S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5900
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                               May 16, 2019
                                ___________
 
 Introduced by Sen. GOUNARDES -- 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 NINETEEN 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 POSSI-
 BLY 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.
 
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06637-01-9

              

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5900--A
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                               May 16, 2019
                                ___________
 
 Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
   --  committee  discharged,  bill amended, ordered reprinted as amended
   and recommitted to said committee
 
 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 NINETEEN 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 POSSI-
 BLY  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
              

 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06637-02-9

 S. 5900--A                          2
 
 are  participants  in  the  New  York  City Employees' Retirement System
 (NYCERS) or the Board of Education Retirement System of the City of  New
 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 - PRESENT VALUES: Based on the census data and  actu-
 arial  assumptions  and  methods described herein, the enactment of this
 proposed legislation would decrease the Present Value of Future Benefits
 (PVFB) by approximately $1.9 million,  decrease  the  Present  Value  of
 future  member contributions by approximately $3.8 million, and decrease
 the Actuarial Value of Assets (AVA) by approximately  $2.5  million  for
 NYCERS  and  BERS.  The  net  result is an increase in the APV of future
 employer contributions of approximately $4.4 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 $0.3  million  and  an
 increase in the APV of future employer Normal Cost of $4.1 million.
   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. As of June
 30, 2018, the remaining working lifetime  of  the  members  in  Eligible
 Carpenter Titles is approximately nine years.
   For  the  purposes  of this Fiscal Note, the increase in UAL was amor-
 tized over a nine-year period (eight payments  under  the  One-Year  Lag
 Methodology  (OYLM))  using  level  dollar  payments. A breakdown of the
 financial impact by System (in $ thousands) is shown in the table below.
 
                                       NYCERS       BERS       Total
   Actuarial Value of Asset (AVA)      $(2,502)     $(57)     $(2,559)
      Accrued Liability (AL)           $(2,168)     $(68)     $(2,236)
     Unfunded Accrued Liability
             (AL-AVA)                  $334         $(11)     $323
      Present Value of Future
       Employer Normal Cost            $4,015       $99       $4,114
      Employer Contributions           $604         $12       $616

 S. 5900--A                          3
 
   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  changes  in  the  Present  Value  of  future  employer
 contributions  and  annual employer contributions would be reflected for
 the first time in the June 30, 2019 actuarial valuation  of  NYCERS  and
 BERS.  In  accordance  with the OYLM used to determine employer contrib-
 utions, the increase in employer contributions would first be  reflected
 in Fiscal Year 2021.
   CENSUS  DATA:  The estimates presented herein are based on census data
 used in the Preliminary June  30,  2018  (Lag)  actuarial  valuation  of
 NYCERS  and  BERS  to  determine  Preliminary  Fiscal Year 2020 employer
 contributions. The following table summarizes the data for the  affected
 participants:
 
                       NYCERS          BERS        NYCERS & BERS
 Count                  294             9               303
 Average Age         55.3 years     56.1 years       55.3 years
 Average Service     12.7 years     14.5 years       12.8 years
 Average Salary       $102,300        $75,000         $101,500
 
   ACTUARIAL  ASSUMPTIONS  AND  METHODS:  The changes in the UAL, Present
 Value of future employer contributions,  and  annual  employer  contrib-
 utions presented herein have been calculated based on the same actuarial
 assumptions  and methods in effect for the June 30, 2018 (Lag) actuarial
 valuations used to determine the Preliminary Fiscal Year  2020  employer
 contributions of NYCERS and BERS.
   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 2019-25 dated May 28,
 2019 was prepared by the Chief Actuary for the New York City  Employees'
 Retirement  System  and  the Board of Education Retirement System of the
 City of New York. This estimate is intended for use only during the 2019
 Legislative Session.