S T A T E   O F   N E W   Y O R K
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                                  7008

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                             April 17, 2015
                               ___________

Introduced by M. of A. ABBATE -- Multi-Sponsored by -- M. of A. GOLDFED-
  ER  -- read once and referred to the Committee on Governmental Employ-
  ees

AN ACT to amend the retirement and social security law, in  relation  to
  permitting  certain  retired  members  of  the New York City Teachers'
  Retirement System to change their retirement options with the  consent
  of  the  nominated  survivor  beneficiary  (Part  A); and to amend the
  education law, in relation to permitting certain  retired  members  of
  the New York State Teachers' Retirement System to change their retire-
  ment  options  with  the consent of the nominated survivor beneficiary
  (Part B)

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

  Section 1. This act enacts into law components of legislation relating
to  certain  options of the teachers' retirement system and the New York
City teachers' retirement system. Each  component  is  wholly  contained
within  a Part identified as Parts A and B.  The effective date for each
particular provision contained within such Part is set forth in the last
section of such Part. Any provision in any section  contained  within  a
Part, including the effective date of the Part, which makes reference to
a  section  "of  this act", when used in connection with that particular
component, shall be deemed  to  mean  and  refer  to  the  corresponding
section of the Part in which it is found. Section three of this act sets
forth the general effective date of this act.

                                 PART A

  Section  1.  Section  514 of the retirement and social security law is
amended by adding a new subdivision e to read as follows:
  E. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, WHERE A RETIRED  MEMBER
OF  THE  NEW  YORK CITY TEACHERS' RETIREMENT SYSTEM HAS NOMINATED HIS OR

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10513-01-5
              

A. 7008                             2

HER SPOUSE AS THE SURVIVOR BENEFICIARY UNDER OPTION  ONE,  TWO  OR  FIVE
PROVIDED  FOR IN SUBDIVISION A OF THIS SECTION, AND SUCH PERSON SO NOMI-
NATED CEASES BY CAUSES OTHER THAN DEATH TO BE HIS OR HER  SPOUSE  OR  IS
SEPARATED  FROM  HIM  OR  HER, OR IF SUCH OPTION WAS SELECTED IN CONTEM-
PLATION OF MARRIAGE WHICH HAS NOT TAKEN PLACE, THEN THE BOARD  OF  TRUS-
TEES  OF  SUCH  RETIREMENT SYSTEM SHALL HAVE THE AUTHORITY TO PERMIT THE
CHANGE OF SUCH OPTION TO THE  MAXIMUM  BENEFIT  THAT  IS  THE  ACTUARIAL
EQUIVALENT BY AND WITH THE CONSENT OF ALL PARTIES.
  S  2. Section 610 of the retirement and social security law is amended
by adding a new subdivision g to read as follows:
  G. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, WHERE A RETIRED  MEMBER
OF  THE  NEW  YORK CITY TEACHERS' RETIREMENT SYSTEM HAS NOMINATED HIS OR
HER SPOUSE AS THE SURVIVOR BENEFICIARY UNDER OPTION  ONE,  TWO  OR  FIVE
PROVIDED  FOR IN SUBDIVISION A OF THIS SECTION, AND SUCH PERSON SO NOMI-
NATED CEASES BY CAUSES OTHER THAN DEATH TO BE HIS OR HER  SPOUSE  OR  IS
SEPARATED  FROM  HIM  OR  HER, OR IF SUCH OPTION WAS SELECTED IN CONTEM-
PLATION OF MARRIAGE WHICH HAS NOT TAKEN PLACE, THEN THE BOARD  OF  TRUS-
TEES  OF  SUCH  RETIREMENT SYSTEM SHALL HAVE THE AUTHORITY TO PERMIT THE
CHANGE OF SUCH OPTION TO THE  MAXIMUM  BENEFIT  THAT  IS  THE  ACTUARIAL
EQUIVALENT BY AND WITH THE CONSENT OF ALL PARTIES.
  S 3. This act shall take effect June 30, 2016.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  PROVISIONS  OF PROPOSED LEGISLATION: With respect to the New York City
Retirement Systems ("NYCRS"),  this  proposed  legislation  would  amend
Retirement  and  Social  Security  Law  ("RSSL") Sections 514 and 610 to
allow certain Tier III, Tier IV and Tier VI retirees  of  the  New  York
City  Teachers'  Retirement  System  ("TRS")  the  opportunity to change
certain optional forms  of  benefit  after  retirement  similar  to  the
provisions  set  forth  in  Administrative  Code of the City of New York
("ACNY") Section 565(c).
  ACNY Section 565(c) covers only Tier I and Tier II members of TRS.
  Specifically, Part A of this proposed legislation would permit a  Tier
III,  Tier  IV  or  Tier  VI retiree of TRS who has nominated his or her
spouse as the survivor beneficiary to  change,  under  certain  optional
forms  of  benefit and with the consent of his or her spouse and the TRS
Retirement Board, from the optional form of benefit originally chosen to
the maximum benefit that is the actuarial equivalent, if such person:
  (1) ceases by causes other than death to be his or her spouse, or
  (2) is separated from him or her, or
  (3) if such option was selected in contemplation of marriage which has
not taken place.
  The Effective Date of the proposed legislation would be  the  date  of
enactment  and  shall be deemed to have been in full force and effect on
or after June 30, 2015.
  FINANCIAL IMPACT -  ACTUARIAL  PRESENT  VALUE  OF  BENEFITS,  EMPLOYER
NORMAL  COST, ACTUARIAL ACCRUED LIABILITY AND EMPLOYER CONTRIBUTIONS: To
the extent that the probabilities of survival of  the  retiree  and  the
beneficiary  designated  under  the  optional  form  of benefit have not
changed significantly since such optional form  of  benefit  was  insti-
tuted,  then  the  enactment of this proposed legislation is expected to
result in little or no change in the Actuarial Present  Value  of  Bene-
fits,  Employer  Normal  Cost,  Actuarial  Accrued Liability or employer
contributions to TRS.
  OTHER COSTS: With respect to the NYCRS, the enactment of this proposed
legislation would result in some administrative expenses for TRS.

A. 7008                             3

  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  2015-08,  dated
February  27, 2015, prepared by the Acting Chief Actuary of the New York
City Teachers' Retirement System.

                                 PART B

  Section 1. Section 539 of the education law is amended by adding a new
subdivision 8 to read as follows:
  8. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, A  RETIREE  SUBJECT  TO
THIS ARTICLE OR ARTICLE FOURTEEN OR FIFTEEN OF THE RETIREMENT AND SOCIAL
SECURITY  LAW  WHO  AT  RETIREMENT  HAD  DULY SELECTED AN OPTION FORM OF
RETIREMENT PROVIDING FOR THE PAYMENT OF A  LESSER  RETIREMENT  ALLOWANCE
OVER  THE LIFE OF THE RETIREE WITH THE PROVISION THAT UPON THE RETIREE'S
DEATH ALL OR A PORTION OF SUCH ALLOWANCE SHALL BE CONTINUED FOR THE LIFE
OF AND PAID TO A BENEFICIARY DULY NOMINATED BY THE  RETIREE  AT  RETIRE-
MENT, SHALL BE PERMITTED TO RESCIND SUCH SELECTION WITHIN ONE YEAR AFTER
SUCH  BENEFICIARY  HAS  CEASED TO BE THE RETIREE'S SPOUSE BY REASON OF A
FINAL JUDGMENT OR DECREE OF DIVORCE  ISSUED  BY  A  COURT  OF  COMPETENT
JURISDICTION.  IN ORDER TO RESCIND SUCH SELECTION, THE RETIREE AND BENE-
FICIARY MUST EACH FILE A WRITTEN CONSENT TO SUCH CHANGE WITH THE  SYSTEM
ON  A  FORM PRESCRIBED BY THE SYSTEM. UPON SATISFACTORILY RECEIVING SUCH
JUDGMENT OR DECREE OF DIVORCE AND SUCH CONSENTS, ANY AND ALL OBLIGATIONS
OF THE SYSTEM TO THE BENEFICIARY UNDER THE  RETIREE'S  OPTION  SELECTION
SHALL BE TOTALLY DISCHARGED AND THE RETIREE SHALL THEREAFTER BE PAID FOR
THE  REMAINDER  OF  SUCH  RETIREE'S LIFE THE MAXIMUM SINGLE LIFE BENEFIT
WHICH WOULD HAVE BEEN PAYABLE, HAD THE RETIREE MADE NO OPTION  SELECTION
AT  THE  TIME OF RETIREMENT. THE RETIREMENT BOARD IS AUTHORIZED TO ADOPT
SUCH RULES AND REGULATIONS AS MAY BE NECESSARY TO IMPLEMENT THIS  SUBDI-
VISION.
  S 2. This act shall take effect June 30, 2016.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  This  bill  would  amend  Section  539 of the Education Law to allow a
retired member  of  the  New  York  State  Teachers'  Retirement  System
(NYSTRS)  who  has  selected an optional form of retirement benefit that
provides that upon the retired member's death, all, or a percentage  of,
such  retirement  benefit shall be continued for the life of a benefici-
ary, to rescind the selection of such option within one year after  such
beneficiary  ceases  to  be  the  retired member's spouse by reason of a
final judgment or decree of divorce. In order to rescind  such  optional
form of retirement benefit, the retired member and beneficiary must each
file  a  written  consent  with respect to such change with NYSTRS. Upon
NYSTRS' receipt of the judgment or decree of  divorce  and  the  written
consents,  the  retired  member  would  receive  the maximum single-life
retirement benefit for the remainder of his or her lifetime,  as  if  no
option  had  been  selected  at  retirement.  Any and all obligations of
NYSTRS to the beneficiary under the option selection shall be considered
fully discharged. This bill shall apply to retirement  benefits  payable
on or after June 30, 2015.
  The  annual  cost  to  the  employers of members of the New York State
Teachers' Retirement System for this benefit is  estimated  to  be  very

A. 7008                             4

low,  likely  less  than  $200,000 per year. Allowing retired members to
change the terms of their option after retirement creates the  potential
for anti-selection however.
  Employee  data  is  from  the System's most recent actuarial valuation
files, consisting of data provided by the employers  to  the  Retirement
System.   Data distributions and statistics can be found in the System's
Comprehensive Annual Financial  Report  (CAFR).  System  assets  are  as
reported  in the System's financial statements, and can also be found in
the CAFR. Actuarial assumptions and methods are provided in the System's
Actuarial Valuation Report.
  The source of this estimate is Fiscal Note  2015-21  dated  March  25,
2015  prepared by the Actuary of the New York State Teachers' Retirement
System and is intended for use only during the 2015 Legislative Session.
I, Richard A. Young, am the Actuary for the  New  York  State  Teachers'
Retirement System. I am a member of he American Academy of Actuaries and
I  meet the Qualification Standards of the American Academy of Actuaries
to render the actuarial opinion contained herein.
  S 2. Severability clause. If any clause, sentence, paragraph, subdivi-
sion, section or part of this act shall be  adjudged  by  any  court  of
competent  jurisdiction  to  be invalid, such judgment shall not affect,
impair, or invalidate the remainder thereof, but shall  be  confined  in
its  operation  to the clause, sentence, paragraph, subdivision, section
or part thereof directly involved in the controversy in which such judg-
ment shall have been rendered. It is hereby declared to be the intent of
the legislature that this act would  have  been  enacted  even  if  such
invalid provisions had not been included herein.
  S  3.  This  act shall take effect immediately provided, however, that
the applicable effective date of Parts A and B of this act shall  be  as
specifically set forth in the last section of such Parts.