Senate Bill S5788

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

                                  5788

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              June 14, 2013
                               ___________

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

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
              

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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.

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  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.