senate Bill S7839

2013-2014 Legislative Session

Provides credit to members of public retirement systems of the state for military service rendered during certain periods

download bill text pdf

Sponsored By

Archive: Last Bill Status - Vetoed by Governor


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

do you support this bill?

Actions

view actions (12)
Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Nov 07, 2014 vetoed memo.484
Oct 29, 2014 delivered to governor
Jun 19, 2014 returned to senate
passed assembly
ordered to third reading rules cal.531
substituted for a6974b
Jun 16, 2014 referred to ways and means
delivered to assembly
passed senate
ordered to third reading cal.1419
committee discharged and committed to rules
Jun 13, 2014 referred to civil service and pensions

Votes

view votes

Co-Sponsors

view additional co-sponsors

S7839 - Bill Details

See Assembly Version of this Bill:
A6974B
Law Section:
Retirement and Social Security Law
Laws Affected:
Amd ยง1000, R & SS L

S7839 - Bill Texts

view summary

Provides up to three years of service credit to members of public retirement systems of the state for military service rendered during times of peace; removes requirement that such military service occur during specified periods of hostilities; requires such members have at least five years of credited service, not including military service.

view sponsor memo
BILL NUMBER:S7839

TITLE OF BILL: An act to amend the retirement and social security
law, in relation to providing credit to members of public retirement
systems of the state for military service

PURPOSE: To extend the Military Service Credit Law of 2000 to all
veterans who have served in the military

SUMMARY OF PROVISIONS:

Section one amends section 1000 of the retirement and social security
law, as added by chapter 548 of the laws of 2000 and subdivision 9 as
added by chapter 547 of the laws of 2002, by deleting the specified
periods of time in which military service would had to have been
rendered in order to receive up to three years of service credit. Such
specified periods currently prevent a person who served in the
military, outside such periods, from obtaining service credit when
applying to a public retirement system of the state. This section also
deletes other restricting dates.

Section two provides that section 25 of the retirement and social
security law shall not apply to this act.

Section three provides the effective date.

JUSTIFICATION: The United States now depends on a volunteer military.
In order to encourage citizens to become a member of the military, the
state needs to recognize all veterans by allowing them to access the
Military Service Credit buy back law Currently, the Military Service
Credit Law of 2000 permits active public employees who served in the
military during only specified conflicts to purchase up to three years
credit for their military service. This legislation will extend this
opportunity to veterans who were in the military and served their
country during peace times as well

LEGISLATIVE HISTORY: 2014 Similar to S.4714-A-Passed Senate

FISCAL IMPLICATIONS:. See fiscal notes included at the end of the
bill.

EFFECTIVE DATE: This act shall take effect immediately.

view full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7839

                            I N  S E N A T E

                              June 13, 2014
                               ___________

Introduced  by  Sen.  LARKIN -- 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
  providing  credit to members of public retirement systems of the state
  for military service

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. Section 1000 of the retirement and social security law, as
added by chapter 548 of the laws of 2000,  subdivision  9  as  added  by
chapter  547  of the laws of 2002 and subdivision 10 as added by chapter
18 of the laws of 2012, is amended to read as follows:
  S 1000. Military  service  credit.  Notwithstanding  any  law  to  the
contrary,  a  member  of  a  public  retirement  system of the state, as
defined in subdivision twenty-three of section five hundred one of  this
chapter, shall be eligible for credit for military service as hereinaft-
er provided:
  1.  A member, upon application to such retirement system, may obtain a
total not to exceed three years of service credit for up to three  years
of  military  duty, as defined in section two hundred forty-three of the
military law, if the member was honorably discharged from  the  military
[and  all  or  part  of  such  military  service was rendered during the
following periods: (a) commencing  December  seventh,  nineteen  hundred
forty-one   and  terminating  December  thirty-first,  nineteen  hundred
forty-six; (b) commencing June twenty-seventh,  nineteen  hundred  fifty
and  terminating  January  thirty-first, nineteen hundred fifty-five; or
(c) commencing February twenty-eighth, nineteen  hundred  sixty-one  and
terminating May seventh, nineteen hundred seventy-five;
  2.  A member, upon application to such retirement system, may obtain a
total not to exceed three years of service credit for up to three  years
of  military  duty, as defined in section two hundred forty-three of the
military law, if honorably discharged therefrom, if all or part of  such
services  was  rendered  in  the military conflicts referenced below, as
follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01368-10-4

S. 7839                             2

  (a) hostilities participated in by the military forces of  the  United
States  in Lebanon, from the first day of June, nineteen hundred eighty-
three to the first day of December, nineteen  hundred  eighty-seven,  as
established by receipt of the armed forces expeditionary medal, the navy
expeditionary medal, or the marine corps expeditionary medal;
  (b)  hostilities  participated in by the military forces of the United
States in Grenada,  from  the  twenty-third  day  of  October,  nineteen
hundred  eighty-three  to  the  twenty-first  day  of November, nineteen
hundred eighty-three, as established by  receipt  of  the  armed  forces
expeditionary  medal,  the navy expeditionary medal, or the marine corps
expeditionary medal;
  (c) hostilities participated in by the military forces of  the  United
States  in  Panama, from the twentieth day of December, nineteen hundred
eighty-nine to the thirty-first day of January, nineteen hundred ninety,
as established by receipt of the armed forces expeditionary  medal,  the
navy expeditionary medal, or the marine corps expeditionary medal; or
  (d)  hostilities  participated in by the military forces of the United
States, from the second day of August, nineteen hundred ninety,  to  the
end  of  such hostilities in case of a veteran who served in the theater
of operations including Iraq, Kuwait, Saudi Arabia, Bahrain, Qatar,  the
United  Arab  Emirates,  Oman,  the  Gulf of Aden, the Gulf of Oman, the
Persian Gulf, the Red Sea, and the airspace above these locations].
  [3] 2. A member must have at least five years of credited service (not
including service granted hereunder) to be eligible  to  receive  credit
under this section.
  [4]  3.  To  obtain  such  credit,  a member shall pay such retirement
system, for deposit in the fund used  to  accumulate  employer  contrib-
utions,  a  sum  equal to the product of the number of years of military
service being claimed and three percent of  such  member's  compensation
earned  during the twelve months of credited service immediately preced-
ing the date that the member made application  for  credit  pursuant  to
this  section.  If  permitted  by  rule  or regulation of the applicable
retirement system, the member may  pay  such  member  costs  by  payroll
deduction  for  a period which shall not exceed the time period of mili-
tary service to be credited pursuant to this section. In the  event  the
member leaves the employer payroll prior to completion of payment, he or
she  shall  forward  all  remaining required payments to the appropriate
retirement system prior to the effective date of retirement. If the full
amount of such member costs is not paid to  the  appropriate  retirement
system  prior to the member's retirement, the amount of service credited
shall be proportional to the total amount of the payments made prior  to
retirement.
  [5]  4. In no event shall the credit granted pursuant to this section,
when added to credit granted for military service  with  any  retirement
system  of  this  state  pursuant to this or any other provision of law,
exceed a total of three years.
  [6] 5. To be eligible to receive credit  for  military  service  under
this  section, a member must make application for such credit before the
effective date of retirement. [Notwithstanding the foregoing  provisions
of  this  subdivision,  an  individual  who retired on or after December
twenty-first, nineteen hundred ninety-eight  and  before  the  effective
date  of  this  section may make application for credit pursuant to this
section within one year following the effective date of this section, in
which event, the cost to the retiree would be based on the twelve  month
period immediately preceding retirement.]

S. 7839                             3

  [7]  6.  All  costs  for service credited to a member pursuant to this
section, other than the member costs set forth  in  subdivision  [three]
TWO  of this section, shall be paid by the state and all employers which
participate in the retirement system in which  such  member  is  granted
credit.
  [8]  7. A member who has purchased military service credit pursuant to
section two hundred forty-four-a of the military law shall  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 pursuant to this section.
  [9]  8.  Notwithstanding  any  other provision of law, in the event of
death prior to retirement, amounts paid by the member for  the  purchase
of  military  service credit pursuant to this section shall be refunded,
with interest, to the extent the military service  purchased  with  such
amounts  does  not  produce a greater death benefit than would have been
payable had the member not purchased such credit.
  Notwithstanding any other provision of law, in the  event  of  retire-
ment,  amounts  paid  by the member for the purchase of military service
credit pursuant to this section shall be refunded, with interest, to the
extent the military service purchased with such amounts does not produce
a greater retirement allowance than would  have  been  payable  had  the
member not purchased such credit.
  [10.]  9. Anything to the contrary in subdivision [four] THREE of this
section notwithstanding, to obtain such credit, a member who first joins
a public retirement system of the state on or  after  April  first,  two
thousand  twelve  shall  pay  such retirement system, for deposit in the
fund used to accumulate employer contributions, a sum equal to the prod-
uct of the number of years of military service  being  claimed  and  six
percent of such member's compensation earned during the twelve months of
credited  service  immediately  preceding  the date that the member made
application for credit pursuant to this section.
  S 2. Notwithstanding any other provision of law to the contrary,  none
of  the  provisions  of  this  act shall be subject to section 25 of the
retirement and social security law.
  S 3. This act shall take effect immediately.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  This bill would allow up to three (3)  years  of  service  credit  for
military  duty  by removing all existing requirements that such military
service be performed during certain war periods, during certain  hostil-
ities  while  in theater of operations or upon the receipt of an expedi-
tionary medal. However, the total service credit granted for active  and
peacetime  military  service  shall  not exceed three (3) years.  Tier 6
members would be required to make a payment of six  percent  of  current
compensation per year of additional service credit granted by this bill.
Members  of all other Tiers would be required to make a payment of three
percent of current compensation per year of  additional  service  credit
granted by this bill. Members must have at least five (5) years of cred-
it service (not including military service).
  If this bill is enacted, insofar as this proposal affects the New York
State and Local Employees' Retirement System (ERS), it is estimated that
the  past service cost will average approximately 12% (9% for Tier 6) of
an affected members' compensation for each year  of  additional  service
credit that is purchased.
  Insofar  as  this proposal affects the New York State and Local Police
and Fire Retirement System (PFRS), it is estimated that the past service
cost will average approximately 17% (14% for  Tier  6)  of  an  affected

S. 7839                             4

members'  compensation  for  each  year  of  additional  service that is
purchased.
  The  exact  number  of  current  members as well as future members who
could be affected by this legislation cannot be readily determined.
  ERS Costs: Pursuant to Section 25 of the Retirement and Social Securi-
ty Law, the increased cost to the New York State  and  Local  Employees'
Retirement  System  would be borne entirely by the State of New York and
would require an itemized appropriation sufficient to pay  the  cost  of
the  provision.  Since a member can apply for this service credit at any
time prior to retirement, a precise cost can't be determined until  each
member, as well as future members, applies for the service credit. Every
year  a cost will be determined (and billed to the state) based on those
benefiting from this provisions.
  PFRS Costs: These costs would be shared by the State of New  York  and
the participating employers in the PFRS.
  Summary of relevant resources:
  The  membership  data  used  in  measuring  the impact of the proposed
change was the same as that used in the March 31, 2013  actuarial  valu-
ation.    Distributions  and  other  statistics can be found in the 2013
Report of the  Actuary  and  the  2013  Comprehensive  Annual  Financial
Report.
  The  actuarial assumptions and methods used are described in the 2010,
2011, 2012 and 2013  Annual  Report  to  the  Comptroller  on  Actuarial
Assumptions,  and  the  Codes  Rules and Regulations of the State of New
York: Audit and Control.
  The Market Assets and GASB Disclosures are found in the March 31, 2013
New York State and Local  Retirement  System  Financial  Statements  and
Supplementary Information.
  I am a member of the American Academy of Actuaries and meet the Quali-
fication   Standards  to  render  the  statement  of  actuarial  opinion
contained herein.
  This estimate, dated October 28, 2013 and intended for use only during
the 2014 Legislative Session, is Fiscal Note No. 2014-5, prepared by the
Actuary for the New York State and Local  Employees'  Retirement  System
and the New York State and Local Police and Fire Retirement System.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  With  respect  to  certain New York City Retirement Systems ("NYCRS"),
this proposed legislation would amend  New  York  State  Retirement  and
Social  Security Law ("RSSL") Section 1000 to provide certain members of
the New York City Employees' Retirement System ("NYCERS"), the New  York
City  Teachers' Retirement System ("NYCTRS"), the New York City Board of
Education Retirement System ("BERS"), the New York City  Police  Pension
Fund  ("POLICE")  and the New York Fire Department Pension Fund ("FIRE")
the opportunity to obtain  additional  retirement  service  credits  for
certain Military Service.
  This proposed legislation would permit any NYCERS member, prior to the
effective  date  of retirement, to make application for these additional
service credits.
  To obtain such Military Service credits, members would be required  to
pay  to  the  appropriate  NYCRS,  for  each  year  of  Military Service
purchased, a sum equal to 3.0% (6.0% for members who first join  on  and
after  April  1,  2012)  if such member's compensation earned during the
twelve months of credited service immediately preceding  the  date  that
the member makes application for credit.

S. 7839                             5

  MEMBERS  IMPACTED: Insofar as this proposed legislation relates to the
NYCRS, the number of members who could  potentially  benefit  from  this
proposed legislation cannot be readily determined.
  IMPACT  ON BENEFITS: With respect to the NYCRS, a member who served in
the U.S. military and received an honorable discharge would  be  permit-
ted,  after  completing five years of credited service (exclusive of the
service credit that could be purchased under this proposed legislation),
to purchase a maximum of three years of Military Service  (inclusive  of
any prior purchases of Military Service credit).
  In  order  to  purchase  the Military Service credits provided in this
proposed legislation, a  member  must  have  been  honorable  discharged
following a period of "military duty" as defined in New York State Mili-
tary Law Section 243.
  If  a  member's  Military  Service  meets  these conditions, then that
member would be permitted to purchase a maximum of three years of  Mili-
tary  Service  (inclusive  of  any  previously-received Military Service
credit) attributable to any period of the member's military career.
  For purposes of the respective NYCRS, each year  of  Military  Service
credit  purchased would apply toward providing the member with a year of
benefit accrual  under  the  particular  benefit  formula  covering  the
member.
  In  certain  circumstances, the member also may be entitled to utilize
such Military Service as  qualifying  service  for  benefit  eligibility
purposes.
  For purposes of this Fiscal Note, it has been assumed that members who
purchase  Military  Service in accordance with this proposed legislation
would generally be entitled to count such service  for  benefit  accrual
purposes and for the purpose of qualifying for benefits.
  FINANCIAL IMPACT - OVERVIEW: With respect to an individual member, the
additional  cost of this proposed legislation would depend on the length
of all New York City service, age, salary history and Plan in which  the
member  participates,  as  well as the number of years of service credit
purchased.
  With respect to employers participating in  the  NYCRS,  the  ultimate
employer  cost  of  this proposed legislation would be determined by the
increase in benefits to be paid, the impact of certain benefits commenc-
ing earlier and the reduction in certain future member contributions.
  FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: The additional  Actuarial
Present  Value ("APV") of benefits would depend on the number, salaries,
ages and lengths of Military Service purchased by members who  would  be
affected by this proposed legislation.
  With  respect  to  the  NYCRS and based on the census data assumptions
herein, the enactment of this proposed legislation  would  increase  the
Actuarial  Present  Value  ("APV") of benefits ("APVB") by approximately
$178.5 million as of June 30, 2014.
  In addition, with respect to the  NYCRS,  the  APV  of  future  member
contributions (primarily attributable to the payments by members of 3.0%
(6.0%  for  members who first join on and after April 1, 2012) of salary
per year of Military Service purchased) would increase by  approximately
$26.5 million when measured as of June 30, 2014.
  Consequently, with respect to the NYCRS, the APV of net future employ-
er  contributions  would  increase by approximately $152.0 million as of
June 30, 2014.
  FINANCIAL IMPACT - ANNUAL EMPLOYER  COSTS:  The  ultimate  cost  of  a
pension  plan  is  the  benefits it pays. With respect to the NYCRS, the
financing of the ultimate cost depends upon the census data used and the

S. 7839                             6

actuarial assumptions and methods employed. Assuming that  all  eligible
members  were  to  purchase  the eligible Military Service during Fiscal
Year 2014 and based on the Actuary's actuarial assumptions  and  methods
in  effect  as  of  June 30, 2013, the enactment of this proposed legis-
lation would increase  annual  employer  costs  by  approximately  $18.0
million per year.
  FINANCIAL  IMPACT - EMPLOYER CONTRIBUTIONS: The impact of the proposed
legislation on employer contributions would be a function of the  census
data  (i.e., age/service/salary, etc) reported to the Actuary and of the
timing of the members electing to buy back their Military Service.
  With respect to the NYCRS, based on the  Actuary's  actuarial  assump-
tions  and  methods in effect as of June 30, 2013, the enactment of this
proposed legislation would ultimately increase employer contributions by
approximately the estimated additional annual employer costs.
  If applications for buying back Military Service were completed during
Fiscal Year 2014 and the NYCRS census data were updated to reflect  this
information by June 30, 2014, then employer contributions would first be
impacted for Fiscal Year 2016.
  If  the  Military  Service  buybacks  were completed after Fiscal Year
2014, then the increase in employer contributions would be delayed.
  FINANCIAL IMPACT - SUMMARY: The following table summarizes  the  esti-
mated financial impact of this proposed legislation on the NYSCRS.

        Estimated Financial impact to Allow Members of the NYCRS
        to Purchase up to Three Years of Military Service Credit

                               ($ Millions)
                                                                Estimated
                                               Additional       First Year
                              Additional     APV of Future      Additional
          Retirement            APV of          Employer        Employer
            System             Benefits       Contributions      Costs

NYCERS                           $ 48.5            $ 40.8            $ 4.8
NYCTRS                             14.4              11.9              1.4
BERS                                2.0               1.7              0.2
POLICE                             92.6              79.4              9.4
FIRE                               21.0              18.2              2.2
  TOTAL                         $ 178.5           $ 152.0           $ 18.0

  ADDITIONAL  EMPLOYER COSTS - GENERAL: In general, the real cost of the
enactment of this proposed legislation would be the additional  benefits
paid.
  OTHER  COSTS:  Not  measured in this Fiscal Note is the impact of this
proposed legislation on the Manhattan and Bronx Surface Transit  Operat-
ing Authority ("MaBSTOA") or on State or Local employees with respect to
their  participation  in  the New York State and Local Retirement System
("NYSLRS") or the New York State Teachers' Retirement System ("NYSTRS").
  Also, this Fiscal Note does not include analyses of the impact of this
proposed legislation on the expected increases in  administrative  costs
or costs for Other Post-Employment Benefits ("OPEB").
  CENSUS DATA: The census data used for estimates of APV of benefits and
employer  contributions presented herein are the active members included
in the June 30, 2013 (Lag) actuarial valuations of NYCERS, NYCTRS, BERS,
POLICE, and FIRE used to determine  the  Preliminary  Fiscal  Year  2015
employer contributions.

S. 7839                             7

  ACTUARIAL  ASSUMPTIONS  AND  METHODS:  Additional  APV of benefits, of
member contributions and of employer contributions have  been  estimated
as  of  June 30, 2014 using various approximating techniques and assump-
tions by the Actuary, including, but not limited to:
  * A certain percentage of Veterans being honorably discharged.
  *  A  certain  percentage of honorably discharged veterans being disa-
bled.
  * Different percentages of members  by  NYRCS  having  prior  Military
Service.
  * Each eligible member purchasing an average of 2.5 years of the Mili-
tary Service.
  Changes  in  employer  contributions  have been estimated assuming the
increase in the APV of Future Employment Contributions would be financed
over a time period comparable to that used for  actuarial  losses  under
the Entry Age Actuarial Cost Method. Using this approach, the Additional
APV  of  Future  Employer Contributions would be amortized over a closed
15-year period (14 payments under One-Year Lag Methodology) using  level
dollar payments.
  ECONOMIC  VALUES OF BENEFITS: The actuarial assumptions used to deter-
mine the financial impact of the proposed legislation discussed in  this
Fiscal  Note  are those appropriate for budgetary models and determining
annual employer contributions to the NYCES.
  However, the  economic  assumptions  that  are  used  for  determining
employer  contributions  do not develop risk-adjusted economic values of
benefits.  Such risk-adjusted, economic values of benefits would  likely
differ significantly from those developed by the budgetary models.
  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  2014-04,  dated
January  30,  2014,  prepared by the Chief Actuary for the New York City
Employees' Retirement System, the New  York  City  Teachers'  Retirement
System,  the New York City Board of Education Retirement System, the New
York City Police Pension Fund and the New York Fire  Deportment  Pension
Fund.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  This  bill would amend Section 1000 of the Retirement and Social Secu-
rity Law to allow active members of public  retirement  systems  of  New
York  State  to  claim  service credit for up to three years of military
service, regardless of when it was performed. Currently, active  members
can  receive  service  credit  for  military service performed, but only
during specified periods of war. A member must have at least five  years
of  credited service to be eligible and make application for such credit
before the effective date of retirement. To obtain such credit, a member
must make payments as required in Section 1000  of  the  Retirement  and
Social  Security  Law. Tier 1, 2, 3, 4 and 5 members are required to pay
three percent of salary earned during  the  twelve  months  of  credited
service immediately preceding the year in which a claim is made for each
year of military service. Tier 6 members are required to pay six percent
of salary earned during the twelve months of credited service immediate-
ly preceding the year in which a claim is made for each year of military
service.

S. 7839                             8

  It is not possible to determine the total annual cost to the employers
of  members  of the New York State Teachers' Retirement System since the
total amount of service credit which would be claimed  under  this  bill
cannot  be  estimated.  However, the cost to the employers of members of
the  New  York  State  Teachers'  Retirement  System  is estimated to be
$21,700 per year of service credited for Tier 1 and 2  members,  $20,500
per  year of service credited for Tier 3 and 4 members, $20,400 per year
of service credited for Tier 5 members and $15,000 per year  of  service
credited  for  Tier 6 members if this bill is enacted. These costs would
be offset by member payments required under Section 1000 of the  Retire-
ment and Social Security Law.
  The  source of this estimate is Fiscal Note 2014-15 dated February 24,
2014 prepared by the Actuary of the New York State Teachers'  Retirement
System and is intended for use only during the 2014 Legislative Session.
I,  Richard  A.  Young,  am the Actuary for the New York State Teachers'
Retirement System. I am a member of the American  Academy  of  Actuaries
and  I meet the Qualification Standards of the American Academy of Actu-
aries to render the actuarial opinion contained herein.

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.