S T A T E O F N E W Y O R K
________________________________________________________________________
4819--A
2013-2014 Regular Sessions
I N S E N A T E
April 25, 2013
___________
Introduced by Sen. LANZA -- read twice and ordered printed, and when
printed to be committed to the Committee on Veterans, Homeland Securi-
ty and Military Affairs -- recommitted to the Committee on Veterans,
Homeland Security and Military Affairs in accordance with Senate Rule
6, sec. 8 -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee
AN ACT to amend the military law, in relation to non-contributory
retirement service credit for members of the New York city retirement
systems called to military duty on or after September eleventh, two
thousand one
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 243-d of the military law, as added by chapter 326
of the laws of 2005, is amended to read as follows:
S 243-d. Non-contributory retirement service credit for members of the
New York state and local retirement systems, THE NEW YORK CITY RETIRE-
MENT SYSTEMS or the New York state teachers' retirement system called to
active military duty on or after September eleventh, two thousand one.
Notwithstanding any other provision of law, any member of the New York
state and local employees' retirement system, THE NEW YORK CITY RETIRE-
MENT SYSTEMS, the New York state and local police and fire retirement
system, or the New York state teachers' retirement system who is called
to active military duty on or after September eleventh, two thousand one
and prior to January first, two thousand six, who is not receiving his
or her full salary from a participating employer and is otherwise eligi-
ble to receive retirement service credit in such system for such active
military duty pursuant to section two hundred forty-two or two hundred
forty-three of this article, shall not be required to make member
contributions to receive such credit.
S 2. This act shall take effect immediately and shall be deemed to
have been in full force and effect on and after September 11, 2001.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05024-03-4
S. 4819--A 2
FISCAL NOTE.-- PROVISIONS OF PROPOSED LEGISLATION: The proposed legis-
lation would amend Military Law Section 243-d to provide non-contributo-
ry retirement service credit for any member of the New York City Retire-
ment Systems ("NYCRS") who was called to active military duty on or
after September 11, 2001 and prior to January 1, 2006, who did not
receive his or her full salary from a participating employer and who
otherwise would be eligible to receive retirement service credit in the
NYCRS for such active military service. Such member would not be
required to make member contributions to receive such credit.
It is the understanding of the Actuary that the time period for which
such member was not receiving his or her full salary from a participat-
ing employer would be the time period of such military service and not
the time period after the return of such member to his or her employment
with a participating employer of the NYCRS.
The Effective Date of the proposed legislation would be the date of
enactment and would be deemed to have been in full force and effect on
and after September 11, 2001.
FINANCIAL IMPACT - SUMMARY: Enactment of this proposed legislation
would increase the Unfunded Actuarial Accrued Liability ("UAAL"), where
such amount depends on the number of members affected and upon the
amount of military service being credited as well as other character-
istics including the age and salary history of the affected members.
Assuming that these affected members would purchase this military
service if this legislation were not enacted, the enactment of this
proposed legislation for each member affected would be expected to
result in an increase in the UAAL reflecting the impact of making such
purchases non-contributory.
Under Military Law Section 243, captioned "Provisions applicable to
public employees who are absent on military duty," members who purchase
such service would contribute such amount as he or she would have
contributed had his or her employment been continuous.
Under Military Law Section 244-a, captioned "Credit to members of
public retirement systems for military service performed during war,"
members who purchase such service would pay in full the cost of such
service (i.e., both the member cost and the employer cost).
Under the Retirement and Social Security Law ("RSSL") Section 1000,
captioned "Military service credit," members who purchase such service
would contribute 3.0% of his or her compensation earned in the 12 months
of credited service immediately preceding the date that the member
purchases this service times the number of years of service being
purchased.
However, RSSL Section 1000 also provides that a member who has
purchased military service pursuant to Military Law Section 244-a would
be entitled to a refund of the difference between the amount paid by the
member for such purchase and the amount that would be payable if service
had been purchased under RSSL Section 1000.
Thus, for purposes of this Fiscal Note, it has been assumed that the
member would have purchased this service under RSSL Section 1000.
Accordingly, the increase in the UAAL would be comparable to the value
of member contributions of 3.0% of his or her compensation earned in the
12 months of credited service immediately preceding the date that the
member purchases this service times the number of years of service being
purchased.
For purposes of amortization of the increase in UAAL, in accordance
with Administrative Code of the City of New York ("ACNY") Section
13.638.2(k-2), the Actuary has roughly estimated the remaining working
S. 4819--A 3
lifetimes of those likely to utilize the provisions of the proposed
legislation to be 10 years. Under the One-Year Lag Methodology ("OYLM")
used to finance the NYCRS, an amortization period of 10 years would
include nine annual payments beginning one year after the actuarial
valuation date.
The following Table summarizes the estimated financial impact of this
proposed legislation on the NYCRS:
Table 1
Estimated Financial Impact to Provide Non-Contributory Service
Credit for Certain Members Called to Active Military Duty on
and after September 11, 2001 and prior to January 1,2006
($ Thousands)
Estimated Increase in
Unfunded Actuarial Estimated Additional
Retirement System{1} Accrued Liability Annual Employer Costs{2}
NYCERS $459.2 $72.9
TRS 0.0{3} 0.0{3}
BERS 0.0{3} 0.0{3}
POLICE 3,774.9 599.4
FIRE 490.9 77.9
Total $4,725.0 $750.2
{1} New York City Employees' Retirement System ("NYCERS")
New York City Teachers' Retirement System ("TRS")
New York City Board of Education Retirement System ("BERS")
New York City Police Pension Fund ("POLICE")
New York City Fire Department Pension Fund ("FIRE")
{2} Based on an amortization period of 10 years (9 payments under OYLM).
{3} De minimis.
Increases in employer contributions would be comparable to the
increases in employer costs.
If enacted during the 2014 Legislative Session and if these affected
members and their amounts of military service being credited were iden-
tified on or before June 30, 2014, this proposed legislation would be
expected to increase employer contributions to the NYCRS beginning
Fiscal Year 2016.
OTHER COSTS: The enactment of this proposed legislation would result
in some administrative expenses for the NYCRS.
CENSUS DATA: The calculation of estimated changes in UAAL, employer
costs and employer contributions presented herein is based upon data
provided by NYCERS, POLICE and FIRE. NYCERS reported that 179 members
were called to military duty between September 11, 2001 and December 31,
2005. POLICE provided data on 1,121 members who were called to military
service between September 11, 2001 and December 31, 2005 along with each
member's length of military service during that period and their rank
when called to duty. FIRE provided data on 185 members who were on mili-
tary service as of the end of each calendar year from 2001 through 2005
along with their salary at the time they were called to duty. Estimates
were made for similar information for TRS and BERS based on the data
received from the other systems.
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.
S. 4819--A 4
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 2014 Legislative Session. It is Fiscal Note 2014-10, dated
April 2, 2014 prepared by the Chief Actuary of the New York City Retire-
ment Systems.
