S T A T E O F N E W Y O R K
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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.