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

                                  9954

                          I N  A S S E M B L Y

                              June 3, 2014
                               ___________

Introduced  by  COMMITTEE ON RULES -- (at request of 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
  twenty-five-year  and  age  fifty-five retirement program for 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.  Paragraph  1  of  subdivision  e  of section 604-b of the
retirement and social security law, as amended by chapter 10 of the laws
of 2000, is amended to read as follows:
  1. In addition to the member contributions  required  by  section  six
hundred  thirteen  of this article, each participant in the twenty-five-
year and age fifty-five  retirement  program  shall  contribute  to  the
retirement  system of which he or she is a member (subject to the appli-
cable provisions of section 13-125.1  of  the  administrative  code)  an
additional  two and thirty-hundredths percent of his or her compensation
earned from all allowable service in the transit authority  rendered  on
and  after  the starting date of the twenty-five-year and age fifty-five
retirement program.  A  participant  in  the  twenty-five-year  and  age
fifty-five   retirement   program  shall  contribute  additional  member
contributions only until he or she has thirty years of allowable service
in the transit authority. In the event that the New  York  city  transit
authority  elects  to eliminate additional member contributions pursuant
to paragraph ten of this subdivision, a participant in the  twenty-five-
year  and  age  fifty-five  retirement program who becomes a participant
pursuant to the provisions of paragraph four-a of subdivision b of  this
section  shall  not  be  required to make any additional member contrib-
utions pursuant to this subdivision.   ANY  ADDITIONAL  MEMBER  CONTRIB-
UTIONS  MADE  PURSUANT  TO THIS SUBDIVISION PRIOR TO ANY ELECTION BY THE
NEW YORK CITY TRANSIT AUTHORITY TO ELIMINATE SUCH CONTRIBUTIONS PURSUANT
TO PARAGRAPH TEN OF THIS SUBDIVISION, SHALL BE REFUNDED TO A PARTICIPANT
IN THE  TWENTY-FIVE-YEAR  AND  AGE  FIFTY-FIVE  RETIREMENT  PROGRAM,  TO
INCLUDE  A  PREVIOUS PARTICIPANT WHO HAS SUCCESSFULLY RETIRED UNDER SUCH
PROGRAM TOGETHER WITH INTEREST THEREON AT THE RATE OF FIVE  PERCENT  PER

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

                                                           LBD15378-01-4

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ANNUM,  COMPOUNDED  ANNUALLY  AND SUCH REFUND SHALL BE PAYABLE UPON SUCH
PREVIOUS PARTICIPANT'S APPLICATION, AS PERMITTED UNDER PARAGRAPH TEN  OF
THIS  SUBDIVISION, AND PURSUANT TO PROCEDURES PROMULGATED IN REGULATIONS
OF THE BOARD OF TRUSTEES OF THE RETIREMENT SYSTEM.
  S  2. Paragraph 10 of subdivision e of section 604-b of the retirement
and social security law, as amended by chapter 379 of the laws of  2007,
is amended to read as follows:
  10.  The  New York city transit authority, by the adoption of a resol-
ution or resolutions, may make an election or elections to eliminate the
additional member contributions required to be made  pursuant  to  para-
graph  one  of  this subdivision. Such election or elections may be made
applicable to all employees of the transit authority, to  employees  who
are represented by a specific collective bargaining organization, recog-
nized  or  certified  pursuant  to article fourteen of the civil service
law, and/or to employees who are not represented  for  the  purposes  of
collective  bargaining.  Such  election  or  elections  shall define the
starting date of the elimination  of  additional  member  contributions,
except  as  set forth below, which shall in no event be earlier than the
first payroll period following  December  fifteenth,  two  thousand.  An
election  made pursuant to this paragraph shall be irrevocable. A demand
for an elimination of  additional  member  contributions  shall  not  be
subject  to  the  provisions  of subdivision five of section two hundred
nine of the civil service law. The New York city transit authority shall
notify the head of the New York city employees' retirement system of any
election or elections made pursuant to this  paragraph.  Notwithstanding
the aforementioned starting date of the elimination of additional member
contributions  or  any  other  provision  of  this  section, an eligible
participant, as defined below, shall be entitled to a refund of  all  of
his  or her accumulated additional member contributions made pursuant to
this subdivision which shall include any and all interest  thereon  paid
to  the retirement system, together with 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 eligible participant shall be a participant (i) who is or was
employed in a title represented for purposes of collective bargaining by
an  employee  organization  representing  a  majority of non-supervisory
employees in the New York city transit  authority's  Queens  Bus  and/or
Staten Island Bus Divisions, recognized or certified pursuant to article
fourteen  of  the  civil service law, and who, on December twenty-eight,
two thousand five, had  an  accumulated  balance  of  additional  member
contributions at the retirement system; [or] (ii) who is or was employed
in  a  title  represented  for  purposes of collective bargaining by the
employee  organization  representing  the  majority  of  non-supervisory
employees  in  the  New  York  city  transit authority in other than the
Queens Bus and/or Staten Island Bus Divisions, recognized  or  certified
pursuant  to  article  fourteen  of  the  civil service law, and who, on
December sixteenth, two thousand five, had  an  accumulated  balance  of
additional  member  contributions  at the retirement system[.]; OR (III)
WHO WAS EMPLOYED IN A  TITLE  REPRESENTED  FOR  PURPOSES  OF  COLLECTIVE
BARGAINING  BY  THE  EMPLOYEE  ORGANIZATION REPRESENTING THE MAJORITY OF
NON-SUPERVISORY EMPLOYEES IN THE NEW  YORK  CITY  TRANSIT  AUTHORITY  IN
OTHER THAN THE QUEENS BUS AND/OR STATEN ISLAND BUS DIVISIONS, RECOGNIZED
OR  CERTIFIED PURSUANT TO ARTICLE FOURTEEN OF THE CIVIL SERVICE LAW, AND
WHO, BY REASON OF RETIREMENT PRIOR TO DECEMBER SIXTEENTH,  TWO  THOUSAND
FIVE,  WAS  NOT  ELIGIBLE FOR A REFUND UNDER (II) OF THIS PARAGRAPH, BUT

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HAD OR WOULD HAVE  HAD  AN  ACCUMULATED  BALANCE  OF  ADDITIONAL  MEMBER
CONTRIBUTIONS  AT THE RETIREMENT SYSTEM IF THE IMPACT OF THE ELECTION BY
SUCH TRANSIT AUTHORITY TO ELIMINATE  ADDITIONAL  EMPLOYEE  CONTRIBUTIONS
UNDER THIS PARAGRAPH IS TAKEN INTO ACCOUNT AND APPLIED TO THEIR PREVIOUS
EMPLOYEE  CONTRIBUTIONS  AS  OF  THE DAY OR DATE OF THEIR RETIREMENT. NO
INTEREST AUTHORIZED BY THIS PROVISION SHALL ACCRUE AFTER THE DAY OR DATE
OF THE RETIREMENT OF THE APPLICANT.
  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-b.e(1) and 604-b.e(10) to provide to certain New York  City
Transit Authority ("NYCTA") retired members of the New York City Employ-
ees' Retirement System ("NYCERS") a refund of Additional Member Contrib-
utions  ("AMC")  that were paid by these members while they were partic-
ipants of the Transit 25 Year/Age 55 Retirement Program ("Transit  55/25
Program").
  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 including  an  assumption  that  no
interest would be paid past a member's retirement date.
  IMPACT  ON  PLAN  PROVISIONS  - ADDITIONAL MEMBER CONTRIBUTIONS: Those
NYCERS members who participated in the Transit 55/25 Program paid AMC of
2.3% of gross wages for service rendered between  August  28,  1994  and
December 15, 2000.
  This  proposed  legislation  would refund AMC to retired Transit 55/25
Program participants who are former members of the Transit Workers Union
Local 100 ("Local 100") and who retired prior to December 16, 2005  with
initial  Program  participation  dates  on  or before December 15, 2000,
including interest  at  5.0%  per  annum  accrued  through  the  retired
member's retirement date.
  To  receive  such refund, those eligible retirees would be required to
file an application pursuant to procedures  to  be  established  by  the
NYCERS Board of Trustees.
  FINANCIAL  IMPACT  -  OVERVIEW:  If enacted into the law, the ultimate
employer cost of the proposed legislation would  be  determined  by  the
reduction in fund assets due to the refund of AMC.
  FINANCIAL  IMPACT - UNFUNDED ACTUARIAL ACCRUED LIABILITY: 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 Asset Value as of  June  30,
2014  and  an  increase  in  the  Unfunded  Actuarial  Accrued Liability
("UAAL") of approximately $2,761,000.
  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 $843,000  per  year  for
four years.
  Increases  in  employer contributions would be comparable to the esti-
mated increases in employer costs.
  As the impact is generally measurable and RSSL Section  430  expresses
the idea that benefit improvements are not to be implemented in a fiscal
year  prior  to the commencement of financing, enactment of the proposed
legislation on or before June 30, 2015 would result in increased employ-
er contributions to NYCERS beginning Fiscal Year 2015.

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  CENSUS DATA: The census data used for estimates of the expected refund
of AMC and change in employer contributions presented herein are the 264
retired Local 100 members of NYCERS  who  participated  in  the  Transit
55/25  Program,  retired  prior to December 16, 2005 and are alive as of
April 2, 2014.
  ACTUARIAL  ASSUMPTIONS  AND METHODS: Estimates of changes in AAL, UAAL
and employer costs have been calculated using the actuarial  assumptions
and  methods  adopted by the NYCERS 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).
  In accordance with Section 13.638.2 (k-2) of the  Administrative  Code
of  the  City  of  New  York ("ACNY") as enacted by Chapter 3/13, as one
component of the 2012 A&M, new UAAL attributable to benefit changes  are
to  be  amortized  as  determined  by the Actuary but generally over the
remaining working lifetimes of those impacted by these benefit changes.
  For this proposed legislation, the average remaining working  lifetime
is  zero  years  because  all  those that would be impacted have already
retired.
  Legislation with similar structures were enacted for Transit Operating
non-supervisory employees as Chapter 734 of the Laws of  2006  ("Chapter
734/06")  and  as Chapter 379 of the Laws of 2007 ("Chapter 379/07") and
the additional UAAL was amortized for each legislation under the actuar-
ial assumptions and methods then in effect (i.e.,  amortized  implicitly
over  the  average  remaining  working  lifetimes  of  all NYCERS active
members).
  Similar legislation  to  the  proposed  legislation  was  enacted  for
certain  Station  Supervisors Level 2 as Chapter 522 of the Laws of 2013
("Chapter 522/13"). The additional UAAL for that legislation is expected
to be amortized over five years using four payments beginning  one  year
after  the  establishment  of  the  UAAL in accordance with One-Year Lag
Methodology ("OYLM") that  is  used  for  the  actuarial  valuations  of
NYCERS.
  The  Actuary  believes  that the appropriate financing period for this
proposed legislation would be the average remaining working lifetime  of
the entire group impacted.
  However,  given  the  history of the financing of similar legislations
(e.g., Chapter 734/06, Chapter 379/07 and Chapter 522/13),  the  Actuary
is  inclined  to  amortize  the  proposed  legislation  over five years.
Essentially, this is a compromise between the remaining average  working
lifetime of the entire group impacted and the average remaining lifetime
of all NYCERS members.
  For  this  particular legislation, as with Chapter 522/13, the Actuary
would likely treat the five years of amortization with the payment peri-
od beginning one year after the establishment of the UAAL. This approach
is consistent with OYLM, where the UAAL is considered  to  be  amortized
over  five  years  with  four  years of payments beginning in the second
year.
  Also note that, historically, other  legislation  impacting  primarily
retired  or  soon-to-be-retired  members  was  often amortized over five
years  (Retirement  Incentive  Programs)  or  10   years   (Supplemental
Programs).
  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.

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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  2014-23,  dated
May  20,  2014,  prepared  by  the  Chief  Actuary for the New York City
Employees' Retirement System.