S. 4825 2
WHERE SUCH MEMBER IS OTHERWISE ELIGIBLE TO RETIRE FOR SERVICE, AND THE
RETIREMENT ALLOWANCE WHICH HE OR SHE WOULD RECEIVE IN THE CASE OF
SERVICE RETIREMENT IS LARGER THAN THE RETIREMENT ALLOWANCE HE OR SHE
WOULD OTHERWISE RECEIVE UNDER THIS PARAGRAPH OR PARAGRAPH (I) OF THIS
SUBDIVISION, HIS OR HER DISABILITY RETIREMENT ALLOWANCE PURSUANT TO THIS
SUBDIVISION SHALL BE EQUAL TO THE RETIREMENT ALLOWANCE HE OR SHE WOULD
RECEIVE IF HE OR SHE HAD RETIRED FROM SERVICE.
S 3. Section 507 of the retirement and social security law is amended
by adding a new subdivision j to read as follows:
J. NOTWITHSTANDING ANY OTHER PROVISION OF THIS CHAPTER OR ANY GENERAL,
SPECIAL OR LOCAL LAW, CHARTER, ADMINISTRATIVE CODE OR RULE OR REGULATION
TO THE CONTRARY, SUBDIVISIONS A, B, C, D, E AND F OF THIS SECTION SHALL
NOT APPLY TO CORRECTION MEMBERS OF THE NEW YORK CITY EMPLOYEES' RETIRE-
MENT SYSTEM WHO ARE SUBJECT TO THIS ARTICLE. A CORRECTION MEMBER OF THE
NEW YORK CITY EMPLOYEES' RETIREMENT SYSTEM WHO IS SUBJECT TO THIS ARTI-
CLE SHALL INSTEAD BE ELIGIBLE FOR ACCIDENTAL DISABILITY RETIREMENT
PURSUANT TO SECTION 13-168 OF THE ADMINISTRATIVE CODE OF THE CITY OF NEW
YORK AND ANY ACCIDENTAL DISABILITY RETIREMENT BENEFITS FOUND IN THE
GENERAL MUNICIPAL LAW AND SHALL RECEIVE A RETIREMENT ALLOWANCE WHICH
SHALL BE EQUAL TO THREE-QUARTERS OF FINAL AVERAGE SALARY, SUBJECT TO THE
PROVISIONS OF SECTION 13-176 OF THE ADMINISTRATIVE CODE OF THE CITY OF
NEW YORK.
S 4. Section 510 of the retirement and social security law is amended
by adding a new subdivision i to read as follows:
I. NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS ARTICLE OR THE ADMIN-
ISTRATIVE CODE OF THE CITY OF NEW YORK, THE ANNUAL ESCALATION PROVIDED
IN THIS SECTION SHALL NOT APPLY TO THE ORDINARY OR ACCIDENTAL DISABILITY
RETIREMENT BENEFIT OF CORRECTION MEMBERS OF THE NEW YORK CITY EMPLOYEES'
RETIREMENT SYSTEM WHO RETIRE PURSUANT TO SECTION FIVE HUNDRED SIX OR
FIVE HUNDRED SEVEN OF THIS ARTICLE. THE ORDINARY OR ACCIDENTAL DISABILI-
TY RETIREMENT BENEFIT OF SUCH MEMBERS SHALL BE ADJUSTED FOR COST-OF-LIV-
ING PURSUANT TO THE PROVISIONS OF SECTION 13-696 OF THE ADMINISTRATIVE
CODE OF THE CITY OF NEW YORK.
S 5. Subdivision f of section 511 of the retirement and social securi-
ty law, as amended by chapter 18 of the laws of 2012, is amended to read
as follows:
f. This section shall not apply to general members in the uniformed
correction force of the New York city department of correction or to
uniformed personnel in institutions under the jurisdiction of the
department of corrections and community supervision and security hospi-
tal treatment assistants, as those terms are defined in subdivision i of
section eighty-nine of this chapter, provided, however, that the
provisions of this section shall apply to a New York city uniformed
[corrections/sanitation] SANITATION revised plan member, AND THIS
SECTION SHALL ALSO NOT APPLY TO CORRECTION REVISED PLAN MEMBERS OF THE
NEW YORK CITY EMPLOYEES' RETIREMENT SYSTEM WHO ARE SUBJECT TO THIS ARTI-
CLE WHO RETIRE ON ORDINARY OR ACCIDENTAL DISABILITY RETIREMENT PURSUANT
TO SECTION FIVE HUNDRED SIX OR FIVE HUNDRED SEVEN OF THIS ARTICLE.
S 6. Section 512 of the retirement and social security law is amended
by adding a new subdivision e to read as follows:
E. NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION A OF THIS SECTION, OR
ANY OTHER GENERAL, SPECIAL OR LOCAL LAW, WITH RESPECT TO CORRECTION
MEMBERS OF THE NEW YORK CITY EMPLOYEES' RETIREMENT SYSTEM WHO RETIRE
PURSUANT TO SECTION FIVE HUNDRED SIX AND FIVE HUNDRED SEVEN OF THIS
ARTICLE, A MEMBER'S FINAL AVERAGE SALARY SHALL MEAN THE SALARY EARNED BY
SUCH MEMBER DURING THE ANY THREE CONSECUTIVE YEARS WHICH PROVIDE THE
S. 4825 3
HIGHEST AVERAGE WAGE, EXCLUSIVE OF ANY FORM OF TERMINATION PAY (WHICH
SHALL INCLUDE ANY COMPENSATION IN ANTICIPATION OF RETIREMENT), OR ANY
LUMP SUM PAYMENT FOR DEFERRED COMPENSATION, SICK LEAVE, OR ACCUMULATED
VACATION CREDIT, OR ANY OTHER PAYMENT FOR TIME NOT WORKED (OTHER THAN
COMPENSATION RECEIVED WHILE ON SICK LEAVE OR AUTHORIZED LEAVE OF
ABSENCE); PROVIDED, HOWEVER, IF THE SALARY OR WAGES EARNED DURING ANY
YEAR INCLUDED IN THE PERIOD EXCEEDS THAT OF THE AVERAGE OF THE PREVIOUS
TWO YEARS BY MORE THAN TEN PER CENTUM, THE AMOUNT IN EXCESS OF TEN PER
CENTUM SHALL BE EXCLUDED FROM THE COMPUTATION OF FINAL AVERAGE SALARY.
IN DETERMINING FINAL AVERAGE SALARY, ANY MONTH OR MONTHS (NOT IN EXCESS
OF THREE) WHICH WOULD OTHERWISE BE INCLUDED IN COMPUTING FINAL AVERAGE
SALARY BUT DURING WHICH THE MEMBER WAS ON AUTHORIZED LEAVE OF ABSENCE
WITHOUT PAY SHALL BE EXCLUDED FROM THE COMPUTATION OF FINAL AVERAGE
SALARY AND THE MONTH OR AN EQUAL NUMBER OF MONTHS IMMEDIATELY PRECEDING
SUCH PERIOD SHALL BE SUBSTITUTED IN LIEU THEREOF.
S 7. This act shall take effect on the sixtieth day after it shall
have become a law.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
Background - Design of Proposed Legislation
In general, the OA believes that proposed legislation should:
* Be technically accurate,
* Be clear in its intent,
* Be administrable, and
* Meet desired policy objectives.
While the OA cannot provide any legal analysis, the OA has done a
review of the proposed legislation and has some concerns. These concerns
that follow represent the best understanding of the Actuary and staff of
the OA and should not be considered legal interpretations. All of these
concerns and suggestions should be reviewed by Counsel.
Concerns with Proposed Legislation with Respect to Ordinary Disability
Retirement ("ODR") and Accidental Disability Retirement ("ADR")
* Benefits Compared to Tier III: The proposed legislation, if enacted,
would revise the ODR and ADR benefit formulas for Tier VI Correction
Members.
It appears that the proposed Tier VI ODR benefit formula is intended
to be the same as the ODR benefit available to Tier III Correction
Members after completing 10 years of service (i.e., 1 2/3% of Three-Year
Final Average Salary ("FAS3") multiplied by the years of service, but
not less than one-third of FAS3).
Similarly, it also appears that the proposed ADR benefit formula for
Tier VI Correction Members is intended to be the same as the ADR benefit
available to Tier III Correction Members (i.e., 75% of FAS3 but not less
than 1 2/3% of FAS3 multiplied by years of credited service).
Correction Tier III ODR and ADR benefits are subject to Cost-of-Living
Adjustments ("COLA") under Chapter 125 of the Laws of 2000 on the first
$18,000 of benefit after five years of Disability Retirement.
Given the proposed statutory references, it is the understanding of
the Actuary that the proposed ODR and ADR benefits for Tier VI
Correction Members would be entitled to the COLA described in the
preceding paragraph, but would NOT be subject to an annual Tier VI Esca-
lation increase on the full benefit immediately from the date of Disa-
bility Retirement.
* Presumptive Conditions for ADR
It is the understanding of the Actuary that the proposed legislation,
if enacted, would provide Tier VI Correction Members the ability to be
S. 4825 4
eligible for and to utilize the presumptive conditions that qualify for
ADR that are available to Tier III Correction Members.
The reasoning behind this understanding is that in the proposed legis-
lation, eligibility conditions for Tier VI Correction members for the
ODR would be determined pursuant to the Administrative Code of the City
of New York ("ACNY") Section 13-167 (i.e., those that apply to Tier III
Correction Members), notwithstanding anything to the contrary.
Similarly, in the proposed legislation, eligibility conditions for
Tier VI Correction Members for ADR would be determined pursuant to the
Administrative Code of the City of New York ("ACNY") Section 13-168
(i.e., those that apply to Tier III Correction Members), notwithstanding
anything to the contrary.
It is the understanding of the Actuary that in the proposed legis-
lation, eligibility for ODR and ADR would not be pursuant to RSSL
Section 507.e. RSSL Section 507.e provides that a member shall not be
eligible for ODR or ADR unless the member waives the benefits of any
statutory presumptions. Accordingly, it is the understanding of the
Actuary that since under the proposed legislation RSSL Section 507.e
would no longer apply to Tier VI Correction Members, Tier VI Correction
Members would not be required to waive RSSL Section 507.e in order to be
eligible for ODR or ADR benefits. Consequently, the statutory presump-
tions would apply since they have not been waived.
In accordance with the above reasoning, since current Tier VI
Correction Members are required to waive the presumptions pursuant to
RSSL Section 507.e, it is the understanding of the Actuary that Tier VI
Correction Members are currently not entitled to presumptive conditions
for ADR.
* Consistency Amongst Uniformed Groups
This proposed legislation would cover member of Correction but not
members of any other uniformed groups. Given the historical consistency
in benefits amongst certain uniformed groups, this proposed legislation
would likely lead to demands for similar legislation for at least some
other uniformed groups.
FISCAL NOTE. PROVISIONS OF PROPOSED LEGISLATION: This proposed legis-
lation would amend Retirement and Social Security Law ("RSSL") Sections
506, 507, 510, 511 and 512 and Administrative Code of the City of New
York ("ACNY") Section 13-171 to change, for Tier VI Correction members
of the New York City Employees' Retirement System ("NYCERS") subject to
Article 14 of the RSSL as amended by Chapter 18 of the Laws of 2012
("Tier VI members"), the eligibility for and the calculation of Ordinary
Disability Retirement ("ODR") benefits and Accidental Disability Retire-
ment ("ADR") benefits.
The Effective Date of the proposed legislation would be the 60th day
after the date of enactment.
IMPACT ON ODR BENEFITS PAYABLE: The current eligibility provisions for
ODR benefits for Tier VI Correction Members are based on:
* Completing five or more years of service, and
* Becoming eligible for Primary Social Security Disability retirement
benefits.
Such current Tier VI ODR benefits are equal to the greater of:
* 33 1/3% of Five-Year Final Average Salary ("FAS5"), or
* 2% of FAS5 multiplied by years of credited service (not in excess of
22 years),
* Reduced by 50% of the Primary Social Security Disability benefits
(determined under RSSL Section 511), and
* Reduced by 100% of Workers' Compensation benefits (if any).
S. 4825 5
Under the proposed legislation the eligibility requirements for ODR
benefits for Tier VI Correction Members would be revised to be the same
as those provided in ACNY Section 13-167 (i.e., the provisions applica-
ble to Tier III Correction members) and would be based on completing ten
or more years of service.
Such Tier III ODR benefits are equal to the greater of:
* 33 1/3% of Three-Year Final Average Salary ("FAS3"), or
* 1 2/3% of FAS3 multiplied by years of credited service.
In addition, the proposed legislation would NOT apply the Escalation
available under RSSL Section 510 to ODR benefits for Tier VI Correction
Members. However, such ODR benefits would still be eligible for Cost-of-
Living Adjustments ("COLA") under Chapter 125 of the laws of 2000.
Note: As a result of Constitutional Protection under Article V,
Section 7 of the New York State Constitution, it is the understanding of
the Actuary that all Tier VI Sanitation members who are NYCERS members
prior to the effective date of this proposed legislation would continue
to be eligible for the current Tier VI ODR provisions, and this has been
assumed for purposes of determining obligations under this proposed
legislation.
IMPACT ON ADR BENEFITS PAYABLE: The current eligibility provision for
ADR benefits for Tier VI Correction Members is based on:
* Being physically or mentally incapacitated as a result of an acci-
dent sustained in the line of duty as determined by the administrative
authority assigned by NYCERS.
Such ADR benefits are equal to:
* 50% multiplied by FAS5,
* Less 50% of Primary Social Security disability benefit or Primary
Social Security benefits, whichever begins first (determined under RSSL
Section 511),
* Less 100% of Workers' Compensation benefits (if any).
Under the proposed legislation the eligibility requirements for ADR
benefits for Tier VI Correction Members would be revised to be the same
as those provided in ACNY Section 13-168 (i.e., the provisions applica-
ble to Tier III Correction Members).
In addition, it is the understanding of the Actuary that the proposed
legislation, if enacted, would provide that Tier VI Correction Members
could be eligible for and utilize the statutory presumptions (e.g.,
certain heart diseases) that qualify certain Tier III Correction Members
for ADR and Accidental Death Benefits.
As a consequence of RSSL Section 507.e, a Tier VI Correction Member
would not be eligible for ADR unless the member waived the benefits of
any statutory presumptions (e.g., certain heart diseases).
Under the proposed legislation, if enacted, the ADR benefit for Tier
VI Correction Members would be revised to equal a retirement allowance
equal to:
* 75% multiplied by FAS3,
* Less 100% of Workers' Compensation benefits (if any).
In addition, the proposed legislation would not apply the Escalation
available under RSSL Section 510 to ADR benefits for Tier VI Correction
Members. However, such ADR benefits would still be eligible for COLA
under Chapter 125 of the Laws of 2000.
FINANCIAL IMPACT - CHANGES IN BENEFITS - ACTUARIAL PRESENT VALUES:
Based on the census data and the actuarial assumptions and methods noted
herein, if the Effective Date is on or before June 30, 2015, then this
would change the Actuarial Present Value ("APV") of benefits ("APVB"),
APV of member contributions, the Unfunded Actuarial Accrued Liability
S. 4825 6
("UAAL") and APV of future employer contributions as of June 30, 2013
for Tier VI Correction Members.
FINANCIAL IMPACT - CHANGES IN PROJECTED APV OF FUTURE EMPLOYER
CONTRIBUTIONS AND PROJECTED EMPLOYER CONTRIBUTIONS: For purposes of this
Fiscal Note, it is assumed that the changes in APVB, APV of member
contributions, UAAL and APV of future employer contributions would be
reflected for the first time in the June 30, 2013 actuarial valuation of
NYCERS.
Under the One-Year Lag Methodology ("OYLM"), the first year that
changes in benefits for Tier VI Correction Members could impact employer
contributions to NYCERS would be Fiscal Year 2015.
In accordance with 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 remaining working lifetime of those impacted by the
benefit changes. As of June 30, 2013, the remaining working lifetime of
the Tier VI Correction Members is approximately 20 years. Recognizing
that this period will decrease over time as the group of Tier VI Members
matures, the Actuary would likely choose to amortize the new UAAL
attributable to this proposed legislation over a 15-year to 20-year
period (between 14 and 19 payments under the OYLM Methodology). However,
since virtually all of the Tier VI Correction members that would be
impacted by the benefit changes are new entrants, the resulting UAAL
would be de minimis and therefore the amortization period used for the
UAAL has very little impact on the final results.
The following Table 1 presents an estimate of the increases due to the
changes in ODR and ADR provisions for Tier VI Correction Members in the
APV of future employer contributions and in employer contributions to
NYCERS for Fiscal Years 2015 through 2019 that would occur based on the
applicable actuarial assumptions and methods noted herein:
Table 1
Estimated Financial Impact on NYCERS
If Certain Revisions are Made to
Provisions for ODR and ADR Benefits
for Tier VI Correction Members *
($ Millions)
Increase in APV of Increase in Employer
Fiscal Year Future Employer Contributions Contributions
2015 $6.8 $0.8
2016 11.3 1.3
2017 15.0 1.6
2018 18.3 1.9
2019 22.0 2.2
* Based on actuarial assumptions and methods set forth in the Actuari-
al Assumptions and Methods section. Also, based on the projection
assumptions as described herein.
ODR and ADR benefits are NOT subject to Tier III Escalation (RSSL
Section 510) but would be eligible for COLA under Chapter 125 of the
Laws of 2000.
The estimated increases in employer contributions shown in Table 1 are
based upon the following projection assumptions:
* Level workforce (i.e., new employees are hired to replace those who
leave active status).
S. 4825 7
* Projected salary increases consistent with those used in projections
presented to the New York City Office of Management and Budget
("NYCOMB") for use in the January 2015 Financial Plan ("Updated Prelimi-
nary Projections").
* New entrant salaries consistent with those used in the Updated
Preliminary Projections.
These "open group" projections include future new entrants introduced
into the census data models to project the future workforces.
As of each future actuarial valuation date, the current "closed group"
actuarial assumptions and valuation methodology are used.
Under this methodology only Plan participants as of each actuarial
valuation date are utilized to determine APVs, employer costs and
employer contributions.
FINANCIAL IMPACT - EMPLOYER ENTRY AGE NORMAL COSTS: Employer Entry Age
Normal Costs can provide a useful basis to compare the value of alterna-
tive benefit programs.
For each Correction member who enters NYCERS, there is a theoretical
net annual employer cost to be paid for such member while such member
remains actively employed (i.e., the Employer Entry Age Normal Cost
("EEANC")).
In addition, such EEANC may be expressed as a percentage of salary
earned over a working lifetime and referred to as the Employer Entry Age
Normal Rate ("EEANR").
Under the proposed legislation and based on the actuarial assumptions
noted herein, the EEANC and EEANR of Tier VI Correction Members would be
greater than the EEANC and EEANR for comparable Tier VI Correction
Members entering at the same attained age and gender under the current
NYCERS provisions.
Table 2 shows a summary of the change in EEANR for Tier VI Correction
Members who have a date of membership on or after the date of enactment
of this proposed legislation for entry ages 25, 30 and 35 determined as
of June 30, 2012 with a starting salary of $45,000, determined as of the
most recent date of published EEANR calculations:
Table 2
Comparison of Employer Entry Age Normal Rates
Determined as of June 30, 2012 Excluding One-Year Lag Methodology*
To Implement Certain ODR and ADR and Accidental Death Benefit Provisions
for Tier VI Correction Members
Under Proposed Changes with Presumptions
and
Under Current Law
EEANR Under Proposed Changes**
Entry Age 25 Entry Age 30 Entry Age 35
Male Female Male Female Male Female
Correction Tier VI 17.80% 18.42% 16.29% 16.90% 15.11% 15.76%
EEANR Under Current Law
Correction Tier VI 17.34% 17.97% 15.79% 16.42% 14.56% 15.24%
S. 4825 8
Increase in EEANR Due to Proposed Changes
Correction Tier VI 0.46% 0.45% 0.50% 0.48% 0.55% 0.52%
* Based on salaries paid over entire working lifetime. EEANR do not vary
significantly over time, absent benefit and/or actuarial assumption
changes.
** EEANR determined under the terms of the revised ODR and ADR benefit
provisions based on the Actuarial Assumptions and Methods as noted here-
in including changes in assumptions for ADR. ODR and ADR benefits are
NOT subject to Tier III Escalation (RSSL Section 510) but would be
eligible for COLA under Chapter 125 of the Laws of 2000.
OTHER COSTS: Not measured in this Fiscal Note are the following:
* The initial, additional administrative costs of NYCERS and other New
York City agencies to implement the proposed legislation.
* The potential impact if this proposed legislation were to be
extended to other public safety employees.
* The impact of this proposed legislation on Other Postemployment
Benefit ("OPEB") costs.
CENSUS DATA: The starting census data used for the calculations
presented herein are the census data used in the Updated Preliminary
June 30, 2013 (Lag) actuarial valuation of NYCERS used to determine the
Updated Preliminary Fiscal Year 2015 employer contributions.
The census data used for the estimates of additional employer contrib-
utions presented herein are based on average salaries of new entrants
utilized in the Updated Preliminary June 30, 2013 (Lag) actuarial valu-
ations used to determine Updated Preliminary Fiscal Year 2015 employer
contributions of NYCERS.
The 877 Tier VI Correction Members as of June 30, 2013 had an average
age of approximately 32, average service of approximately 0.5 years and
an average salary of approximately $46,000.
ACTUARIAL ASSUMPTIONS AND METHODS: The additional employer contrib-
utions presented herein have been calculated based on the actuarial
assumptions and methods in effect for the June 30, 2013 (Lag) actuarial
valuations used to determine Updated Preliminary Fiscal Year 2015
employer contributions of NYCERS and adjusted for revised ADR and Acci-
dental Death eligibility provisions.
For determining the change in APVB and increase in employer costs to
NYCERS, the actuarial assumptions and methods are the same as those used
in the June 30, 2013 (Lag) actuarial valuation of NYCERS except that
probabilities of Ordinary Disability and Ordinary Death have been
reduced by 5% and 10%, respectively, and the probabilities of Accidental
Disability and Accidental Death have been increased by the same amounts
of reduction in the probabilities of Ordinary Disability and Ordinary
Death, respectively.
Neither this Fiscal Note nor the actuarial valuation methodology used
to determine employer contributions to NYCERS reflect a calculation of
the value of an offset for Workers' Compensation benefits.
ADR benefits under both the current provisions and proposed legis-
lation are offset by Workers' Compensation benefits and, therefore, any
Workers' Compensation benefits paid would not impact the costs shown.
On the other hand, to the extent members who receive ODR benefits also
receive Workers' Compensation benefits, those Workers' Compensation
benefits received reduce the amounts otherwise payable under current
S. 4825 9
provisions of law but would not impact the benefits payable under the
proposed legislation.
Thus, the lack of an offset for the value of Workers' Compensation
benefits understates the costs presented in this Fiscal Note but the
Actuary believes this understatement is modest.
The amounts shown in this Fiscal Note equal the impact on employer
contributions were the proposed legislation to be enacted.
To the extent that the enactment of this proposed legislation would
cause a greater (lesser) number of Tier VI Correction Members to be
reclassified from Ordinary Disability to Accidental Disability Retire-
ment or from Ordinary Death to Accidental Death, or to the extent that
Tier VI Correction Members who would not otherwise ever choose to apply
and then receive an Ordinary Disability Retirement benefit or an Acci-
dental Disability Retirement benefit, then the additional APVB and
employer contributions shown herein would be greater (lesser).
Employer contributions under current methodology have been estimated
assuming the additional APVB would be financed through future normal
contributions including an amortization of the new UAAL attributable to
this proposed legislation over a 15-year period (14 payments under the
OYLM Methodology).
New entrant Tier VI Correction Members were projected to replace the
Correction members expected to leave the active population to maintain a
steady-state population.
The following Table 3 presents the total number of active employees of
Correction used in the projections, assuming a level work force, and the
cumulative number (i.e., net of withdrawals) of Tier VI Members as of
each June 30 from 2013 through 2017.
Table 3
Surviving Actives from Census on June 30, 2013
and
Cumulative New Tier VI Correction Members from 2013
Used in the Projections*
June 30 Tier I, II, III & IV Tier VI Total
2013 7,798 877 8,675
2014 7,278 1,397 8,675
2015 6,865 1,810 8,675
2016 6,414 2,261 8,675
2017 5,919 2,756 8,675
* Total active members included in the projections assume a level work
force based on the June 30, 2013 (Lag) actuarial valuation census data.
Assumes presumptions apply to Tier VI Correction members.
For purposes of estimating the impact of the Tier VI Escalation for
retired Tier VI Correction Members, consistent with an underlying
Consumer Price Inflation ("CPI") assumption of 2.5% per year, Tier VI
Escalation of 2.5% per year has been assumed.
This compares with the current Chapter 125 of the Laws of 2000 COLA
assumption of 1.5% per year (i.e., 50% of CPI adjusted to recognize 1.0%
minimum and 3.0% maximum) on the first $18,000 of benefit.
ECONOMIC VALUES OF BENEFITS: The actuarial assumptions used to deter-
mine the financial impact of the proposed legislation discussed in this
S. 4825 10
Fiscal Note are those appropriate for budgetary models and determining
annual employer contributions to NYCERS.
However, the economic assumptions (current and proposed) 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 Acting
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 Actuar-
ies. I meet the Qualification Standards of the American Academy of Actu-
aries to render the actuarial opinion contained herein.
FISCAL NOTE IDENTIFICATION: This estimate is intended for use only
during the 2015 Legislative Session. It is Fiscal Note 2015-20, dated
April 9, 2015 prepared by the Acting Chief Actuary of the New York City
Employees' Retirement System.
