S T A T E O F N E W Y O R K
________________________________________________________________________
6424--A
2011-2012 Regular Sessions
I N A S S E M B L Y
March 16, 2011
___________
Introduced by M. of A. ABBATE -- read once and referred to the Committee
on Governmental Employees -- recommitted to the Committee on Govern-
mental Employees in accordance with Assembly Rule 3, sec. 2 -- commit-
tee discharged, bill amended, ordered reprinted as amended and recom-
mitted to said committee
AN ACT in relation to service credit for certain members of 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 to the contrary,
Ms. Linda Bores, Ms. Lisa Bosse and Ms. Catherine Littlefield members of
the New York city employee's retirement system and employees of the New
York city health and hospitals corporation at Coney Island Hospital, who
were previously employed by University Group Medical Associates at Coney
Island Hospital, shall be eligible for credit for service at Coney
Island Hospital while employed by University Group Medical Associates,
provided that each such member files a claim for part or all of such
service with the retirement system within 90 days of the effective date
of this act and contributes to the retirement system an amount which
such member would have contributed during such period, together with
interest thereon, and further provided that no additional credit for
service shall be given for any periods of service already purchased. The
amount contributed shall be pursuant to regulations adopted by the board
of trustees of the retirement system.
S 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
PROVISIONS OF PROPOSED LEGISLATION - OVERVIEW: The proposed legis-
lation would permit Linda Bores, Lisa Bosse and Catherine Littlefield
("Eligible Members"), who are members of the New York City Employees'
Retirement System ("NYCERS") employed by the Health and Hospitals Corpo-
ration ("HHC") at Coney Island Hospital who were previously employed by
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09344-04-2
A. 6424--A 2
University Group Medical Associates ("UGMA") at Coney Island Hospital,
to be eligible for credit for service at Coney Island Hospital while
employed by UGMA ("Eligible Service").
The Effective Date of the proposed legislation would be the date of
enactment.
IMPACT ON MEMBER CONTRIBUTIONS: The Eligible Members currently partic-
ipate in the Tier IV Age Fifty-Seven Retirement Program for certain New
York City members ("57/5 Plan").
Under the proposed legislation, each Eligible Member would be required
to pay Basic Member Contributions ("BMC") and Additional Member Contrib-
utions ("AMC") including accrued interest at a rate of 5.0% per annum in
order to purchase Eligible Service.
The method of payment, including the amount of periodic deduction from
payroll and the time period needed to purchase the Eligible Service,
would be prescribed by the Executive Director and approved by the Board
of Trustees of NYCERS.
IMPACT ON BENEFITS: The proposed legislation, if enacted, would permit
the Eligible Members to acquire service credit for their Eligible
Service and would increase their expected benefits payable from NYCERS.
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 $760,000 as of June 30, 2010.
In addition, the Actuarial Present Value ("APV") of future member
contributions would decrease by approximately $40,000 as of June 30,
2010. The member contributions to buy back the prior service would equal
approximately $370,000 measured as of June 30, 2010.
Consequently, the APV of net future employer contributions would
increase by approximately $430,000 as of June 30, 2010.
FINANCIAL IMPACT - ANNUAL EMPLOYER COSTS: Based on the Actuary's actu-
arial assumptions and methods in effect on June 30, 2010, the enactment
of this proposed legislation would increase first year annual employer
costs to NYCERS by approximately $60,000.
FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS: If enacted during the 2012
Legislative Session on or before June 30, 2012, and if these Eligible
Members elect to purchase Eligible Service, that Eligible Service would
likely first be reflected in the June 30, 2012 census data. In accord-
ance with the One-Year Lag methodology used to determine employer
contributions, increased employer contributions would be consistent with
the increased employer costs and would be determined for Fiscal Year
2014.
If enacted during the 2012 Legislative Session after June 30, 2012 and
on or before June 30, 2013, increased employer contributions would be
determined for Fiscal Year 2015.
CENSUS DATA: The census data used for the results presented herein was
the active data used in the June 30, 2010 (Lag) actuarial valuation of
NYCERS used to determine Preliminary Fiscal Year 2012 employer contrib-
utions, supplemented by additional information provided by the Eligible
Members.
This supplemental information indicates that the Eligible Members
would be eligible to purchase approximately 48 years of Eligible
Service.
ACTUARIAL ASSUMPTIONS AND METHODS: The APVB, APV of future member
contributions, APV of future salaries, employer costs and employer
contributions shown herein have been determined using estimated benefits
A. 6424--A 3
and the applicable actuarial assumptions and methods currently in effect
for the June 30, 2010 (Lag) actuarial valuation of NYCERS.
POTENTIAL CHANGES IN ACTUARIAL ASSUMPTIONS AND METHODS: The impact of
enactment of the proposed legislation provided in this Fiscal Note has
been based on the continued use of the current actuarial assumptions and
methods.
However, the Actuary is currently in the process of proposing a new
package of actuarial assumptions and methods for use in determining
employer contributions to NYCERS for Fiscal Year 2012 and after, as the
current actuarial assumptions no longer represent the Actuary's best
estimates.
It it anticipated that the proposed new package of actuarial assump-
tions and methods would likely result in a greater increase in APVB than
the amount determined under the current actuarial assumptions and meth-
ods. Annual employer costs and contributions would increase similarly
assuming that the prior service obligation associated with this increase
in APVB were amortized over a period comparable to that required under
the current actuarial methodology.
Hence, the estimated financial impact of proposed legislation incorpo-
rating the new package of actuarial assumptions and methods is expected
to differ from the financial impact computed using the actuarial assump-
tions and methods continued from Fiscal Year 2011.
ECONOMIC VALUES OF BENEFITS: The actuarial assumptions used to deter-
mine the financial impact of the proposed legislation discussed in this
Fiscal Note are those appropriate for budgetary models and determining
annual employer contributions to NYCERS.
However, the economic assumptions (current and proposed) that are used
for determining employer contributions do not develop risk-adjusted,
economic values of benefits. Such risk-adjusted, economic values of
benefits would likely differ significantly from those developed by the
budgetary models.
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 of the American Academy of Actuar-
ies to render the actuarial opinion contained herein.
FISCAL NOTE IDENTIFICATION: This estimate is intended for use only
during the 2012 Legislative Session. It is Fiscal Note 2012-01, dated
January 12, 2012, prepared by the Chief Actuary for the New York City
Employees' Retirement System.