Senate Bill S3718

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

                                 3718--A

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                             March 30, 2009
                               ___________

Introduced  by Sens. SAVINO, ADDABBO, THOMPSON -- read twice and ordered
  printed, and when printed to be committed to the  Committee  on  Civil
  Service  and Pensions -- recommitted to the Committee on Civil Service
  and Pensions in accordance with Senate Rule 6,  sec.  8  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

AN  ACT  to amend the retirement and social security law and chapter 511
  of the laws of 1988 amending the retirement and  social  security  law
  relating  to  a  reduction  in  retirement age for certain members, in
  relation to extending the application of such provisions

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

  Section  1.  Paragraph  (ii)  of  subdivision  a of section 651 of the
retirement and social security law, as amended by  chapter  225  of  the
laws of 2006, is amended to read as follows:
  (ii) For each full year of covered employment occurring prior to Janu-
ary  first,  two  thousand [nine] TWELVE which is subsequent to December
thirty-first, nineteen hundred seventy, his or her normal retirement age
shall be reduced by four months.
  S 2. Section 2 of chapter 511  of  the  laws  of  1988,  amending  the
retirement and social security law relating to a reduction in retirement
age  for certain members, as amended by chapter 225 of the laws of 2006,
is amended to read as follows:
  S 2. This act shall take effect immediately, and shall apply  only  to
covered employment performed on or before December 31, [2008] 2011.
  S  3.  This  act  shall take effect immediately and shall be deemed to
have been in full force and effect on and after December 31, 2008.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  PROVISIONS OF PROPOSED LEGISLATION: This  proposed  legislation  would
amend  Retirement  and Social Security Law ("RSSL") Section 651.a(ii) to

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06282-04-0

              

S. 3718--A                          2

extend special unreduced early retirement provisions for certain members
of the New York City Employees' Retirement System ("NYCERS").
  The  Effective  Date  of the proposed legislation would be the date of
enactment.
  MEMBERS IMPACTED BY THE PROPOSED LEGISLATION: The proposed legislation
would cover those members of NYCERS ("Covered Members") who are employed
at the Triborough Bridge and Tunnel Authority ("TBTA") in the  following
job titles:
  * Bridge and Tunnel Officer,
  * Bridge and Tunnel Sergeant,
  * Bridge and Tunnel Lieutenant,
  * Assistant Bridge and Tunnel Maintainer,
  * Bridge and Tunnel Maintainer,
  * Senior Bridge and Tunnel Maintainer, and
  * Bridge and Tunnel Laborer.
  IMPACT  ON  BENEFITS PAYABLE: Under the provisions of Article 16 of of
the RSSL, Covered Members are entitled to retire without a reduction  in
Retirement  Allowance  prior  to  attainment  of  Normal  Retirement Age
("NRA") defined as:
  * Age 55 - for Tier I members.
  * Age 62 - for Tier II, Tier III and Tier IV members.
  The Period Without Reduction Before NRA  ("PWRBN")  is  determined  in
accordance  with  a  schedule which is based upon years of employment in
one of the above job titles ("Covered Employment"):
  * For Covered Employment before January 1, 1971, six months  per  year
of service.
  *  For  Covered  Employment  between  January 1, 1971 and December 31,
2008, four months per year of service.
  Nothing in these provisions shall permit a Tier I  member  to  retire,
other  than  for  disability, prior to age 50, or a Tier II, Tier III or
Tier IV member to retire, other than for disability, prior to age 55.
  In addition, such Covered Member  must  meet  the  applicable  service
requirements  for  retirement of the NYCERS Plan or Program in which the
member participates.
  For example, under current provisions in the Tier  IV  Basic  Plan,  a
Covered  Member  with 18 years of credited service in Covered Employment
as of December 31, 2008 would have a PWRBN period of 6.00  years  (i.e.,
18  years  times 4 months per year equals 72 months divided by 12 equals
6.00 years). Based on the existing Normal Retirement Age of  62  in  the
Tier  IV  Basic  Plan, the earliest Unreduced Retirement Age ("URA") for
this Covered Member would equal age 56 (i.e., the earliest age at  which
benefits are paid without actuarial reduction).
  The  proposed legislation would extend the PWRBN provisions to include
credited service for Covered Employment to December 31, 2011.
  Thus, using the earlier example of a Covered Member with 18  years  of
credited  service  as  a of December 31, 2008, under the proposed legis-
lation if that Covered Member reaches 21 years of service as of December
31, 2011, the earliest URA would equal age 55.
  FINANCIAL IMPACT - ACTUARIAL PRESENT  VALUES  ("APV"):  Based  on  the
census  data and the actuarial assumptions and methods noted herein, the
enactment of the proposed legislation would increase the APV of Benefits
("APVB") to NYCERS by approximately $260,000.
  Since the proposed legislation would allow earlier  unreduced  service
retirement,  there  would  be  a  reduction  in the APV of future member
contributions ("APVMCB") of approximately $1,000 and a reduction in  the
APV of future salary ("APVSAL") of approximately $2.9 million.

S. 3718--A                          3

  FINANCIAL  IMPACT - ANNUAL EMPLOYERS COSTS AND EMPLOYER CONTRIBUTIONS:
The ultimate cost of a Retirement Program is the benefits it  pays.  The
financing of that ultimate cost is provided by contributions and invest-
ment income.
  Based  on the Actuary's actuarial assumptions and methods in effect as
of June 30, 2008, the  enactment  of  this  proposed  legislation  would
increase  annual  employer  costs to NYCERS by approximately $90,000 per
year.
  If enacted on or before June 30, 2010, this proposed legislation would
be expected to  increase  employer  contributions  to  NYCERS  beginning
Fiscal Year 2010.
  If enacted during the 2010 Legislative Session after June 30, 2010 but
on  or  before  June  30, 2011, this proposed Legislation would increase
employer contributions to NYCERS beginning Fiscal Year 2011.
  OTHER COSTS: The enactment of this proposed legislation would also  be
expected  to  result  in  modest increases in administrative expenses of
NYCERS, the employer and certain New York City agencies.
  CENSUS DATA: The calculation of estimated  changes  in  APVB,  APVMCB,
APVSAL,  employer  costs  and employer contributions presented herein is
based upon the census data for active members included in the  June  30,
2008 (Lag) actuarial valuation of NYCERS.
  For  TBTA  overall,  census  data consisted of 1,682 active members of
NYCERS with annual salaries of approximately $119.8 million. There  were
1,201 Covered Members with annual salaries of $80.2 million.
  The  subset  of  Covered  Members  who are potentially affected by the
proposed legislation consisted of 273 Tier IV members with  salaries  of
approximately  $18.7 million whose average age and average service as of
June 30, 2008 were 48.0 years and 15.1 years, respectively.
  ACTUARIAL ASSUMPTIONS AND METHODS: Additional  APVB,  APVMCB,  APVSAL,
employer  costs  and  employer contributions have been computed based on
the actuarial assumptions and methods in effect for the  June  30,  2008
(Lag)  actuarial  valuation of NYCERS for use in determining the Updated
Preliminary Fiscal Year 2010 Employer Contributions.
  Additional annual employer costs and employer contributions have  been
estimated  assuming the additional APVB would be financed through future
normal contributions.
  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  2010  Legislative Session. It is Fiscal Note 2010-07, dated
March 3, 2010, prepared by the Chief  Actuary  for  the  New  York  City
Employees' Retirement System.