senate Bill S7439

2013-2014 Legislative Session

Relates to contributions required of members for the twenty-year/age fifty program for Triborough bridge and tunnel members

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jun 20, 2014 committed to rules
Jun 02, 2014 advanced to third reading
May 29, 2014 2nd report cal.
May 28, 2014 1st report cal.997
May 15, 2014 referred to civil service and pensions

Votes

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May 28, 2014 - Civil Service and Pensions committee Vote

S7439
7
0
committee
7
Aye
0
Nay
4
Aye with Reservations
0
Absent
0
Excused
0
Abstained
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Civil Service and Pensions Committee Vote: May 28, 2014

Co-Sponsors

S7439 - Bill Details

See Assembly Version of this Bill:
A9418
Current Committee:
Senate Rules
Law Section:
Retirement and Social Security Law
Laws Affected:
Amd §604-c, R & SS L

S7439 - Bill Texts

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Relates to contributions required of members for the twenty-year/age fifty program for Triborough bridge and tunnel members.

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BILL NUMBER:S7439

TITLE OF BILL: An act to amend the retirement and social security law,
in relation to members of the twenty-year/age fifty retirement program
for Triborough bridge and tunnel members

SUMMARY OF PROVISIONS:

Section 1- requires that a member that returns to a position that makes
them eligible to participate in a 20 year/age 50 program repay the Addi-
tional Member Contributions that would have been collected during the
period the member was in the managerial position.

Section 2 - Immediate Effective Date

PURPOSE: This bill would require a member who spends a portion of his
or her career in a non-participating managerial position and then
returns to a TBTA Eligible position to contribute the additional member
contributions (AMC) required for the enhanced 20 year/age 50 retirement
plan.

JUSTIFICATION: This bill will correct problem in the TBTA 20 year/age
50 plan within the New York City Employees Retirement System (NYCERS).
It addresses the members that leave the 20 year/age 50 plan to take a
managerial position. Those members stop making the AMCs which can range
from 5.5% - 6% depending on their rank prior to taking the managerial
position. The member can at a later date return to the 20 year/age 50
plan and retire taking advantage of using the time as a manager toward
the 20 years required to retire. In many cases it has been as much as 10
years without making any Additional Member contributions toward their
pension.

This legislation would correct the funding imbalance caused by this
anomaly and maintain parity for plan members who do not receive manage-
rial positions

LEGISLATIVE HISTORY: New Bill

FISCAL IMPLICATIONS: The estimated total savings to the plan would be
approximately $1,200,000 for the current group of managerial employees.

EFFECTIVE DATE: Immediately.

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

                                  7439

                            I N  S E N A T E

                              May 15, 2014
                               ___________

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 to amend the retirement and social security law, in  relation  to
  members of the twenty-year/age fifty retirement program for Triborough
  bridge and tunnel 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-c  of  the
retirement  and  social  security  law, as amended by chapter 661 of the
laws of 2002, 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-
year/age fifty retirement program in the rank of bridge and tunnel offi-
cer shall contribute to the retirement system of which he or  she  is  a
member (subject to the applicable provisions of subdivision d of section
six  hundred thirteen of this article) an additional five and fifty one-
hundredths percent of his or her compensation and  each  participant  in
the  twenty-year/age fifty retirement program in the rank of sergeant or
lieutenant shall contribute to the retirement system an  additional  six
percent  of  his or her compensation earned [from] FOR (A) all allowable
service as a Triborough bridge and tunnel member rendered on  and  after
the  date which is one hundred eighty days prior to the starting date of
the twenty-year/age fifty  retirement  program,  AND  (B)  ALL  CREDITED
SERVICE  AFTER  SUCH  PERSON CEASES TO BE A PARTICIPANT BUT BEFORE HE OR
SHE AGAIN BECOMES A PARTICIPANT PURSUANT TO PARAGRAPH SIX OF SUBDIVISION
B OF THIS SECTION. A participant in the twenty-year/age fifty retirement
program shall contribute additional member contributions until the later
of (i) the date as of which he or  she  has  twenty  years  of  credited
service as a bridge and tunnel officer, or (ii) the third anniversary of
the date that he or she last became a participant in the twenty-year/age
fifty retirement program.
  S 2. This act shall take effect immediately.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13878-02-4

S. 7439                             2

  PROVISIONS OF PROPOSED LEGISLATION: This proposed legislation, revised
as  described  below,  would  amend  Retirement  and Social Security Law
("RSSL") Section 604-c.e(1) to require Additional  Member  Contributions
("AMC")  for  a  period  of non-participation be made by a member of the
Triborough  Bridge  and Tunnel Authority ("TBTA") 20-Year/Age 50 Retire-
ment Plan ("TBTA 20/50 Plan") who ceases to be a participant  and  later
again becomes a participant.
  The Actuary has a concern that the impact of this proposed legislation
may be reduced due to Constitutional Protection under Article V, Section
7 of the New York State Constitution.
  Note:  The  analysis  presented  in  the Fiscal Note presumes that the
proposed legislation could be administered as written.
  The effective date of the proposed legislation would be  the  date  of
enactment.
  BACKGROUND:  Members in the New York City Employees' Retirement System
("NYCERS") TBTA 20/50 Plan must be employed in a TBTA Eligible  Position
to  be  eligible  to participate. A TBTA Eligible Position is a position
held by a Tier 4 member who is employed as  a  TBTA  Bridge  and  Tunnel
Officer, Sergeant or Lieutenant in a non-managerial position. To partic-
ipate in the TBTA 20/50 Plan, in addition to Basic Member Contributions,
AMC  must  be  made  at the rate of 5.5% of gross wages for Officers and
6.0% of gross wages for Sergeants and Lieutenants until the later of (1)
20 years of Credited Service in a TBTA Eligible  Position,  or  (2)  the
third anniversary of participation in the TBTA 20/50 Plan.
  If a TBTA 20/50 Plan member gets promoted to a managerial position, he
or  she is no longer eligible to participate in that Plan. Subsequently,
if the member is reassigned to a  non-managerial  position,  making  the
member  once  again  eligible to participate in the TBTA 20/50 Plan, the
member is then able to retire with full TBTA 20/50 Plan benefits despite
not having contributed AMC during the period the  member  spent  in  the
managerial position.
  This  proposed  legislation,  if  enacted,  would require a member who
spends a portion of his or her career in a non-participating  managerial
position  and then returns to a TBTA Eligible Position to contribute AMC
for the period of time that the member was in that managerial position.
  For purposes of  developing  the  analysis  herein,  the  Actuary  has
assumed  that  the  required  AMC  rate  for this period of time will be
deemed to be equal to the AMC rate last  paid  by  the  member  while  a
participant in the TBTA 20/50 Plan.
  FINANCIAL  IMPACT  - ACTUARIAL PRESENT VALUE OF BENEFITS: Enactment of
this legislation would result in a reduction in  the  Actuarial  Present
Value  of  Benefits  ("APVB")  and  employer contributions to NYCERS and
would be based on the number of members affected, the  number  of  years
that  they  were  in  non-participating  positions and their gross wages
during those periods. Based on the assumptions herein,  the  savings  in
the APVB, if this legislation is enacted, would be approximately $60,000
per member at the date of retirement.
  Although  the  exact  number  of affected members cannot be known with
certainty, there are approximately 20 members who are currently in mana-
gerial positions who could potentially be reassigned  to  non-managerial
positions just prior to retirement, and therefore, avoid the requirement
to  contribute AMC for a portion of their career. If all 20 members were
to be affected by this proposed legislation, the total savings would  be
approximately  $1,200,000 for this current group of managerial employees
if the legislation were to be enacted.

S. 7439                             3

  FINANCIAL IMPACT - EMPLOYER COSTS: Enactment of this  proposed  legis-
lation could decrease employer costs, where such amounts would depend on
the  number of members affected, upon the number of years that they were
in non-participating positions and their gross wages during those  years
and would equal the value of the additional AMC paid.
  The increase in the assets of NYCERS as a result of the additional AMC
paid  in any year would be treated as an actuarial gain and be amortized
over 15 years. Based on the assumptions herein, should 20 members  repay
$1,200,000  at  the  same  time, the cost savings would be approximately
$140,000 per year.
  FINANCIAL IMPACT  -  EMPLOYER  CONTRIBUTIONS:  Decreases  in  employer
contributions would ultimately be comparable to the decreases in employ-
er costs.
  ACTUARIAL  ASSUMPTIONS AND METHODS: The approximate savings per member
in the APVB has been estimated assuming that:
  * The member has been in a managerial position for 10 years
  * The member's gross wages at  the  end  of  the  10-year  period  was
$100,000
  *  The  member  had received increases in gross wages of 4.0% per year
during the 10-year period
  * The AMC rate was 6.0% of gross wages, and
  * AMC are accumulated at the rate of 5.0% per year.
  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  2014  Legislative Session. It is Fiscal Note 2014-15, dated
April 18, 2014 prepared by the  Chief  Actuary  of  the  New  York  City
Employees' Retirement System.

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