S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8048
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               May 25, 2017
                                ___________
 
 Introduced by M. of A. KAVANAGH -- read once and referred to the Commit-
   tee on Governmental Employees
 
 AN  ACT  relating  to  granting Tier I status to Cynthia Falletta in the
   Teachers' Retirement System of the City of New York with a  membership
   date of June 1, 1972
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Notwithstanding any inconsistent provision of law,  Cynthia
 Falletta, a member of the Teachers' Retirement System of the City of New
 York  (TRSNYC) with Tier IV status, who was employed by the City Univer-
 sity of New York from June 1, 1972 until April 8, 1976 and from June 22,
 1976 to October 28, 1976, and was a member of  the  Board  of  Education
 Retirement  System  from  December  12,  1990 until February 28, 1994 at
 which point she became a member of the Teachers'  Retirement  System  of
 the  City  of  New  York,  and who for reasons not ascribable to her own
 negligence was retroactively enrolled as a Tier IV member,  shall,  upon
 submission  of an application filed with the Board of Trustees of TRSNYC
 on or before the thirty-first day of December next succeeding  the  date
 on  which  this act shall have become a law, be reclassified as a Tier I
 member with June 1, 1972 as her date of membership and shall be entitled
 to every right, benefit and privilege which would have been available to
 her in accordance with Tier I status, and the City of New York shall  be
 responsible  for  all  costs  to  provide  the Tier I benefit to Cynthia
 Falletta, provided, however that Cynthia Falletta shall  be  responsible
 for  contributing  the  required member contributions for Tier I member-
 ship.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   PROVISIONS OF PROPOSED LEGISLATION:  The  proposed  legislation  would
 permit  Cynthia  Falletta,  a retired Tier 4 member of the New York City
 Teachers' Retirement System (TRS), to elect, by  filing  an  application

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

                                                            LBD09751-02-7

 A. 8048                             2
 
 with the Board of Trustees of TRS within the end of the calendar year in
 which the proposed legislation is passed, to be reclassified as a Tier 1
 member  and  have  her  retirement allowance recalculated and paid under
 Tier 1 (Plan A) benefit calculation provisions.
   The  Effective  Date  of the proposed legislation would be the Date of
 Enactment.
   BACKGROUND - GENERAL: Ms. Falletta retired as a Tier 4 TRS  member  on
 October  18, 2012. She currently receives an annual retirement allowance
 of $48,243.
   If the proposed legislation is passed, Ms. Falletta would be reclassi-
 fied as a Tier 1 retired member and her retirement  allowance  would  be
 recalculated  as if she had joined a public retirement system within the
 state upon her commencement of part-time employment as a college assist-
 ant with the City University of New York in 1972. The  additional  cost,
 less  any  required  member contributions paid by Ms.  Falletta, to fund
 the increased retirement allowance associated with the  proposed  legis-
 lation would fall upon the City of New York.
   Because Tier 1 TRS members are generally permitted to take an actuari-
 al  reduction  of  their retirement allowance to account for deficits in
 member contributions, for purposes of this fiscal  note  it  is  assumed
 that  Ms. Falletta would not pay any owed member contributions resulting
 from the reclassification. Based on this assumption and  application  of
 other  Tier  1  benefit calculation provisions, it is estimated that Ms.
 Falletta's annual retirement allowance would increase to  $64,822.  This
 annual  increase  would  apply prospectively as well as retroactively to
 Ms. Falletta's October 18, 2012 date of retirement.
   FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: The  estimated  financial
 impact  of  this  proposal  has  been calculated based on the difference
 between the actuarial present value of  (1)  the  Tier  1  benefits  Ms.
 Falletta would receive if this proposed legislation were enacted (retro-
 active to her October 18, 2012 retirement date) and (2) the Tier 4 bene-
 fits that are currently being paid to Ms. Falletta.
   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 TRS by approximately $272,000 as of June 30, 2017.
   FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In  accordance  with
 Section  13-638.2(k-2)  of  the  Administrative  Code of the City of New
 York, the amortization schedule for new  UAAL  attributable  to  benefit
 changes  is  determined  by the Actuary but is generally calculated over
 the remaining working lifetime of those impacted by the benefit changes.
   Since Ms. Falletta is retired and collecting  a  pension,  the  entire
 increase  in  UAAL  of $272,000 based on the Actuary's actuarial assump-
 tions and methods in effect on June 30, 2016 would be recognized in  the
 first year.
   CONTRIBUTION  TIMING:  If enacted during the 2017 Legislative Session,
 the retirement allowance payable to Ms. Falletta would likely  first  be
 reflected  in the June 30, 2017 census data. In accordance with the One-
 Year Lag methodology  used  to  determine  employer  contributions,  the
 increase  in  employer contributions would first be reflected for Fiscal
 Year 2019.
   OTHER COSTS: This Fiscal Note does not  measure  administrative  costs
 associated with implementing this proposed legislation.
   ACTUARIAL  ASSUMPTIONS AND METHODS: Additional APVB, UAAL and employer
 contributions  presented  herein  have  been  calculated  based  on  the
 Actuary's  actuarial  assumptions and methods in effect for the Prelimi-

 A. 8048                             3
 
 nary June 30, 2016 (Lag)  actuarial  valuation  used  to  determine  the
 Preliminary Fiscal Year 2018 employer contributions of TRS.
   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 2017-08 dated April 17,
 2017, was prepared by the Chief Actuary for the New York City  Teachers'
 Retirement  System.  This  estimate  is intended for use only during the
 2017 Legislative Session.