S T A T E O F N E W Y O R K
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S. 6215--A A. 9174--A
2009-2010 Regular Sessions
S E N A T E - A S S E M B L Y
October 14, 2009
___________
IN SENATE -- Introduced by Sen. SAVINO -- read twice and ordered print-
ed, and when printed to be committed to the Committee on Rules --
recommitted to the Committee on Corporations, Authorities and Commis-
sions in accordance with Senate Rule 6, sec. 8 -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
IN ASSEMBLY -- Introduced by M. of A. ABBATE -- read once and referred
to the Committee on Governmental Employees -- recommitted to the
Committee on Governmental Employees in accordance with Assembly Rule
3, sec. 2 -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee
AN ACT to amend the public authorities law, in relation to the suspen-
sion of certain employees of the New York city school construction
authority
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 1738 of the public authorities law, as added by
chapter 738 of the laws of 1988, is amended to read as follows:
S 1738. Retirement of employees. 1. Employees of the authority shall
be eligible to join the board of education retirement system as estab-
lished in section twenty-five hundred seventy-five of the education law
and pursuant to the usual rules of that system, provided that a new
employee who upon appointment by or transfer to the authority is a
member of the New York city employees retirement system may remain a
member of the New York city employees retirement system if, within nine-
ty days of the effective date of the transfer to or appointment by the
authority, the employee exercises an election to do so. Furthermore, the
retirement rights of employees of the city board employed on the effec-
tive date of this title shall not be impaired by reason of the enactment
of this title into law.
2. A. NOTWITHSTANDING THE PROVISIONS OF ANY OTHER GENERAL OR LOCAL
LAW, ADMINISTRATIVE CODE OR ORDINANCE TO THE CONTRARY, ANY EMPLOYEE OF
THE AUTHORITY WHO WAS SUSPENDED ON OR AFTER DECEMBER FIRST, TWO THOUSAND
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14810-02-0
S. 6215--A 2 A. 9174--A
TWO BECAUSE OF ECONOMY MEASURES TAKEN BY THE AUTHORITY, AND WHO RETURNED
TO SUCH SERVICE PRIOR TO JANUARY EIGHTH, TWO THOUSAND EIGHT, SHALL BE
DEEMED TO HAVE BEEN IN CONTINUOUS SERVICE IN DETERMINING LENGTH OF
SERVICE FOR RETIREMENT PURPOSES; PROVIDED, HOWEVER, THAT FOR RETIREMENT
PURPOSES, A MEMBER RECEIVING SUCH SERVICE CREDIT SHALL PAY THE ADDI-
TIONAL MEMBER CONTRIBUTIONS PRESCRIBED BY PARAGRAPH B OF THIS SUBDIVI-
SION. NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO THE CONTRARY, A
PERSON WHO OTHERWISE MEETS THE REQUIREMENTS OF THIS PARAGRAPH FOR
OBTAINING RETIREMENT SERVICE CREDIT FOR SUCH PERIOD OF SUSPENSION, AND
WHO, AFTER RETURNING TO SUCH SERVICE FROM SUCH PERIOD OF SUSPENSION,
RETIRED FOR SERVICE OR DISABILITY FROM A POSITION WITH THE AUTHORITY
PRIOR TO THE EFFECTIVE DATE OF THIS SUBDIVISION, MAY OBTAIN RETIREMENT
SERVICE CREDIT FOR SUCH PERIOD OF SUSPENSION BY (I) FILING WITH THE
RETIREMENT SYSTEM AN APPLICATION TO PURCHASE SUCH RETIREMENT SERVICE
CREDIT WITHIN ONE HUNDRED TWENTY DAYS AFTER THE EFFECTIVE DATE OF THIS
SUBDIVISION, AND (II) PAYING TO THE RETIREMENT SYSTEM THE AMOUNT
REQUIRED BY PARAGRAPH B OF THIS SUBDIVISION WITHIN ONE YEAR AFTER THE
EFFECTIVE DATE OF THIS SUBDIVISION.
B. IN ADDITION TO THE REGULAR MEMBER CONTRIBUTIONS THAT MAY BE PAYABLE
FOR HIS OR HER CURRENT SERVICE, SUCH MEMBER SHALL PAY BY DEDUCTIONS FROM
HIS OR HER COMPENSATION THE FOLLOWING ADDITIONAL MEMBER CONTRIBUTIONS:
(I) ALL REGULAR MEMBER CONTRIBUTIONS WHICH SUCH MEMBER WOULD HAVE BEEN
REQUIRED TO PAY TO THE RETIREMENT SYSTEM FOR SUCH PERIOD OF SUSPENSION
IF HE OR SHE HAD BEEN IN SERVICE DURING SUCH PERIOD OF SUSPENSION; AND
(II) IF SUCH MEMBER IS A PARTICIPANT IN A SPECIAL PLAN, THE ADDITIONAL
MEMBER CONTRIBUTIONS ATTRIBUTABLE TO PARTICIPATION IN SUCH SPECIAL PLAN
WHICH HE OR SHE WOULD HAVE BEEN REQUIRED TO PAY TO THE RETIREMENT SYSTEM
FOR SUCH PERIOD OF SUSPENSION IF HE OR SHE HAD BEEN IN SERVICE DURING
SUCH PERIOD OF SUSPENSION; AND
(III) AN AMOUNT EQUIVALENT TO THE ADDITIONAL COSTS TO THE EMPLOYER OF
PROVIDING RETIREMENT SERVICE CREDIT TO SUCH MEMBER FOR SUCH PERIOD OF
SUSPENSION, AS DETERMINED BY THE ACTUARY FOR THE RETIREMENT SYSTEM.
C. THE DEDUCTIONS FOR THE ADDITIONAL MEMBER CONTRIBUTIONS REFERRED TO
IN PARAGRAPH B OF THIS SUBDIVISION SHALL BE MADE IN ACCORDANCE WITH SUCH
EQUITABLE METHOD AND OVER SUCH EQUITABLE PERIOD OF TIME AS SHALL BE
PRESCRIBED BY THE EXECUTIVE DIRECTOR OF THE MEMBER'S RETIREMENT SYSTEM
WITH THE APPROVAL OF THE BOARD OF TRUSTEES.
D. THE ADDITIONAL MEMBER CONTRIBUTIONS REFERRED TO IN SUBPARAGRAPH (I)
OF PARAGRAPH B OF THIS SUBDIVISION SHALL BE PAID INTO THE ACCOUNT ESTAB-
LISHED BY THE RETIREMENT SYSTEM FOR THE DEPOSIT AND ACCUMULATION OF SUCH
MEMBER'S REGULAR MEMBER CONTRIBUTIONS. THE ADDITIONAL MEMBER CONTRIB-
UTIONS REFERRED TO IN SUBPARAGRAPH (II) OF PARAGRAPH B OF THIS SUBDIVI-
SION SHALL BE PAID INTO THE CONTINGENT RESERVE FUND OF SUCH RETIREMENT
SYSTEM AND SHALL BE SUBJECT TO THE PROVISIONS OF LAW WHICH GOVERN ADDI-
TIONAL MEMBER CONTRIBUTIONS IN THE SPECIAL PLAN IN WHICH SUCH MEMBER IS
A PARTICIPANT. THE ADDITIONAL MEMBER CONTRIBUTIONS REFERRED TO IN
SUBPARAGRAPH (III) OF PARAGRAPH B OF THIS SUBDIVISION SHALL BE PAID INTO
THE CONTINGENT RESERVE FUND OF SUCH RETIREMENT SYSTEM AND SHALL NOT BE
SUBJECT TO ANY RETIREMENT SYSTEM RIGHT OR PRIVILEGE OF SUCH MEMBER,
UNLESS SUCH RIGHT OR PRIVILEGE IS GRANTED BY OTHER PROVISIONS OF LAW
WHICH SPECIFICALLY REFER TO ADDITIONAL MEMBER CONTRIBUTIONS MADE PURSU-
ANT TO SUBPARAGRAPH (III) OF PARAGRAPH B OF THIS SUBDIVISION.
E. AT ANY TIME PRIOR TO COMPLETION OF THE DEDUCTIONS FOR THE ADDI-
TIONAL MEMBER CONTRIBUTIONS REFERRED TO IN PARAGRAPH B OF THIS SUBDIVI-
SION, PAYMENT OF THE REMAINDER OF THE TOTAL OF SUCH ADDITIONAL CONTRIB-
UTIONS REQUIRED BY SUCH PARAGRAPH MAY BE MADE IN A LUMP SUM.
S. 6215--A 3 A. 9174--A
S 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50: PROVISIONS OF
PROPOSED LEGISLATION: This proposed legislation would amend Public
Authorities Law Section 1738 to provide certain employees of the New
York City School Construction Authority ("SCA") an opportunity to buy
back service credit for time while suspended for economy measures on and
after December 1, 2002 until their return to such service prior to Janu-
ary 8, 2008.
It is the understanding of the Actuary that the opportunity to buy
back service credit would be voluntary and this Fiscal Note reflects
that understanding.
The Effective Date of the proposed legislation would be the date of
enactment.
IMPACT ON MEMBERSHIP: The proposed legislation would cover those Tier
IV members of the New York City Employees' Retirement System ("NYCERS")
and the New York City Board of Education Retirement System ("BERS")
employed by SCA who were suspended on or after December 1, 2002 and who
returned to such service prior to January 8, 2008, including those who
may have retired prior to the Effective Date (collectively, "Returning
Furloughed Members").
The Returning Furloughed Members participate in one of the following
plans:
Basic Plan - Unreduced Service Retirement at attainment of age 62 and
completion of five years of credited service or Reduced Service Retire-
ment after attainment of age 55 and completion of five years of credited
service, or
55/25 Early Retirement Program - Unreduced Service Retirement at
attainment of age 55 and completion of 25 years of credited service, or
57/5 Program - Unreduced Service Retirement at attainment of age 57
and completion of 5 years of credited service.
IMPACT ON MEMBER CONTRIBUTIONS: Returning Furloughed Members of NYCERS
and BERS would be permitted to voluntarily buy back service credit for
their periods of suspension. It is the understanding of the Actuary that
this would be permitted at any time prior to retirement for active
employees.
Those Returning Furloughed Members who retired, subsequent to reem-
ployment, for Service Retirement or for Disability Retirement, would be
permitted to voluntarily buy back service credit for their periods of
suspension prior to retirement by filing within 120 days of the Effec-
tive Date.
The following amounts would be required to be paid by each Returning
Furloughed Member for each period of suspension, including accrued
interest at a rate of 5.0% per annum:
Basic Member Contributions ("BMC"):
A rate of 3.0% of salary per year, during the first 10 years of
membership or to the date of 10 years of credited service, if earlier.
Additional Member Contributions ("AMC"):
For those participating in the 55/25 Early Retirement Program or the
57/5 Program, a rate of 1.85% of salary per year not to exceed 30 years.
Extra Member Contributions ("EMC"):
An amount, as determined by the Actuary, equivalent to the additional
costs to the employer of providing retirement service credit for the
period of suspension.
For active employees, the method of payment, including the amount of
periodic deduction from payroll and the time period needed to purchase
the suspension time, would be prescribed by the respective Executive
S. 6215--A 4 A. 9174--A
Director and approved by the Board of Trustees for each of NYCERS and
BERS.
For retirees who voluntarily elect to purchase service credits for
their suspension time, the time period needed to purchase such service
credits would be within one year of election.
The proposed legislation would also permit Returning Furloughed
Members to make a lump sum payment equal to the balance owed on any BMC,
AMC, and EMC to fully purchase such service credits.
EMC contributions would be considered employer contributions and would
not be available for loan or refund.
IMPACT ON BENEFITS: The proposed legislation, if enacted, would permit
Returning Furloughed Members to voluntarily acquire service credits for
their periods of suspension.
Once acquired, these additional service credits would result in a
Returning Furloughed Member having a greater retirement allowance and
possibly an earlier vesting date, an earlier retirement date and other
advantages.
In the event a Returning Furloughed Member were to terminate employ-
ment prior to completing the purchase of service credits for the entire
suspension period, then the amount of service credited for such suspen-
sion period would be prorated based on the amount of layoff time consid-
ered purchased.
FINANCIAL IMPACT - EMPLOYER COST: The ultimate cost of a pension plan
is the benefits it pays. The financing of that ultimate cost depends
upon the amounts deposited by the employer and employee, the investment
return and the actuarial assumptions and methods employed.
Under the proposed legislation any additional retirement benefit costs
to purchase service credits for suspension time are intended to be borne
by the members.
Thus, the enactment of the proposed legislation would be expected to
be cost neutral to the City of New York and would not be expected to
increase employer costs to NYCERS or BERS.
Thus, any increase in benefits after crediting service for suspension
time would be paid for in full by the BMC, AMC and EMC of Returning
Furloughed Members.
FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS: If the proposed legislation
were enacted during the 2010 Legislative Session prior to June 30, 2010
or after June 30, 2010 and prior to June 30, 2011, there would be no
expected change in employer contributions to NYCERS or to BERS for
Fiscal Year 2010 or after.
OTHER COSTS: Not measured in this Fiscal Note are any other possible
non-retirement benefit costs such as increased administrative costs or
additional medical costs or increases in the costs of certain Other
Post-Employment Benefits ("OPEB") attributable to the potential earlier
retirements of Returning Furloughed Members.
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 2010-02, dated
January 27, 2010, prepared by the Chief Actuary for the New York City
Employees' Retirement System and the New York City Board of Education
Retirement System.
