S T A T E O F N E W Y O R K
________________________________________________________________________
8023
2013-2014 Regular Sessions
I N A S S E M B L Y
June 14, 2013
___________
Introduced by M. of A. COLTON -- read once and referred to the Committee
on Governmental Employees
AN ACT in relation to authorizing John H. Di Veglio, Jr. to apply for
service credit for a period of time during which he received long-term
disability benefits prior to returning to his employment with the New
York city school construction authority
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Notwithstanding any provision of law to the contrary, John
H. Di Veglio, Jr. who commenced employment with the New York city school
construction authority on October 23, 1989, and who through no negli-
gence of his own was disabled while employed with the New York city
school construction authority in August 2000 and who received workers'
compensation payments from August 2000 and received long term disability
benefits in February 2001 through October 3, 2004 during which time he
completed rehabilitation and subsequently returned to full-time employ-
ment on October 3, 2004 with the New York city school construction
authority, shall be deemed to have been a member of the New York city
board of education retirement system from February 2001 through October
3, 2004 and shall be entitled to receive service credit for such period
provided he files an application therefor with the board of trustees of
the New York city board of education retirement system on or before
December 31, 2013 provided he pays the member cost based on the rate of
pay as of his last day of employment prior to his date of disability.
Such payment may be made by means of a trustee to trustee transfer
between Mr. Di Veglio's deferred compensation plan and the New York city
board of education retirement system.
S 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
PROVISIONS OF PROPOSED LEGISLATION: The proposed legislation would
deem John H. Di Veglio, Jr. to have been a member of the New York City
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10395-06-3
A. 8023 2
Board of Education Retirement System ("BERS") during the time he was
receiving Long Term Disability ("LTD") benefits from February 2001
through October 3, 2004, as the result of being disabled while employed
with the New York City School Construction Authority, and, after meeting
certain criteria, receive service credit for such period.
The Effective Date of the proposed legislation would be the Date of
Enactment.
STATUTORY PROVISIONS: Mr. Di Veglio is a Tier IV member of BERS and is
covered under the provisions of Retirement and Social Security Law
("RSSL") Article 15.
RSSL Article 15, Section 609 captioned "Credit for service" provides
in Subdivision c caption "Creditable service," in pertinent part, that
"[o]ther than previous service, a member shall only be eligible to
obtain credit for active service with a participating employer."
RSSL Section 601 captioned "Definitions" under Subdivision a captioned
"Active service" provides that active service
" shall mean service while being paid on the payroll of a participat-
ing employer provided, however, a leave of absence with pay may be
deemed active service pursuant to rules and regulations adopted by a
public retirement system of the state."
RSSL Section 609.b captioned "Previous service" provides pertinent
part that:
"[a] member shall be eligible to obtain retirement credit hereunder
for previous service with a public employer if retirement credit had
previously been granted for such service or if such service which would
have been creditable in one of the public retirement systems of the
state,..."
Accordingly, since the time Mr. Di Veglio spent on LTD is not active
service nor previous service, he would not be able under the existing
statutes to obtain such service as creditable service for retirement
benefits.
This proposed legislation would provide Mr. Di Veglio the opportunity
to purchase on or before December 31, 2013, service for his time on LTD.
FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: With respect to BERS, and
assuming that Mr. Di Veglio purchases expeditiously the service credits
permitted under this proposed legislation, then the enactment of this
proposed legislation would result in an increase in the Actuarial Pres-
ent Value of Benefits ("APVB") by approximately $74,700 as of June 30,
2013.
The proposed legislation requires that Mr. Di Veglio pay for the
member cost of service credit from February 2001 through October 3,
2004, based on his rate of pay as of his last day of employment prior to
his date of disability. The member contributions to buy back the prior
service would be approximately $17,500 as of June 30, 2013.
After reflecting the member contributions of $17,500 required to buy
back the service and the increase in the Actuarial Present Value of
Future Normal Costs of approximately $1,300, the net increase in the
Actuarial Present Value ("APV") of future employer contributions would
be approximately $57,200 and the net increase in Unfunded Actuarial
Accrued Liability ("UAAL") would be approximately $55,900 as of June 30,
2013.
FINANCIAL IMPACT - ADDITIONAL ANNUAL EMPLOYER COSTS AND CONTRIBUTIONS:
In accordance with Administrative Code of the City of New York ("ACNY")
Section 13.638.2(k-2), new UAAL attributable to benefit changes are to
be amortized as determined by the Actuary but generally over the remain-
ing working lifetimes of those impacted by the benefit changes.
A. 8023 3
Mr. Di Veglio has an expected future working lifetime of approximately
three years.
Therefore, under the One-Year Lag Methodology and following the intent
of ACNY Section 13.638.2(k-2), the increase in the UAAL would be amor-
tized over a three-year period (two payments under the One-Year Lag
Methodology).
With respect to BERS, the enactment of the proposed legislation would
increase annual employer costs in each of the first two years that the
change is recognized by approximately $33,000. Subsequent to the first
two years, the enactment of the proposed legislation would increase
annual employer costs each year until his ultimate assumed retirement
age of 70 by the increase in the Normal Cost due to the legislation
which has been estimated to be approximately $1,000 per year.
Increases in employer contributions would be comparable to the esti-
mated increases in employer costs and, as Mr. Di Veglio is employed by
the New York City School Construction Authority ("SCA"), it is expected
that SCA would pay the increased employer contributions.
If enacted on or before June 30, 2013, increased employer contrib-
utions to BERS would begin Fiscal Year 2015.
If enacted after June 30, 2013 but prior to finalization of Fiscal
Year 2015 employer contributions (I.E., on or before approximately April
2014), increased employer contributions to BERS would begin Fiscal Year
2015.
If enacted after finalization of Fiscal Year 2015 employer contrib-
utions, increased employer contributions to BERS would begin Fiscal Year
2016 or later, depending upon the date of enactment.
OTHER COSTS: Not measured in this Fiscal Note are any additional
administrative costs or possible increased Other Postemployment Benefit
("OPEB") costs.
ACTUARIAL ASSUMPTIONS AND METHODS: Estimates of changes in APVB, UAAL
and employer costs have been calculated using the actuarial assumptions
and methods adopted by the BERS Board of Trustees during Fiscal Year
2012 and enacted as Chapter 3 of the Laws of 2013 ("2012 A&M") for
determining employer contributions for fiscal years beginning on and
after July 1, 2011 (i.e., Fiscal Years 2012 and after).
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.
FISCAL NOTE IDENTIFICATION: This estimate is intended for use only
during the 2013 Legislative Session. It is Fiscal Note 2013-13, dated
June 13, 2013 prepared by the Chief Actuary of the New York City Board
of Education Retirement System.