LBD12220-06-0
A. 11144 2
PART A
Section 1. Definitions. As used in this act, unless the context clear-
ly requires otherwise:
a. "Retirement system" means the New York state and local employees'
retirement system, the New York state teachers' retirement system, the
New York city teachers' retirement system, the New York city board of
education retirement system or the New York city employees' retirement
system, exclusive of the retirement plans established pursuant to
sections 13-156 and 13-157 of the administrative code of the city of New
York.
b. "Teachers' retirement system" means the New York state teachers'
retirement system or the New York city teachers' retirement system.
c. "Optional retirement program" means the programs established pursu-
ant to the provisions of section 181, 391 or 6251 of the education law;
or continued pursuant to section 3 of chapter 980 of the laws of 1962.
d. "State employer" means (a) the executive branch of the state, (b)
the state-operated institutions of the state university of New York, (c)
the statutory and contract colleges operated pursuant to section 357 of
the education law, (d) the state university construction fund (herein-
after referred to in this act as the "fund"), (e) a cooperative exten-
sion association (hereinafter referred to in this act as the "associ-
ation"), (f) the city university of New York as defined in subdivision 2
of section 6202 of the education law, (g) the unified court system, (h)
the senate, (i) the assembly, and (j) joint legislative employers.
e. (a) "Participating employer" means an employer, other than a state
employer, which participates in a retirement system; such term shall
include a community college operating under the program of the state
university of New York.
(b) "Educational employer" means a participating employer which is a
school district, a board of cooperative educational services, a voca-
tional education and extension board, an institution for the instruction
of the deaf and of the blind as enumerated in section 4201 of the educa-
tion law, or a school district as enumerated in section 1 of chapter 566
of the laws of 1967, as amended.
f. "Eligible employee" means a person who is a member of a retirement
system or a participant in an optional retirement program who is an
employee in the executive branch of a state employer or an employee of a
state employer or a participating employer which makes an election under
this section or section four of this act, but such term shall not
include the following persons:
(a) elected officials, judges or justices appointed to or serving in a
court of record and acting village justices;
(b) chief administrative officers of participating employers which
participate in a teachers' retirement system;
(c) officers described in sections 4, 41-a, 46, 61, 70, 70-a, 169
(including those officers whose salary is established pursuant to salary
plans under subdivision 3 of section 169), 180 and subdivision 1 of
section 41 of the executive law and any agency or department head
appointed by the governor, comptroller or attorney general;
(d) appointed members of boards or commissions any of whose members
are appointed by the governor or by another state officer or body;
(e) nonjudicial officers and employees of the unified court system
unless the chief administrator of the courts elects as provided herein,
which election shall cover only nonjudicial officers and employees hold-
A. 11144 3
ing positions in any title in the classified service of the unified
court system;
(f) officers or employees of the senate unless the senate adopts a
resolution authorizing the temporary president to file the election as
provided in this subdivision;
(g) officers or employees of the assembly unless the assembly adopts a
resolution authorizing the speaker of the assembly to file the election
as provided in this subdivision; and
(h) officers or employees of joint legislative employers unless:
(i) with respect to officers or employees of the legislative library,
legislative messenger service, legislative health service, legislative
ethics commission, the legislative bill drafting commission, and the
joint line of the legislative task force on demographic research and
reapportionment, the senate and assembly adopt a concurrent resolution
authorizing the temporary president of the senate and the speaker of the
assembly to jointly file an election as provided in this subdivision;
(ii) with respect to officers or employees of components of the senate
as identified pursuant to section 90 of the legislative law, the senate
adopts a resolution authorizing the temporary president to file an
election for officers or employees of those components designated in
such resolution; and
(iii) with respect to officers or employees of components of the
assembly as identified pursuant to section 90 of the legislative law,
the assembly adopts a resolution authorizing the speaker of the assembly
to file an election for officers or employees of those components desig-
nated in such resolution.
Any election under paragraphs (e) through (h) of this subdivision to
make available the retirement incentive program provided by this act
shall be in writing and filed with the state comptroller not later than
ninety days after the effective date of this act. Notwithstanding any
other provision of this act, each such filing shall specify the
commencement date and the length of the open period. Only one open peri-
od shall be made available for employees covered by elections under
paragraphs (e) through (h) of this subdivision.
For the purposes of such paragraphs (f), (g) or (h) of this subdivi-
sion, an employee of the legislature shall be as such term is defined in
section 7-a, 7-b or 7-d of the legislative law or by any other provision
of law which classifies employees of an entity to be legislative employ-
ees for all purposes, but shall not include senators or members of the
assembly. The term "joint legislative employer" shall mean legislative
commissions, committees, task forces, councils or similar bodies whose
membership is comprised of both senators and assembly members, or which
consist of commissioners, or the majority of whose membership is
appointed by one or more of the following: the temporary president of
the senate, the speaker of the assembly, the minority leader of the
senate, and/or the minority leader of the assembly. The temporary presi-
dent of the senate and the speaker of the assembly shall be the joint
legislative employer of the employees of the legislature referred to in
sections 7-a and 7-b of the legislative law.
g. "Eligible title" means any title where a certain number of posi-
tions in that title, as identified by agency, department, work location
or appointing authority, college or campus, as the case may be, would
otherwise be identified for layoff but for this act because of economy,
consolidation or abolition of functions, curtailment of activities or
otherwise. However, an eligible title can also include a title as iden-
tified by agency, department, work location or appointing authority in
A. 11144 4
which positions would not be eliminated but into which employees in
titles affected by layoff can be transferred or reassigned pursuant to
the civil service law, rule or regulation. The determination of eligible
titles shall be made by: (a) the appointing authority, subject to the
approval of the director of state operations for titles within the exec-
utive branch, (b) the board of trustees for the state university
(including the association) subject to the approval of the director of
state operations, the fund, the city university of New York and of each
community college operating under the program of the state university,
(c) the person or persons who elect under paragraphs (e) through (h) of
subdivision f of this section to offer the retirement incentive provided
by this act, and (d) the chief executive officer or other comparable
official for participating employers other than the community colleges.
h. "College faculty" means an employee, not in the classified service,
of a state employer described in paragraphs (b), (c), (d), (e) and (f)
of subdivision d of this section or of a community college who is a
member of a teachers' retirement system, the New York state and local
employees' retirement system or a participant in an optional retirement
program.
i. "Active service" means service while being paid on the payroll,
provided that (a) a leave of absence with pay shall be deemed active
service; (b) other approved leave without pay not to exceed twelve weeks
from February 1, 2010 and the commencement of the designated open peri-
od; and (c) the period of time subsequent to the June 2010 school term
and on or before August 31, 2010 for a teacher (or other employee
employed on a school-year basis) who is otherwise in active service on
February 1, 2010 shall be deemed active service.
j. "Open period " means the period beginning with the commencement
date as defined in subdivision k of this section and shall not be more
than ninety days nor less than thirty days in length, as specified by
the director of state operations or by a participating employer pursuant
to section four of this act, by the appropriate board of trustees for
the state university (including the association), the fund, the city
university of New York or a community college operating under a program
of the state university or by a state employer described in paragraphs
(g), (h), (i) and (j) of subdivision d of this section; provided however
that any such period shall not extend beyond September 30, 2010 for the
executive branch of a state employer described in paragraphs (a) and (b)
of subdivision d of this section (except for college faculty), not
beyond December 31, 2010 for participating employers, college faculty
for a state employer described in paragraph (b) of subdivision d of this
section, state employers described in paragraphs (c), (d) and (e) of
subdivision d of this section, not beyond January 31, 2011 for college
faculty of an employer described in paragraph (f) of subdivision d of
this section, and not beyond August 31, 2010 for educational employers.
For the purposes of retirement pursuant to this act, a service retire-
ment application must be filed with the appropriate retirement system
not less than fourteen days prior to the effective date of retirement to
become effective, unless a shorter period of time is permitted under
law.
k. "Commencement date" means the first day the retirement incentive
authorized by this act shall be made available, which shall mean a date
on or after the effective date of this act to be determined by the
director of state operations for the executive branch of the state, and
which date shall occur no later than thirty days before September 30,
2010 or for any participating employer a date on or after the effective
A. 11144 5
date of this act. For any other state employer, such term shall mean a
date on or after the effective date of this act and shall occur no later
than thirty days before September 30, 2010. The director of state oper-
ations shall notify the head of the appropriate retirement system of the
date of each open period applicable to employees of the executive branch
or of a state employer prior to the commencement date.
S 2. The determination of whether a title shall be considered eligible
shall consider whether the reduction of a specific number of positions
within a title would unacceptably:
a. Directly result in a reduction of the level of service required or
mandated to protect and care for clients of the state or a participating
employer or to assure public health and safety;
b. Endanger the health or safety of employees of the state or a
participating employer; or
c. Clearly result in a loss of significant revenue to the state or a
participating employer or result in substantially increased overtime or
contractual costs. However, upon the determination of the director of
state operations, with respect to employees of the executive branch of a
state employer, any titles may be determined eligible if the vacancies
created can be controlled by the use of transfer or reassignment
provisions of the civil service law, rules or regulations or other
deployment of state employees.
S 3. a. Eligibility for inclusion in the retirement incentive provided
by section six of this act shall be determined: (a) by seniority: for
participating employers and for state employers described in paragraphs
(a), (b), (c), (d), (e) and (f) of subdivision d of section one of this
act, other than for college faculty; seniority shall mean the date of
original permanent appointment in the civil service of the state
adjusted to include veteran's credits for those entitled to receive such
credits pursuant to sections 80, 80-a and 85, if applicable, of the
civil service law, as established in the official records of the depart-
ment of civil service, regardless of the jurisdictional classification
of the position or the status of the incumbent; (b) by seniority, as
applicable for the unified court system; (c) for state employers
described in paragraphs (h), (i) and (j) of subdivision d of section one
of this act as determined by the person or persons who make the election
to offer the retirement incentive; and (d) for college faculty, by the
board of trustees of the state university, city university and of each
community college operating under the program of the state university.
b. All eligible employees serving in eligible titles desiring to avail
themselves of the retirement incentive provided by section six of this
act shall provide written notice to his or her employer on or before the
twenty-first day preceding the end of the open period, or before the end
of the applicable open period as such open period is determined by the
director of state operations. Failure to provide such written notice
shall render the employee ineligible for the retirement incentive
provided by this act.
S 4. a. On or before August 31, 2010, a participating employer or a
state employer described in paragraphs (b), (c), (d), (e) and (f) of
subdivision d of section one of this act may elect to provide its
employees the retirement incentive authorized by this act by (a) the
enactment of a local law or (b) in the case of a participating employer
which is not so empowered to act by local law or a state employer
described in paragraphs (b), (c), (d), (e) and (f) of subdivision d of
section one of this act, by the adoption of a resolution of its govern-
ing body; provided however, no local law or resolution enacted pursuant
A. 11144 6
to this section shall in any manner supersede any local charter,
provided further, that for an educational employer such election must be
made by July 30, 2010. The local law or resolution shall specify the
commencement date of the program and the length of the open period. For
a community college operating under the program of state university of
New York, such election shall be made by the board of trustees of such
community college subject to the approval of its sponsor. A copy of such
law or resolution shall be filed with the appropriate retirement system
or systems, and, if applicable, on forms provided by such system. The
local law or resolution shall be accompanied by the affidavit of the
chief executive officer or other comparable official certifying to the
information contained in subdivision b of this section.
b. Notwithstanding any other provision of law, the benefits provided
by this act shall not be made available to any person who (a) has
received any retirement incentive authorized by any provision of state
law, or (b) who receives, has received or is eligible to receive a
payment in a lump sum or in another form from a retirement incentive
pursuant to the provisions of a collective bargaining agreement or by
other arrangement with his or her employer, unless such person files a
written statement with his or her employer, a copy of which shall be
forwarded to the appropriate retirement system, that he or she agrees to
waive any right to such payment. A participating employer who makes an
election pursuant to this section and who offers or has offered a
retirement incentive pursuant to the provisions of a collective bargain-
ing agreement or by other arrangement shall prepare, and file with each
retirement system, a list containing the names and social security
numbers of all persons described in this subdivision. A participating
employer is authorized to exempt persons in its employ from the
provisions of paragraph (b) of this subdivision. Such exemption shall be
made part of the election made pursuant to this section; provided,
however, that such exemption shall not allow any employee who retires
under the provisions of chapter 45 of the laws of 2010 to receive a
retirement incentive authorized by this act.
c. Notwithstanding any other provision of this act to the contrary,
the mayor of the city of New York may declare employees of the community
colleges of the city university of New York ineligible for the retire-
ment incentive provided by this act by filing such notification with the
chancellor of the city university of New York, with copies to the chair
of the senate finance committee, the chair of the assembly ways and
means committee and the director of the budget, in writing, no later
than the thirtieth day next succeeding the effective date of this act.
S 5. Notwithstanding any other provision of law, any eligible employee
serving in an eligible title who:
a. has been continuously in the active service of a state employer or
of a participating employer from February 1, 2010 to the date immediate-
ly prior to the commencement date of the applicable open period;
b. files an application for service retirement (or files the appropri-
ate application and authorization form with the optional retirement
program and a duly acknowledged retirement incentive form for such
program with the appropriate personnel office) that is effective during
the open period; and
c. is otherwise eligible for a service retirement as of the effective
date of the application for retirement shall be entitled to the retire-
ment incentive provided in section six of this act. If not otherwise
eligible for a service retirement, the following person shall be deemed
to satisfy the eligibility condition of this section: a person who is at
A. 11144 7
least age fifty with ten or more years service as of the effective date
of retirement (other than a member of a retirement plan which provides
for half-pay pension upon completion of twenty-five years or less
service without regard to age); a member of a retirement plan which
provides for half-pay pension upon completion of twenty-five years of
service without regard to age who has not accrued, excluding additional
credit granted pursuant to this act, the minimum number of years of
service required to retire with an allowance equal to fifty percent of
final average salary under such plan, but has, with the inclusion of the
additional credit provided under this act, accrued such number of years
of credit; or a participant in an optional retirement plan at least
fifty years of age with ten years of service on an annual salary basis
with his or her employer as of the date of retirement.
S 6. Notwithstanding any other provision of law, an eligible employee
serving in an eligible title who is:
a. A member of a retirement system and who is entitled to a retirement
incentive pursuant to section five of this act shall receive a retire-
ment incentive of one-twelfth of a year of additional retirement credit
for each year of pension service credited as of the date of retirement,
up to a maximum of three years of retirement service credit at the time
of retirement, provided, however, that service credit provided under the
provisions of sections 902 and 911 of the retirement and social security
law shall not be included when calculating the additional retirement
credit awarded pursuant to this act. For the New York city teachers'
retirement system, the New York city employees' retirement system and
the New York city board of education retirement system such incentive
shall be available for all purposes, including fulfilling the qualifying
service requirements of plan A and C, if applicable.
An eligible employee who is covered by the provisions of article 15 of
the retirement and social security law shall retire under the provisions
of article 15 of the retirement and social security law. The amount of
such benefit for an eligible employee who is covered by article 15 of
the retirement and social security law and retires under the provisions
of this section (other than a member with thirty or more years of
service in the New York state and local employees' retirement system or
a teachers' retirement system) shall be reduced by six percent for each
of the first two years by which retirement precedes age sixty-two, plus
a further reduction of three percent for each year by which retirement
precedes age sixty, provided, however, the foregoing reductions shall
not apply: (i) in any case where an eligible employee can retire after
twenty-five years of service with immediate payability prior to the age
of sixty-two pursuant to section 604-b of the retirement and social
security law or (ii) to any time period subsequent to the point at which
an eligible employee can retire for service without reduction of his or
her service retirement allowance pursuant to article 16 of the retire-
ment and social security law. Such reduction shall be prorated for
partial years. The amount of such benefit for an eligible employee with
thirty or more years of service who is a member of the New York state
and local employees' retirement system or a teachers' retirement system
or an eligible employee who is a participant in the optional twenty-five
year early retirement program for certain New York city members governed
by section 604-c of the retirement and social security law, as added by
chapter 96 of the laws of 1995 or a twenty-five year participant in the
age fifty-five retirement program governed by section 604-i of the
retirement and social security law, with twenty-five or more years of
service and who is covered by article 15 of the retirement and social
A. 11144 8
security law shall be reduced by five percent for each year by which
retirement pursuant to this section precedes age fifty-five. The amount
of such benefit for an eligible New York city employee with five or more
years of service and who is a participant in the age fifty-seven retire-
ment program governed by section 604-d of the retirement and social
security law shall be reduced by one-thirtieth for the first two years
by which retirement precedes age fifty-seven plus a further reduction of
one-twentieth for each year by which retirement precedes age fifty-five.
Such reduction shall be prorated for partial years. There shall be no
reduction for an eligible New York city employee in a physically taxing
position with twenty-five or more years of service and who is a partic-
ipant (i) in the optional twenty-five year early retirement program for
certain members governed by section 604-c of the retirement and social
security law, as added by chapter 96 of the laws of 1995, or (ii) in the
age fifty-seven retirement program governed by section 604-d of the
retirement and social security law.
An eligible employee serving in an eligible title who is covered by
article 11 of the retirement and social security law shall retire under
the provisions of such article. The amount of such benefit for an eligi-
ble employee covered by article 11 of the retirement and social security
law other than a member of a teachers' retirement system or a member of
the New York state and local employees' retirement system with thirty or
more years of service, a participant in the optional age fifty-five
improved benefit retirement program for certain New York city employees
governed by section 445-d of the retirement and social security law, as
added by chapter 96 of the laws of 1995, with twenty-five or more years
of service, or a participant in the optional age fifty-five retirement
program for New York city teachers and certain other members governed by
section 445-i of the retirement and social security law, with twenty-
five or more years of service, shall be reduced by six percent for each
of the first two years by which retirement pursuant to this section
precedes age sixty-two, plus a further reduction of three percent for
each year by which retirement pursuant to this section precedes age
sixty, provided, however, the foregoing reductions shall not apply: (i)
in any case where an eligible employee can retire pursuant to a plan
which permits retirement for service with immediate payability, exclu-
sive of this act, prior to the age of fifty-five or (ii) to any time
period subsequent to the point at which an eligible employee can retire
for service without reduction of his or her service retirement allowance
pursuant to article 16 of the retirement and social security law. Such
reduction shall be prorated for partial years. The amount of such bene-
fit for an eligible employee who is a member of a teachers' retirement
system or a member of the New York state and local employees' retirement
system with thirty or more years of service, a participant in the
optional age fifty-five improved benefit retirement program for certain
New York city employees governed by section 445-d of the retirement and
social security law, as added by chapter 96 of the laws of 1995, with
twenty-five or more years of service, or a participant in the optional
age fifty-five retirement program for New York city teachers and certain
other members governed by section 445-i of the retirement and social
security law, with twenty-five or more years of service and who is
covered by article 11 of the retirement and social security law shall be
reduced by five percent for each year by which retirement pursuant to
this section precedes age fifty-five. Such reduction shall be prorated
for partial years. There shall be no reduction for an eligible New York
city employee in a physically taxing position and who is a participant
A. 11144 9
in the optional age fifty-five improved benefit retirement program for
certain New York city employees governed by section 445-d of the retire-
ment and social security law, as added by chapter 96 of the laws of
1995, with twenty-five or more years of service.
An eligible employee serving in an eligible title who is not covered
by article 11 or 15 of the retirement and social security law shall
retire under the provisions of the plan by which he or she is covered.
The amount of such benefit shall be reduced by five percent for each
year by which retirement pursuant to this section precedes age fifty-
five, provided, however, the foregoing reductions shall not apply: (i)
in any case where an eligible employee can retire pursuant to a plan
which permits retirement for service with immediate payability, exclu-
sive of this act, prior to the age of fifty-five or (ii) to any time
period subsequent to the point at which an eligible employee can retire
for service without reduction of his or her service retirement allowance
pursuant to article 16 of the retirement and social security law. Such
reduction shall be prorated for partial years.
An eligible employee serving in an eligible title who participates in
a retirement plan which provides for a retirement allowance equal to
fifty percent of final average salary upon the completion of twenty-five
years of service without regard to age and who is otherwise eligible to
retire shall retire under the provisions of such plan. Such employee
shall, at the time of retirement, be credited with one-twelfth of a year
of additional retirement service credit for each year of service credit-
ed under such plan as of the date of retirement, up to a maximum of
three years of retirement service credit, subject to the provisions of
subdivision b of this section. If such employee has not accrued, exclud-
ing additional credit granted pursuant to this act, the minimum number
of years of service required to retire with an allowance equal to fifty
percent of final average salary under such plan, but has, with the
inclusion of the additional credit provided under this act, accrued such
number of years of credit, the benefit payable shall be the percentage
of final average salary that would ordinarily be applicable to such
individual upon retirement with such amount of credit (including incen-
tive credit), reduced by five per centum per year for each year by which
the number of years of service otherwise required to retire with an
allowance equal to fifty percent of final average salary under such plan
exceeds the amount of service credited to such employee under such plan
at retirement (excluding the additional retirement incentive service
credit provided pursuant to this act). Such reduction shall be prorated
for partial years.
b. A participant in an optional retirement program who is entitled to
a retirement incentive pursuant to section five of this act shall
receive an additional employer contribution equal to an amount, which
shall be calculated as follows: (one-twelfth for each year of service)
multiplied by (fifteen percent) multiplied by (the employee's earnable
annual salary rate in effect on March 1, 2010 or the effective date of
this act if the employee retires prior to March 1, 2010), such amount
not to exceed forty-five percent of such salary rate. Such contribution
shall be made to the employee's retirement annuity under the optional
retirement program up to the maximum contribution allowable under
section 415 of the internal revenue code. Any contribution in excess of
that limit shall be contributed by the employer to an internal revenue
code section 403(b) contract on behalf of the employee to the extent it
can be contributed on a before-tax basis under the maximum limits
allowed under the internal revenue code. Contributions in excess of that
A. 11144 10
amount shall be paid in cash to the participant in three equal install-
ments during a twenty-four month period commencing on such eligible
employee's effective date of retirement. Provided, however, if the
employee is employed by the city university of New York and in the
active service of such employer on October 1, 2010 or the effective date
of this act if the employee retires prior to October 1, 2010, the
employee's earnable annual salary rate shall be the annual salary rate
in effect on such applicable date.
S 7. a. An employee of a state employer, other than the city universi-
ty of New York, who retires pursuant to this act may defer calculation
of the value of accumulated sick leave credits, if any, and partic-
ipation in the state health insurance plan.
b. Notwithstanding any other provision of law, any termination pay or
leave arising from accrued sick leave or accrued annual leave for an
eligible employee who has elected the retirement incentive provided by
this act and who is a member of the New York city teachers' retirement
system employed by the board of education of the city of New York shall
be paid in three equal installments during a twenty-four month period
commencing on such eligible employee's effective date of retirement.
c. An employee of the city of New York or the city university of New
York, as defined in subdivision 2 of section 6202 of the education law,
who retires under the retirement incentive provided by this act, who is
eligible for terminal leave pursuant to an applicable collective
bargaining agreement or a personnel policy or rule or retirement leave
pursuant to section 3107 of the education law or who has an accrued
annual leave balance on the effective date of retirement shall be paid
in three equal installments two months, fourteen months and twenty-four
months following such eligible employee's effective date of retirement.
S 8. a. With respect to employees of the executive branch of a state
employer, any position, other than a position supported by special
revenue funds, vacated as a result of an eligible employee in an eligi-
ble title receiving the retirement incentive provided by section six of
this act shall be eliminated unless such position is identified by the
director of state operations as one into which another state employee
can be appointed, transferred or reassigned pursuant to the civil
service law, rules or regulations, in which case the former position of
the state employee so appointed, transferred or reassigned shall be
eliminated.
b. The director of state operations shall direct the department of
civil service to prepare a report designating the title, grade level,
salary, and classification, according to appointing authority, (i) of
each position which is eliminated pursuant to subdivision a of this
section, (ii) of each position into which another state employee was
appointed, transferred, or reassigned and the former position of such
state employee, and (iii) of each position which is eliminated as a
result of an appointment, transfer or reassignment referred to in para-
graph (ii) of this subdivision. Such report shall be available no later
than ninety days after the last date of the open period related to such
positions.
S 9. Notwithstanding any inconsistent provision of section eight of
this act or any other provision of law:
a. A participating employer or a state employer described in para-
graphs (b) through (e) of subdivision d of section one of this act shall
not be required to eliminate the positions of eligible employees in
eligible titles receiving the retirement incentive provided by section
six of this act if such employer can demonstrate that it will achieve a
A. 11144 11
compensation savings such that the total amount of base salary paid for
the two-year period subsequent to the effective date of retirement for
such eligible employees in eligible titles to those new hires, if any,
who otherwise would not have been hired by such employer after the
effective date of this act but for the retirement incentive provided
herein shall be no more than one-half of the total amount of base salary
that would have been paid to such eligible employees from their date of
retirement for such two-year period. Each such employer shall make
available its plans for achieving these savings.
b. The city of New York or the city university of New York, as defined
in subdivision 2 of section 6202 of the education law, shall not be
required to eliminate the positions of eligible employees in eligible
titles receiving the retirement incentive provided by section six of
this act if such participating employer can demonstrate that it will
achieve a compensation or equivalent headcount savings such that the
total amount of compensation including benefits paid for the two-year
period subsequent to the effective date of retirement for such eligible
employees in eligible titles to those new hires, if any, who otherwise
would not have been hired by such employer after the effective date of
this act but for the retirement incentive provided herein shall be no
more than one-half of the total amount of base salary that would have
been paid to such eligible employees from their date of retirement for
such two-year period. For purposes of this subdivision, the "city of New
York" shall mean the city of New York or a participating employer a
majority of the members of whose governing body are: (a) appointed by
the mayor of the city of New York or other citywide elected official, a
borough president of the city of New York, or any combination thereof;
(b) designated by virtue of their city of New York office or position or
their office or position with a participating employer whose governing
board is described in paragraph (a) of this subdivision; or (c)
appointed or designated by any combination of the foregoing. Each such
employer shall make available its plans for achieving these savings.
c. To the extent any transfer of personnel between the state employer
described in paragraph (a) of subdivision d of section one of this act
and the state employer described in paragraph (b) of subdivision d of
section one of this act occurs pursuant to a voluntary transfer of state
personnel, or otherwise, the provisions of subdivision a of this section
with respect to achieving savings shall be applicable. Nothing herein
shall be construed to impair the authority of the director of state
operations pursuant to subdivision g of section one or section two of
this act.
S 10. Nothing in this act shall be used to provide benefits that shall
exceed the limits contained in section 415 of the internal revenue code.
Provided, however, any service retirement benefit which has been reduced
because of section 415 of the internal revenue code shall be increased
when (and consistent with) the dollar limits in section 415 of the
internal revenue code are adjusted by the internal revenue service for
cost of living increases. Such increases shall not increase the benefit
in excess of the service retirement benefit otherwise payable.
S 11. Any eligible employee who retires pursuant to the provisions of
this act and enters or reenters public service as defined in subdivision
e of section 210 of the retirement and social security law and joins or
rejoins any public retirement system of the state as defined in subdivi-
sion 6 of section 152 of the retirement and social security law or
elects to participate in an optional retirement program shall if the
additional benefit was provided pursuant to: (a) subdivision a of
A. 11144 12
section six of this act, forfeit the additional benefit authorized by
this act at the time of his or her subsequent retirement; or (b) subdi-
vision b of section six of this act, repay to the state or participating
employer such additional contribution together with the appropriate
interest as determined by the state comptroller.
S 12. Notwithstanding any other provision of law, if the service
retirement benefit of a member of a retirement system is subject to a
maximum retirement benefit, the additional benefit authorized by this
act will be computed by multiplying the final average salary times the
number of years of service credit granted by section six of this act
times the benefit fraction of the plan under which such member retires.
S 13. The provisions of section 430 of the retirement and social secu-
rity law shall not apply to any benefit or benefit improvement provided
by this act.
S 14. The pension benefit costs of subdivision a of section six of
this act shall be paid by employers as provided by applicable law for
each retirement system covered by this act over a period not to exceed
five years commencing in the state fiscal year ending March 31, 2012.
S 15. Where an employee is eligible to receive the benefit authorized
under section six and the retirement benefit provided for under section
five of part B of the chapter of the laws of 2010 which added this part,
such employee may elect a section under which he or she will partic-
ipate. Any other provision of this act or any other law to the contrary
notwithstanding, an employee eligible for the retirement benefit under
chapter 45 of the laws of 2010 and otherwise eligible to receive the
benefit provided under section six of this act shall not be eligible to
receive the benefit authorized under section six of this act unless such
employee elects to receive such benefit in lieu of the benefit under
chapter 45 of the laws of 2010. In no event shall the benefits provided
for in section six of this act be received by any employee in conjunc-
tion with the benefits of section five of part B of this act or the
benefits of chapter 45 of the laws of 2010.
S 16. This act shall take effect immediately.
PART B
Section 1. Definitions. As used in this act, unless the context clear-
ly requires otherwise:
a. "Retirement system" means the New York state and local employees'
retirement system, the New York state teachers' retirement system, the
New York city teachers' retirement system, the New York city board of
education retirement system or the New York city employees' retirement
system, exclusive of the retirement plans established pursuant to
sections 13-156 and 13-157 of the administrative code of the city of New
York.
b. "Teachers' retirement system" means the New York state teachers'
retirement system or the New York city teachers' retirement system.
c. "State employer" means (a) the executive branch of the state, (b)
the state-operated institutions of the state university of New York, (c)
the statutory and contract colleges operated pursuant to section 357 of
the education law, (d) the state university construction fund (herein-
after referred to in this act as the "fund"), (e) a cooperative exten-
sion association (hereinafter referred to in this act as the "associ-
ation"), and (f) the city university of New York as defined in
subdivision 2 of section 6202 of the education law, (g) the unified
A. 11144 13
court system, (h) the senate, (i) the assembly, and (j) joint legisla-
tive employers.
d. (a) "Participating employer" means an employer, other than a state
employer, which participates in a retirement system; such term shall
include a community college operating under the program of state univer-
sity of New York.
(b) "Educational employer" means a participating employer which is a
school district, a board of cooperative educational services, a voca-
tional education and extension board, an institution for the instruction
of the deaf and of the blind as enumerated in section 4201 of the educa-
tion law, or a school district as enumerated in section 1 of chapter 566
of the laws of 1967, as amended.
e. "Eligible employee" means a person who is a member of a retirement
system who is an employee in the executive branch of a state employer or
an employee of a state employer or a participating employer who has
attained age fifty-five and has at least twenty-five years of creditable
service in a retirement system, but such term shall not include the
following persons:
(a) elected officials, judges or justices appointed to or serving in
court of record and acting village justices;
(b) chief administrative officers of participating employers which
participate in a teachers' retirement system;
(c) officers described in sections 4, 41-a, 46, 61, 70, 70-a, 169
(including those officers whose salary is established pursuant to salary
plans under subdivision 3 of section 169), 180 and subdivision 1 of
section 41 of the executive law and any agency or department head
appointed by the governor, comptroller or attorney general;
(d) appointed members of boards or commissions any of whose members
are appointed by the governor or by another state officer or body;
(e) nonjudicial officers and employees of the unified court system
unless the chief administrator of the courts elects as provided herein,
which election shall cover only nonjudicial officers and employees hold-
ing positions in any title in the classified service of the unified
court system;
(f) officers or employees of the senate unless the senate adopts a
resolution authorizing the temporary president to file the election as
provided in this subdivision;
(g) officers or employees of the assembly unless the assembly adopts a
resolution authorizing the speaker of the assembly to file the election
as provided in this subdivision; and
(h) officers or employees of joint legislative employers unless:
(i) with respect to officers or employees of the legislative library,
legislative messenger service, legislative health service, legislative
ethics committee, the legislative bill drafting commission, and the
joint line of the legislative task force on demographic research and
reapportionment, the senate and assembly adopt a concurrent resolution
authorizing the temporary president of the senate and the speaker of the
assembly to jointly file an election as provided in this subdivision;
(ii) with respect to officers or employees of components of the senate
as identified pursuant to section 90 of the legislative law, the senate
adopts a resolution authorizing the temporary president to file an
election for officers or employees of those components designated in
such resolution; and
(iii) with respect to officers or employees of components of the
assembly as identified pursuant to section 90 of the legislative law,
the assembly adopts a resolution authorizing the speaker of the assembly
A. 11144 14
to file an election for officers or employees of those components desig-
nated in such resolution.
Any election under paragraphs (e) through (h) of this subdivision to
make available the retirement incentive provided by this act shall be in
writing and filed with the state comptroller not later than ninety days
after the effective date of this act. Notwithstanding any other
provision of this act, each such filing shall specify the commencement
date of the open period.
For the purposes of such paragraph (f), (g) or (h) of this subdivi-
sion, an employee of the legislature shall be as such term is defined in
section 7-a, 7-b or 7-d of the legislative law or by any other provision
of law which classifies employees of an entity to be legislative employ-
ees for all purposes, but shall not include senators or members of the
assembly. The term "joint legislative employer" shall mean legislative
commissions, committees, task forces, councils or similar bodies whose
membership is comprised of both senators and assembly members, or which
consist of commissioners, or the majority of whose membership is
appointed by one or more of the following: the temporary president of
the senate, the speaker of the assembly, the minority leader of the
senate, and/or the minority leader of the assembly. The temporary presi-
dent of the senate and the speaker of the assembly shall be the joint
legislative employer of the employees of the legislature referred to in
sections 7-a and 7-b of the legislative law.
f. "College faculty" means an employee, not in the classified service,
of a state employer described in paragraphs (b), (c), (d), (e) and (f)
of subdivision c of this section or of a community college who is a
member of a teachers' retirement system, or the New York state and local
employees' retirement system.
g. "Active service" means service while being paid on the payroll,
provided that (a) a leave of absence with pay shall be deemed active
service; (b) other approved leave without pay not to exceed twelve weeks
from February 1, 2010 and the commencement of the designated open peri-
od; and (c) the period of time subsequent to the June 2010 school term
and on or before August 31, 2010 for a teacher (or other employee
employed on a school-year basis) who is otherwise in active service on
the effective date of this act shall be deemed active service.
h. "Open period" means the period beginning with the commencement date
as defined in subdivision i of this section and shall be ninety days in
length; provided however that there shall be only one such open period
and any such period shall not extend beyond September 30, 2010 for a
state employer and December 31, 2010 for a participating employer. For
educational employers who make election after June 1, 2010, the open
period shall begin immediately after such election, and shall not extend
beyond August 31, 2010. For the purposes of retirement pursuant to this
act, a service retirement application must be filed with the appropriate
retirement system not less than fourteen days prior to the effective
date of retirement to become effective, unless a shorter period of time
is permitted under law.
i. "Commencement date" means the first day the retirement benefit
mandated by this act shall be made available, which shall mean a date or
dates on or after the effective date of this act to be determined by the
director of state operations for the executive branch of the state, or
for any other state employer or any participating employer which elects
to participate pursuant to section three of this act a date on or after
the effective date of this act; provided, however, that for an educa-
tional employer which elects to participate pursuant to section three of
A. 11144 15
this act, the commencement date shall be June 1, 2010; or immediately
after election of the retirement incentive for educational employers who
elect after June 1, 2010 and provided, further that for participating
employers which elect to participate pursuant to section three of this
act, except the city of New York and participating employers which are
not empowered to act by local law, the commencement date shall be Octo-
ber 1, 2010. The director of state operations shall notify the head of
the appropriate retirement system of the date of the open period appli-
cable to employees of the executive branch or of a state employer prior
to the commencement date.
S 2. a. A state employer which elects to participate pursuant to
section three of this act, participating employer which is not empowered
to act by local law which elects to participate pursuant to section
three of this act, or the city of New York, if it elects to participate
pursuant to section three of this act shall establish a commencement
date for the retirement benefit established under section five of this
act in the following manner: (a) for the executive branch, the director
of state operations shall establish the commencement date in writing to
the appropriate retirement system; (b) for state employers described in
paragraphs (b), (c), (d), (e) and (f) of subdivision c of section one of
this act and participating employers that are not empowered to act by
local law, its governing body shall adopt a resolution establishing a
commencement date; (c) for state employers described in paragraphs (g),
(h), (i) and (j) of subdivision c of section one of this act, the person
or persons who make the election to offer the retirement incentive
pursuant to part A of the chapter of the laws of 2010 which added this
part shall establish a commencement date in writing to the appropriate
retirement system; and (d) for the city of New York, the chief executive
officer shall issue an executive order establishing the commencement
date, provided, however, no executive order, in the case of the city of
New York issued pursuant to this section, shall in any manner supersede
any local charter. A copy of any such resolution or executive order in
the case of the city of New York establishing a commencement date shall
be filed with the appropriate retirement system or systems, and, if
applicable, on forms provided by such system. The resolution or execu-
tive order in the case of the city of New York shall be accompanied by
the affidavit of the chief executive officer or other comparable offi-
cial certifying the commencement date.
b. A state employer, participating employer which is not empowered to
act by local law which elects to participate pursuant to section three
of this act, or the city of New York if it elects to participate pursu-
ant to section three of this act shall be required to establish a
commencement date under paragraph a of this subdivision for the retire-
ment benefit established under section five of this act. In the event
that a state employer, participating employer which is not empowered to
act by local law which elects to participate pursuant to section three
of this act, or the city of New York if it elects to participate pursu-
ant to section three of this act fails to establish a commencement date
for the retirement benefit established under section five of this act,
the commencement date for the eligible employees of a state employer
shall be July 1, 2010. The commencement date for the eligible employees
of all other employers referenced in this subdivision shall be September
1, 2010.
S 3. On or before September 1, 2010, a participating employer or a
state employer described in paragraphs (b), (c), (d), (e) and (f) of
subdivision c of section one of this act may elect to provide its
A. 11144 16
employees the retirement incentive authorized by this act by (a) the
enactment of a local law or (b) in the case of a participating employer
which is not so empowered to act by local law or a state employer
described in paragraphs (b), (c), (d), (e) and (f) of subdivision c of
section one of this act, by the adoption of a resolution of its govern-
ing body; provided however, no local law or resolution enacted pursuant
to this section shall in any manner supersede any local charter,
provided further, that for an educational employer such election must be
made by July 1, 2010. For a community college operating under the
program of state university of New York, such election shall be made by
the board of trustees of such community college subject to the approval
of its sponsor. A copy of such law or resolution shall be filed with the
appropriate retirement system or systems, and, if applicable, on forms
provided by such system. The local law or resolution shall be accompa-
nied by the affidavit of the chief executive officer or other comparable
official certifying the validity of such local law or resolution. The
executive branch of the state shall be deemed to have made an election
under this section upon its enactment.
S 4. Notwithstanding any other provision of law, any eligible employee
who (a) has been continuously in the active service of a state employer
or of a participating employer from February 1, 2010 to the date imme-
diately prior to the commencement date of the applicable open period,
(b) files an application for service retirement that is effective during
the open period, and (c) is otherwise eligible for a service retirement
as of the effective date of the application for retirement shall be
entitled to the retirement benefit provided in section five of this act.
S 5. a. Notwithstanding any other provision of law, an eligible
employee who is: (a) a member of a retirement system and (b) who is
entitled to a retirement benefit pursuant to section four of this act
may retire during the open period without the reduction of his or her
retirement benefit that would otherwise be imposed by article 11 or 15
of the retirement and social security law if he or she has attained the
age of fifty-five and has completed at least twenty-five or more years
of creditable service. An eligible employee who is covered by the
provisions of articles 11 and 15 of the retirement and social security
law shall retire under the provisions of articles 11 and 15 of the
retirement and social security law.
b. The director of state operations, the chief executive officer of
the city of New York, or chief executive officer or governing board, as
appropriate, of the participating employer may deny participation in the
retirement benefit provided by subdivision a of this section if the
director of state operations, the chief executive officer of New York
city or the chief executive officer or governing board of the partic-
ipating employer makes a determination that the employee holds a posi-
tion that is deemed critical to the maintenance of public health and
safety.
c. Where an employee is eligible for the retirement benefit under this
section and the retirement incentive authorized pursuant to section six
of part A of the chapter of the laws of 2010 which added this part, such
employee shall elect a section under which he or she will participate.
The benefits provided by subdivision a of this section shall not be
conditioned upon a state or participating employer making the benefits
of section six of part A of this act available to employees in their
employ. Further, the benefits provided by subdivision a of this section
shall not be available in conjunction with the benefits of section six
of part A of the chapter of the laws of 2010 which added this part.
A. 11144 17
d. The action of the director of state operations, the chief executive
officer of the city of New York, or chief executive officer or governing
board, as appropriate, of the participating employer in denying the
retirement benefit provided for in subdivision a of this section to any
individual shall be subject to review in the manner provided for in
article 78 of the civil practice law and rules. Such action for review
pursuant to article seventy-eight of the civil practice law and rules
shall only be commenced by the individual that was denied the retirement
benefit provided by subdivision a of this section.
e. After making any such determination under subdivision b of this
section, the director of state operations, the chief executive officer
of the city of New York and the chief executive officer or governing
board, as appropriate, of the participating employer shall notify the
appropriate retirement system or teachers' retirement system of its
determination.
S 6. The pension benefit costs of section five of this act shall be
paid by employers as provided by applicable law for each retirement
system covered by this act over a period not to exceed five years
commencing in the state fiscal year ending March 31, 2012.
S 7. This act shall take effect immediately.
S 3. Severability clause. If any clause, sentence, paragraph, subdivi-
sion, section or part of this act shall be adjudged by any court of
competent jurisdiction to be invalid, such judgment shall not affect,
impair, or invalidate the remainder thereof, but shall be confined in
its operation to the clause, sentence, paragraph, subdivision, section
or part thereof directly involved in the controversy in which such judg-
ment shall have been rendered. It is hereby declared to be the intent of
the legislature that this act would have been enacted even if such
invalid provisions had not been included herein.
S 4. This act shall take effect immediately; provided, however, that
the applicable effective date of Parts A and B of this act shall be as
specifically set forth in the last section of such Parts.
FISCAL NOTE. -- Pursuant to Legislative Law, Section 50:
This bill would provide additional service credit (one-twelfth of a
year for each year of non-sick leave, non-Article 19 service credited as
of the date of retirement, up to a maximum of three years) for certain
members of the New York State and Local Employees' Retirement System,
New York State Teachers' Retirement System, New York City Teachers'
Retirement System, New York City Board of Education and the New York
City Employees' Retirement System. Further, for certain members who are
not otherwise eligible for a service retirement benefit, this bill would
provide the ability to retire with reductions. This benefit would be
available to only targeted positions.
In addition, this bill would eliminate the early retirement reductions
at 25 years of service instead of at 30 years of service for retirement
during a specified 90 day period for Tier 2, 3 and 4 members of the New
York State and Local Employees' Retirement System, New York State Teach-
ers' Retirement System, New York City Teachers' Retirement System, New
York City Board of Education and the New York City Employees' Retirement
System. Employers electing this provision can declare health and safety
positions to be ineligible.
Retiring members may not receive both the additional service credit
and the elimination of the early retirement reductions at 25 years of
service instead of at 30 years of service.
If this bill is enacted, insofar as it affects the New York State and
Local Employees' Retirement System (ERS), the additional cost for each
A. 11144 18
member who receives these benefits will vary depending on the member's
age, years of service, plans and final average salary.
We anticipate that the per-member cost (at retirement) of the addi-
tional service credit benefit will average approximately 60% of a
member's final average salary. This cost will be borne by each employer
electing the incentive over a five-year period commencing with a payment
in the State fiscal year 2011-2012.
We anticipate that the per-member cost (at retirement) of the elimi-
nation of the early retirement reductions at 25 years of service instead
of at 30 years of service will average approximately 110% of a member's
final average salary. This cost will be borne by each employer electing
the incentive over a five-year period commencing with a payment in the
State fiscal year 2011-2012.
This estimate, dated April 30, 2010, and intended for use only during
the 2010 Legislative Session, is Fiscal Note No. 2010-157 prepared by
the Actuary for the New York State and Local Employees' Retirement
System.
FISCAL NOTE. -- Pursuant to Legislative Law, Section 50:
This bill would provide a temporary retirement incentive for fiscal
year 2010-2011. In Part A of the retirement incentive, employers who
elect to participate would provide certain eligible employees a retire-
ment incentive of one-twelfth of a year of additional service credit per
year of accrued service credit up to a maximum of three additional
years. To be eligible, a member must have attained age 50 or greater,
with at least ten years of service. Members not subject to an early
retirement reduction and less than age 55 at retirement will have their
benefit reduced by five percent for each year their age precedes 55.
Part B of the retirement incentive would permit eligible Tier 2, 3 and
4 members of employers who elect to participate to retire without early
retirement reductions upon attainment of at least age 55 with 25 years
of service. Currently 30 years of service are required. In order to
receive either the Part A or Part B benefit, an eligible member of an
employer who has elected to participate must retire during the employ-
er's designated open period. For Part A, such period shall be at least
30, but not more than 90 days in length, and for educational employers,
shall not extend beyond August 31, 2010. For Part B, the open period for
educational employers shall begin upon the later of June 1, 2010 or the
date elected by the employer, and shall not extend beyond August 31,
2010. Members may not receive a benefit under both Part A and Part B,
or Part A and the retirement incentive provided under Chapter 45 of the
Laws of 2010. Employers participating in Part A or Part B (or both)
would pay the cost of the retirement incentive over a period not to
exceed five years, beginning in the state fiscal year ending March 31,
2012.
It is not possible to accurately forecast the total cost to the New
York State Teachers' Retirement System employers electing to participate
in this retirement incentive because the number of eligible members
electing to retire under the incentive, their ages and the amount of
service credited cannot be readily estimated. The Part A cost, measured
as the increase in the present value of benefit per participating
member, however, will range from 5% to more than 100% of final average
salary, averaging between 50% and 75% of final average salary, depending
on the member's age, years of service, and tier at retirement. The Part
B cost per participating member will range from 3% to more than 100% of
final average salary, depending on the member's age, years of service,
A. 11144 19
and tier at retirement. The potential number of members eligible to
benefit under Part A is much greater than under Part B.
The source of this estimate is Fiscal Note 2010-54 dated May 18, 2010
prepared by the Actuary of the New York State Teachers' Retirement
System and is intended for use only during the 2010 Legislative Session.
FISCAL NOTE: PROVISIONS OF PROPOSED LEGISLATION: With respect to
certain New York City Retirement Systems ("NYCRS"), this proposed legis-
lation would provide for a temporary Early Retirement Incentive Program
("ERI Program") to allow certain NYCRS members to elect immediate
retirement with enhanced benefits. This proposed legislation consists of
two components, each wholly contained within a part, identified as Part
A and Part B.
* Part A: Additional Service Credit of 1/12 per year of service, to a
maximum of three years, if at least age 50 with 10 or more years of
service, or
* Part B: Unreduced Benefit on Account of Age, if at least age 55 with
25 or more years of service.
A NYCRS member eligible for Part B would be permitted to elect Part A
(if eligible for Part A) but would not be permitted to combine the bene-
fits of Part A and Part B.
In addition, to be eligible, a member of a NYCRS must be the employee
of an employer participating in a NYCRS ("Obligor") who elects to
participate in the ERI Program.
Additional requirements and details are set forth under the Terms of
Early Retirement Incentive section that follows.
The Effective Date of the proposed legislation would be the date of
enactment.
TERMS OF EARLY RETIREMENT INCENTIVE PROGRAM: Under the proposed legis-
lation, with respect to the NYCRS, and ERI Program would be made avail-
able if elected by a participating employer, including New York City
(the "City"), by enactment of a local law or resolution. Such local law
or resolution would specify for employees the applicable "Open Period,"
anywhere from 30 to 90 days, during which time eligible NYCRS members
would be permitted to elect and retire, but not beyond August 31, 2010
for educational employees and not beyond December 31, 2010 for all
others.
The Mayor of the City may declare employees of the Community Colleges
of the City University of New York ("CUNY") to be ineligible for Part A
of the ERI Program. It is also the understanding of the Actuary that the
Mayor may determine such employees to be ineligible for Part B.
This proposed legislation also provides that employers who elect Part
A of the ERI Program should demonstrate certain compensation savings
over the two-year period following the effective dates of retirement of
those employees who participate in Part A of the ERI Program.
NYCRS RETIREMENT SYSTEMS IMPACTED: The proposed legislation would
impact the following NYCRS:
* New York City Employees' Retirement System ("NYCERS"),
* New York City Teachers' Retirement System ("NYCTRS"), and
* New York City Board of Education Retirement System ("BERS").
PART A
If an employer elects to participate in Part A of the ERI Program,
then an employee must meet the following criteria in order to retire
under the ERI:
Eligibility - Part A: A NYCRS member must be a member of NYCERS,
NYCTRS or BERS and is required to:
1. Be in Active Service - paid on payroll, or
A. 11144 20
- On leave of absence with pay, or
- Approved leave of absence without pay but not more than 12 weeks
prior to the "Open Period," or
- A teacher on payroll as of February 1, 2010 which would include the
period between the end of the June 2010 term and on or before August 31,
2010, and
2. Be in an Eligible Title.
- Those positions otherwise identified for layoff,
- Those positions that could be transferred or reassigned under Civil
Service Law, and
3. Be eligible for Service Retirement if the ERI service credit is
applied or have at least attained age 50 with 10 or more years of
service, and
4. Be in Active Service between February 1, 2010 and the commencement
date specified in the Open Period, and
5. File an application for Service Retirement that is effective during
the Open Period, and
6. File written notification with the employer of the member on or
before the 21st day prior to the end of the Open Period.
Benefits - Part A: For those NYCRS members who participate in Part A,
the members would receive an ERI of:
- 1/12 of additional retirement service credit per year of pension
service, up to a maximum of three years.
Such retirement service credit would be usable for both inclusion in
the applicable benefit formula and for meeting eligibility requirements
to retire.
Generally, there would be reductions to the retirement benefit if the
eligible employee retired before a plan's normal retirement age.
In addition, for an eligible employee who participates in a retirement
plan which provides for a retirement allowance equal to 50% of FAS upon
the completion of 25 years without regard to age, the proposed legis-
lation sets forth the reductions to the retirement allowance otherwise
payable if the eligible employee has not accrued, excluding the addi-
tional credit granted under the proposed legislation, the minimum number
of years needed to retire with such allowance.
However, the proposed legislation does not address the situation where
an eligible employee is in a plan where 25 years of service is needed to
retire with 55% of FAS.
It is the understanding of the Actuary that the same reductions
described in the proposed legislation for plans providing 50% of FAS
after 25 years of service would apply to plans providing 55% of FAS
after 25 years of service.
Optional Retirement Program - Part A: For those NYCRS members who
participate in an Optional Retirement Program (i.e., Internal Revenue
Code ("IRC") Section 403(b) Plan or "403(b) Plan") as specified in
Education Law Section 6251, there is a special Part A benefit.
A member of a 403(b) Plan would, if the member elected to retire under
the Part A provisions, be entitled to an additional employer contrib-
ution equal to: 1/12 x years of service x 15% x member's annual salary
rate as of March 1, 2010, such amount could not exceed 45% of such sala-
ry rate (i.e., no more than 36 years of service would be included).
PART B
If an employer elects to participate in Part B of the ERI Program,
then the employees must meet the following criteria in order to retire
under the ERI:
A. 11144 21
Eligibility - Part B: To be eligible for Part B, members must have
attained age 55 and have completed 25 or more years of creditable
service as of the effective date of retirement.
Benefits - Part B: For those NYCRS members who are eligible for Part
B, such members would be entitled to receive the retirement allowance
accrued under the plan in which the member participates based on the
amount of credited service such member would have at retirement, but
such retirement allowance would be payable without reduction for early
commencement.
Note: If eligible under Part A, a NYCRS member eligible for Part B
would be permitted to elect to receive the benefits under Part A in lieu
of the benefits under Part B.
PART A AND PART B
Any additional benefits payable under Part A or Part B would be limit-
ed to the extent that the total benefit payable were to exceed the
Internal Revenue Code ("IRC") Section 415 limits.
Note: Under Chapter 623 of the Laws of 2004, the NYCRS now have Excess
Benefit Plans that permit benefits in excess of the IRC Section 415
limits but the ERI Program does not recognize the availability of these
Excess Benefit Plans.
With respect to the Optional Retirement Program, for any additional
employer contribution made under a 403(b) Plan, such additional employer
contribution would not be permitted to exceed the IRC Section 415
limits. If it were to exceed those limits, then the portion in excess of
the limit would either be contributed to the employee in a separate IRC
Section 403(b) contract to the extent it can be contributed on a
before-tax basis under the limit or paid to the employee over a 24-month
period in three equal installments.
Note: It is also the understanding of the Actuary that Part A, Section
10 (i.e., IRC Section 415 limits) and Part A, Section 13 (i.e.,
provisions of RSSL Section 430) would be applicable to both Part A and
Part B of the proposed legislation.
FINANCIAL IMPACT - OVERVIEW: If enacted into the law, the ultimate
employer cost of this proposed legislation would be determined by the
number of members of the NYCRS who participate in the ERI Program and
the amount of additional benefits paid.
FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: Based on the census data
and the actuarial assumptions and methods described herein, the enact-
ment of this proposed legislation would increase the Actuarial Present
Value of Benefits ("APVB") and increase employer contributions to
NYCERS, NYCTRS and BERS based on the number of members who participate
in the ERI Program and the amounts of benefits that are paid.
The following Table 1 presents, based on assumptions set forth herein
by the Actuary, a Hypothetical Scenario of the financial impact to
provide the ERI Program for the NYCRS:
Table 1
Hypothetical Scenario of Financial Impact to Provide an
Early Retirement Incentive for Certain NYCRS Members*
($ Millions)
Retirement Additional Estimated Additional
System APVB** Employer Contributions#
NYCERS $ 76.8 $20.0
NYCTRS 34.2 8.9
BERS 4.9 1.3
------ -----
TOTAL $115.9 $30.2
A. 11144 22
* Based on Hypothetical Scenario developed by the Actuary assuming
employers were to elect to participate in the ERI Program and members
were to elect to participate as set forth in Actuarial Assumptions and
Methods section of this Fiscal Note.
** Estimated amounts as of June 30, 2010 based on the actuarial
assumptions and methods described herein.
# The amounts shown would be payable annually over five Fiscal Years
beginning Fiscal Year 2012.
FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS: Based on the census data
and the actuarial assumptions and methods described herein as a
Hypothetical Scenario, the enactment of this proposed legislation would
increase annual employer contributions by approximately $20.0 million
for NYCERS, $8.9 million for NYCTRS and $1.3 million for BERS, or a
total of $30.2 million per year for the five fiscal years beginning
Fiscal Year 2012.
FINANCIAL IMPACT - TIMING OF EMPLOYER CONTRIBUTIONS: The increased
employer contributions to NYCERS, NYCTRS and BERS attributable to this
proposed legislation would be paid over a period of not more than five
years commencing with the fiscal year beginning during the New York
State fiscal year ending March 31, 2012 (e.g. as applicable to most
participating employers of the NYCRS, beginning with the fiscal year
ending June 30, 2012).
FINANCIAL IMPACT - OTHER: The Actuary is expecting to propose revised
actuarial assumptions and methods to be effective on or after Fiscal
Year 2010.
The estimated financial impact of proposed legislation incorporating
those revised actuarial assumptions and methods is expected to differ,
possibly significantly, from the financial impact computed using the
actuarial assumptions and methods continued from Fiscal Year 2010.
Further, the near certainty of payment of benefits from the NYCRS (due
to the substantive level of funding and New York State Constitutional
Protection of benefits), suggests that it may be appropriate to also
consider a more economic-based, market-related estimate of the value of
those benefits (i.e., a Financial Value estimate). Such value of bene-
fits would likely be based on an expected pattern of benefits payments
determined using discount rates consistent with those derived from
default-free securities of similar duration.
Under current economic conditions, the APVB, employer cost and employ-
er contributions determined under Financial Value concepts would be
greater than those shown herein.
OTHER COSTS: Most significantly, not measured herein is any potential
reduction in employer payrolls attributable to members who retire under
the ERI Program.
Also not measured in this Fiscal Note is the impact of this proposed
legislation on administrative costs of NYCERS, NYCTRS and BERS and their
participating employers.
In addition, and potentially significant, no account has been taken of
the impact of the expected increase in costs attributable to Other Post
Employment Benefits ("OPEB").
CENSUS DATA: The census data used for the estimates of additional APVB
and employer contributions presented herein was the active data used in
the June 30, 2009 (Lag) actuarial valuations of NYCERS, NYCTRS and BERS
used to determine Preliminary Fiscal Year 2011 employer contributions.
Active members as of June 30, 2009 were grouped by individual ages and
services for the members who could potentially meet the age and service
requirements for the ERI Program and are shown in Table 2.
A. 11144 23
Note: This slightly overstates the number of potentially eligible
members as some members may have left employment after June 30, 2009.
Table 2
Active Members on June 30, 2009 Potentially Eligible for
ERI Program as of June 30, 2010*
($ Millions)
ERI-Part A ERI-Part B
Retirement System Number Salaries Number Salaries
NYCERS 61,682 $4,279.5 3,662 $241.9
NYCTRS 32,752 2,788.9 382 $38.4
BERS 6,160 270.4 232 $17.4
TOTAL 100,594 $7,338.8 4,276 $297.7
* Assumes NYCRS members as of June 30, 2009 remain in active service
through June 30, 2010 and then meet the age and service requirements for
the ERI Program as of June 30, 2010.
The following Table 3 presents the estimated number and salaries for
those potential members assumed to participate in the ERI Program under
the Hypothetical Scenario.
ACTUARIAL ASSUMPTIONS AND METHODS: The additional APVB and employer
contributions presented herein have been calculated, with certain addi-
tional Hypothetical Scenario assumptions, based on the actuarial assump-
tions and methods used for NYCERS, NYCTRS and BERS in the June 30, 2009
(Lag) actuarial valuations used to determine Preliminary Fiscal Year
2011 employer contributions to the NYCRS.
These actuarial assumptions were adopted by the Boards of Trustees of
the NYCRS during Fiscal Year 2006 and are part of an overall package of
actuarial assumptions and methods used to determine employer contrib-
utions to the NYCRS that includes an Actuarial Interest Rate ("AIR")
assumption of 8.0% per annum.
Table 3
Active Members Assumed to Participate in ERI Program under
Hypothetical Scenario*
ERI-Part A ERI-Part B
Retirement
System Number Salaries Number Salaries
NYCERS 996 $ 71.1 732 $48.4
NYCTRS 701 66.2 76 7.7
BERS 54 3.6 46 3.5
Total 1,751 $140.9 854 $59.6
* Based on assumptions that 20% of all potentially eligible ERI - Part
B members, and that of the 25% of ERI - Part A members who are assumed
to be targeted employees, 20% would elect to participate in the ERI
Program.
For purposes of determining those active members who would be poten-
tially eligible (and likely to consider Part B), it was assumed that
those active members who meet the Part B eligibility conditions would
prefer this Part B versus Part A if they were under attained age 61 and
were not otherwise eligible to retire immediately with an unreduced
benefit (excluding teacher members with 30 or more years of credited
service). The balance of the potentially eligible NYCRS members were
assumed to potentially participate in Part A.
For the purposes of the Hypothetical Scenario, the following addi-
tional assumptions were used to determine the additional APVB and annual
employer contributions:
* Part A
** Obligors to NYCRS choose to participate in Part A, and
A. 11144 24
** Obligors target 25% of all Eligible Employees in Eligible Titles
("Targeted Employees"), and
** Only Targeted Employees with the following characteristics elect
to take ERI ("Part A Eligible Employees"):
*** Age 55 and greater
*** 20 or more years of service, and
** 20% of Part A Eligible Employees elect to take the ERI
* Part B
** All Obligors to NYCRS choose to participate in Part B, and
** 20% of Part B Eligible Employees elect to take the ERI
Employer contributions have been developed under the terms of the
proposed legislation that require that the APVB of such ERI be spread
over five years in the fiscal year beginning in the New York State
fiscal year ending March 31, 2012.
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 2010-14, dated
May 17, 2010 prepared by the Chief Actuary for the New York City Employ-
ees' Retirement System, the New York City Teachers' Retirement System
and the New York City Board of Education Retirement System.