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

                                  11277

                          I N  A S S E M B L Y

                              May 25, 2010
                               ___________

Introduced by M. of A. CUSICK -- read once and referred to the Committee
  on Governmental Employees

AN ACT to grant Bruce Kerr a retroactive system membership date and tier
  I status in the New York city employees' retirement system

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

  Section 1. Notwithstanding any other provision of law, Bruce  Kerr,  a
member  of  the  New York city employees' retirement system with tier II
status, who was first employed by New York city, office of the mayor  as
an assistant to the administrative assistant to the mayor from September
1969 to April 1970 and from February 1971 to September 1972 as community
liaison  trainee  for  the city of New York, department of hospitals and
who for reasons not ascribable to his own negligence failed to become  a
member  of the New York city employees' retirement system until June 30,
1976, shall be deemed to  have  joined  the  New  York  city  employees'
retirement  system  on  September  5,  1969 with tier I status, if on or
before December 31, 2010, he shall file a written  application  therefor
with the New York city employees' retirement system.
  S  2. No contributions made to the New York city employees' retirement
system by Bruce Kerr shall be returned to him.  Such  employee  contrib-
utions shall be used to offset any past service cost incurred due to the
implementation of this act.
  S 3. This act shall take effect immediately.
  FISCAL  NOTE.--PROVISIONS  OF  PROPOSED  LEGISLATION - OVERVIEW:   The
proposed legislation would permit one individual who was initially hired
during September 1969 by the City  of  New  York  (the  "City"),  worked
intermittently  in  the 1970's and initially began membership in the New
York City Employees' Retirement System ("NYCERS") on June 30,  1976,  to
be deemed to have become a member of NYCERS as of September 5, 1969.
  The  Effective  Date  of the proposed legislation would be the date of
enactment.
  IMPACT ON BENEFITS: In general, employees  who  joined  NYCERS  during
Calendar  Year  1976  prior to July 27, 1976 are eligible to receive the
benefits available under the Tier II provisions of NYCERS. Such  members

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

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are also permitted to buy back service with the City that occurred prior
to joining NYCERS.
  The  one  NYCERS  member  who  is potentially impacted by the proposed
legislation has already paid to NYCERS amounts  sufficient  to  purchase
all  pre-membership  service  in  Tier  II  and to include all such City
service as Tier II credited service.
  Under this proposed legislation, if enacted, the one NYCERS member who
would benefit, if such member made an appropriate, timely application to
NYCERS on or before December 31, 2010, would be deemed to  have  been  a
member  of  NYCERS  retroactive to September 5, 1969 and entitled to the
benefits available to Tier I members of NYCERS.
  Tier I Career Pension Plan ("CPP") members are eligible for  unreduced
benefits  from  the  attainment  of age 55 and completion of 25 years of
credited service and are also eligible  for  Tier  I  Increased  Service
Fraction  ("ISF") unreduced benefits after the attainment of age 55 with
no service requirement.
  Under Tier II provisions, Modified CPP benefits and Modified ISF bene-
fits commence unreduced from attainment of age 62 or on a reduced  basis
prior to age 62.
  The  benefits  available  to  Tier  I  members of NYCERS are generally
greater than those available to Tier II members of NYCERS.
  Rates of member contributions are also greater for Tier I members than
for Tier II members.
  For the one member who,  under  the  proposed  legislation,  would  be
deemed  a  Tier I member, there would be a deficiency in the accumulated
value of unpaid Tier I member contributions. If not repaid,  this  defi-
ciency would impact the value of Tier I CPP benefits.
  Overall,  since  Tier  II  benefits commencing at and after age 62 are
unreduced and Tier II required member contributions are less than Tier I
required member contributions, and where salary does  not  significantly
increase  in  the  Final  Average  Salary period, the amount of benefits
determined under Tier II provisions could be greater than  those  deter-
mined under Tier  I provisions.
  In  addition,  it  is  the  understanding  of the Actuary that the one
member impacted by the proposed legislation had an opportunity to  elect
the  Optional  Age  Fifty-Five  and  Improved Benefit Retirement Program
enacted under Chapter 96 of the Laws of 1995. Such  Program  would  have
provided  unreduced  retirement  benefits  from attainment of age 55 and
completion of 25 years of credited service. This  one  member,  however,
did not elect to participate in that Program.
  FINANCIAL  IMPACT  -  ACTUARIAL PRESENT VALUES: Based on the actuarial
assumptions and methods described herein, the enactment of this proposed
legislation would increase  the  Actuarial  Present  Value  of  Benefits
("APVB") of NYCERS by approximately $40,000 as of June 30, 2008.
  In  addition, based on the actuarial assumptions and methods described
herein, the Actuarial Present Value of  Future  Salaries  ("APVSAL")  of
NYCERS would decrease by approximately $110,000 as of June 30, 2008.
  FINANCIAL IMPACT - ANNUAL EMPLOYER COSTS: Based on the Actuary's actu-
arial  assumptions and methods in effect on June 30, 2008, the enactment
of this proposed legislation would increase first year  annual  employer
costs to NYCERS by approximately $8,000.
  Note,  as  the  age  of the one member impacted by the proposed legis-
lation gets closer to age 62, the relative value of the Tier  I  benefit
decreases.
  FINANCIAL  IMPACT - EMPLOYER CONTRIBUTIONS: If enacted during the 2010
Legislative Session on or before  June  30,  2010,  and  if  the  member

A. 11277                            3

believed to be impacted by this proposed legislation elects revised Tier
status,  that revised Tier status would likely first be reflected in the
June 30, 2010 census data.  In accordance with the One-Year Lag  method-
ology  used  to  determine  employer  contributions,  increased employer
contributions would be determined for Fiscal Year 2012.
  If enacted during the 2010 Legislative Session after June 30, 2010 and
on or before June 30, 2011, increased employer  contributions  would  be
determined for Fiscal Year 2013.
  For  Fiscal Years 2012 and after, the additional annual employer costs
for this proposed legislation would be expected to approximate the addi-
tional annual employer contributions.
  CENSUS DATA: Estimates of Tier I and Tier  II  benefits  for  the  one
member known to be impacted by this proposed legislation have been based
on member information as of June 30, 2008 supplied by NYCERS.
  ACTUARIAL  ASSUMPTIONS  AND  METHODS: The APVB, APVSAL, employer costs
and employer contributions shown herein have been determined using esti-
mated benefits and the applicable actuarial assumptions and  methods  in
effect for the June 30, 2008 (Lag) actuarial valuation of NYCERS.
  Additional  employer  contributions  have been assumed to begin during
the second Fiscal Year following the June 30 as of  which  a  change  in
Tier  status  would first be expected. The June 30 date has been assumed
to occur as of the next June 30  following  enactment  of  the  proposed
legislation.
  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  2010-12,  dated
April  9,  2010,  prepared  by  the  Chief Actuary for the New York City
Employees' Retirement System.