NY State Assembly Bill 2009-A9041

Assembly Bill A9041

2009-2010 Legislative Session

Establishes the "retirement for advanced career teachers program" which provides a temporary retirement incentive to certain retirement systems

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Archive: Last Bill Status - In Assembly Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2010	referred to governmental employees
Jun 22, 2009	referred to governmental employees

2009-A9041 (ACTIVE) - Details

Current Committee:: Assembly Governmental Employees
Law Section:: Retirement

2009-A9041 (ACTIVE) - Summary

Establishes the retirement for advanced career teachers program; provides a temporary retirement incentive to certain retirement systems in which eligible Tier 2, 3 and 4 members would be permitted to retire without penalty upon the attainment of at least age 55 and where their age and years of creditable service combined equals eighty or more as of their effective date of retirement; open period is July first, two thousand nine and ending on August thirty-first, two thousand nine.

2009-A9041 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:A9041

TITLE OF BILL:
An act
to establish the "retirement for advanced career teachers"
program; provides temporary
retirement incentive to certain retirement systems

PROVISIONS OF BILL:
This legislation is designed to eliminate the
onerous retirement penalties imposed upon many teachers and
school-related professionals in order to provide salary cost savings
for school districts and other educational employers and to avoid
layoffs in order to maintain the continuity of quality public
educational services now and into the future.

JUSTIFICATION:
In the 2009-10 school year, over 5,000 teachers and other
school-related professionals around New York state are facing layoffs
and there are another 5,000 teaching and other educational support
positions slated for elimination through attrition. Barring a major
economic recovery that is extremely unlikely at this juncture, it is
probable that these numbers will increase significantly over the next
several years.

Unfortunately, these workforce reductions, which will fall

disproportionately on newer workers with student loans and young
families, will negatively impact the delivery of quality public
educational services around this state and mark a step backward in
the fight to close the achievement gap. Moreover, these job
reductions will have much more negative financial repercussions in
already economically fragile communities around this state.

Most school districts and other educational employers are self-insured
for unemployment benefit purposes. This fact requires that each
educational employer pay the entire unemployment insurance benefit
available to each eligible employee on a dollar-for-dollar basis.
Using a conservative estimate that 75% (or 3,750) of the displaced
educational employees are eligible for the state maximum weekly
unemployment insurance benefit of $405, the current scenario will
require affected educational employers to pay over $1.5M in
unemployment benefit costs per week. Moreover, given the suspension
of growth in the foundation formula enacted in the State Budget for
the 2010-2011 school year and the rise in the unemployment rate
generally, it is unlikely that these workers will be able to find
other comparable employment over the near term. If these displaced
employees are not rehired within the next year, affected educational
employers will have to pay over $75M in unemployment insurance
benefits.

As most credible economists correctly indicated during the public
debate regarding the enactment of the Federal Economic Fiscal

Stimulus package - laying-off middle-income workers has a far
reaching, long-term negative impact on the overall economy. In New
York state, the layoff of educational employees will require
educational employers to increase class sizes, cut important programs
and student services and pay increased costs for unemployment
insurance. These laid-off workers, in turn, are forced to curtail
discretionary spending at local businesses and are much more likely
to default on their local property and school taxes, mortgages, auto
loans and other outstanding consumer debt.

This legislation is designed to provide fiscal relief to educational
employers and workers and to mitigate the broader economic,
educational and social problems caused by laying-off educational
employees. This legislation will immediately reduce salary costs for
public educational employers and
mitigate projected increases in cost for unemployment insurance. It
will also mitigate the shorter-term economic hardships associated
with laying-off younger workers with families and it will provide a
spring board to address longer-term demographic problems stemming
from an already aging "baby-boom" workforce.

If enacted, this legislation will empower school-district and other
educational employees who are age 55 or older and whose years of
service and age combined equates to eighty or more to retire from
service without penalty. The reduction in payroll costs affected by
this change will allow educational employers to save positions and
programs, maintain appropriate class sizes, employee younger, lower
salaried workers and to balance their budgets at a time of limited
state support.

Over 80% of retired educational employees continue to reside in New
York state after retirement. By maintaining purchasing power for both
newly retired and younger workers, this legislation will help
stimulate economic activity in communities small and large across the
state. This, in turn, will help stabilize local communities and
maintain the integrity and continuity of public educational services
around the state.

FISCAL IMPLICATIONS: This bill would provide a
temporary retirement
incentive in which eligible Tier 2, 3 and 4 members of the New York
State Teachers' Retirement System would be permitted to retire
without penalty upon the attainment of at least age 55 and where
their age and years of creditable service combined equals eighty or
more as of their effective date of retirement. An eligible member's
effective date of retirement must occur during the open period
beginning on July 1, 2009 and ending on August 31, 2009. Currently
age 55 with 30 years of service or age 62 with five years of service,
are required in order to retire without reductions.

The annual cost to the employers of members of the New York State
Teachers' Retirement System for this benefit is estimated to be $15.5
million or .11% of payroll if this bill is enacted.

The source of this estimate is Fiscal Note 2009-67 dated May 21, 2009
prepared by the Actuary of the New York State Teachers' Retirement
System and is intended for use only during the 2009 Legislative
Session.

This bill would eliminate the early retirement reductions for Tier 2,
3 and 4 members of the New York State and Local Employees' Retirement
System (ERS), New York State Teachers' Retirement System, the New
York City Teachers' Retirement System, New York City Board of
Education Retirement System and the New York City Employees'
Retirement System who are employed by educational institutions and
who retire between July 1, 2009 and August 31, 2009.

If this bill is enacted, insofar as it affects ERS, the additional
cost will be shared by all educational employers over five year
period, with the first payment due in the fiscal year ending March
31, 2011. We expect the annual cost to be up to .2% of annual payroll
of educational employers.

This estimate, dated May 7, 2009, and intended for use only during the
2009 Legislative Session, is Fiscal Note No. 2009-237, prepared by
the Actuary for the New York State and Local Employees' Retirement
System.

EFFECTIVE DATE: This act shall take effect immediately.

2009-A9041 (ACTIVE) - Bill Text download pdf

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

                                  9041

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                              June 22, 2009
                               ___________

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

AN  ACT  to  establish  the  "retirement  for  advanced career teachers"
  program; provides temporary retirement incentive to certain retirement
  systems

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

  Section 1. This act enacts into law components of legislation that are
intended to provide public educational employers and educational employ-
ees  with  the tools necessary to address short-term economic hardships,
to remediate the need for layoffs in  certain  educational  institutions
and  to deal with long-term demographic trends relative to the impending
retirement of senior educational staff and the attraction of new, quali-
fied teachers and other school-related professionals. Each component  is
wholly  contained  within a part identified as parts A and B. The effec-
tive date for each particular provision contained within  such  part  is
set forth in the last section of such part. Any provision in any section
contained within a part, including the effective date of the part, which
makes reference to a section "of this act," when used in connection with
that  particular  component,  shall  be  deemed to mean and refer to the
corresponding section of the part in which it  is  found,  unless  noted
otherwise.
  S 2. Legislative findings. The legislature finds and declares that the
retirement  incentive  provided for in this act is specifically designed
to achieve immediate cost savings for public educational  employers  and
taxpayers,  to  mitigate  the need for layoffs of public school teachers
and other school-related professionals, to maintain  the  continuity  of
quality  educational  services  and programs for students and to address
long-term demographic  trends  by  attracting  younger,  lower  salaried
educators  and other school-related professionals into the public school
system.  Therefore, the retirement benefit provided for in this  act  is

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14468-01-9

A. 9041                             2

intended  only to be temporary in nature for certain educational employ-
ees and school-related professionals who are  eligible  to  receive  and
qualify  for  the  applicable  benefit during the applicable time period
specified  herein.  Further,  nothing  in this act shall be construed to
create an expectation of a future or continuing retirement  benefit  for
any  educational employee who is not eligible to receive and qualify for
the retirement benefits herein during the applicable time period.

                                 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  employees'
retirement  system  or  the  New York city board of education retirement
system.
  b.  "Educational  employer"  means  an  employer  which  is  a  school
district,  a  board  of  cooperative  educational services, a vocational
education and extension board, an institution for the instruction of the
deaf and of the blind as enumerated in section  4201  of  the  education
law,  or  a school district as enumerated in section 1 of chapter 566 of
the laws of 1967, as amended, the state university of New York, the city
university of New York or a community college.
  c. "Educational employee" means a person who is a member of a  retire-
ment system and who is an employee of an educational employer.
  d. "Open period" means the period beginning on July 1, 2009 and ending
on August 31, 2009. 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.
  e.  "Eligible  employee"  means  an  educational  employee who (1) has
attained age fifty-five and whose age and years  of  creditable  service
combined  equals  eighty  or  more and is otherwise eligible for service
retirement as of the effective date of the application  for  retirement,
(2)  has  been continuously in active service of an educational employer
from February 2, 2009 to the date immediately prior to the start of  the
open  period,  (3)  files  an application for service retirement that is
effective during the open period shall be  entitled  to  the  retirement
incentive provided in section four of part B of this act.
  f. "Active service" means being paid on the payroll, provided that (1)
a  leave  of  absence with pay shall be deemed active service; (2) other
approved leave without pay not to exceed twelve weeks  from  January  1,
2009  and  the  start of the open period; and (3) the time period subse-
quent to the June 2009 school term 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 in active service.
  S 2. Notwithstanding any other provision of law, any eligible employee
who is a member of a  retirement  system  may  retire  pursuant  to  the
provisions  of  article  11  or 15 of the retirement and social security
law, whichever is applicable,  without  the  reduction  of  his  or  her
retirement  benefit  that  would  otherwise  be  imposed by such article
provided (1) such eligible employee is age fifty-five or older and whose
age and years of creditable service combined equal eighty or more as  of
the  effective  date  of  the  application  for retirement; and (2) such

A. 9041                             3

educational employee's effective date of retirement is during  the  open
period.
  S  3. This act shall take effect immediately and shall be deemed to be
in full force and effect on and after June 30, 2009, provided,  however,
that the cost of this benefit shall be borne as a constant percentage of
payroll  over a five year period beginning in fiscal year ending 2011 by
all educational employers as defined in subdivision b of section one  of
this act.

                                 PART B

  Section 1. Definitions. As used in this act, unless the context clear-
ly requires otherwise:
  a. "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.
  b. "Campus employer" means (1) the state-operated institutions of  the
state  university  of  New York, (2) the statutory and contract colleges
operated pursuant to section 357 of the education  law,  (3)  the  state
university construction fund ("fund"), (4) a cooperative extension asso-
ciation  ("association"), (5) the city university of New York as defined
in subdivision 2 of section 6202 of the education law and (6)  community
colleges  operating  under  the  program  of the state university of New
York.
  c. "Eligible employee" means a person  who  is  a  participant  in  an
optional  retirement program and whose combined age and years of service
equate to eighty or more.
  d. "College faculty" means an employee, not in the classified service,
of a campus employer described in subdivision b of this section who is a
participant in an optional retirement program.
  e. "Active service" means service while (1) being paid on the payroll,
(2) on an approved leave of absence with  pay,  (3)  on  other  approved
leave  without  pay  provided  such  leave began on or after February 2,
2009, and (4) for a teacher or other employee employed on a school  year
basis the time subsequent to the June 2009 school term.
  f. "Open period" means the period beginning July 1, 2009 and ending on
August 31, 2009. For the purposes of the program established pursuant to
this act, a service retirement application must be filed with the campus
employer  prior  to the effective date of retirement to become effective
unless a shorter period is provided by applicable statute.
  g. "Commencement date" shall mean July 1, 2009.
  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  campus
employer or to assure public health and safety;
  b. endanger the health or safety of employees of the state or a campus
employer; or
  c.  clearly  result in a loss of significant revenue to the state or a
campus  employer  or  result  in  substantially  increased  overtime  or
contractual costs.
  S 3. a. Eligibility for inclusion in the retirement incentive provided
by section four of this act shall be determined by the board of trustees
of  the state university (including the association), the fund, the city

A. 9041                             4

university of New York and each community college  operating  under  the
program of the state university.
  b. All eligible employees desiring to avail themselves of the benefits
provided by section four of this act shall provide written notice to his
or  her employer on or before December 31, 2009. Failure to provide such
written notice shall render the employee ineligible for  the  retirement
incentive provided by this act.
  S  4. Notwithstanding any other provision of law, an eligible employee
serving in an eligible title who is a participant in an optional retire-
ment program who is entitled to the benefits pursuant to 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, 2009 or the effective  date  of
this  act  if  the  employee  retires  prior to December 31, 2009), 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 amount shall be paid in cash to the participant in  three  equal
installments during a twenty-four month period commencing on such eligi-
ble  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 in October in the year preceding the
effective date of this act if the employee retires prior to September 1,
2009, respectively, then the  employee's  earnable  annual  salary  rate
shall be the annual salary rate in effect on such applicable date.
  S  5. a. An employee of a campus employer, other than the city univer-
sity 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.  Where  there  is an agreement in accordance with article 14 of the
civil service law, an employee of a campus employer described  in  para-
graph  (1) of subdivision b of section 1 of this act, who retires pursu-
ant to this act, shall be eligible for any lump sum  longevity  perform-
ance  award  or  other  lump sum payments due and owing to such employee
pursuant to such agreement, if any, had he or  she  remained  in  active
service through March 31, 2009.
  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  6.  The  pension benefit costs of section four of this act shall be
paid by campus employers as provided by applicable law over a period not
to exceed five years commencing in the state fiscal  year  ending  March
31, 2012.

A. 9041                             5

  S  7.  This  act  shall take effect immediately and shall be deemed in
full force and effect on and after June 30, 2009.
  S  3. 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  4.  The pension benefit costs of this act shall be paid as provided
by applicable law for each retirement system covered by this act.
  S 5. The retirement systems of this  state  shall  inform  educational
employers  and  educational employees of their eligibility for the bene-
fits provided by this act.
  S 6. 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  7.  This act shall take effect immediately, provided, however, that
the retirement systems of this state shall establish  any  rules,  regu-
lations  and  procedures necessary for the timely implementation of this
act as provided herein.
  FISCAL NOTE.--This bill would provide a temporary retirement incentive
in which eligible Tier 2, 3 and 4 members of the New York  State  Teach-
ers' Retirement System would be permitted to retire without penalty upon
the attainment of at least age 55 and where their age and years of cred-
itable service combined equals eighty or more as of their effective date
of  retirement.  An  eligible member's effective date of retirement must
occur during the open period beginning on July 1,  2009  and  ending  on
August  31,  2009.  Currently  age 55 with 30 years of service or age 62
with five years of service, are required  in  order  to  retire  without
reductions.
  The  annual  cost  to  the  employers of members of the New York State
Teachers' Retirement System for this benefit is estimated  to  be  $15.5
million or .11% of payroll if this bill is enacted.
  The  source of this estimate is Fiscal Note 2009-67 dated May 21, 2009
prepared by the Actuary of  the  New  York  State  Teachers'  Retirement
System and is intended for use only during the 2009 Legislative Session.
  FISCAL   NOTE.--This   bill   would  eliminate  the  early  retirement
reductions for Tier 2, 3 and 4 members of the New York State  and  Local
Employees'  Retirement System (ERS), New York State Teachers' Retirement
System, the New York City Teachers' Retirement  System,  New  York  City
Board  of  Education  Retirement System and the New York City Employees'
Retirement System who are employed by educational institutions  and  who
retire between July 1, 2009 and August 31, 2009.
  If  this  bill  is  enacted, insofar as it affects ERS, the additional
cost will be shared by all educational employers over five year  period,
with the first payment due in the fiscal year ending March 31, 2011.  We
expect  the annual cost to be up to .2% of annual payroll of educational
employers.
  This estimate, dated May 7, 2009, and intended for use only during the
2009 Legislative Session, is Fiscal Note No. 2009-237, prepared  by  the
Actuary for the New York State and Local Employees' Retirement System.

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