NY State Senate Bill 2013-S7544

Senate Bill S7544

2013-2014 Legislative Session

Relates to refunding contributions for New York city transit authority members in the title transit manager

download bill text pdf

Archive: Last Bill Status - In Senate Committee Civil Service And Pensions Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

Please enter your contact information

First Name

Last Name

Email Address

A valid email address is required.

Home address is used to determine the senate district in which you reside. Your support or opposition to this bill is then shared immediately with the senator who represents you.

Optional services from the NY State Senate:

Create an account. An account allows you to officially support or oppose key legislation, sign petitions with a single click, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Include a custom message for your Senator? (Optional)

Enter a message to your senator. Many New Yorkers use this to share the reasoning behind their support or opposition to the bill. Others might share a personal anecdote about how the bill would affect them or people they care about.

Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 15, 2014	referred to civil service and pensions

2013-S7544 (ACTIVE) - Details

See Assembly Version of this Bill:: A9748
Current Committee:: Senate Civil Service And Pensions
Law Section:: Retirement and Social Security Law
Laws Affected:: Amd §§604-c & 604-d, R & SS L
Versions Introduced in 2015-2016 Legislative Session:: S5359, A6563

2013-S7544 (ACTIVE) - Summary

Relates to refunding contributions for New York city transit authority members in the title transit manager.

2013-S7544 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S7544

TITLE OF BILL:  An act to amend the retirement and social security
law, in relation to refunding contributions made to the twenty-five
year early retirement program and the age fifty-seven retirement
program by New York city transit authority members in the title
transit manager

PURPOSE: This bill provides for the refund of certain member
contributions made under the transit 57/25 program.

SUMMARY OF PROVISIONS:

Section 1- Amends subdivision d of section 604-c of the retirement and
social security law by adding the title transit manager to the titles
covered under this benefit.

Section 2- Amends section 604-d of the retirement and social security
law by adding the title transit manager to the titles covered under
this benefit.

JUSTIFICATION: To correct the inequity to members who originally opted
into the Chapter 96 of the Laws of 1995 (Chapter 96/95) 55/25 pension
program who paid an additional member contribution (AMC) from the time
they opted into until January 3, 2001. Then as a result of Chapter 10
of the Laws of 2000, members who did not opt into the 55/25 pension

program were put into the 55/25 pension program without having to make
any additional member contributions.

Members who made the additional member contributions are not being
given any additional benefit for their contributions. It is only fair
and equitable to refund the additional contributions back to these
members. Members of the 1994 25/55 pension program have already been
refunded their additional member contributions.

Similar legislation has been enacted for competitive class members
through various collective bargaining agreements (See Chapter 734 of
2006, Chapter 379 of 2007 and Chapter 522 of 2013. The members covered
by this new legislation are managerial titles and not subject to
collective bargaining and can only pursue this benefit through
legislative means.

LEGISLATIVE HISTORY: New Legislation

FISCAL IMPLICATIONS:  The enactment of this legislation would increase
annual employer contributions to NYCERS by $340,000 per year for 5
years. There are approximately 230 active and retired members eligible
for this refund. Retirees, would only accrue interest up to their date
of retirement. See Fiscal Note 2014-21, prepared by Chief Actuary for
the New York City Employees' Retirement System on May 9, 2014.  2012.

EFFECTIVE DATE: This act shall take effect immediately.

2013-S7544 (ACTIVE) - Bill Text download pdf

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

                                  7544

                            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
  refunding  contributions made to the twenty-five year early retirement
  program and the age fifty-seven retirement program by  New  York  city
  transit authority members in the title transit manager

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

  Section 1. Paragraph 15 of subdivision  d  of  section  604-c  of  the
retirement  and social security law, as added by chapter 522 of the laws
of 2013, is amended to read as follows:
  15. An eligible former participant,  as  defined  in  this  paragraph,
shall  be  entitled  to  a  refund of the employee portion of his or her
additional member contributions made pursuant to this subdivision  which
shall  include  any and all 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 eligi-
ble former participant shall be a participant who is or was employed  in
the  title  supervisor (stations) in assignment level II in the New York
city transit authority's stations department OR THE TITLE TRANSIT MANAG-
ER, and who, on October first, two thousand six, was employed by the New
York city transit authority in such title and who was a  participant  in
the twenty-five year early retirement program prior to the starting date
of  the  elimination of additional member contributions, as such date is
defined in an election made pursuant to paragraph ten of  subdivision  e
of section six hundred four-b of this article.
  S  2. Paragraph 15 of subdivision f of section 604-d of the retirement
and social security law, as added by chapter 522 of the laws of 2013, is
amended to read as follows:
  15. An eligible former participant,  as  defined  in  this  paragraph,
shall  be  entitled  to  a  refund of the employee portion of his or her
additional member contributions made pursuant to this subdivision  which
shall  include  any and all 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 eligi-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14760-03-4

S. 7544                             2

ble former participant shall be a participant who is or was employed  in
the  title  supervisor (stations) in assignment level II in the New York
city transit authority's stations department OR THE TITLE TRANSIT MANAG-
ER, and who, on October first, two thousand six, was employed by the New
York  city  transit authority in such title and who was a participant in
the age fifty-seven retirement program prior to the starting date of the
elimination of additional member contributions, as such date is  defined
in  an  election  made  pursuant  to  paragraph  ten of subdivision e of
section six hundred four-b of this article.
  S 3. This act shall take effect immediately.
  FISCAL NOTE.-- Pursuant to Legislative Law, Section 50:
  This proposed legislation would amend New York  State  Retirement  and
Social  Security  Law  ("RSSL")  Sections  604-c and 604-d to provide to
certain New York City Transit Authority ("NYCTA")  members  of  the  New
York City Employees' Retirement System ("NYCERS") a refund of Additional
Member Contributions ("AMC") that were paid while participants of one of
the  Chapter  96  of  the  Laws  of  1995  ("Chapter  96/95") Retirement
Programs.
  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.
  IMPACT  ON  PLAN  PROVISIONS  - ADDITIONAL MEMBER CONTRIBUTIONS: Under
Chapter 96/95, AMC were required under  each  of  the  Early  Retirement
Programs:
  * The Twenty-Five-Year Early Retirement Program ("55/25 Program") and
  * The Age Fifty-Seven Retirement Program ("57/5 Program").
  Those  NYCERS members who participated in either of such Programs paid
AMC of:
  * 4.35% of salary for service on and after January 1, 1995 until Janu-
ary 1, 1998,
  * 2.85% of salary for service on  and  after  January  1,  1998  until
December 2, 2001, and
  * 1.85% of salary for service on and after December 2, 2001.
  In addition, if such member's job title was considered Physically-Tax-
ing  ("PT"),  an  additional Physically-Taxing AMC ("PTAMC") of 1.98% of
salary was required for all service on and after January 1, 1995.
  As a result of Chapter 10 of the Laws of 2000, many of the NYCTA  Tier
IV  members  of  NYCERS who participated in the Chapter 96/95 Retirement
Programs were transferred into  the  Transit  Twenty-Five-Year  and  Age
Fifty-Five Retirement Program ("Transit 55/25 Program") effective Decem-
ber 15, 2000. For these members, the AMC and PTAMC that had been payable
under  the  Chapter  96/95  Retirement  Programs were no longer required
after January 3, 2001 (i.e.,  the  effective  implementation  date,  the
first payroll period following the transfer date).
  This  proposed  legislation  would  refund, on and after the Effective
Date, to certain Transit 55/25 Program participants with Initial Program
participation dates on or before December 15, 2000 who were employed  by
the Transit Authority as Transit Managers as of October 1, 2006, includ-
ing those who are currently retired, the employee portion of the AMC and
PTAMC,  if  any,  paid for participation in the Chapter 96/95 Retirement
Programs, including accrued interest at 5.0% per annum.  For  those  who
are currently retired, interest would accrue until retirement date.
  Note:  Under the Chapter 96/95 Retirement Programs, 50% of the AMC and
PTAMC paid into such Programs is  considered  an  employer  contribution

S. 7544                             3

while  the  other  50%  is  considered  to  be the employee portion. The
employee portion of the AMC and PTAMC is refunded to members who decease
prior to retirement or who retire at age 62 or later.  If  the  proposed
legislation  were  enacted, those impacted Transit 55/25 Program partic-
ipants would receive the balance of the accumulated employee portion  of
AMC and PTAMC.
  To  receive such refund, those eligible participants would be required
to complete a form and follow procedures to be established by the NYCERS
Board of Trustees.
  FINANCIAL IMPACT - OVERVIEW: If enacted into  the  law,  the  ultimate
employer  cost  of  this proposed legislation would be determined by the
reduction in expected benefits paid (due to  there  no  longer  being  a
requirement  to  refund  AMC  on  a  future  withdrawal),  offset by the
reduction in Fund assets due to the current 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 Accrued Liability ("AAL") of
approximately $85,000 as of June 30, 2013.
  In addition, there would be a reduction in Actuarial Asset Value as of
June  30, 2013 to reflect the expected refund of the employee portion of
accumulated Chapter 96/95 Retirement Program AMA and PTAMC, if any,  for
those  impacted  Transit  55/25  Program  participants  of approximately
$1,420,000.
  Together, the enactment of the proposed legislation would result in  a
net  increase  in  the  Unfunded Actuarial Accrued Liability ("UAAL") to
NYCERS of approximately $1,335,000 as of June 30, 2013.
  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 $340,000 per year for  5
years.
  Increases  in  employer contributions would be comparable to the esti-
mated increases in employer costs.
  If enacted on or before June 30,  2014,  increased  employer  contrib-
utions to NYCERS would begin Fiscal Year 2016.
  If  enacted  after  June  30,  2014  and  on  or before June 30, 2015,
increased employer contributions to NYCERS would begin Fiscal Year 2017.
  OTHER COSTS: Not measured in  this  Fiscal  Note  are  any  additional
administrative  costs  or the impact of this proposed legislation on the
Manhattan and Bronx Surface Transit Operating Authority ("MaBSTOA").
  CENSUS DATA: The census data used  for  estimates  of  AAL,  UAAL  and
employer  contributions  presented  herein  are  the  841 Tier IV active
members of NYCERS who participate in the Transit 55/25 Program  and  who
were  employed  by  the Transit Authority as Transit Managers as of June
30, 2006.
  Of these 841 Tier IV members of NYCERS who participate in the  Transit
55/25  Program and who were employed by the Transit Authority as Transit
Managers as of June 30, 2006, 230 members  have  AMC  (and,  in  certain
cases, PTAMC) account balances from contributions made under the Chapter
96/95  Retirement  Programs.  The  remaining 611 of these members do not
have such AMC or PTAMC account balances.
  Of the 230 members eligible for a refund, 91 were active members as of
June 30, 2013 and 115 retired before age 62.  In  addition,  11  members
deceased before retirement and 13 members retired after age 62 and these
24  members  were already refunded the employee portion of their AMC and
PTAMC.

S. 7544                             4

  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 estimated to equal approximately two years from June 30, 2014 for the
entire  group impacted and approximately five years for just those esti-
mated to still be active members as of June 30, 2014.
  Similar legislations for Transit Operating  non-supervisory  employees
were  enacted  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 actuarial  assumptions
and  methods then in effect, implicitly over the average remaining work-
ing lifetimes of all NYCERS active members.
  Similar legislation was also enacted as Chapter 522  of  the  Laws  of
2013  ("Chapter  522/13")  and an additional UAAL was amortized for this
legislation for cost purposes over a five year period.
  The Actuary believes that the ideal 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 that
approximates the current  average  remaining  working  lifetime  of  the
active  members  impacted. 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, the Actuary would likely treat the
five years of amortization as the  payment  period  beginning  one  year
after  the  establishment  of the UAAL. This approach is consistent with
the One-Year Lag Methodology ("OYLM") where the UAAL is considered to be
amortized over six years with five 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.
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 2014-21, dated
May 9, 2014, prepared by the Chief Actuary for the New York City Employ-
ees' Retirement System.

Comments

Open Legislation is a forum for New York State legislation. All comments are subject to review and community moderation is encouraged.

Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity, hate or toxic speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Attempts to intimidate and silence contributors or deliberately deceive the public, including excessive or extraneous posting/posts, or coordinated activity, are prohibited and may result in the temporary or permanent banning of the user. 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.

Create an account. An account allows you to sign petitions with a single click, officially support or oppose key legislation, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.