S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  8011--A
 
                             I N  S E N A T E
 
                               March 9, 2020
                                ___________
 
 Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
   printed  to  be  committed  to  the  Committee  on Local Government --
   committee discharged, bill amended, ordered reprinted as  amended  and
   recommitted to said committee
 
 AN  ACT to amend the general municipal law and the retirement and social
   security law, in relation to  increasing  certain  special  accidental
   death benefits
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision c of section 208-f  of  the  general  municipal
 law,  as  amended by chapter 382 of the laws of 2019, is amended to read
 as follows:
   c. Commencing July first, two thousand [nineteen] TWENTY  the  special
 accidental  death  benefit  paid  to  a widow or widower or the deceased
 member's children under the age of eighteen or, if a student, under  the
 age  of  twenty-three,  if the widow or widower has died, shall be esca-
 lated by adding thereto an additional percentage of the  salary  of  the
 deceased member (as increased pursuant to subdivision b of this section)
 in accordance with the following schedule:
      calendar year of death
      of the deceased member              per centum
           1977 or prior                  [246.1%] 256.5%
           1978                           [236%] 246.1%
           1979                           [226.2%] 236%
           1980                           [216.7%] 226.2%
           1981                           [207.5%] 216.7%
           1982                           [198.5%] 207.5%
           1983                           [189.8%] 198.5%
           1984                           [181.4%] 189.8%
           1985                           [173.2%] 181.4%
           1986                           [165.2%] 173.2%
           1987                           [157.5%] 165.2%
           1988                           [150.0%] 157.5%
           1989                           [142.7%] 150.0%
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD14957-05-0

 S. 8011--A                          2
 
           1990                           [135.7%] 142.7%
           1991                           [128.8%] 135.7%
           1992                           [122.1%] 128.8%
           1993                           [115.7%] 122.1%
           1994                           [109.4%] 115.7%
           1995                           [103.3%] 109.4%
           1996                            [97.4%] 103.3%
           1997                            [91.6%] 97.4%
           1998                            [86.0%] 91.6%
           1999                            [80.6%] 86.0%
           2000                            [75.4%] 80.6%
           2001                            [70.2%] 75.4%
           2002                            [65.3%] 70.2%
           2003                            [60.5%] 65.3%
           2004                            [55.8%] 60.5%
           2005                            [51.3%] 55.8%
           2006                            [46.9%] 51.3%
           2007                            [42.6%] 46.9%
           2008                            [38.4%] 42.6%
           2009                            [34.4%] 38.4%
           2010                            [30.5%] 34.4%
           2011                            [26.7%] 30.5%
           2012                            [23.0%] 26.7%
           2013                            [19.4%] 23.0%
           2014                            [15.9%] 19.4%
           2015                            [12.6%] 15.9%
           2016                             [9.3%] 12.6%
           2017                             [6.1%] 9.3%
           2018                             [3.0%] 6.1%
           2019                             [0.0%] 3.0%
           2020                             0.0%
   § 2. Subdivision c of section 361-a of the retirement and social secu-
 rity  law,  as amended by chapter 382 of the laws of 2019, is amended to
 read as follows:
   c. Commencing July first, two thousand [nineteen] TWENTY  the  special
 accidental  death  benefit  paid  to  a widow or widower or the deceased
 member's children under the age of eighteen or, if a student, under  the
 age  of  twenty-three,  if the widow or widower has died, shall be esca-
 lated by adding thereto an additional percentage of the  salary  of  the
 deceased member, as increased pursuant to subdivision b of this section,
 in accordance with the following schedule:
      calendar year of death
      of the deceased member              per centum
           1977 or prior                    [246.1%] 256.5%
           1978                             [236%] 246.1%
           1979                             [226.2%] 236%
           1980                             [216.7%] 226.2%
           1981                             [207.5%] 216.7%
           1982                             [198.5%] 207.5%
           1983                             [189.8%] 198.5%
           1984                             [181.4%] 189.8%
           1985                             [173.2%] 181.4%
           1986                             [165.2%] 173.2%
           1987                             [157.5%] 165.2%
           1988                             [150.0%] 157.5%
           1989                             [142.7%] 150.0%

 S. 8011--A                          3

           1990                             [135.7%] 142.7%
           1991                             [128.8%] 135.7%
           1992                             [122.1%] 128.8%
           1993                             [115.7%] 122.1%
           1994                             [109.4%] 115.7%
           1995                             [103.3%] 109.4%
           1996                              [97.4%] 103.3%
           1997                              [91.6%] 97.4%
           1998                              [86.0%] 91.6%
           1999                              [80.6%] 86.0%
           2000                              [75.4%] 80.6%
           2001                              [70.2%] 75.4%
           2002                              [65.3%] 70.2%
           2003                              [60.5%] 65.3%
           2004                              [55.8%] 60.5%
           2005                              [51.3%] 55.8%
           2006                              [46.9%] 51.3%
           2007                              [42.6%] 46.9%
           2008                              [38.4%] 42.6%
           2009                              [34.4%] 38.4%
           2010                              [30.5%] 34.4%
           2011                              [26.7%] 30.5%
           2012                              [23.0%] 26.7%
           2013                              [19.4%] 23.0%
           2014                              [15.9%] 19.4%
           2015                              [12.6%] 15.9%
           2016                               [9.3%] 12.6%
           2017                               [6.1%] 9.3%
           2018                               [3.0%] 6.1%
           2019                               [0.0%] 3.0%
           2020                               0.0%
   § 3. This act shall take effect July 1, 2020.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This  bill  would amend both the General Municipal Law and the Retire-
 ment and Social Security Law to increase the salary used in the computa-
 tion of the special accidental death benefit by 3%  in cases  where  the
 date of death was before 2020.
   Insofar  as  this  bill would amend the Retirement and Social Security
 Law, it is estimated that there would be an additional  annual  cost  of
 approximately  $606,000  above  the  approximately $13.6 million current
 annual cost of this benefit. This cost would be shared by the  State  of
 New York and all participating employers of the New York State and Local
 Police and Fire Retirement System.
   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: Adult 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.

 S. 8011--A                          4
 
   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.
   This  estimate,  dated  February  24,  2020, and intended for use only
 during the  2020  Legislative  Session,  is  Fiscal  Note  No.  2020-57,
 prepared  by  the  Actuary  for  the New York State and Local Retirement
 System.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: This proposed legislation would amend General Munici-
 pal Law (GML) Section 208-f(c) to increase  certain  Special  Accidental
 Death  Benefits  (SADB)  for  surviving spouses, dependent children, and
 certain other individuals (Eligible Beneficiaries) of  former  uniformed
 employees  of  the  City  of  New  York and the New York City Health and
 Hospitals Corporation, and for certain former employees of  the  Tribor-
 ough  Bridge  and Tunnel Authority, who were members of certain New York
 City Pension Funds or Retirement Systems (NYCRS) and died as  a  natural
 and  proximate  result  of  an  accident sustained in the performance of
 duty.
   Effective Date: July 1, 2020.
   BACKGROUND: Under the GML, the basic SADB is defined as:
   The salary of the deceased member at date of  death  (or,  in  certain
 instances,  a  greater  salary  based  on a higher rank or other status)
 (Final Salary), less the following payments to an Eligible Beneficiary:
   * Any NYCRS death benefit as adjusted by any Supplementation or  Cost-
 of-Living Adjustment (COLA),
   * Any Social Security death benefit, and
   * Any Workers' Compensation benefit.
   The  SADB is paid to the deceased member's surviving spouse, if alive.
 If the spouse is no longer alive, the  SADB  is  paid  to  the  deceased
 member's  children  until  age  eighteen  or until age twenty-three if a
 student. If neither a spouse nor a dependent child is  alive,  the  SADB
 may  be  paid  to  certain other individuals, if eligible, in accordance
 with certain laws related to the World Trade Center attack.
   The GML also provides that the SADB is subject to escalation based  on
 the  calendar  year in which the former member died. The SADB has tradi-
 tionally been increased by a cumulative, incremental percentage of Final
 Salary based on the calendar year of the member's death.
   IMPACT ON BENEFITS: With respect to the  NYCRS,  the  proposed  legis-
 lation  would impact the SADB payable to certain survivors of members of
 the:
   * New York City Employees' Retirement System (NYCERS),
   * New York City Police Pension Fund (POLICE), or
   * New York City Fire Pension Fund (FIRE),
   and who were employed by one of the  following  employers  in  certain
 positions:
   * New York City Police Department - Uniformed Position,
   * New York City Fire Department - Uniformed Position,
   * New York City Department of Sanitation - Uniformed Position,
   * New York City Housing Authority - Uniformed Position,
   * New York City Transit Authority - Uniformed Position,
   * New York City Department of Correction - Uniformed Position,
   *  New  York City - Uniformed Position as Emergency Medical Technician
 (EMT),

 S. 8011--A                          5
 
   * New York City Health and Hospitals Corporation - Uniformed  Position
 as EMT, or
   * Triborough Bridge and Tunnel Authority - Bridge and Tunnel Position.
   Under  the proposed legislation, effective July 1, 2020, an additional
 3.0% of Final Salary would be applied to the SADB  paid  due  to  deaths
 occurring  in each calendar year on and after 1977.  The SADB for deaths
 occurring prior to 1977 would receive  the  same  escalation  as  deaths
 occurring in 1977.
   FINANCIAL IMPACT - PRESENT VALUES: Based on the Eligible Beneficiaries
 of  deceased NYCRS members who would be impacted by this proposed legis-
 lation and the actuarial assumptions and methods described  herein,  the
 enactment  of this proposed legislation would increase the Present Value
 of Future Benefits (PVFB) by approximately $52.0 million.
   FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: As a result  of  the
 past  four  decades'  practice  of providing 3.0% COLAs on the SADB each
 year, and the likelihood that COLAs will continue to be granted  in  the
 future,  the  Actuary  assumes  that  the  SADB benefit will continue to
 increase 3.0% per year in  the  future  in  determining  NYCRS  employer
 contributions.    Therefore, the costs of this proposed legislation have
 already been accounted for and will not result in a further increase  in
 employer  contributions.  There will, however, be a decrease in employer
 contributions if the proposed legislation is not enacted.
   In accordance with Section 13-638.2(k-2) of the Administrative Code of
 the City of New York (ACCNY), new Unfunded Accrued Liability to  benefit
 changes are to be amortized as determined by the Actuary, but are gener-
 ally  amortized over the remaining working lifetime of those impacted by
 the benefit changes. However, since changes in the SADB  COLA  paid  are
 not  known  in advance, the decrease in expected pension payments due to
 this legislation not passing would be  treated  as  an  actuarial  gain.
 These  actuarial  gains  would  be  amortized  over a 15-year period (14
 payments under the One-Year Lag Methodology (OYLM)) using  level  dollar
 payments.  This  would  result  in  a  decrease in NYCRS annual employer
 contributions of approximately $6.2 million each year.
   CONTRIBUTION TIMING: For the purposes  of  this  Fiscal  Note,  it  is
 assumed  that  the changes in the PVFB and annual employer contributions
 if this proposed legislation fails to pass, would be reflected  for  the
 first  time  in  the Final June 30, 2021 actuarial valuations of NYCERS,
 POLICE, and FIRE. In accordance with the OYLM used to determine employer
 contributions, the decrease in employer  contributions  would  first  be
 reflected in Fiscal Year 2023.
   CENSUS  DATA: The estimates presented herein are based upon the census
 data for such Eligible Beneficiaries provided by NYCRS.
 
                                                  Annual Accidental Death
                                                Benefit Prior to Proposed
                    Number of Deceased Members      July 1, 2019 Increase
 Retirement System  with Eligible Survivors                  ($ Millions)
    NYCERS                         40                       $  3.7
    POLICE                        426                         48.6
    FIRE                          643                         77.3
                                  ___                         ____
    Total                       1,109                       $129.6
 
   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 in effect for the  June  30,  2019

 S. 8011--A                          6
 
 (Lag) actuarial valuations used to determine the Preliminary Fiscal Year
 2021 employer contributions of NYCERS, POLICE, and FIRE.
   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, POLICE and FIRE and other
 exogenous  factors such as investment, contribution, and other risks. If
 actual 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, POLICE,  and
 FIRE  and  other New York City agencies to implement the proposed legis-
 lation.
   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 2020-16 dated March 18,
 2020 was prepared by the Chief Actuary for the New York City  Employees'
 Retirement  System,  the New York City Police Pension Fund, and New York
 City Fire Pension Fund. This estimate is intended for  use  only  during
 the 2020 Legislative Session.