S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  7602--A
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                                May 3, 2017
                                ___________
 
 Introduced  by  M.  of A. ABBATE, SEPULVEDA -- read once and referred to
   the Committee on Governmental Employees -- reported  and  referred  to
   the  Committee  on  Ways  and Means -- recommitted to the Committee on
   Ways and Means in accordance with Assembly Rule 3, sec. 2 -- 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
   loans to members of certain retirement systems
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision i of section 517-c of the retirement and social
 security law, as amended by chapter 511 of the laws of 2005, is  amended
 to read as follows:
   i.  Notwithstanding  the provisions of section five hundred sixteen of
 this article, whenever a member of such a retirement system, for whom  a
 loan  is  outstanding, retires, the retirement allowance payable without
 optional modification shall be reduced by a life annuity which is  actu-
 arially  equivalent to the amount of the outstanding loan (all outstand-
 ing loans shall continue to accrue interest charges  until  retirement),
 such life annuity being calculated utilizing the interest rate on thirty
 year  United  States  treasury bonds as of January first of the calendar
 year of the effective date of retirement and the  mortality  tables  for
 options available under section five hundred fourteen of this article. A
 retiree of the New York city employees' retirement system [or], board of
 education  retirement  system  of  the city of New York, OR THE NEW YORK
 STATE AND LOCAL EMPLOYEES' RETIREMENT SYSTEM whose benefit has  been  so
 reduced may repay the outstanding balance of the loan at any time. Bene-
 fits payable after the repayment of the loan shall not be subject to the
 actuarial reduction required by this subdivision.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11071-02-8

              

 A. 7602--A                          2
 
   § 2. Subdivision i of section 613-b of the retirement and social secu-
 rity  law,  as amended by chapter 511 of the laws of 2005, is amended to
 read as follows:
   i.  Notwithstanding  the  provisions  of  subdivision b of section six
 hundred twelve of this article, whenever a member of such  a  retirement
 system,  for  whom a loan is outstanding, retires, the retirement allow-
 ance payable without optional modification shall be reduced  by  a  life
 annuity which is actuarially equivalent to the amount of the outstanding
 loan  (all  outstanding  loans shall continue to accrue interest charges
 until retirement), such life  annuity  being  calculated  utilizing  the
 interest  rate on thirty year United States treasury bonds as of January
 first of the calendar year of the effective date of retirement  and  the
 mortality  tables for options available under section six hundred ten of
 this article. A retiree of  the  New  York  city  employees'  retirement
 system  [or],  board  of  education retirement system of the city of New
 York, OR THE NEW YORK STATE AND LOCAL EMPLOYEES' RETIREMENT SYSTEM whose
 benefit has been so reduced may repay the  outstanding  balance  of  the
 loan at any time. Benefits payable after the repayment of the loan shall
 not be subject to the actuarial reduction required by this subdivision.
   § 3. This act shall take effect immediately.
   FISCAL NOTE.-- Pursuant to Legislative Law, Section 50:
   This  bill  would  allow  a  retiree  of  the New York State and Local
 Employees' Retirement System (ERS) to repay the outstanding loan balance
 DETERMINED ON THE DAY OF RETIREMENT, by making a lump sum payment  after
 retirement.  Upon receipt of such repayment, the future pension payments
 of  such  retirees  shall  be  recalculated  to  be  without   actuarial
 reduction.  Currently, member loans must be settled at retirement either
 by a lump sum payment  or  by  an  annual  actuarial  reduction  to  the
 pensions.
   If this bill is enacted, there would be a small administrative cost to
 implement this change.
   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, 2017  actuarial  valu-
 ation.    Distributions  and  other  statistics can be found in the 2017
 Report of the  Actuary  and  the  2017  Comprehensive  Annual  Financial
 Report.
   The  actuarial assumptions and methods used are described in the 2015,
 2016, and 2017 Annual Report to the  Comptroller  on  Actuarial  Assump-
 tions,  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, 2017
 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 Quali-
 fication Standards to render the actuarial opinion contained herein.
   This  estimate,  dated  January  17,  2018,  and intended for use only
 during the  2018  Legislative  Session,  is  Fiscal  Note  No.  2018-30,
 prepared  by  the  Actuary  for  the New York State and Local Retirement
 System.