S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8859
 
                             I N  S E N A T E
 
                               May 29, 2018
                                ___________
 
 Introduced  by  Sen.  GOLDEN -- 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
   additional  member  contributions  for  certain  members under the age
   fifty-seven retirement program
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Paragraph  1  of  subdivision  f  of section 604-d of the
 retirement and social security law is amended by adding a  new  subpara-
 graph (iv) to read as follows:
   (IV) NOTWITHSTANDING THE PROVISIONS OF SUBPARAGRAPH (II) OF THIS PARA-
 GRAPH,  A PARTICIPANT HOLDING THE TITLE OF CARPENTER, SUPERVISOR CARPEN-
 TER, SHIP CARPENTER, SUPERVISOR  SHIP  CARPENTER,  RIGGER,  DOCKBUILDER,
 SUPERVISOR  DOCKBUILDER  AND  GENERAL  SUPERVISOR  DOCKBUILDER  WHO IS A
 PARTICIPANT IN THE AGE FIFTY-SEVEN RETIREMENT PROGRAM AND WHOSE AGE  AND
 ALLOWABLE  SERVICE ARE SUCH THAT HE OR SHE COULD NOT POSSIBLY BE ABLE TO
 ACCUMULATE AT LEAST TWENTY-FIVE YEARS OF SERVICE BY THE TIME HE  OR  SHE
 REACHES  AGE  FIFTY-SEVEN,  SHALL NOT BE REQUIRED TO MAKE THE ADDITIONAL
 MEMBER CONTRIBUTION PURSUANT TO SUBPARAGRAPH  (II)  OF  THIS  PARAGRAPH.
 ANY  PARTICIPANT  IN THE TITLES LISTED IN THIS SUBPARAGRAPH WHO HAS MADE
 ADDITIONAL MEMBER CONTRIBUTIONS PURSUANT TO SUBPARAGRAPH  (II)  OF  THIS
 PARAGRAPH  PRIOR TO THE EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO
 THOUSAND SEVENTEEN THAT ADDED THIS SUBPARAGRAPH SHALL RECEIVE  A  REFUND
 OF  THE  EMPLOYEE  PORTION  OF SUCH CONTRIBUTIONS PLUS INTEREST PROVIDED
 THAT THEIR AGE AND ALLOWABLE SERVICE ARE SUCH THAT HE OR SHE  COULD  NOT
 POSSIBLY  BE ABLE TO ACCUMULATE AT LEAST TWENTY-FIVE YEARS OF SERVICE BY
 THE TIME HE OR SHE REACHES AGE FIFTY-SEVEN.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL:  This  proposed  legislation  would  amend  New  York
 Retirement  and  Social Security Law (RSSL) Section 604-d to exempt from
 the physically taxing provisions certain Tier 4  carpenter  titles,  who
 are  participants  in  the  New  York  City Employees' Retirement System
 (NYCERS) or the Board of Education Retirement System of the City of  New
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD11976-04-8

 S. 8859                             2
 
 York  (BERS)  Age  57  Retirement Program (57/5 Plan), and who would not
 benefit from the early retirement provisions for such physically  taxing
 titles.
   The  proposed  legislation  would affect 57/5 Plan participants in the
 physically  taxing  titles  of  carpenter,  supervisor  carpenter,  ship
 carpenter,  supervisor  ship  carpenter, rigger, dockbuilder, supervisor
 dockbuilder, and  general  supervisor  dockbuilder  (Eligible  Carpenter
 Title)  who  would be unable to reach the requisite 25 years of credited
 service in a physically taxing title by age 57, and would  therefore  be
 ineligible  to  take advantage of the early retirement provisions of the
 physically taxing title, which permits retirement at  age  50  (with  25
 years of credited service).
   Under  the proposed legislation, Eligible Carpenter Titles who started
 in the 57/5 Plan but will not reach 25 years of credited  service  in  a
 physically  taxing title by age 57 would no longer pay physically taxing
 Additional Member Contributions (AMCs) and would  receive  an  immediate
 refund  of  the  employee  portion (i.e. 50%) of their physically taxing
 AMCs plus interest. Such Titles would remain responsible for  applicable
 basic member contributions and applicable non-physically taxing AMCs for
 continued 57/5 Plan participation.
   Effective Date: Upon enactment.
   FINANCIAL  IMPACT - ACTUARIAL PRESENT VALUES: Based on the census date
 and actuarial assumptions and methods described herein, the enactment of
 this proposed legislation would decrease  the  Actuarial  Present  Value
 (APV) of Benefits (APVB) by approximately $2.1 million, decrease the APV
 of  future  member  contributions  by  approximately  $3.5  million  and
 decrease the Actuarial Asset Value (APV) by approximately  $2.0  million
 for  NYCERS and BERS. The net result is an increase in the APV of future
 employer contributions of approximately $3.4 million.
   Under the Entry Age Normal cost method used to determine the  employer
 contributions  to  NYCERS  and  BERS,  there would be an increase in the
 Unfunded Accrued Liability (UAL) of approximately $0.5  million  and  an
 increase in the APV future employer Normal Cost of $2.9 million.
   FINANCIAL  IMPACT  - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with
 the Administrative  Code  of  the  City  of  New  York  (ACCNY)  Section
 13-638.2(k-2),  new UAL attributable to benefit changes are to amortized
 as determined by the Actuary but generally over  the  remaining  working
 lifetime  of those impacted by the benefit changes. As of June 30, 2017,
 the remaining working lifetime of  the  members  in  Eligible  Carpenter
 Titles is approximately eight years for NYCERS and seven years for BERS.
   For  the  purposes  of this Fiscal Note, the increase in UAL was amor-
 tized over an eight-year period (seven payments under the  One-Year  Lag
 Methodology)  for NYCERS and a seven-year period (six payments under the
 One-Year Lag Methodology) for BERS using  level  dollar  payments.  This
 payment  plus  the increase in the Normal Cost results in an increase in
 annual employer contributions of approximately  $526,000  ($514,000  for
 NYCERS and $12,000 for BERS).
 
    ESTIMATED FINANCIAL IMPACT ON NYCERS AND BERS IF CERTAIN CARPENTERS
    WITHDRAW PHYSICALLY TAXING AMCs FROM THE TIER 4 57/5 PLAN AND CEASE
                          MAKING SUCH FUTURE AMCs
                                  ($000s)
 
                                         NYCERS      BERS    Total
      Actuarial Asset Value (AAV)        $(1,975)    $(45)   $(2,020)
      Actuarial Accrued Liability

 S. 8859                             3
 
      (AAL)                              $(1,481)    $(43)   $(1,524)
      Unfunded Accrued Liability
      (AAL-AAV)                          $ 494       $ 2     $ 496
      Actuarial Present Value of
      Future Employer Normal Cost        $ 2,832     $ 77    $ 2,909
      Employer Contributions             $ 514       $ 12    $ 526
 
 OTHER COSTS: Not measured in this Fiscal Note are the following:
   *  The  initial,  additional administrative costs of NYCERS, BERS, and
 other New York City agencies to implement the proposed legislation.
   * The impact of this  proposed  legislation  on  Other  Postemployment
 Benefit (OPEB) costs.
   CONTRIBUTION  TIMING:  For  the  purposes  of  this Fiscal Note, it is
 assumed that the changed in the APV of the future employer contributions
 and annual employer contributions would be reflected for the first  time
 in  the June 30, 2018 actuarial valuation of NYCERS and BERS. In accord-
 ance with the One-Year Lag Methodology (OYLM) used to determine employer
 contributions, the increase in employer  contributions  would  be  first
 reflected in the Fiscal Year 2020
   CENSUS  DATA:  The estimates presented herein are based on census data
 used in the Preliminary June  30,  2017  (Lag)  actuarial  valuation  of
 NYCERS  and  BERS  to  determine  Preliminary  Fiscal Year 2019 employer
 contributions. The following table summarizes the data for the  affected
 participants:
                          NYCERS         BERS           Total
      Count               259            7              266
      Average Age         54.4 years     54.4 years     54.4 years
      Average Service     12.2 years     14.9 years     12.3 years
      Average Salary      $102,300       $98,900        $102,200
   ACTUARIAL  ASSUMPTIONS  AND  METHODS:  The  changes in the UAL, APV of
 future  employer  contributions,  and  annual   employer   contributions
 presented  herein  have  been  calculated  based  on  the same actuarial
 assumptions and methods in effect for the June 30, 2017 (Lag)  actuarial
 valuations  used  to determine the Preliminary Fiscal Year 2019 employer
 contributions of NYCERS and BERS.  Please  note  these  assumptions  and
 methods  are subject to change as this valuation is not considered final
 until the end of Fiscal Year 2019.
   STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief  Actu-
 ary  for,  and  independent of, the New York City Retirement Systems and
 Pension Funds. I am a Fellow of the Society of  Actuaries,  an  Enrolled
 Actuary  under  the  Employee Retirement Income and Security Act of 1974
 (ERISA), a Member of the American Academy of Actuaries, and a Fellow  of
 the  Conference of Consulting Actuaries. I meet the Qualification Stand-
 ards of the American Academy of Actuaries to render the actuarial  opin-
 ion contained herein. To the best of my knowledge, the results contained
 herein have been prepared in accordance with generally accepted actuari-
 al  principles  and procedures and with the Actuarial Standards of Prac-
 tice issued by the Actuarial Standards Board.
   FISCAL NOTE IDENTIFICATION: This Fiscal Note  2018-30  dated  May  23,
 2018, was prepared by the Chief Actuary for the New York City Employees'
 Retirement  System  and Board of Education Retirement System of the City
 of New York. This estimate is intended for  use  only  during  the  2018
 Legislative Session.