S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                 10477--A
 
                           I N  A S S E M B L Y
 
                               May 22, 2020
                                ___________
 
 Introduced  by  COMMITTEE  ON RULES -- (at request of M. of A. Abinanti,
   Epstein) -- read once and referred to the  Committee  on  Governmental
   Employees  -- committee discharged, bill amended, ordered reprinted as
   amended and recommitted to said committee
 
 AN ACT to provide temporary  retirement  incentive  for  certain  public
   employees

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. This act enacts into law  components  of  legislation  that
 would  establish  an  age  55/25  temporary incentive for certain public
 employees.
   § 2. Legislative findings. The legislature finds and declares that the
 retirement benefit for certain public employees who are above age 55 and
 with 25 years of service provided for in this act is intended only to be
 temporary in nature for employees who are eligible to receive and quali-
 fy for the applicable benefit during the applicable time periods  speci-
 fied  in  this  act.  Further, nothing in this act shall be construed to
 create an expectation of a future or continuing retirement  benefit  for
 any  public  employee who is not eligible to receive and qualify for the
 retirement benefits herein during the applicable time periods.
   § 3. Definitions. As used in this  act,  unless  the  context  clearly
 requires otherwise:
   (a)  "Retirement system" means the New York state and local employees'
 retirement system and the New York state teachers' retirement system.
   (b) "Teachers' retirement system" means the New York  state  teachers'
 retirement system.
   (c) "Participating employer" means an educational employer, the state-
 operated  institutions of the state university of New York, and a commu-
 nity college operating under a program of the state  university  of  New
 York,  and  which participates in a retirement system as defined in this
 section.
   (d) "Educational employer" means a participating employer which  is  a
 school  district,  a  board of cooperative educational services, a voca-
 tional education and extension board, an institution for the instruction
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD14487-06-0

 A. 10477--A                         2
 
 of the deaf and of the blind as enumerated in section 4201 of the educa-
 tion law, or a school district as enumerated in section 1 of chapter 566
 of the laws of 1967, as amended; who employ members who  participate  in
 the  New  York  state teachers' retirement system and the New York state
 and local employees' retirement system.
   (e) "Eligible employee" means a person who is a member of the New York
 State teachers' retirement system  or  the  New  York  State  and  local
 employees  retirement system and who is an employee of an educational or
 participating employer as defined in subdivision  (c)  or  (d)  of  this
 section.
   (f)  "Active  service"  means service while being paid on the payroll,
 provided that (i) a leave of absence with pay  shall  be  deemed  active
 service;  (ii)  other  approved  leave  without pay not to exceed twelve
 weeks from February 1, 2020 and the commencement of the designated  open
 period;  and (iii) the period of time subsequent to the June 2020 school
 term and on or before August  31,  2020  for  an  eligible  employee  as
 defined  in this act who is otherwise in active service on the effective
 date of this act shall be deemed active service.
   (g) "Open period" means the period  beginning  with  the  commencement
 date  as  defined in subdivision (h) of this section; provided, however,
 for the state-operated institutions of the state university of New  York
 and  community  colleges,  the  open period shall be as specified by the
 appropriate board of trustees, and  shall  be  ninety  days  in  length;
 provided  however  that there shall be only one such open period and any
 such period shall not extend beyond September 11, 2020  for  educational
 employers  and  shall not extend beyond December 31, 2020 for the state-
 operated institutions of the state university of New York and  community
 colleges. For the purposes of retirement pursuant to this act, a service
 retirement  application  must  be  filed with the appropriate retirement
 system not less than fourteen days prior to the effective  date  of  the
 retirement, unless a shorter time period is permitted under law.
   (h)  "Commencement  date"  means  the first day the retirement benefit
 mandated by this act shall be made available, which shall mean a date or
 dates on or after the effective date of this act to be determined  by  a
 participating  employer;  provided,  however,  that  for  an educational
 employer, the commencement date shall be June 30, 2020.
   § 4. Notwithstanding any other provision of law, any eligible employee
 serving in an eligible title who (a) has been continuously in the active
 service of a participating employer from February 1, 2020  to  the  date
 immediately  prior to the commencement date of the applicable open peri-
 od, (b) files an application for service retirement  that  is  effective
 during  the  open  period,  and  (c) is otherwise eligible for a service
 retirement as of the effective date of the  application  for  retirement
 shall  be entitled to the retirement benefit provided in section five of
 this act.
   § 5. Notwithstanding any other provision of law, an eligible  employee
 who  is:  (a)  a  member  of  a retirement system, and (b) entitled to a
 retirement benefit pursuant to section  four  of  this  act  may  retire
 during  the  open  period without the reduction of his or her retirement
 benefit that would otherwise be imposed by  article  11  or  15  of  the
 retirement  and social security law if he or she has attained the age of
 55 and has completed at least 25 or more years of creditable service. An
 eligible employee who is covered by the provisions of articles 11 and 15
 of the retirement  and  social  security  law  shall  retire  under  the
 provisions  of  articles 11 and 15 of the retirement and social security
 law.

 A. 10477--A                         3
 
   § 6. Notwithstanding any other provision of law, this act  shall  have
 no  impact  on  retirement incentives, options or inducements offered as
 part of a contractual agreement between an eligible employee and  eligi-
 ble  employer  which were negotiated prior to the effective date of this
 act.
   § 7. Severability clause. If any clause, sentence, paragraph, subdivi-
 sion,  section  or  part  of  this act shall be adjudged by any court of
 competent jurisdiction to be invalid, such judgment  shall  not  affect,
 impair,  or  invalidate  the remainder thereof, but shall be confined in
 its operation to the clause, sentence, paragraph,  subdivision,  section
 or part thereof directly involved in the controversy in which such judg-
 ment shall have been rendered. It is hereby declared to be the intent of
 the  legislature  that  this  act  would  have been enacted even if such
 invalid provisions had not been included herein.
   § 8. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would eliminate the early retirement reductions for Tier  2,
 3, 4, 5 and 6 members of the New York State and Local Employees' Retire-
 ment  System (ERS) and the New York State Teachers Retirement System who
 have attained age 55 and have accrued 25 years  of  creditable  service,
 who are employed by educational institutions and who retire within their
 employer's  90  day  open  election  period, which may not extend beyond
 December 31, 2020.
   If this bill is enacted, insofar as it affects the New York State  and
 Local  Employees'  Retirement System (ERS), the additional cost for each
 member who receives these benefits will vary depending on  the  member's
 age,  years of service, plans and final average salary. We estimate that
 the per-member cost could average approximately 110% of a member's final
 average salary.
   The exact number of members who would be affected by  this  cannot  be
 readily determined.
   These  costs  would  be  borne  entirely  by  the State of New York. A
 precise cost cannot be determined until  each  member  is  approved  for
 retirement under the incentive. After the election deadline, a cost will
 be  calculated  (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, 2019 actuarial valu-
 ation. Distributions and other statistics  can  be  found  in  the  2019
 Report  of  the  Actuary  and  the  2019  Comprehensive Annual Financial
 Report.
   The actuarial assumptions and methods used are described in the  2015,
 2016, 2017, 2018, and 2019 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, 2019
 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  fiscal note does not constitute a legal opinion on the viability
 of the proposed change nor is it intended to serve as a  substitute  for
 the professional judgment of an attorney.

 A. 10477--A                         4

   This estimate, dated May 6, 2020, and intended for use only during the
 2020  Legislative  Session, is Fiscal Note No. 2020-112, prepared by the
 Actuary for the New York State and Local Retirement System.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would provide a temporary retirement incentive during fiscal
 year  2020-2021.  This incentive would permit eligible members to retire
 without an early retirement reduction upon attainment of at least age 55
 with 25 years of service. Currently 30 years of service are required  in
 order  to  retire without reduction. In order to receive this benefit, a
 member must retire during the designated open period, beginning on  June
 30,  2020  and  not  extending beyond September 11, 2020 for educational
 employers. In order to be eligible, a member must be an  employee  of  a
 participating  employer.  The  cost of this incentive will be socialized
 across all employers.
   The annual cost to the employers of members  of  the  New  York  State
 Teachers'  Retirement  System  for this benefit is estimated to be $42.1
 million or .24% of payroll if this bill is enacted.
   Member data is from  the  System's  most  recent  actuarial  valuation
 files,  consisting  of  data provided by the employers to the Retirement
 System. Data distributions and statistics can be found in  the  System's
 Comprehensive  Annual  Financial  Report  (CAFR).  System  assets are as
 reported in the System's financial statements, and can also be found  in
 the CAFR. Actuarial assumptions and methods are provided in the System's
 Actuarial Valuation Report.
   The source of this estimate is Fiscal Note 2020-31 dated June 15, 2020
 prepared  by  the  Actuary  of  the  New York State Teachers' Retirement
 System and is intended for use only during the 2020 Legislative Session.
 I, Richard A. Young, am the Actuary for the  New  York  State  Teachers'
 Retirement  System.  I  am a member of the American Academy of Actuaries
 and I meet the Qualification Standards of the American Academy of  Actu-
 aries to render the actuarial opinion contained herein.