S T A T E O F N E W Y O R K
________________________________________________________________________
7762
2017-2018 Regular Sessions
I N A S S E M B L Y
May 12, 2017
___________
Introduced by M. of A. WALKER -- read once and referred to the Committee
on Governmental Employees
AN ACT to amend the retirement and social security law, in relation to
allowable service credit for participants in the twenty-five year and
age fifty-five retirement program for New York city transit authority
members
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraph 6 of subdivision a of section 604-b of the
retirement and social security law, as added by chapter 529 of the laws
of 1994, is amended to read as follows:
6. (I) "Allowable service in the transit authority" shall mean credit-
ed service which was rendered as a member of the New York city transit
authority[.]; AND
(II) "ALLOWABLE SERVICE" SHALL MEAN CREDITED SERVICE WHICH WAS
RENDERED AS A MEMBER OF THE NEW YORK CITY TRANSIT AUTHORITY AND ALL
SERVICE RENDERED PRIOR TO SERVICE IN THE NEW YORK CITY TRANSIT AUTHORITY
WHICH QUALIFIES AS "CITY-SERVICE" AS THAT TERM IS DEFINED IN SECTION
13-101 OF THE ADMINISTRATIVE CODE.
§ 2. Paragraph 7 of subdivision a of section 604-b of the retirement
and social security law, as added by chapter 529 of the laws of 1994, is
amended to read as follows:
7. "Minimum period" shall mean the minimum period of twenty-five years
of allowable service [in the transit authority] that is required in
order for a participant in the twenty-five-year and age fifty-five
retirement program to be eligible for early service retirement pursuant
to paragraph one of subdivision c of this section.
§ 3. Subparagraph (i) of paragraph 1 of subdivision c of section 604-b
of the retirement and social security law, as added by chapter 529 of
the laws of 1994, is amended to read as follows:
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10372-02-7
A. 7762 2
(i) who has completed twenty-five or more years of allowable service
[in the transit authority]; and
§ 4. Subparagraph (ii) of paragraph 1 of subdivision d of section
604-b of the retirement and social security law, as amended by chapter
18 of the laws of 2012, is amended to read as follows:
(ii) in the case of a participant who is not a New York city revised
plan member, prior to such discontinuance, completed five but less than
twenty-five years of allowable service [in the transit authority] or, in
the case of a participant who is a New York city revised plan member,
has completed ten but less than twenty-five years of allowable service
[in the transit authority] prior to such discontinuance; and
§ 5. Subparagraph (ii) of paragraph 2 of subdivision d of section
604-b of the retirement and social security law, as added by chapter 352
of the laws of 1997, is amended to read as follows:
(ii) prior to such discontinuance completed twenty-five years of
allowable service [in the transit authority]; and
§ 6. Clause (A) of subparagraph (ii) of paragraph 8 of subdivision e
of section 604-b of the retirement and social security law, as added by
chapter 529 of the laws of 1994, is amended to read as follows:
(A) Should a participant in the twenty-five-year and age fifty-five
retirement program who has rendered less than twenty-five-years of
allowable service [in the transit authority] cease to hold a position as
a New York city transit authority member for any reason whatsoever, his
or her accumulated additional member contributions made pursuant to this
subdivision (together with any interest thereon paid to the retirement
system) [maybe] MAY BE withdrawn by him or her pursuant to procedures
promulgated in regulations of the board of trustees of the retirement
system, together with interest thereon at the rate of five percent per
annum, compounded annually.
§ 7. This act shall take effect immediately.
FINSCAL NOTE.-- Pursuant to Legislative Law, Section 50:
PROVISIONS OF PROPOSED LEGISLATION: The proposed legislation would
amend Retirement and Social Security Law (RSSL) Section 604-b to permit
eligible New York City Employees' Retirement System (NYCERS) members in
the Tier 4 or Tier 6 Twenty-Five Year and Age Fifty-Five Retirement
Program for New York City Transit Authority Members (Transit 25/55 Plan)
to purchase certain furlough time for Allowable Service credit in the
Plan.
The Effective Fate of the proposed legislation would be the date of
enactment.
To be eligible to purchase furlough time, an individual must:
be a current NYCERS Transit 25/55/ Plan member,
have been on a preferred eligible list anytime on and after May 11,
2010 to July 25, 2012, inclusive, because of the abolition of his or her
position by the Transit Authority, and
have been a member or former member of the Transit 25/55 Plan at the
time his or her name was placed on such list.
In order to receive Allowable Service credit in the Transit 25/55
Plan, an eligible member must make any applicable contributions to
NYCERS, with interest, for the period of eligible furlough time. The
period of purchased furlough time shall be considered Allowable Service
in the Transit Authority for all purposes in the Transit 25/55 Plan,
including eligibility for and calculation of benefits.
For purposes of this Fiscal Note, it is assumed that eligible Transit
25/55 Plan Members who purchase applicable furlough time would be ineli-
A. 7762 3
gible to receive service credit in any public retirement system within
the State, including NYCERS, for the same period of time.
FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: With respect to NYCERS
and based on the actuarial assumptions and methods described herein, the
enactment of this proposed legislation would increase the Actuarial
Present Value (APV) of Benefits (APVB) by approximately $1,180,000. In
addition, there would be an increase in the APV of Future Employer
Contributions of $1,186,000.
FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with
the Administrative Code of the City of New York (ACNY) Section
13.638.2(k-2), new UAAL attributable to benefit changes are to be amor-
tized as determined by the Actuary but generally over the remaining
working lifetime of the Transit Authority members that would be impacted
by the proposed legislation is approximately 13 years.
With respect to NYCERS based on the actuarial assumptions and methods
used in the Preliminary June 30, 2016 valuations of NYCERS, the enact-
ment of this proposed legislation would increase annual employer
contributions by approximately $160,000 per year beginning in Fiscal
Year 2019.
OTHER COSTS: Not measured in this Fiscal Note are the initial, addi-
tional administrative costs of NYCERS and other New York City agencies
to implement the proposed legislation.
CENSUS DATA: The starting census data used for the calculations
presented herein is the census data used in the Preliminary June 30,
2016 (Lag) actuarial valuation of NYCERS. This data was supplemented by
additional service data provided by NYCERS for 156 Transit Authority
employees who would benefit under the proposed legislation. These 156
members had an average age of approximately 46.7, average service of
approximately 10.3 years (11.1 years after reflecting purchase of
furlough time if the proposed legislation is enacted), and an average
salary of approximately $68,000.
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 Preliminary June 30, 2016
(Lag) actuarial valuations used to determine the Preliminary Fiscal Year
2018 employer contributions of NYCERS.
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 13-year period (12 payments under the
One-Year Lag Methodology).
STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu-
ary for, and independent of, the New York City Pension Funds and Retire-
ment Systems. I am a Fellow of the Society of Actuaries, a Fellow of the
Conference of Consulting 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 Fiscal Note 2017-15 dated May 9, 2017
was prepared by the Chief Actuary for 5the New York City Employees'
Retirement System. This estimate is intended for use only during the
2017 Legislative Session.