Senate Bill S7504

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

                                  7504

                            I N  S E N A T E

                              May 30, 2012
                               ___________

Introduced  by  Sen.  STEWART-COUSINS -- read twice and ordered printed,
  and when printed to be committed to the Committee on Civil Service and
  Pensions

AN ACT to authorize the New York city employees'  retirement  system  to
  consider the application for disability retirement benefits from Peter
  DiMario

  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, the application
for disability retirement benefits of Peter DiMario, who was employed by
the New York city off-track betting corporation  from  June  1984  until
December  2010  when such corporation closed, and is a member of the New
York city employees' retirement system, which for reasons not ascribable
to his own negligence has been denied a disability retirement  from  the
New  York  city  employees'  retirement  system,  shall  be accepted for
consideration by the New York city employees' retirement  system  as  if
such application had been filed in a timely manner on March 7, 2011.
  S 2. All costs associated with the implementation of this act shall be
borne by the state.
  S 3. This act shall take effect immediately.
  FISCAL  NOTE:  PROVISIONS OF PROPOSED LEGISLATION: The proposed legis-
lation would authorize the New York City  Employees'  Retirement  System
("NYCERS")  to  accept  for  consideration an application for Disability
Retirement benefits from Peter DiMario.
  BACKGROUND: Mr. DiMario became a Tier IV member of NYCERS on June  18,
1984  and is covered under the provisions of Retirement and Social Secu-
rity Law (RSSL") Article 15.
  RSSL Article 15, Section 605 provides that an application for Disabil-
ity Retirement must be filed either:
  (a) By a vested member incapacitated as the  result  of  a  qualifying
World  Trade Center condition as defined in RSSL Section 2, at any time,
or
  (b) Within three months from the last date the member was  being  paid
on the payroll or,

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

                                                           LBD14637-04-2

S. 7504                             2

  (c)  In  the case of a member who was placed on a leave of absence for
medical reasons without pay, either voluntarily or involuntarily, at the
time he/she ceased being paid, not later than twelve  months  after  the
date  the  employee  receives  notice that his/her employment status has
been terminated.
  In  the  case  of Mr. DiMario, under current law, he would have had to
file pursuant to the preceding basis (b) (i.e., within three  months  of
his last day of pay). His last day of pay was December 7, 2010.
  However,  Mr.  DiMario  filed for Disability Retirement on October 25,
2011, more than three months after his last day of pay. Since his appli-
cation was not timely filed, NYCERS informed Mr. DiMario that  it  could
not be processed.
  The proposed legislation, if enacted, would authorize NYCERS to accept
for consideration his application for Disability Retirement as if it had
been filed in a timely manner on March 7, 2011.
  All  costs  associated with the implementation of this proposed legis-
lation would be borne by New York State.
  The Effective Date of the proposed legislation would be  the  Date  of
Enactment.
  FINANCIAL  IMPACT  - ACTUARIAL PRESENT VALUES: The estimated financial
impact has been calculated based on the difference between (1) the bene-
fits Mr. DiMario would receive if this proposed legislation were enacted
and his application for Disability Retirement were approved and (2)  the
benefits Mr. DiMario would otherwise be entitled to receive.
  The  difference  in  estimated costs is intended to provide a sense of
the ultimate financial impact.
  The difference in first year employer contributions reflects both  the
difference  in  costs  and the impact of the actuarial valuation assump-
tions initially in use.
  Based on the actuarial assumptions and methods described herein, on an
estimated cost basis, the enactment of this proposed  legislation  would
increase  the  Actuarial Present Value of Benefits ("APVB") of NYCERS by
approximately $180,000 as of June 30, 2012.
  On an actuarial valuation basis where, as of June 30, 2010, Mr. DiMar-
io is considered to be entitled to a Vested Benefit and assumed to  have
a life expectance similar to a Service (rather than Disability) retiree,
the  proposed  legislation would increase the APVB of NYCERS by approxi-
mately $150,000.
  FINANCIAL IMPACT - ANNUAL EMPLOYER COSTS AND ANNUAL EMPLOYER  CONTRIB-
UTIONS:  Based  on  the  Actuary's  actuarial assumptions and methods in
effect on June 30, 2010, the  enactment  of  this  proposed  legislation
would  increase  the  Actuarial Present Value ("APV") of future employer
costs by approximately $180,000 and annual employer costs to  NYCERS  by
approximately $24,000.
  As  of June 20, 2010, based on the actuarial valuation assumptions and
methods then in effect, the proposed legislation would increase the  APV
of future employer contributions by approximately $150,000 and the first
year employer contributions by approximately $20,000.
  CONTRIBUTION TIMING
  If  enacted during the 2012 Legislative Session and if his application
for Disability Retirement were approved on or before June 30, 2012,  his
status  as  a  Disability Retiree would likely first be reflected in the
June 30, 2012 census data. In accordance with the One-Year Lag methodol-
ogy  used  to  determine  employer  contributions,  increased   employer
contributions  would be consistent with the increased employer costs and
would be determined for Fiscal Year 2014.

S. 7504                             3

  If enacted during the 2012 Legislative Session, and if his application
for Disability Retirement were approved after June 30, 2012  but  on  or
before June 30, 2013, his status as a Disability Retiree would likely be
first  be  reflected  in  the  June  30,  2013 census data and increased
employer contributions would be determined for Fiscal Year 2015.
  ACTUARIAL  ASSUMPTIONS  AND  METHODS: The additional APVB for employer
contribution purposes (i.e., additional APV of future employer  contrib-
utions and first year additional employer contributions) presented here-
in  have  been  calculated  by comparing the APVB of a Vested Benefit as
determined for actuarial  valuation  purposes  (i.e.,  using  a  Service
Retirement  mortality  table)  which the APVB of a Disability Retirement
benefit as determined for actuarial valuation purposes  (i.e.,  using  a
Disability Retirement mortality table).
  The  additional  APVB for employer cost purposes (i.e., additional APV
of future employer costs and additional annual employer  costs)  reflect
an assumption that Mr. DiMario's life expectancy is more consistent with
a Disability Retirement mortality table.
  In addition, no optional form of benefit has been assumed payable.
  In  addition to the actuarial assumptions described above, all results
presented herein have been calculated based on the actuarial assumptions
and methods in effect for the June 30, 2010 (Lag)  actuarial  valuations
used to determine Preliminary Fiscal Year 2012 employer contributions of
NYCERS.
  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  the  current
actuarial assumptions and methods.
  However,  the  Actuary has proposed a new package of actuarial assump-
tions and methods for  use  in  determining  employer  contributions  to
NYCERS  for Fiscal Year 2012 and after, as the current actuarial assump-
tions no longer represent the Actuary's best estimates.
  It is 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 and 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 the American Academy of  Actuaries
to render the actuarial opinion contained herein.

S. 7504                             4

  FISCAL  NOTE  IDENTIFICATION:  This  estimate is intended for use only
during the 2012 Legislative Session. It is Fiscal  Note  2012-12,  dated
May  29, 2012 prepared by the Chief Actuary of the New York City Employ-
ees' Retirement System.