S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10324
 
                           I N  A S S E M B L Y
 
                              April 22, 2020
                                ___________
 
 Introduced by M. of A. LENTOL -- read once and referred to the Committee
   on Governmental Employees
 
 AN  ACT  to  amend  the  administrative code of the city of New York, in
   relation to extending the benefits of the  variable  supplements  fund
   for  transit police members of 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 (c) of subdivision 1 of section 13-191 of the
 administrative code of the city of New York, as amended by  chapter  577
 of the laws of 1992, is amended to read as follows:
   (c)  "Beneficiary".  Any person who receives a retirement allowance by
 reason of having retired, on or  after  [July  first,  nineteen  hundred
 eighty-seven]  OCTOBER  FIRST,  NINETEEN HUNDRED SIXTY-EIGHT for service
 (with credit for twenty or more years  of  service  toward  the  minimum
 period) as a transit police officer; provided, that no person who held a
 rank  or  position  as  a transit police superior officer, as defined in
 subdivision eighty-four of section 13-101 of this title who, on or after
 May first, nineteen hundred ninety-two, subsequently  became  a  transit
 police  officer shall be considered a beneficiary unless such person (1)
 subsequently performed at least three years  of  service  as  a  transit
 police  officer  or  (2)  returned  to  service,  from  the  position of
 sergeant, as a transit police officer during the eighteen  month  proba-
 tionary  period,  or such other probationary period as may be applicable
 or (3) returned to service as a transit police officer during the  three
 year  period  specified  in  paragraph (e) of subdivision one of section
 seventy-five of the civil service law, or (4) returned to service  as  a
 transit  police officer as the result of a hearing conducted pursuant to
 applicable law.
   § 2.  Paragraph (b) of subdivision 1 of section 13-192 of the adminis-
 trative code of the city of New York, as amended by chapter 720  of  the
 laws of 1994, is amended to read as follows:
   (b)  "Beneficiary".  Any person who receives a retirement allowance by
 reason of having retired, on or  after  [July  first,  nineteen  hundred

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD15695-03-0

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 eighty-seven,]  OCTOBER FIRST, NINETEEN HUNDRED SIXTY-EIGHT, for service
 (with credit for twenty or more years  of  service  toward  the  minimum
 period)  as  a  transit  police  member and as a transit police superior
 officer; provided, however, that where a person who held or holds a rank
 or position as a transit police superior officer, subsequently and on or
 after May first, nineteen hundred ninety-two became or becomes a transit
 police  officer,  and while a transit police officer, retired or retires
 for service under such circumstances that he or she would have qualified
 as a beneficiary under the provisions of paragraph  (c)  of  subdivision
 one  of  section  13-191 of this title (other than the proviso thereof),
 but did not or does not qualify as a beneficiary  under  such  paragraph
 (c) because he or she was or is disqualified by the terms of such provi-
 so,  such retiree shall nevertheless be deemed to be a beneficiary under
 the provisions of this section.
   § 3. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: This proposed legislation would amend Sections 13-191
 and 13-192 of the Administrative Code of the City of New  York  (ACCNY),
 both enacted by Chapter 844 of the Laws of 1987, to extend the eligibil-
 ity provisions providing for the payment of Transit Police Officers' and
 Transit Police Superior Officers' Variable Supplements Funds (VSF) bene-
 fits to certain retirees.
   Specifically,  this proposed legislation would provide for payments to
 former New York City Employees' Retirement System (NYCERS)  members  who
 are  retired  for  service  from  the  New York City Transit Police (TP)
 between October 1, 1968 and June 30, 1987 (Prior Retirees)  with  20  or
 more  years  of service. These benefits would be paid from the following
 VSFs (referred to hereafter as the Impacted VSFs):
   * Transit Police Officers' Variable Supplements Fund (TPOVSF), and
   *  Transit  Police  Superior  Officers'  Variable   Supplements   Fund
 (TPSOVSF).
   Effective Date: Upon enactment.
   IMPACT ON BENEFITS - VSF PAYMENTS: Each of the Impacted VSFs currently
 provides  supplemental non-pension benefits to former NYCERS members who
 retired for service on or after July 1, 1987 as TP with 20 or more years
 of service.
   The amount of VSF benefits paid  is  currently  $12,000  per  Calendar
 Year.
   These VSF benefits are payable on an annual basis around December 15th
 to  eligible  former  NYCERS  members  for their lifetimes. There are no
 optional forms of payment. Upon the death of  the  NYCERS  retiree,  VSF
 payments cease.
   If  the  proposed  legislation  were to be enacted, all Prior Retirees
 would become immediately eligible for VSF benefits on the December  15th
 subsequent to the Effective Date and for each year thereafter.
   For  the  purposes  of  this Fiscal Note, the Actuary has assumed that
 benefits payable under this proposed legislation  are  prospective  only
 (i.e. there would be no retroactive payments for VSF benefits due before
 the Effective Date for such Prior Retirees).
   FINANCIAL  IMPACT  -  PRESENT VALUES: Based on the census data and the
 actuarial assumptions and methods noted herein,  the  enactment  of  the
 proposed legislation would increase the Present Value of Future Benefits
 (PVFB)  of  the  Impacted VSFs by approximately $30.2 million as of June
 30, 2019.
   There are no active TP members of NYCERS and  therefore  there  is  no
 mechanism in place for funding the TP VSFs since the VSFs' funding allo-

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 cation  method  normally would be based on the ratio of active TP member
 salaries to salaries of all active members in NYCERS. As a  consequence,
 a  transfer  from NYCERS to the Impacted VSFs would be necessary to fund
 the additional VSF benefit obligations.
   FINANCIAL  IMPACT - EMPLOYER CONTRIBUTIONS: In accordance with Section
 13-638.2(k2) of the Administrative Code of the City of New York (ACCNY),
 new Unfunded Accrued Liability (UAL) attributable to benefit changes are
 to be amortized as determined by the Actuary, but  are  generally  amor-
 tized over the remaining working lifetime of those impacted by the bene-
 fit changes.
   For  the  purposes of this Fiscal Note, since those that would benefit
 are retired, and therefore  have  no  remaining  working  lifetime,  the
 entire  increase  in  UAL (or PVFB) of $30.2 million would be recognized
 immediately.
   CONTRIBUTION TIMING: For the purposes  of  this  Fiscal  Note,  it  is
 assumed  that  the  first VSF benefit payment would be made in December,
 2020 and therefore, changes in the PVFB, and UAL would be reflected  for
 the  first  time  in the June 30, 2019 actuarial valuation of NYCERS. In
 accordance with the One-Year Lag Methodology (OYLM)  used  to  determine
 employer  contributions, the increase in employer contributions would be
 reflected in Fiscal Year 2021.
   CENSUS DATA: The estimates presented herein are based  on  the  census
 data  used in the Preliminary June 30, 2019 (Lag) actuarial valuation of
 NYCERS to determine the Preliminary Fiscal Year 2021  employer  contrib-
 utions.
   The  414  Prior  Retirees  as  of  June 30, 2019 had an average age of
 approximately 78.9 years.
   ACTUARIAL ASSUMPTIONS AND METHODS: The changes in  the  PVFB  and  UAL
 presented herein have been calculated based on the actuarial assumptions
 and  methods  in effect for the June 30, 2019 (Lag) actuarial valuations
 used to determine the Preliminary Fiscal  Year  2021  employer  contrib-
 utions of NYCERS.
   RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
 highly on the realization of the actuarial assumptions used, as well  as
 certain  demographic  characteristics  of  NYCERS  and  other  exogenous
 factors such as investment, contribution, and  other  risks.  If  actual
 experience  deviates  from actuarial assumptions, the actual costs could
 differ from those presented herein. Costs  are  also  dependent  on  the
 actuarial  methods used, and therefore different actuarial methods could
 produce different results. Quantifying these risks is beyond  the  scope
 of this Fiscal Note.
   Not  measured in this Fiscal Note are the initial, additional adminis-
 trative costs of NYCERS and other New York City  agencies  to  implement
 the proposed legislation.
   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, a
 Member of the American Academy of Actuaries, and a Fellow of the Confer-
 ence of Consulting 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 generally accepted actuarial principles
 and  procedures  and  with the Actuarial Standards of Practice issued by
 the Actuarial Standards Board.

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   FISCAL NOTE IDENTIFICATION: This Fiscal Note 2020-27 dated  April  15,
 2020, was prepared by the Chief Actuary for the New York City Employees'
 Retirement  System.  This  estimate  is intended for use only during the
 2020 Legislative Session.