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

                                  7015

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                             April 20, 2015
                               ___________

Introduced by M. of A. HIKIND -- read once and referred to the Committee
  on Governmental Employees

AN  ACT  relating  to  granting retroactive retiree status to former New
  York city public-school teacher Israel Baum

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

  Section 1. Notwithstanding any provision of law to the contrary, Isra-
el  Baum,  a  member  of  the  New York city teachers' retirement system
having Tier III status, who was employed as a teacher by  the  New  York
City Board of Education from February 1, 1974 until his death on Septem-
ber  20,  2009,  and  who became a member of the New York city teachers'
retirement system on October 1, 1977, and who, for reasons not  ascriba-
ble to his own negligence, was not able to complete the retirement proc-
ess  before  his  untimely  death,  shall  be  deemed to have officially
retired from the New York City Board of Education on September 20, 2009,
if, on or before December 31, 2015, Mr.  Baum's  widow,  Rochelle  Baum,
files  a  written  application  therefor, including a retirement benefit
option election and election of the beneficiary of such  benefits,  with
the  head  of  the  New  York city teachers' retirement system; and upon
receipt of such application, the head of the  New  York  city  teachers'
retirement  system  shall  calculate  Israel  Baum's retirement benefits
retroactive to September 20, 2009 and thereafter and pay  such  benefits
accordingly  as  if he had retired on September 20, 2009.  The amount of
benefits payable pursuant to this act shall be reduced by  the  ordinary
death benefit which has been paid to Rochelle Baum, less the retroactive
sum  of previous years that is owed to Mrs. Baum, the exact amount to be
calculated actuarially.  Due to the length of his service, Mr. Baum  was
eligible  to  retire  with  full  pension benefits. Mr. Baum's intent to
retire was evidenced by the fact that he, along with his wife,  Rochelle
Baum,  attended  a  special  seminar for teachers given in February 2009
called "Getting  Ready  for  Retirement";  this  seminar  was  expressly

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00691-03-5
              

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designed for those members of the retirement system who were planning to
retire  within  the  year. The Baums received a letter dated January 22,
2009 confirming their participation. At  the  seminar,  the  Baums  were
given a package of documents and an overview regarding retirement proce-
dures  and benefits. Mr. Baum also submitted an informal designated date
of retirement as requested. Subsequently, on June 22, 2009, Mr. and Mrs.
Baum attended a personal session at the Board of Education  in  downtown
Brooklyn for the purpose of discussing Mr. Baum's retirement.  The Baums
discussed the various retirement allowance options and decided that they
would  select Option 1 - Equal Pay Option, which would allow the benefi-
ciary to receive monthly payments equal to 100% of his  reduced  retire-
ment  allowance  payments.  The  beneficiary of Israel Baum's retirement
allowance was to be his wife, Rochelle Baum.
  S 2. Any costs incurred as a result of the enactment of this act shall
be borne by the New York City Board of Education.
  S 3. This act shall take effect immediately.
  FISCAL NOTE--Pursuant to Legislative Law, Section 50:
  PROVISIONS OF PROPOSED LEGISLATION:  The  proposed  legislation  would
authorize, upon application made on or before December 31, 2015, the New
York City Teachers' Retirement System ("NYCTRS") to pay pension benefits
to  the widow of Mr. Israel Baum (Mrs. Rochelle Baum) as if Mr. Baum had
retired for service on September 20, 2009 (his date of death), elected a
100% Joint & Survivor form of payment and died immediately thereafter.
  BACKGROUND: Mr. Baum became a Tier III member of NYCTRS on October  1,
1977.
  He  died  on September 20, 2009 without having filed a Service Retire-
ment application with NYCTRS. Accordingly,  NYCTRS  paid  on  or  around
February  18,  2010  an  Ordinary Death Benefit equal to three times Mr.
Baum's last year's salary plus his accumulated contributions plus inter-
est to his widow, Mrs. Rochelle Baum. These amounts  are  summarized  as
follows:

* Three times last year's salary        $324,419.85
* Accumulated contributions               86,982.30
* Interest to date of payment              7,428.28
                                        ___________
                                        $418,830.43
  The  proposed  legislation,  if enacted, would authorize NYCTRS to pay
pension benefits to Mrs. Baum as if Israel Baum has retired for  service
on  his  date  of death of September 20, 2009 and elected a 100% Joint &
Survivor option with Mrs. Baum as his beneficiary, offset by  the  Ordi-
nary Death Benefit ("ODB") that has previously been paid.
  The  100%  Joint & Survivor benefit that would be payable to Mrs. Baum
has been estimated to be approximately  $59,900  per  year.  The  actual
implementation  of  this  legislation  including  any recognition of the
difference in taxability of the ODB as compared to the  Service  Retire-
ment  benefit  would be determined by NYCTRS if the proposed legislation
is enacted.
  All costs associated with the implementation of this  proposed  legis-
lation would be borne by the New York City Board of Education.
  The  Effective  Date  of the proposed legislation would be the Date of
Enactment.
  FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: The  estimated  financial
impact  of  this  proposal  has  been calculated based on the difference
between (1) the actuarial present value of the Service Retirement  bene-

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fits  Mrs.  Baum would receive if this proposed legislation were enacted
and (2) the ODB that has already been paid to Mrs. Baum.
  Based  on  the actuarial assumptions and methods described herein, the
enactment of this proposed  legislation  would  increase  the  Actuarial
Present  Value  of  Benefits ("APVB") and the Unfunded Actuarial Accrued
Liability ("UAAL") of NYCTRS by approximately $1,355,000 as of June  30,
2015  prior to offsetting for the ODB that Mrs. Baum has previously been
paid. This amount includes the monthly payments  that  Mrs.  Baum  would
have  received  from September 2009 to June 2015 and the post-retirement
Death Benefit that would have been paid to Mrs.  Baum  upon  Mr.  Baum's
death (had Mr. Baum retired for service on his date of death and elected
the  100%  Joint  &  Survivor benefit with Mrs. Baum as his beneficiary)
brought forward to June 30, 2015 in accordance with NYCTRS Policies  and
Procedures regarding delayed interest calculations.
  The  ODB  previously  paid  to Mrs. Baum brought forward with compound
interest of 7.0% per annum from September 20, 2009 to June 30,  2015  is
approximately $602,000. Therefore, the net increase in the APVB and UAAL
of NYCTRS would be approximately $753,000 as of June 30, 2015.
  FINANCIAL  IMPACT - ANNUAL EMPLOYER COSTS AND ANNUAL EMPLOYER CONTRIB-
UTIONS: In accordance with Section 13.638.2(k-2) of  the  Administrative
Code  of the City of New York ("ACNY"), 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. For this proposed legislation, Mrs.  Baum would be collecting a
pension and therefore the entire increase in UAAL of $753,000  based  on
the  Actuary's  actuarial  assumptions and methods in effect on June 30,
2013 would be recognized in the first year.
  CONTRIBUTION TIMING: If enacted during the 2015 Legislative Session on
or before June 30, 2015, the pension payable to Mrs. Baum  would  likely
first  be reflected in the June 30, 2015 census data. In accordance with
the One-Year Lag methodology used to determine  employer  contributions,
increased  employer contributions would be consistent with the increased
employer costs and would be determined for Fiscal Year 2017.
  If enacted during the 2015 Legislative Session after June 30, 2015 but
on or before June 30, 2016, the pension payable to Mrs. Baum would like-
ly first be reflected in the June 30, 2016  census  data  and  increased
employer contributions would be determined for Fiscal Year 2018.
  ACTUARIAL  ASSUMPTIONS  AND  METHODS: The additional APVB and UAAL for
employer contribution purposes presented herein have been calculated  by
using  the  actuarial assumptions and methods in effect for the June 30,
2013 (Lag) actuarial valuation used  to  determining  Fiscal  Year  2015
employer contributions of NYCTRS.
  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 NYCTRS.
  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.

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  FISCAL  NOTE  IDENTIFICATION:  This  estimate is intended for use only
during the 2015 Legislative Session. It is Fiscal Note  2015-06R,  dated
March 6, 2015 prepared by the Acting Chief Actuary for the New York City
Teachers' Retirement System.