsequent to
purchasing this "service" exceed our expectations, or  for  members  who
survive  beyond their life expectancy. There will also be administrative
costs to the NYS&LERS.
  This bill would  provide  members  with  a  favorable  alternative  to
purchasing  annuities  in the private market. The NYS&LERS would, effec-
tively, be providing 8% annual interest.
  This estimate, dated January 29,  2010,  and  intended  for  use  only
during  the  2010  Legislative  Session,  is  Fiscal  Note  No. 2010-87,
prepared by the Actuary for the New  York  State  and  Local  Employees'
Retirement System.