NY State Senate Bill 2017-S5634B

Senate Bill S5634B

Vetoed By Governor

2017-2018 Legislative Session

Relates to employer's duties regarding optional public retirement systems

download bill text pdf

Archive: Last Bill Status Via A7193 - Vetoed by Governor

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

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Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Nov 29, 2017	tabled vetoed memo.180
Nov 17, 2017	delivered to governor
Jun 21, 2017	returned to assembly passed senate 3rd reading cal.1338 substituted for s5634b
Jun 21, 2017	substituted by a7193c
Jun 05, 2017	advanced to third reading
May 24, 2017	2nd report cal.
May 23, 2017	1st report cal.1338
May 10, 2017	print number 5634b
May 10, 2017	amend and recommit to civil service and pensions
May 03, 2017	print number 5634a
May 03, 2017	amend and recommit to civil service and pensions
Apr 21, 2017	referred to civil service and pensions

Votes

- Jun 21, 2017 - Floor Vote
  A7193
  
  62
  
  Aye
  
  0
  
  Nay
  
  1
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: Jun 21, 2017
      
      aye (62)
      
      Addabbo Jr.
      
      Akshar
      
      Alcantara
      
      Amedore
      
      Avella
      
      Bailey
      
      Benjamin
      
      Bonacic
      
      Boyle
      
      Breslin
      
      Brooks
      
      Carlucci
      
      Comrie
      
      Croci
      
      DeFrancisco
      
      Diaz
      
      Dilan
      
      Felder
      
      Flanagan
      
      Funke
      
      Gallivan
      
      Gianaris
      
      Golden
      
      Griffo
      
      Hamilton
      
      Hannon
      
      Helming
      
      Hoylman-Sigal
      
      Jacobs
      
      Kaminsky
      
      Kennedy
      
      Klein
      
      Krueger
      
      LaValle
      
      Lanza
      
      Larkin
      
      Latimer
      
      Little
      
      Marcellino
      
      Marchione
      
      Montgomery
      
      Murphy
      
      O'Mara
      
      Ortt
      
      Parker
      
      Peralta
      
      Persaud
      
      Phillips
      
      Ranzenhofer
      
      Ritchie
      
      Rivera
      
      Robach
      
      Savino
      
      Serino
      
      Serrano
      
      Seward
      
      Squadron
      
      Stavisky
      
      Stewart-Cousins
      
      Tedisco
      
      Valesky
      
      Young
      
      absent (1)
      
      Sanders Jr.
  May 23, 2017 - Civil Service And Pensions Committee Vote
  S5634B
  
  9
  
  Aye
  
  0
  
  Nay
  
  2
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Civil Service And Pensions Committee Vote: May 23, 2017
      
      aye (9)
      
      Addabbo Jr.
      
      Croci
      
      Golden
      
      Lanza
      
      Ortt
      
      Persaud
      
      Sanders Jr.
      
      Savino
      
      Serrano
      
      aye wr (2)
      
      Phillips
      
      Ritchie

Bill Amendments

Original

B (Active)

2017-S5634 - Details

See Assembly Version of this Bill:: A7193
Law Section:: Retirement and Social Security Law
Laws Affected:: Amd §45, R & SS L

2017-S5634 - Summary

Relates to employer's duties regarding optional public retirement systems; provides for the automatic enrollment for employees whose right to membership has been made optional by the head of the public retirement system involved.

2017-S5634 - Sponsor Memo

                                 BILL NUMBER:  S5634

 TITLE OF BILL :  An act to amend the retirement and social security
law, in relation to providing for the automatic enrollment for
employees whose right to membership has been made optional by the head
of the public retirement system involved

 PURPOSE :

To provide for automatic enrollment to all pension eligible employees.

 SUMMARY OF PROVISIONS :

Section one of the bill amends § 45 of the retirement and social
security law to require employers who hire eligible employees with an
optional right to membership in a public retirement system to, after
90 days of employment, automatically enroll eligible employees who
neither affirmatively elect to join nor affirmatively elect to opt-out
of the public retirement system. The employer would be required to
provide written notice to new eligible employees that states, in
addition to their right to membership in a public retirement system,
that they will be automatically enrolled after 90 days unless the
employee opts out.

This section would not modify the right of eligible employees to join
a public retirement system as of the first date of covered employment,

but rather it creates a 90-day window for an eligible employee to
opt-out before he or she is automatically enrolled in the system.
Eligible employees who opt-out during this period would.  retain the
right to join at a later date. Employees who are mandated members of a
public retirement system are not affected by this bill, and cannot
opt-out.

This section also requires that all current eligible employees who are
not yet enrolled in a public retirement system be enrolled by
employers on October 1, 2018, unless any such current eligible
employees affirmatively opt-out of the public retirement system by
September 30, 2018. Automatic enrollment in a public retirement system
would not waive any of the eligibility requirements for previous
service credit.

Section two of the bill provides the effective date.

 JUSTIFICATION :

Currently, part-time or temporary  employees, or employees not
required to take a civil service exam, even though eligible for
membership in the public retirement system, are maintained in a
category of workers only allowed optional enrollment.  Although the
law requires employers to notify them of their optional eligibility at
the time of employment, these workers often continue to work for many
years without affirmatively enrolling in the system, thereby missing
years' worth of benefits and the financial security those benefits
should have provided in retirement.

It is not unusual to learn the story of many employees who each day
provide vital public services alongside co-workers who are covered by
a full pension only to discover, after many years on the job, that
they missed their opportunity to enroll and end up losing time earned
pension benefits when they register many years after entering the
system.This class of public employees loses valuable pension benefits
with some of them never knowing that they were entitled to a pension
plan that could have provided economic assistance which often leaves
them impoverished when they can no longer work.


It is unjust that due to a lack of information or awareness, benefits
deriving from years of public service are stolen away from employees
that have dedicated their lives to the state and local governments.
By allowing for automatic enrollment unless a worker affirmatively
opts out, all workers who are eligible will be provided the
opportunity to benefit from their retirement plan as intended, and
that this class of workers are not left pension-less due to an
innocent error at the onset of their service.

 PRIOR LEGISLATIVE HISTORY :

New bill.

 FISCAL IMPLICATIONS :

To be determined.

 EFFECTIVE DATE :
July 1, 2018.

2017-S5634 - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5634
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                              April 21, 2017
                                ___________
 
 Introduced  by  Sen.  SAVINO -- 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
   providing  for  the  automatic enrollment for employees whose right to
   membership has been made optional by the head of the public retirement
   system involved
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section  45 of the retirement and social security law, as
 added by chapter 878 of the laws of 1986, is amended to read as follows:
   § 45. Right to membership.   A. Upon the employment  of  any  employee
 whose  right  to  membership in a public retirement system of the state,
 which for purposes of this section shall include any  public  retirement
 system  other  than  the New York state teachers' retirement system, has
 been made optional by the head of the retirement  system  involved,  the
 employer shall PROVIDE THE RESPECTIVE AUTOMATIC CONTRIBUTION ARRANGEMENT
 FOR  THE  EMPLOYEE  TO  JOIN  THE  RETIREMENT  SYSTEM  NINETY DAYS AFTER
 COMMENCEMENT OF EMPLOYMENT, WITH MEMBERSHIP  IN  THE  RETIREMENT  SYSTEM
 COMMENCING  ON  THE  NINETY-FIRST  DAY AFTER COMMENCEMENT OF EMPLOYMENT,
 PROVIDED THAT, IF THE EMPLOYEE FILES WITH THE SYSTEM AN  APPLICATION  TO
 OPT  OUT  OF MEMBERSHIP WITHIN NINETY DAYS AFTER COMMENCEMENT OF EMPLOY-
 MENT, THE EMPLOYER SHALL REFRAIN FROM  ENROLLING  THE  EMPLOYEE  IN  THE
 RETIREMENT  SYSTEM  UNLESS AND UNTIL SUCH EMPLOYEE SUBSEQUENTLY FILES AN
 APPLICATION FOR MEMBERSHIP WITH THE SYSTEM. THE AUTOMATIC ENROLLMENT  OF
 OPTIONAL  EMPLOYEES  AS  PROVIDED  FOR  IN  THIS  SECTION  SHALL  NOT BE
 CONSTRUED TO MODIFY THE RIGHT OF ELIGIBLE EMPLOYEES  TO  JOIN  A  PUBLIC
 RETIREMENT  SYSTEM  AS OF THE FIRST DATE OF COVERED EMPLOYMENT BY FILING
 AN APPLICATION FOR  MEMBERSHIP  WITH  THE  SYSTEM.  THE  EMPLOYER  SHALL
 FURTHER  inform  the employee in writing of the right to join the system
 AS WELL AS THE FACT THAT THE EMPLOYEE SHALL BE ENROLLED IN  THE  RETIRE-
 MENT  SYSTEM  AFTER  THE NINETIETH DAY AFTER COMMENCEMENT OF EMPLOYMENT,
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD10847-04-7

 S. 5634                             2
 
 UNLESS SUCH EMPLOYEE FILES WITH THE SYSTEM AN APPLICATION TO OPT OUT  OF
 THE SYSTEM PRIOR TO SUCH DATE.  Each such employee shall acknowledge the
 receipt of such notice by signing a copy thereof and filing it with such
 employer[;  provided, however, the failure to inform such employee shall
 not in any way be construed to waive the requirement that membership for
 such an employee commences only when an application  for  membership  is
 filed  with  the  system,  nor shall it be construed to waive any of the
 eligibility requirements for previous service  credit].    ANY  ELIGIBLE
 EMPLOYEE  WHO  ELECTS  TO  OPT  OUT OF MEMBERSHIP IN A PUBLIC RETIREMENT
 SYSTEM WITHIN THE NINETY DAY PERIOD SHALL RETAIN THE RIGHT TO JOIN  SUCH
 SYSTEM  BY  SUBSEQUENTLY FILING AN APPLICATION FOR MEMBERSHIP SO LONG AS
 SUCH EMPLOYEE REMAINS IN COVERED EMPLOYMENT.
   B. EACH EMPLOYER SHALL ENROLL IN  THE  APPLICABLE  RETIREMENT  SYSTEM,
 EVERY  CURRENT  EMPLOYEE  ELIGIBLE  FOR,  BUT  NOT ENROLLED IN, A PUBLIC
 RETIREMENT SYSTEM, ON OCTOBER FIRST, TWO THOUSAND EIGHTEEN, UNLESS  SUCH
 EMPLOYEE  FILES AN APPLICATION WITH THE SYSTEM TO OPT OUT OF THE RETIRE-
 MENT SYSTEM BY SEPTEMBER THIRTIETH,  TWO  THOUSAND  EIGHTEEN.  AUTOMATIC
 ENROLLMENT  IN THE RETIREMENT SYSTEM SHALL NOT BE CONSTRUED TO WAIVE ANY
 OF THE ELIGIBILITY REQUIREMENTS FOR PREVIOUS SERVICE CREDIT.
   C. THE AUTOMATIC ENROLLMENT OF OPTIONAL EMPLOYEES AS PROVIDED  FOR  IN
 THIS SECTION SHALL NOT BE CONSTRUED TO MODIFY THE RIGHTS AND OBLIGATIONS
 OF  ANY  EMPLOYEE WHO IS A MANDATED MEMBER OF A PUBLIC RETIREMENT SYSTEM
 UNDER ANY APPLICABLE LAW, AND SUCH MANDATED MEMBERS MAY NOT OPT  OUT  OF
 MEMBERSHIP.
   § 2. This act shall take effect July 1, 2018.

2017-S5634A - Details

See Assembly Version of this Bill:: A7193
Law Section:: Retirement and Social Security Law
Laws Affected:: Amd §45, R & SS L

2017-S5634A - Summary

2017-S5634A - Sponsor Memo

                                 BILL NUMBER:  S5634A

 TITLE OF BILL :

An act to amend the retirement and social security law, in relation to
providing for the automatic enrollment for employees whose right to
membership has been made optional by the head of the public retirement
system involved

 PURPOSE :

To provide for automatic enrollment to all pension eligible employees.

 SUMMARY OF PROVISIONS :

Section one of the bill amends § 45 of the retirement and social
security law to require employers who hire eligible employees with an
optional right to membership in the Board of Education retirement
system to, after 90 days of employment, automatically enroll eligible
employees who neither affirmatively elect to join nor affirmatively
elect to opt-out of the public retirement system. The employer would
be required to provide written notice to new eligible employees that
states, in addition to their right to membership in the Board of
Education retirement system, that they will be automatically enrolled
after 90 days unless the employee opts out.

This section would not modify the right of eligible employees to join
a public retirement system as of the first date of covered employment,
but rather it creates a 90-day window for an eligible employee to
opt-out before he or she is automatically enrolled in the system.
Eligible employees who opt-out during this period would retain the
right to join at a later date. Employees who are mandated members of a
public retirement system are not affected by this bill, and cannot
opt-out.

This section also requires that all current eligible employees who are
not yet enrolled in a public retirement system be enrolled by
employers on October 1, 2018, unless any such current eligible
employees affirmatively opt-out of the public retirement system by
September 30, 2018. Automatic enrollment in a public retirement system
would not waive any of the eligibility requirements for previous
service credit.

Section two of the bill provides the effective date.

 JUSTIFICATION :

Currently, part-time, temporary, or those employees not required to
take a civil service exam (even though eligible for membership in the
Board of Education retirement system) are maintained in a category of
workers only allowed optional enrollment.  Although the law requires
employers to notify them of their optional eligibility at the time of
employment, these workers often continue to work for many years
without affirmatively enrolling in the system, thereby missing years'
worth of benefits and the financial security those benefits should
have provided in retirement.

Under the current optional enrollment rules, only 72% of eligible
employees eventually join BERS. Of those who have not elected to
enroll in the system, approximately 73% are female with an average age
of 34.9 years old, an average salary of approximately $25,500, and an
average of 2.4 years of past service where retirement benefits were
not accruing.

It is not unusual to learn the story of many employees who each day
provide vital public services alongside co-workers who are covered by
a full pension only to discover, after many years on the job, that
they missed their opportunity to enroll and end up losing time earned
pension benefits when they register many years after entering the
system. This class of public employees loses valuable pension benefits
with some of them never knowing that they were entitled to a pension
plan that could have provided economic assistance which often leaves
them impoverished when they can no longer work.

It is unjust that due to a lack of awareness, benefits deriving from
years of public service are stolen away from employees that have
dedicated their lives to the state and local governments. By allowing
for automatic enrollment unless a worker affirmatively opts out, all
workers who are eligible will be provided the opportunity to benefit
from their retirement plan as intended, and that this class of workers
are not left pension-less due to an innocent error at the onset of
their service.

This bill does not create a new class of retirement system member;
rather it adjusts the timetable for enrollment. Once a new employee is
hired they would automatically be enrolled in the pension system 90
days after commencement of employment. This change would eliminate the
need for any refunds, and the employee would still have the right to
join the pension system immediately upon employment. This is an
efficient implementation of automatic pension enrollment.

 PRIOR LEGISLATIVE HISTORY :

New bill.

 FISCAL IMPLICATIONS :

The New York City Office of the Actuary has estimated that the
additional annual employer contribution will be $11.0 million if no
prior years of services are purchased back by employees and $18.1
million if all years of prior service eligible for buyback are
purchased.

 EFFECTIVE DATE :
July 1, 2018.

2017-S5634A - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5634--A
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                              April 21, 2017
                                ___________
 
 Introduced  by  Sen.  SAVINO -- 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
   providing for the automatic enrollment for employees  whose  right  to
   membership has been made optional by the head of the public retirement
   system involved
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 45 of the retirement and social  security  law,  as
 added by chapter 878 of the laws of 1986, is amended to read as follows:
   §  45.  Right  to membership.   A. Upon the employment of any employee
 whose right to membership in a public retirement system  of  the  state,
 which  for  purposes of this section shall include any public retirement
 system other than the New York state teachers'  retirement  system,  has
 been  made  optional  by the head of the retirement system involved, the
 employer shall inform the employee in writing of the right to  join  the
 system.  Each such employee shall acknowledge the receipt of such notice
 by signing a copy thereof and filing it with  such  employer;  provided,
 however,  the  failure  to  inform such employee shall not in any way be
 construed to waive the requirement that membership for such an  employee
 commences  only  when  an  application  for membership is filed with the
 system, nor shall it be  construed  to  waive  any  of  the  eligibility
 requirements for previous service credit.
   B. 1. NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION A OF THIS SECTION,
 UPON  THE  EMPLOYMENT  OF  ANY EMPLOYEE WHOSE RIGHT TO MEMBERSHIP IN THE
 BOARD OF EDUCATION RETIREMENT SYSTEM HAS BEEN MADE OPTIONAL BY THE  HEAD
 OF  THE  RETIREMENT  SYSTEM  INVOLVED,  THE  EMPLOYER  SHALL PROVIDE THE
 RESPECTIVE AUTOMATIC CONTRIBUTION ARRANGEMENT FOR THE EMPLOYEE  TO  JOIN
 THE  RETIREMENT SYSTEM NINETY DAYS AFTER THE COMMENCEMENT OF EMPLOYMENT,
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD10847-06-7

 S. 5634--A                          2
 
 WITH MEMBERSHIP IN THE RETIREMENT  SYSTEM COMMENCING ON THE NINETY-FIRST
 DAY AFTER COMMENCEMENT OF EMPLOYMENT, PROVIDED  THAT,  IF  THE  EMPLOYEE
 FILES  WITH  THE  SYSTEM  AN APPLICATION TO OPT OUT OF MEMBERSHIP WITHIN
 NINETY DAYS AFTER COMMENCEMENT OF EMPLOYMENT, THE EMPLOYER SHALL REFRAIN
 FROM  ENROLLING  THE  EMPLOYEE IN THE RETIREMENT SYSTEM UNLESS AND UNTIL
 SUCH EMPLOYEE SUBSEQUENTLY FILES AN APPLICATION FOR MEMBERSHIP WITH  THE
 SYSTEM.  THE  AUTOMATIC ENROLLMENT OF OPTIONAL EMPLOYEES AS PROVIDED FOR
 IN THIS SECTION SHALL NOT BE CONSTRUED TO MODIFY THE RIGHT  OF  ELIGIBLE
 EMPLOYEES  TO JOIN THE RETIREMENT SYSTEM AS OF THE FIRST DATE OF COVERED
 EMPLOYMENT BY FILING AN APPLICATION FOR MEMBERSHIP WITH THE SYSTEM.  THE
 EMPLOYER  SHALL  FURTHER  INFORM THE EMPLOYEE IN WRITING OF THE RIGHT TO
 JOIN THE SYSTEM AS WELL AS THE FACT THAT THE EMPLOYEE SHALL BE  ENROLLED
 IN  THE  RETIREMENT SYSTEM AFTER THE NINETIETH DAY AFTER COMMENCEMENT OF
 EMPLOYMENT, UNLESS SUCH EMPLOYEE FILES WITH THE SYSTEM AN APPLICATION TO
 OPT OUT OF THE SYSTEM PRIOR TO SUCH  DATE.  ANY  ELIGIBLE  EMPLOYEE  WHO
 ELECTS  TO  OPT  OUT  OF  MEMBERSHIP IN THE RETIREMENT SYSTEM WITHIN THE
 NINETY DAY PERIOD SHALL RETAIN THE RIGHT TO JOIN SUCH SYSTEM  BY  SUBSE-
 QUENTLY  FILING  AN  APPLICATION FOR MEMBERSHIP SO LONG AS SUCH EMPLOYEE
 REMAINS IN COVERED EMPLOYMENT.
   2.  EACH EMPLOYER SHALL ENROLL IN THE RETIREMENT SYSTEM EVERY  CURRENT
 EMPLOYEE  ELIGIBLE  FOR,  BUT NOT ENROLLED IN, THE RETIREMENT SYSTEM, ON
 OCTOBER FIRST, TWO THOUSAND EIGHTEEN,  UNLESS  SUCH  EMPLOYEE  FILES  AN
 APPLICATION  WITH  THE  SYSTEM  TO  OPT  OUT OF THE RETIREMENT SYSTEM BY
 SEPTEMBER THIRTIETH, TWO THOUSAND EIGHTEEN. AUTOMATIC ENROLLMENT IN  THE
 RETIREMENT SYSTEM SHALL NOT BE CONSTRUED TO WAIVE ANY OF THE ELIGIBILITY
 REQUIREMENTS FOR PREVIOUS SERVICE CREDIT.
   3.  THE  AUTOMATIC ENROLLMENT OF OPTIONAL EMPLOYEES AS PROVIDED FOR IN
 THIS SECTION SHALL NOT BE CONSTRUED TO MODIFY THE RIGHTS AND OBLIGATIONS
 OF ANY EMPLOYEE WHO IS A MANDATED MEMBER OF A PUBLIC  RETIREMENT  SYSTEM
 UNDER  ANY  APPLICABLE LAW, AND SUCH MANDATED MEMBERS MAY NOT OPT OUT OF
 MEMBERSHIP.
   § 2. This act shall take effect July 1, 2018.

co-Sponsors

View additional co-sponsors

2017-S5634B (ACTIVE) - Details

See Assembly Version of this Bill:: A7193
Law Section:: Retirement and Social Security Law
Laws Affected:: Amd §45, R & SS L

2017-S5634B (ACTIVE) - Summary

2017-S5634B (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S5634B

 TITLE OF BILL :  An act to amend the retirement and social security
law, in relation to providing for the automatic enrollment for
employees whose right to membership has been made optional by the head
of the public retirement system involved

 PURPOSE :

To provide for automatic enrollment to all pension eligible employees.

 SUMMARY OF PROVISIONS :

Section one of the bill amends § 45 of the retirement and social
security law to require employers who hire eligible employees with an
optional right to membership in the Board of Education retirement
system to, after 90 days of employment, automatically enroll eligible
employees who neither affirmatively elect to join nor affirmatively
elect to opt-out of the public retirement system. The employer would
be required to provide written notice to new eligible employees that
states, in addition to their right to membership in the Board of
Education retirement system, that they will be automatically enrolled
after 90 days unless the employee opts out.

This section would not modify the right of eligible employees to join
a public retirement system as of the first date of covered employment,

but rather it creates a 90-day window for an eligible employee to
opt-out before he or she is automatically enrolled in the system.
Eligible employees who opt-out during this period would retain the
right to join at a later date. Employees who are mandated members of a
public retirement system are not affected by this bill, and cannot
opt-out.

This section also requires that all current eligible employees who are
not yet enrolled in a public retirement system be enrolled by
employers on October 1, 2018, unless any such current eligible
employees affirmatively opt-out of the public retirement system by
September 30, 2018. Automatic enrollment in a public retirement system
would not waive any of the eligibility requirements for previous
service credit.

Section two of the bill provides the effective date.

 JUSTIFICATION :

Currently, part-time, temporary, or those employees not required to
take a civil service exam (even though eligible for membership in the
Board of Education retirement system) are maintained in a category of
workers only allowed optional enrollment. Although the law requires
employers to notify them of their optional eligibility at the time of
employment, these workers often continue to work for many years
without affirmatively enrolling in the system, thereby missing years'
worth of benefits and the financial security those benefits should
have provided in retirement.

Under the current optional enrollment rules, only 72% of eligible
employees eventually join BERS. Of those who have not elected to
enroll in the system, approximately 73% are female with an average age
of 34.9 years old, an average salary of approximately $25,500, and an
average of 2.4 years of past service where retirement benefits were
not accruing.

It is not unusual to learn the story of many employees who each day
provide vital public services alongside co-workers who are covered by
a full pension only to discover, after many years on the job, that
they missed their opportunity to enroll and end up losing time earned
pension benefits when they register many years after entering the
system. This class of public employees loses valuable pension benefits
with some of them never knowing that they were entitled to a pension
plan that could have provided economic assistance which often leaves
them impoverished when they can no longer work.

It is unjust that due to a lack of awareness, benefits deriving from
years of public service are stolen away from employees that have
dedicated their lives to the state and local governments. By allowing
for automatic enrollment unless a worker affirmatively opts out, all
workers who are eligible will be provided the opportunity to benefit
from their retirement plan as intended, and that this class of workers
are not left pension-less due to an innocent error at the onset of
their service.

This bill does not create a new class of retirement system member;
rather it adjusts the timetable for enrollment. Once a new employee is
hired they would automatically be enrolled in the pension system 90
days after commencement of employment. This change would eliminate the
need for any refunds, and the employee would still have the right to
join the pension system immediately upon employment. This is an
efficient implementation of automatic pension enrollment.

 PRIOR LEGISLATIVE HISTORY :

New bill.

 FISCAL IMPLICATIONS :

The New York City Office of the Actuary has estimated that the
additional annual employer contribution will be $11.0 million if no
prior years of services are purchased back by employees and $18.1
million if all years of prior service eligible for buyback are
purchased.

 EFFECTIVE DATE :
July 1, 2018.

2017-S5634B (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5634--B
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                              April 21, 2017
                                ___________
 
 Introduced  by  Sen.  SAVINO -- 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  --  committee  discharged, bill
   amended, ordered reprinted as amended and recommitted to said  commit-
   tee
 
 AN  ACT  to amend the retirement and social security law, in relation to
   providing for the automatic enrollment for employees  whose  right  to
   membership has been made optional by the head of the public retirement
   system involved
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 45 of the retirement and social  security  law,  as
 added by chapter 878 of the laws of 1986, is amended to read as follows:
   §  45.  Right  to membership.   A. Upon the employment of any employee
 whose right to membership in a public retirement system  of  the  state,
 which  for  purposes of this section shall include any public retirement
 system other than the New York state teachers'  retirement  system,  has
 been  made  optional  by the head of the retirement system involved, the
 employer shall inform the employee in writing of the right to  join  the
 system.  Each such employee shall acknowledge the receipt of such notice
 by signing a copy thereof and filing it with  such  employer;  provided,
 however,  the  failure  to  inform such employee shall not in any way be
 construed to waive the requirement that membership for such an  employee
 commences  only  when  an  application  for membership is filed with the
 system, nor shall it be  construed  to  waive  any  of  the  eligibility
 requirements for previous service credit.
   B. 1. NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION A OF THIS SECTION,
 UPON  THE  EMPLOYMENT  OF  ANY EMPLOYEE WHOSE RIGHT TO MEMBERSHIP IN THE
 BOARD OF EDUCATION RETIREMENT SYSTEM HAS BEEN MADE OPTIONAL BY THE  HEAD
 OF  THE  RETIREMENT  SYSTEM  INVOLVED,  THE  EMPLOYER  SHALL PROVIDE THE
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD10847-10-7

 S. 5634--B                          2
 
 RESPECTIVE AUTOMATIC CONTRIBUTION ARRANGEMENT FOR THE EMPLOYEE  TO  JOIN
 THE  RETIREMENT SYSTEM NINETY DAYS AFTER THE COMMENCEMENT OF EMPLOYMENT,
 WITH MEMBERSHIP IN THE RETIREMENT  SYSTEM COMMENCING ON THE NINETY-FIRST
 DAY  AFTER  COMMENCEMENT  OF  EMPLOYMENT, PROVIDED THAT, IF THE EMPLOYEE
 FILES WITH THE SYSTEM AN APPLICATION TO OPT  OUT  OF  MEMBERSHIP  WITHIN
 NINETY DAYS AFTER COMMENCEMENT OF EMPLOYMENT, THE EMPLOYER SHALL REFRAIN
 FROM  ENROLLING  THE  EMPLOYEE IN THE RETIREMENT SYSTEM UNLESS AND UNTIL
 SUCH EMPLOYEE SUBSEQUENTLY FILES AN APPLICATION FOR MEMBERSHIP WITH  THE
 SYSTEM.  THE  AUTOMATIC ENROLLMENT OF OPTIONAL EMPLOYEES AS PROVIDED FOR
 IN THIS SECTION SHALL NOT BE CONSTRUED TO MODIFY THE RIGHT  OF  ELIGIBLE
 EMPLOYEES  TO JOIN THE RETIREMENT SYSTEM AS OF THE FIRST DATE OF COVERED
 EMPLOYMENT BY FILING AN APPLICATION FOR MEMBERSHIP WITH THE SYSTEM.  THE
 EMPLOYER  SHALL  FURTHER  INFORM THE EMPLOYEE IN WRITING OF THE RIGHT TO
 JOIN THE SYSTEM AS WELL AS THE FACT THAT THE EMPLOYEE SHALL BE  ENROLLED
 IN  THE  RETIREMENT SYSTEM AFTER THE NINETIETH DAY AFTER COMMENCEMENT OF
 EMPLOYMENT, UNLESS SUCH EMPLOYEE FILES WITH THE SYSTEM AN APPLICATION TO
 OPT OUT OF THE SYSTEM PRIOR TO SUCH  DATE.  ANY  ELIGIBLE  EMPLOYEE  WHO
 ELECTS  TO  OPT  OUT  OF  MEMBERSHIP IN THE RETIREMENT SYSTEM WITHIN THE
 NINETY DAY PERIOD SHALL RETAIN THE RIGHT TO JOIN SUCH SYSTEM  BY  SUBSE-
 QUENTLY  FILING  AN  APPLICATION FOR MEMBERSHIP SO LONG AS SUCH EMPLOYEE
 REMAINS IN COVERED EMPLOYMENT.
   2.  EACH EMPLOYER SHALL ENROLL IN THE RETIREMENT SYSTEM EVERY  CURRENT
 EMPLOYEE  ELIGIBLE  FOR,  BUT NOT ENROLLED IN, THE RETIREMENT SYSTEM, ON
 OCTOBER FIRST, TWO THOUSAND EIGHTEEN,  UNLESS  SUCH  EMPLOYEE  FILES  AN
 APPLICATION  WITH  THE  SYSTEM  TO  OPT  OUT OF THE RETIREMENT SYSTEM BY
 SEPTEMBER THIRTIETH, TWO THOUSAND EIGHTEEN. AUTOMATIC ENROLLMENT IN  THE
 RETIREMENT SYSTEM SHALL NOT BE CONSTRUED TO WAIVE ANY OF THE ELIGIBILITY
 REQUIREMENTS FOR PREVIOUS SERVICE CREDIT.
   3.  THE  AUTOMATIC ENROLLMENT OF OPTIONAL EMPLOYEES AS PROVIDED FOR IN
 THIS SECTION SHALL NOT BE CONSTRUED TO MODIFY THE RIGHTS AND OBLIGATIONS
 OF ANY EMPLOYEE WHO IS A MANDATED MEMBER OF A PUBLIC  RETIREMENT  SYSTEM
 UNDER  ANY  APPLICABLE LAW, AND SUCH MANDATED MEMBERS MAY NOT OPT OUT OF
 MEMBERSHIP.
   § 2. This act shall take effect July 1, 2018.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   In response to your request, this letter presents the estimated finan-
 cial impact if participation is made mandatory for the Board  of  Educa-
 tion Retirement System of the City of New York (BERS).
   The  ultimate  employer cost for this change will be determined by the
 number, ages, years of service, and salary of those employees that would
 otherwise not have elected to become member of BERS.
   In order to prepare this analysis, we were supplied a file  of  12,287
 individuals  who  are  not currently members of BERS but could voluntary
 elect to participate. This group consisted of 11,292 part-time  and  995
 full-time  employees  that  was approximately 73% female with an average
 age of 34.9, average salary of approximately $25,500, and  average  past
 service  of 2.4 years. We are also told, for calendar year 2016, employ-
 ees in Payroll Codes 745, 744 and 056  are  part-time  and  earned  0.80
 years,  0.44  years  and 0.72 years of service on average, respectively.
 Employees in Payroll Code 740 are generally full-time employees.  Final-
 ly, we were told 72% of eligible employees eventually join BERS.
   Based  on  this  data and these statistics, we have estimated that the
 additional annual employer contribution will  be  $11.0  million  if  no
 prior  years  of  service  are  purchased by these individuals and $18.1
 million  if  all  years  of  prior  service  eligible  for  buyback  are
 purchased.  These  estimates assume that the fractional years of service

 S. 5634--B                          3
 
 earned in 2016 as described above remains unchanged in the future. These
 estimates also assume a level workforce (i.e., the  number  and  salary,
 age  and service characteristics of the added group remain approximately
 the  same  in  future  years.)  Finally, for purposes of determining the
 portion of the annual employer contribution attributable to the  buyback
 of prior service, we have assumed an amortization period of 15 years (14
 payments under the Lag methodology used in the actuarial valuation.) All
 other  actuarial  assumptions  and methods are the same as those used in
 the June 30, 2016 (Lag) actuarial valuation to determine the Preliminary
 Fiscal Year 2018 employer contributions for BERS.
   If the change to mandatory participation is  made  prior  to  July  1,
 2017,  these  new  additional  members  would  likely be included in the
 census data as of June 30, 2017 and  if  so  the  increase  in  employer
 contributions to BERS would first be reflected in Fiscal Year 2019.
   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. To the
 best of my knowledge, the results contained herein have been prepared in
 accordance with the Actuarial Standards of Practice issued by the  Actu-
 arial Standards Board.

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