S T A T E   O F   N E W   Y O R K
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                                  5446--A
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                              March 29, 2017
                                ___________
 
 Introduced  by  Sen.  GRIFFO -- 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  authorize  members  of the New York state and New York city
   teachers' retirement systems and the New York state and local  employ-
   ees'  retirement system to claim retirement credit for certain private
   school teaching service
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Notwithstanding any other provision of law, a member of the
 New  York  state teachers' retirement system or the New York city teach-
 ers' retirement system, or any member of the New York  state  and  local
 employees'  retirement  system  who  is employed by a school district, a
 board of cooperative educational services, a  vocational  education  and
 extension  board,  an  institution  for  the instruction of the deaf and
 blind as enumerated in section 4201 of the education  law  or  a  school
 district  as enumerated in section 1 of chapter 566 of the laws of 1967,
 or who is employed by the state of New York as an institutional  teacher
 as defined by section 136 of the civil service law, shall be entitled to
 obtain  credit  for  up  to  five years of service rendered as a teacher
 employed by a private elementary or secondary school within the state of
 New York chartered by or registered with the board of regents, or  in  a
 private  college within the state of New York authorized by the board of
 regents to grant degrees, which would constitute service as  a  teacher,
 had  it  been performed within New York state for an employer subject to
 the applicable provisions of law governing such retirement system.
   § 2. The crediting of service pursuant to this act shall be in accord-
 ance with such rules and regulations as shall be adopted by the  retire-
 ment  board  of  the  New  York  state  teachers' retirement system, the
 retirement board of the New York city teachers' retirement system or the
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD05635-04-7

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 state comptroller, as appropriate, provided that such  rules  and  regu-
 lations  shall  be substantially equivalent to the rules and regulations
 otherwise applicable for the crediting of service pursuant to applicable
 provisions  of  law  governing each such retirement system, and provided
 further that if such provisions have not expired such member  makes  the
 applicable  payments required pursuant to the provisions of sections 517
 and 613, and paragraph 2 of subdivision b of section 609 of the  retire-
 ment and social security law.
   §  3. The service credit granted pursuant to this act shall constitute
 service for the purpose of  both  computing  the  pension  payable  upon
 retirement  for  service  and in determining the total length of service
 credited for the purpose of eligibility for a service  retirement  bene-
 fit,  but  shall not be used in computing final average salary. Provided
 further, no such credit shall be allowed for any service for  which  the
 person  is  receiving a benefit or will be entitled to receive a benefit
 at any future time from any other public or private retirement system or
 plan in this state, any other state or from the federal government.
   § 4. This act shall take effect June 30, 2017, except that any rule or
 regulation necessary for the timely implementation of the provisions  of
 this act on its effective date are authorized and directed to be promul-
 gated on or before such date.
   FISCAL NOTE. -- Pursuant to Legislative Law, Section 50:
   This  bill will allow members of certain public retirement systems who
 are currently employed by a school  district,  a  board  of  cooperative
 educational  service,  a  vocational  education  and extension board, an
 institution for the deaf and blind or as  an  institutional  teacher  to
 receive  up  to  five  years of service credit in such public retirement
 systems for employment as a teacher  in  private  schools  in  New  York
 State.  The  additional  service  credit granted pursuant to this legis-
 lation shall constitute service credit for the purpose of computing  the
 pension payable upon retirement and shall be used to determine eligibil-
 ity for a service benefit. For certain individuals, member contributions
 will  be  required  to be paid to obtain such additional service credit.
 Tier 6 members would be required to make a payment  of  six  percent  of
 current  compensation  per  year of additional service credit granted by
 this bill. Members of all other  tiers  would  be  required  to  make  a
 payment  of three percent of current compensation per year of additional
 service credit granted by this bill.
   Granting service credit for employment rendered  to  any  organization
 that may potentially be considered a non-governmental or private employ-
 er,  such as certain types of educational institutions described in this
 bill, could jeopardize the Retirement System's governmental plan  status
 and  its exemption from ERISA. This development could result in the loss
 of qualified status, which would mean the loss  of  tax  benefits.  This
 result would substantially impair the System's value to our approximate-
 ly one million participants.
   If  this bill is enacted, insofar as it affects the New York State and
 Local Employees' Retirement System (ERS), it is estimated that the  past
 service  cost  will  average  approximately  15%  (12% for Tier 6) of an
 affected members' compensation for each year of additional service cred-
 it 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.
   Pursuant  to Section 25 of the Retirement and Social Security Law, the
 past service cost for the ERS will be borne entirely by the State of New
 York and would require an itemized appropriation sufficient to  pay  the

 S. 5446--A                          3

 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.
   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, 2016 actuarial valu-
 ation.  Distributions and other statistics can  be  found  in  the  2016
 Report  of  the  Actuary  and  the  2016  Comprehensive Annual Financial
 Report.
   The actuarial assumptions and methods used are described in  the  2015
 and  2016 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, 2016
 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 14,  2017,  and  intended  for  use  only
 during  the  2017  Legislative  Session,  is  Fiscal  Note No. 2017-119,
 prepared by the Actuary for the New  York  State  and  Local  Retirement
 System.