Senate Bill S1101

                                BILL NUMBER:S1101

TITLE OF BILL:  An act to amend the retirement and social security
law, in relation to military service credits

PURPOSE OR GENERAL IDEA OF BILL:

The purpose of the bill is to allow members of the service to obtain
service credit not to exceed seven years of service credit for up to
fifty percent of their total years in active military duty and to
update the list of "hostilities" which qualifies veterans for military
service credits.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1 of the bill amends the language of the opening paragraph and
adds two new paragraphs (e) and (f) to subdivision 2 of section 1000
of the retirement and social security law. Language is added to the
opening paragraph which will allow a member of the service to obtain a
credit which is the greater of up to three years of service credit for
up to three years of military duty or not to exceed seven years of
service credit for fifty percent of such member's total years in
active military duty. The bill also adds two new paragraphs (e) and
(1) which add to the military conflicts in which members may have
served in order to be eligible for such service credits including the
Global War on Terrorism from September 11, 2001 through the end of
              

such hostilities in paragraph(e) and United States participation in UN
related combat theaters in Somalia, Bosnia and Kosovo in paragraph
(f).

Section 2 of the bill sets forth an immediate effective date.

JUSTIFICATION:

State law currently provides military service credit up to a maximum
of three years of service credit for up to three years of active
military duty. This arbitrary cap does not allow a veteran who has
dedicated their life to service in the military for longer than 3
years to be acknowledged for that sacrifice. This is especially the
case for those veterans who may have stayed in the military for up to
14 years and then returned to civilian employment but were ineligible
to stay long enough in the military to retire after 20 years and thus
receive federal retirement benefits.

It is appropriate that veterans be allowed to obtain up seven years of
service credit for 50% of their total years in active military duty as
recognition of their valor and dedication to the security of this
country.

The bill also amends the law to bring current the list of
"hostilities" which qualifies veterans for military service credits.
This includes the hostilities in the Global War on Terrorism
(including Iraq, Kuwait, Saudi Arabia, Bahrain, Qatar, the United Arab
Emirate, Oman, the Gulf of Aden, the Gulf of Oman, the Persian Gulf,
the Red Sea, and the airspace above these location, and the UN related
combat theaters in Somalia, Bosnia and Kosovo.


PRIOR LEGISLATIVE HISTORY:

New Bill.

FISCAL IMPLICATIONS:

This bill would amend the benefits of Chapter 548, Laws of 200 to
permit members of public retirement systems in New York State who are
eligible to purchase military service credit, to purchase the larger
of up to 3 years of service credit, or up to 50% of such member's
total years in active military duty up to 7 years of service credit
(current law allows up to 3 years). In addition, this bill would
include the following conflicts as allowable military service for
credit in the case of a veteran who served in the theater of
operations:

-from 9/11/01 to the end of hostilities in Afghanistan, Iraq,
Pakistan, Yemen, Oman, Saudi Arabia, Turkey, Libya, Egypt, India,
Lebanon, Syria, the Gulf of Aden, the Gulf of Oman, the Persian Gulf,
the Red Sea and the airspace above these locations

-in UN related combat theaters in Somalia from 8/1992 - 3/1994
-in NATO related combat theaters in Bosnia 12/1995 - 11/2004
-in NATO related combat theaters in Kosovo 4/1999 - 6/1999
Members must have at least five years of credited service (not
including military service). Tier 1-5 members would be required to
make a payment of three percent of their most recent compensation per
year of additional service credit granted by their bill. Tier 6
members would be required to make a payment of six percent of their
most recent compensation per year of additional service credit.

If the 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 15% (14% for Tier 6) of an
affected 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
Security Law, the increased cost to other 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 provision.


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
valuation. 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
Qualification Standards to render the actuarial opinion contained
herein.

This estimate, dated December 6, 2013 and intended for use only during
the 2014 Legislative Session, is Fiscal Note No. 2014-38, prepared by
the Actuary for the New York State and Local Police and Fire
Retirement System.

EFFECTIVE DATE:

This act shall take effect immediately.