S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4468
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              March 12, 2019
                                ___________
 
 Introduced  by  Sen. ADDABBO -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
 
 AN ACT authorizing Jonathan Grossman to apply for a recalculation of his
   retirement benefits
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Notwithstanding any provision of law to the contrary, Jona-
 than  Grossman, who joined the New York city teachers' retirement system
 as a Tier I member on January 1, 1972, who retired from such  system  on
 September 28, 2010, and who for reasons not ascribable to his own negli-
 gence  had his retirement benefits calculated without the inclusion of a
 lump sum payment for accumulated vacation,  shall  have  his  retirement
 benefits  recalculated  with  such lump sum payments, including interest
 accruing from the date of retirement, if he shall  file  an  application
 therefor  with the state comptroller on or before one year of the effec-
 tive date of this act.
   § 2. All past service costs of implementing the provisions of this act
 shall be borne by the city of New York.
   § 3. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: The proposed legislation would  provide  to  Jonathan
 Grossman, a retired Tier 1 member of the New York City Teacher's Retire-
 ment  System (TRS), an election, by filing an application with the State
 Comptroller within one year of the effective date on which the  proposed
 legislation  is  passed, to have his retirement benefits recalculated to
 include his lump sum payment for accumulated vacation in the calculation
 of his final average salary.
   Effective Date: Upon enactment.
   BACKGROUND: Mr. Grossman retired as a Tier 1 TRS member  on  September
 28,  2010.  He  currently  receives  an  annual  retirement allowance of
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01047-02-9
              

 S. 4468                             2
 
 $102,127 per year under the 50% Joint and Survivor with  Pop-Up  payment
 option.
   If  the  proposed  legislation  is  passed,  Mr. Grossman's retirement
 allowance would be recalculated to include in his final average salary a
 lump sum payment he received for unused vacation time, which is a  bene-
 fit  that  is  generally not afforded TRS retirees. The additional cost,
 less any required member contributions paid by Mr. Grossman, to fund the
 increased retirement allowance associated with the proposed  legislation
 would fall upon the City of New York.
   Because Tier 1 TRS members are generally permitted to take an actuari-
 al  reduction  of  their retirement allowance to account for deficits in
 member contributions, for purposes of this fiscal note,  it  is  assumed
 that  Mr. Grossman would not pay any owed member contributions resulting
 from the recalculation. Based on  this  assumption  and  application  of
 other  Tier  1  benefit calculation provisions, it is estimated that Mr.
 Grossman's annual retirement allowance would increase to $113,146.  This
 annual increase would apply prospectively as well as retroactively, less
 any  payments previously made, to Mr. Grossman's September 28, 2010 date
 of retirement.
   FINANCIAL IMPACT - PRESENT VALUES: The estimated financial  impact  of
 this  proposal  has  been calculated based on the difference between the
 present value of (1) the benefits Mr.   Grossman would receive  if  this
 proposed legislation were enacted (retroactive to his September 28, 2010
 retirement  date)  and (2) the benefits that are currently and have been
 paid to Mr. Grossman.
   Based on the actuarial assumptions and methods described  herein,  the
 enactment  of this proposed legislation would increase the Present Value
 of Future Benefits (PVFB) and the Unfunded Accrued  Liability  (UAL)  of
 TRS by approximately $234,000 as of June 30, 2019.
   FINANCIAL  IMPACT  - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with
 Administrative  Code  of  the  City  of   New   York   (ACCNY)   Section
 13-638.2(k-2),  new  UAL attributable to benefit changes are to be amor-
 tized as determined by the Actuary  but  generally  over  the  remaining
 working lifetime of those impacted by the benefit changes.
   For  purposes  of  this Fiscal Note, since Mr. Grossman is retired and
 collecting a pension, and therefore has no remaining  working  lifetime,
 the entire increase in UAL (or PVFB) would be recognized immediately.
   OTHER COSTS: Not measured in this Fiscal Note are the following:
   *  The  initial,  additional administrative costs of TRS and other New
 York City agencies to implement the proposed legislation.
   CONTRIBUTION TIMING: For the purposes  of  this  Fiscal  Note,  it  is
 assumed  that  the changes in the PVFB and annual employer contributions
 would be reflected for the first time in the  June  30,  2019  actuarial
 valuation of TRS. 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: As of June 30, 2018, Mr. Grossman was  approximately  age
 71, and receiving a pension of $102,127 per year under the 50% Joint and
 Survivor with Pop-Up payment option.
   ACTUARIAL  ASSUMPTIONS AND METHODS: The changes in the PVFB and annual
 employer contributions presented herein have been  calculated  based  on
 the  actuarial  assumptions and methods adopted by the Board of Trustees
 on February 28, 2019 that will be used to  determine  the  Final  Fiscal
 Year  2019  employer contributions of TRS. Please note these assumptions
 and methods are subject to change as this valuation  is  not  considered
 final until the end of Fiscal Year 2019.

 S. 4468                             3
 
   RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
 highly on the actuarial assumptions and methods used and are subject  to
 change  based  on  the realization of potential investment, demographic,
 contribution, and other risks. If actual experience deviates from  actu-
 arial  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.
   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.
   FISCAL  NOTE  IDENTIFICATION: This Fiscal Note 2019-02 dated March 11,
 2019 was prepared by the Chief Actuary for the New York  City  Teachers'
 Retirement  System.  This  estimate  is intended for use only during the
 2019 Legislative Session.