S T A T E   O F   N E W   Y O R K
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                                  8200

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                              June 6, 2011
                               ___________

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

AN  ACT  to amend the retirement and social security law, in relation to
  refunding contributions made to the twenty-five year early  retirement
  program  and  the  age fifty-seven retirement program by New York city
  transit authority members

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

  Section 1. Subdivision d of section 604-c of the retirement and social
security  law, as added by chapter 96 of the laws of 1995, is amended by
adding a new paragraph 15 to read as follows:
  15. AN ELIGIBLE FORMER PARTICIPANT,  AS  DEFINED  IN  THIS  PARAGRAPH,
SHALL  BE  ENTITLED  TO  A  REFUND OF THE EMPLOYEE PORTION OF HIS OR HER
ADDITIONAL MEMBER CONTRIBUTIONS MADE PURSUANT TO THIS SUBDIVISION  WHICH
SHALL  INCLUDE  ANY AND ALL INTEREST THEREON AT THE RATE OF FIVE PERCENT
PER ANNUM, COMPOUNDED ANNUALLY AND SUCH REFUND SHALL  BE  PAYABLE,  UPON
SUCH  PARTICIPANT'S  APPLICATION  PURSUANT  TO PROCEDURES PROMULGATED IN
REGULATIONS OF THE BOARD OF TRUSTEES OF THE RETIREMENT SYSTEM. AN ELIGI-
BLE FORMER PARTICIPANT SHALL BE A CURRENT NEW YORK CITY TRANSIT AUTHORI-
TY MEMBER, AS DEFINED IN SUBDIVISION A OF SECTION SIX HUNDRED FOUR-B  OF
THIS  ARTICLE,  WHO  WAS  A  PARTICIPANT  IN  THE TWENTY-FIVE YEAR EARLY
RETIREMENT PROGRAM PRIOR TO THE STARTING  DATE  OF  THE  ELIMINATION  OF
ADDITIONAL  MEMBER CONTRIBUTIONS, AS SUCH DATE IS DEFINED IN AN ELECTION
MADE PURSUANT TO PARAGRAPH TEN OF SUBDIVISION E OF SECTION  SIX  HUNDRED
FOUR-B OF THIS ARTICLE.
  S 2. Subdivision f of section 604-d of the retirement and social secu-
rity law is amended by adding a new paragraph 15 to read as follows:
  15.  AN  ELIGIBLE  FORMER  PARTICIPANT,  AS DEFINED IN THIS PARAGRAPH,
SHALL BE ENTITLED TO A REFUND OF THE EMPLOYEE  PORTION  OF  HIS  OR  HER
ADDITIONAL  CONTRIBUTIONS  MADE PURSUANT TO THIS SUBDIVISION WHICH SHALL
INCLUDE ANY AND ALL INTEREST  THEREON  PAID  TO  THE  RETIREMENT  SYSTEM

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04787-02-1
              

A. 8200                             2

TOGETHER  WITH  INTEREST  THEREON AT THE RATE OF FIVE PERCENT PER ANNUM,
COMPOUNDED ANNUALLY AND SUCH REFUND SHALL BE PAYABLE, UPON SUCH  PARTIC-
IPANT'S APPLICATION PURSUANT TO PROCEDURES PROMULGATED IN REGULATIONS OF
THE  BOARD  OF  TRUSTEES  OF  THE  RETIREMENT SYSTEM. AN ELIGIBLE FORMER
PARTICIPANT SHALL BE A CURRENT NEW YORK CITY TRANSIT  AUTHORITY  MEMBER,
AS  DEFINED IN SUBDIVISION A OF SECTION SIX HUNDRED FOUR-B OF THIS ARTI-
CLE, WHO WAS A PARTICIPANT IN THE  AGE  FIFTY-SEVEN  RETIREMENT  PROGRAM
PRIOR  TO  THE  STARTING  DATE  OF  THE ELIMINATION OF ADDITIONAL MEMBER
CONTRIBUTIONS, AS SUCH DATE IS DEFINED IN AN ELECTION MADE  PURSUANT  TO
PARAGRAPH  TEN  OF  SUBDIVISION  E OF SECTION SIX HUNDRED FOUR-B OF THIS
ARTICLE.
  S 3. This act shall take effect immediately.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  PROVISIONS OF PROPOSED LEGISLATION: This  proposed  legislation  would
amend  New  York  State  Retirement  and  Social  Security  Law ("RSSL")
Sections 604-c and 604-d to provide to certain  New  York  City  Transit
Authority  ("NYCTA")  members of the New York City Employees' Retirement
System ("NYCERS") a refund of Additional  Member  Contributions  ("AMC")
that  were  paid while participants of one of the Chapter 96 of the Laws
of 1995 ("Chapter 96/95") Retirement Programs.
  The Effective Date of the proposed legislation would be  the  date  of
enactment.
  This  Fiscal Note assumes that the proposed legislation is intended to
refund interest on AMC in accordance with NYCERS procedures for  credit-
ing interest on member contributions.
  IMPACT  ON  PLAN  PROVISIONS  - ADDITIONAL MEMBER CONTRIBUTIONS: Under
Chapter 96/95, AMC were required under  each  of  the  Early  Retirement
Programs:
  * The Twenty-Five-Year Early Retirement Program ("55/25 Program") and
  * The Age-Fifty-Seven Retirement Program ("57/5 Program").
  Those  NYCERS members who participated in either of such Programs paid
AMC of:
  4.35% of salary for service on and after January 1, 1995 until January
1, 1998,
  2.85% of salary for service on and after January 1, 1998 until  Decem-
ber 2, 2001, and
  1.85% of salary for service on and after December 2, 2001.
  In addition, if such member's job title was considered Physically-Tax-
ing  ("PT"),  an  additional Physically-Taxing AMC ("PTAMC") of 1.98% of
salary was required for all service on and after January 1, 1995.
  As a result of Chapter 10 of the Laws of 2000, many of the NYCTA  Tier
IV  members  of  NYCERS who participated in the Chapter 96/95 Retirement
Program were transferred  into  the  Transit  Twenty-Five-Year  and  Age
Fifty-Five Retirement Program ("Transit 55/25 Program") effective Decem-
ber 15, 2000. For these members, the AMC and PTAMC that had been payable
under  the  Chapter  96/95  Retirement  Programs were no longer required
after January 3, 2001 (i.e.,  the  effective  implementation  date,  the
first payroll period following the transfer date).
  This  proposed  legislation  would  refund, on and after the Effective
Date, to certain Transit 55/25 Program participants with initial Program
participation dates on or before December 15, 2000, the employee portion
of the AMC and PTAMC, if any, paid  for  participation  in  the  Chapter
96/95 Retirement Programs, including accrued interest at 5.0% per annum.
  Note,  under the Chapter 96/95 Retirement Programs, 50% of the AMC and
PTAMC paid into such Programs is  considered  an  employer  contribution
while  the  other  50%  is considered to be the employee portion. If the

A. 8200                             3

proposed Legislation were enacted, those impacted Transit 55/25  Program
participants  would  receive  the  balance  of  the accumulated employee
portion of AMC and PTAMC.
  To  receive such refund, those eligible participants would be required
to complete a form and follow procedures to be established by the NYCERS
Board of Trustees.
  FINANCIAL IMPACT - OVERVIEW: If enacted into  the  law,  the  ultimate
employer  cost  of  this  proposed legislation will be determined by the
reduction in expected benefits paid, (due to there  no  longer  being  a
requirement  to  refund  AMC  on  a  future  withdrawal),  offset by the
reduction in Fund assets due to the current refund of AMC.
  FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: With  respect  to  NYCERS
and  based  on  the  census  data  and actuarial assumptions and methods
described herein, the  enactment  of  this  proposed  legislation  would
result  in a decrease in the Actuarial Present Value ("APV") of Benefits
("APVB") of approximately $0.1 million as of June 30, 2010.
  In addition, there would be a reduction in Actuarial Asset Value as of
June 30, 2010 to reflect the expected refund of the employee portion  of
accumulated  Chapter 96/95 Retirement Program AMC and PTAMC, if any, for
those impacted Transit 55/25 Program participants of approximately  $1.7
million.
  Together,  the enactment of the proposed legislation would result in a
net increase in the APV of Future Employer Normal  Costs  to  NYCERS  of
approximately $1.6 million as of June 30, 2010.
  FINANCIAL IMPACT - ADDITIONAL ANNUAL EMPLOYER COSTS AND CONTRIBUTIONS:
With respect to NYCERS, the enactment of this proposed legislation would
increase annual employer costs by approximately $210,000 per year.
  Increases  in  employer contributions would be comparable to the esti-
mated increases in employer costs.
  If enacted during the 2011 Legislative Session on or before  June  30,
2011, then increased employer contributions to NYCERS would begin Fiscal
Year 2011.
  If  enacted  during  the 2011 Legislative Session after June 30, 2011,
then increased employer contributions to NYCERS would begin Fiscal  Year
2012.
  FINANCIAL  IMPACT  -  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 certain  current
actuarial assumptions.
  However,  this  set of actuarial assumptions and methods do not repre-
sent the only possible approach for funding the New York City Retirement
Systems ("NYCRS").
  Historically, actuarial assumptions and methods have been reviewed  on
average  every  five  years  in  connection with an actuarial experience
study mandated by New York City Charter Section 96.
  Following this review, the Actuary generally proposes changes in actu-
arial assumptions and methods  that  he  believes  are  appropriate  and
reasonably related to such experience period and future expectations.
  The  next  such review is anticipated during Fiscal Year 2012 at which
time the Actuary is likely to propose new packages of actuarial  assump-
tions  and  methods  to  be  effective  for  use in determining employer
contributions beginning Fiscal Year 2012.
  It is anticipated that whatever new actuarial assumptions  are  recom-
mended by the Actuary are likely to result in increased APVB and employ-
er  costs  as  the current actuarial assumptions no longer represent the
Actuary's best estimates.

A. 8200                             4

  Note: The Actuary has not yet committed to  any  particular  actuarial
assumptions  or  methodology for determining employer costs and employer
contributions in connection with  the  upcoming,  experience  review  of
actuarial assumptions and methods.
  OTHER  COSTS:  Not  measured  in  this  Fiscal Note are any additional
administrative costs or the impact of this proposed legislation  on  the
Manhattan and Bronx Surface Transit Operating Authority ("MaBSTOA").
  CENSUS DATA: The census data used for estimates of APVB, APV of Future
Employer  Normal  Costs  and employer contributions presented herein are
the 35,300 Tier IV active members of NYCERS who participate in the Tran-
sit 55/25 Program with annual salaries of approximately $2,490.0 million
included in the June 30, 2010 actuarial valuation of NYCERS.
  Of these 35,300 Tier IV members of NYCERS who participate in the Tran-
sit 55/25 Program as of June 30, 2010, 746 members with annual  salaries
of  approximately  $57.7 million have AMC (and, in certain cases, PTAMC)
account balances from contributions made under the Chapter 96/95 Retire-
ment Programs while 34,554 of these members do not have such  AMC  (and,
in certain cases, PTAMC) account balances.
  Of such 746 NYCERS members, 467 members with salaries of approximately
$40.2  million  became  participants  of the Transit 55/25 Program on or
before December 15, 2000 while 279 of  such  members  with  salaries  of
approximately  $17.6  million  have  Chapter  96/95 AMC (and, in certain
cases, PTAMC) account balances,  but are not eligible for a refund.
  Those former participants of the Transit 55/25 Program who do not meet
the definition of active participant because  they  withdrew  and  their
length  of  absence  has  exceeded five years, or withdrew with deferred
vested benefits or who have retired, were therefore excluded.
  ACTUARIAL ASSUMPTIONS AND METHODS:  Additional  APVB,  APV  of  Future
Employer  Normal Costs and employer costs have been calculated using the
actuarial assumptions and methods in effect for the June 30, 2010  (Lag)
actuarial  valuation  of  NYCERS to determine employer contributions for
Fiscal Year 2012.
  The development of the APVB and the expected refund of  Chapter  96/95
AMC  and  PTAMC  assume  that all impacted Transit 55/25 Program partic-
ipants would still be active participants in that Program.
  Additional annual employer costs  have  been  estimated  assuming  the
additional  APV  of Future Normal Costs would be financed through future
normal contributions.
  As stated earlier, the Actuary is likely to propose  new  packages  of
actuarial assumptions and methods to be effective for use in determining
employer  contributions  beginning  Fiscal  Year  2012. As such, not all
assumptions employed in determining the results contained in this letter
for Fiscal Years 2012 and later represent  the  Actuary's  current  best
estimate  of  future  experience.  However,  most of the assumptions and
methods used to determine the results  contained  herein  are  generally
those  adopted  by the NYCRS Boards of Trustees and enacted by the State
Legislature and Governor, and  provide  consistency  with  the  employer
contributions currently being presented.
  Finally,  the actuarial assumptions currently employed for determining
employer contributions do not represent risk-adjusted,  economic  evalu-
ations.  Such  risk-adjusted,  economic  evaluations  could, for certain
components of the proposed  Legislation,  produce  results  that  differ
significantly from the results shown herein.
  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.

A. 8200                             5

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 2011 Legislative Session. It is Fiscal  Note  2011-19,  dated
May  18,  2011,  prepared  by  the  Chief  Actuary for the New York City
Employees' Retirement System.