S T A T E   O F   N E W   Y O R K
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                                  8179--A
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               June 6, 2019
                                ___________
 
 Introduced by M. of A. ABBATE -- read once and referred to the Committee
   on  Governmental  Employees -- recommitted to the Committee on Govern-
   mental Employees in accordance with Assembly Rule 3, sec. 2 -- commit-
   tee discharged, bill amended, ordered reprinted as amended and  recom-
   mitted 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.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD06637-04-0

 A. 8179--A                          2
 
   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
 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 result in an increase in the present value of
 future employer contributions for NYCERS and BERS of approximately  $5.6
 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 $2.3 million and an
 increase in the present value of future employer  Normal  Cost  of  $3.3
 million. These results are summarized in the table below:
 
 Change in:                 NYCERS       BERS      Total
 Actuarial Value of         $(5,018)     $(121)    $(5,139)
 Assets (AVA)
 Accrued Liability (AL)     $(2,826)     $ (61)    $(2,887)
 Unfunded Accrued Liability $ 2,192      $ 60      $ 2,252
 (AL-AVA)
 Present Value of Future    $ 3,262      $ 43      $ 3,305
 Employer Normal Cost
 
   FINANCIAL  IMPACT  - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with
 Section 13-638.2(k-2) of the Administrative Code of the City of New York
 (ACCNY), new UAL attributable to benefit changes are to be amortized  as
 determined  by the Actuary, but are generally amortized over the remain-
 ing working lifetime of those impacted by the  benefit  changes.  As  of
 June 30, 2019, the remaining working lifetime of the members in Eligible
 Carpenter  Titles is approximately eight years for NYCERS and five years
 for BERS.

 A. 8179--A                          3
 
   For the purposes of this Fiscal Note, the increase in  UAL  was  amor-
 tized  over  an eight-year period (seven payments) for NYCERS and over a
 five-year period (four payments) for BERS under the One-Year Lag Method-
 ology (OYLM) using level dollar payments. When added to  the  change  in
 Employer Normal Cost, the estimated increase in annual employer contrib-
 utions is approximately $855,000 for NYCERS and $26,000 for BERS.
   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, 2020 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 2022.
   CENSUS  DATA:  The estimates presented herein are based on census data
 used in the Preliminary June  30,  2019  (Lag)  actuarial  valuation  of
 NYCERS  and  BERS  to  determine  Preliminary  Fiscal Year 2021 employer
 contributions.  The following table summarizes the data for the affected
 participants:

                            NYCERS       BERS        NYCERS & BERS
 Count                      268          6           274
 Average Age                56.0 years   60.2 years  56.1 years
 Average Service            13.2 years   15.6 years  13.3 years
 Average Salary             $95,600      $64,700     $94,900
 
   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, 2019 (Lag)  actuarial
 valuations  used  to determine the Preliminary Fiscal Year 2021 employer
 contributions of NYCERS and BERS.
   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 BERS and other  exoge-
 nous factors such as investment, contribution, and other risks. If actu-
 al  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 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.
   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.

 A. 8179--A                          4
 
   FISCAL NOTE IDENTIFICATION: This Fiscal Note 2020-28 dated  April  17,
 2020  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 2020
 Legislative Session.