NY State Senate Bill 2017-S6381A

Archive: Last Bill Status - In Senate Committee Civil Service And Pensions Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2018	referred to civil service and pensions
Jun 07, 2017	print number 6381a
Jun 07, 2017	amend and recommit to civil service and pensions
May 11, 2017	referred to civil service and pensions

Bill Amendments

Original

A (Active)

2017-S6381 - Details

Current Committee:: Senate Civil Service And Pensions
Law Section:: Retirement and Social Security Law
Laws Affected:: Amd §613, R & SS L
Versions Introduced in 2015-2016 Legislative Session:: S7232

2017-S6381 - Summary

Relates to member contributions to the New York city employees' retirement system.

2017-S6381 - Sponsor Memo

2017-S6381 - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6381
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                               May 11, 2017
                                ___________
 
 Introduced by Sen. ALCANTARA -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
 
 AN  ACT  to amend the retirement and social security law, in relation to
   member contributions to the New York city employees' retirement system

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Paragraph 2 of subdivision a of section 613 of the retire-
 ment and social security law, as amended by chapter 510 of the  laws  of
 2015, is amended to read as follows:
   2.  A  member of the New York city employees' retirement system who is
 eligible to be a participant in the twenty-five-year and age  fifty-five
 retirement  program,  as  defined  by paragraph five of subdivision a of
 section six hundred four-b of this article shall contribute two  percent
 of  annual  wages  to  such system effective on the starting date of the
 elimination  of  additional  member  contributions,  as  defined  in  an
 election  made pursuant to paragraph ten of subdivision e of section six
 hundred four-b of this article, except [that] beginning April first, two
 thousand thirteen AND ENDING ON THE DECEMBER THIRTY-FIRST NEXT  SUCCEED-
 ING THE EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND SEVEN-
 TEEN THAT AMENDED THIS PARAGRAPH for members who first become members of
 the  New York city employees' retirement system on or after April first,
 two thousand twelve[, the rate at which each such member shall  contrib-
 ute  in  any  current  plan  year  (April  first  to March thirty-first,
 provided, however, that plan  year  shall  mean  January  first  through
 December  thirty-first commencing with the January first next succeeding
 the effective date of the chapter of the laws of  two  thousand  fifteen
 that  amended  this  paragraph)  shall be determined by reference to the
 wages of such member in the second plan year (April first to March thir-
 ty-first, provided, however, that plan year  shall  mean  January  first
 through  December  thirty-first  commencing  with the January first next
 succeeding the effective date of the chapter of the laws of two thousand

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

                                                            LBD06931-02-7

 S. 6381                             2

 fifteen that amended this paragraph) preceding such current plan year as
 follows:
   (i)  members  with  wages  of forty-five thousand dollars per annum or
 less shall contribute three per centum of annual wages;
   (ii) members with wages greater than forty-five  thousand  per  annum,
 but  not  more than fifty-five thousand per annum shall contribute three
 and one-half per centum of annual wages;
   (iii) members with wages greater than fifty-five thousand  per  annum,
 but  not more than seventy-five thousand per annum shall contribute four
 and one-half per centum of annual wages;
   (iv) members with wages greater than seventy-five thousand  per  annum
 but  not  more than one hundred thousand per annum shall contribute five
 and three-quarters per centum of annual wages; and
   (v) members with wages greater than one  hundred  thousand  per  annum
 shall contribute six per centum of annual wages.
   Notwithstanding  the  foregoing,  during  each of the first three plan
 years (April first to March thirty-first, provided, however,  that  plan
 year  shall  mean January first through December thirty-first commencing
 with the January first next succeeding the effective date of the chapter
 of the laws of two thousand fifteen  that  amended  this  paragraph)  in
 which  such  member  has  established  membership  in  the New York city
 employees' retirement system, such member shall contribute a  percentage
 of  annual  wages in accordance with the preceding schedule based upon a
 projection of annual wages provided by the employer].
   § 2. This act shall take effect immediately.

co-Sponsors

2017-S6381A (ACTIVE) - Details

Current Committee:: Senate Civil Service And Pensions
Law Section:: Retirement and Social Security Law
Laws Affected:: Amd §613, R & SS L
Versions Introduced in 2015-2016 Legislative Session:: S7232

2017-S6381A (ACTIVE) - Summary

Relates to member contributions to the New York city employees' retirement system.

2017-S6381A (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S6381A

 TITLE OF BILL :  An act to amend the retirement and social security
law, in relation to member contributions to the New York city
employees' retirement system

 SUMMARY OF PROVISIONS :

This bill amends Retirement and Social Security Law ("RSSL") SS
504-a(e) (8) (i); 504- b(e) (12)(i); 504-d(e) (9) (i); 517(d);
604-a(e)(8)(i); 604-b(e)(8) (i); 604-c(d) (7) (i) (as added by Chapter
96 of the Laws of 1995); 604-c(e) (8)(i) (as added by Chapter 472 of
the Laws of 1995); 604-d(f)(6)(i); 604-e(e) (10) (i)(as added by
Chapter 576 of the Laws of 2000);604-e(e) (as added by Chapter 577 of
the Laws of 2000); 504-f(e)(10)(i) (as added by Chapter 559 of the
Laws of 2001); 604-f(e)(10)(1)) (as added by Chapter 582 of the Laws
of 2001); 604-g(e)and 604-h(e) (10) (i); (the "Special Plans") and
adds subdivision (h) to RSSL 5 613 to allow New York City Employees'
Retirement System ("NYCERS") members who are subject to the Special
Plans in Articles 14 and 15 of the RSSL and required to pay additional
member contributions, to, upon the separation from. New York City
service as a result of retirement, use a surplus of additional member
contributions paid into the retirement system to offset a deficit in
the member's basic member contributions account, and vice versa.

 REASONS FOR SUPPORT :

The proposed legislation expands the definition of additional member
contributions and basic member contributions by allowing a participant
of one of the Special Plans ("Special Plan participant") to, upon
retirement, use a surplus in his or her additional member
contributions account to offset a deficit in his or her basic member
contributions account, and, likewise, to use a surplus in his or her
basic member contributions account to offset a deficit in his or her
additional member contributions account.

Currently, under the Special Plans additional member contributions and
basic member contributions must only be used to satisfy the
requirements of the type of contributions that it was originally
collected for. The law specifically states that the contributions
cannot be used for any other purpose. Further, where a Special Plan
requires that all additional member contributions be paid prior to
retirement and the Special Plan participant has a deficit, the
participant will either not be eligible for a retirement benefit under
the Plan or the participant must retire with an actuarial reduction.
Consequently, if a Special Plan participant has a deficit at
retirement in a Plan that does not allow for an actuarial reduction,
he or she must first pay the retirement system the balance of a
deficit in additional member contributions before the participant may
retire. Due to the limitation in the law regarding the use of
additional member contributions and basic contributions, the
retirement system cannot use one type of contribution to remedy a
deficit of the other type of contribution.  Rather, the retirement
system and Special Plan participant must undergo a series of costly
and timely administrative steps that require the retirement system to
process the surplus and the deficit separately. The retirement system
must process a check to refund money from a surplus in one account,
only to make the participant pay back the deficit in another account
before the member may retire under his or her respective Special Plan.
The proposed legislation cures these administrative ailments. Indeed,
this bill eliminates the need for all of the separate processing steps
by expanding the definition and use of additional member contributions
and basic member contributions for the sole purpose of remedying a
deficit upon retirement. This bill does not change the use of
additional member contributions and basic member contributions for any
other purpose.  Instead, it eliminates the need for the retirement
system to request payment from the participant before he or she may
retire, thus expediting the retirement process and reducing the risk
of a Special Plan participant being ineligible for a retirement
benefit or receiving a reduced retirement benefit under his or her
respective Special Plan. By allowing the retirement system to, solely
upon the member's retirement, use a surplus of additional member
contributions to remedy a deficit in the member's basic member
contributions, and vice versa, this legislation aides in the
administrative efficiency of the retirement system and eliminates some
burdens on Special Plan participant.

Accordingly, the NYCERS Board of Trustees urges the favorable
consideration of this proposal by the Legislature.

 EFFECTIVE DATE OF THE BILL :

This act shall take effect immediately. Budgetary Implications of the
Bill

2017-S6381A (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6381--A
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                               May 11, 2017
                                ___________
 
 Introduced by Sen. ALCANTARA -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
   --  committee  discharged,  bill amended, ordered reprinted as amended
   and recommitted to said committee
 
 AN ACT to amend the retirement and social security law, in  relation  to
   member contributions to the New York city employees' retirement system
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph 2 of subdivision a of section 613 of the  retire-
 ment  and  social security law, as amended by chapter 510 of the laws of
 2015, is amended to read as follows:
   2. A member of the New York city employees' retirement system  who  is
 eligible  to be a participant in the twenty-five-year and age fifty-five
 retirement program, as defined by paragraph five  of  subdivision  a  of
 section  six hundred four-b of this article shall contribute two percent
 of annual wages to such system effective on the  starting  date  of  the
 elimination  of  additional  member  contributions,  as  defined  in  an
 election made pursuant to paragraph ten of subdivision e of section  six
 hundred four-b of this article, except [that] beginning April first, two
 thousand  thirteen AND ENDING ON THE DECEMBER THIRTY-FIRST NEXT SUCCEED-
 ING THE EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND SEVEN-
 TEEN THAT AMENDED THIS PARAGRAPH for members who first become members of
 the New York city employees' retirement system on or after April  first,
 two thousand twelve, the rate at which each such member shall contribute
 in  any  current plan year (April first to March thirty-first, provided,
 however, that plan year shall mean January first through December  thir-
 ty-first commencing with the January first next succeeding the effective
 date  of  [the]  chapter  FIVE  HUNDRED  TEN of the laws of two thousand
 fifteen that amended this paragraph) shall be determined by reference to
 the wages of such member in the second plan year (April first  to  March
 thirty-first, provided, however, that plan year shall mean January first
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD06931-05-7

 S. 6381--A                          2
 
 through  December  thirty-first  commencing  with the January first next
 succeeding the effective date of [the] chapter FIVE HUNDRED TEN  of  the
 laws of two thousand fifteen that amended this paragraph) preceding such
 current plan year as follows:
   (i)  members  with  wages  of forty-five thousand dollars per annum or
 less shall contribute three per centum of annual wages;
   (ii) members with wages greater than forty-five  thousand  per  annum,
 but  not  more than fifty-five thousand per annum shall contribute three
 and one-half per centum of annual wages;
   (iii) members with wages greater than fifty-five thousand  per  annum,
 but  not more than seventy-five thousand per annum shall contribute four
 and one-half per centum of annual wages;
   (iv) members with wages greater than seventy-five thousand  per  annum
 but  not  more than one hundred thousand per annum shall contribute five
 and three-quarters per centum of annual wages; and
   (v) members with wages greater than one  hundred  thousand  per  annum
 shall contribute six per centum of annual wages.
   Notwithstanding  the  foregoing,  during  each of the first three plan
 years (April first to March thirty-first, provided, however,  that  plan
 year  shall  mean January first through December thirty-first commencing
 with the January first next succeeding the effective date of [the] chap-
 ter FIVE HUNDRED TEN of the laws of two thousand  fifteen  that  amended
 this  paragraph)  in which such member has established membership in the
 New York city employees' retirement system, such member shall contribute
 a percentage of annual wages in accordance with the  preceding  schedule
 based upon a projection of annual wages provided by the employer.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   PROVISIONS  OF  PROPOSED  LEGISLATION: This proposed legislation would
 amend paragraph 2 of subdivision a of Section 613 of the Retirement  and
 Social  Security  Law (RSSL) to modify the member contribution rate on a
 prospective basis for Tier 6 Transit Authority members  who  participate
 in  the  Transit  25-Year/Age 55 Retirement Plan from the current graded
 schedule of 3% to 6% based on the members' wages to a flat 2% of wages.
   The Effective Date of the proposed legislation would be  the  date  of
 enactment.
   FINANCIAL  IMPACT  -  ACTUARIAL PRESENT VALUES: Based on the actuarial
 assumptions and methods herein, the enactment of  this  proposed  legis-
 lation would decrease the Actuarial Present Value of Benefits (APVB) for
 NYCERS by approximately $13.5 million (as a result of a reduction in the
 amount  of  refunds  of member contributions upon termination of employ-
 ment) and decrease the Actuarial Present Value of  member  contributions
 by approximately $255.4 million as of June 30, 2016.
   Under  the  Entry  Age Actuarial Cost Method (EAACM) used to determine
 employer contributions to NYCERS, there would  be  an  increase  in  the
 Actuarial Present Value of Future Employer Normal Cost of $228.3 million
 and  an  increase  in the Unfunded Actuarial Accrued Liability (UAAL) of
 approximately $13.6 million.
   FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: 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 life-
 time of those impacted by the benefit changes, which has been  estimated
 to  be  approximately  17.9  years.  Recognizing  that  this period will
 decrease over time as the group of Tier VI Members matures, the  Actuary

 S. 6381--A                          3
 
 would  likely  choose  to  amortize  the  new  UAAL attributable to this
 proposed legislation over a 15-year period.
   With  respect  to NYCERS, based on the Actuary's actuarial assumptions
 and methods used in the Preliminary June  30,  2016  valuations  of  the
 NYCERS  and  those described later in this Fiscal Note, the enactment of
 this proposed legislation would increase annual  employer  contributions
 by approximately $28.1 million per year.
   This  increase  in  employer contributions has been estimated assuming
 that the increase in UAAL would be financed over a  15-year  period  (14
 payments under One-Year Lag Methodology) using level dollar payments.
   If  enacted  into  law  during the 2017 Legislative Session, increased
 employer costs would be determined for Fiscal Year 2018.
   CENSUS DATA: Estimates  of  increases  in  APVB,  employer  costs  and
 employer  contributions are based on the active census data used for the
 Preliminary June 30, 2016  actuarial  valuations  of  NYCERS,  including
 7,684  Tier  6 25/55 NYCTA members with salaries of approximately $507.2
 million.
   ACTUARIAL ASSUMPTIONS AND METHODS: Additional APVB, UAAL and  employer
 costs presented herein have been calculated based on the Actuary's actu-
 arial  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.
   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  2017-16  Dated  May  12,
 2017, was prepared by the Chief Actuary for the New York City Employees'
 Retirement  System.  This  estimate  is intended for use only during the
 2017 Legislative Session.

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Senate Bill S6381A

Sponsored By

Archive: Last Bill Status - In Senate Committee Civil Service And Pensions Committee

Bill Amendments

2017-S6381 - Details

2017-S6381 - Summary

2017-S6381 - Sponsor Memo

2017-S6381 - Bill Text download pdf

co-Sponsors

2017-S6381A (ACTIVE) - Details

2017-S6381A (ACTIVE) - Summary

2017-S6381A (ACTIVE) - Sponsor Memo

2017-S6381A (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S6381A

Share this bill

Sponsored By

Marisol Alcantara

Archive: Last Bill Status - In Senate Committee Civil Service And Pensions Committee

Bill Amendments

2017-S6381 - Details

2017-S6381 - Summary

2017-S6381 - Sponsor Memo

2017-S6381 - Bill Text download pdf

co-Sponsors

Joseph P. Addabbo Jr.

Jesse Hamilton

James Sanders Jr.

Diane J. Savino

2017-S6381A (ACTIVE) - Details

2017-S6381A (ACTIVE) - Summary

2017-S6381A (ACTIVE) - Sponsor Memo

2017-S6381A (ACTIVE) - Bill Text download pdf

Comments