S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8126
 
                             I N  S E N A T E
 
                              March 23, 2020
                                ___________
 
 Introduced  by Sen. HARCKHAM -- 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
   the  retiree earnings cap for health care officials and workers during
   a declared public health related state of emergency

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section  212 of the retirement and social security law is
 amended by adding a new subdivision 4 to read as follows:
   4. NOTWITHSTANDING THE EARNING LIMITATIONS  FOR  RETIRED  PERSONS  SET
 FORTH  IN  THIS  SECTION,  STATE  AND LOCAL GOVERNMENTS MAY HIRE RETIRED
 PUBLIC HEALTH OFFICIALS AND WORKERS AT ANY REASONABLE EARNING  LEVEL  IN
 TIMES OF A DECLARED PUBLIC HEALTH RELATED STATE OF EMERGENCY DECLARED BY
 THE  GOVERNOR,  PROVIDED  THAT  SUCH RETIREES HIRED DURING SUCH STATE OF
 EMERGENCY ARE HIRED AND CONTINUE TO  BE  EMPLOYED  FOR  THE  PURPOSE  OF
 COMBATTING COVID-19.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This  bill  would  exempt  from  the earnings limitations set forth in
 Section 212 of the Retirement and Social Security Law (RSSL) any retired
 public health officials and workers rehired at  any  reasonable  earning
 level  in  times  of a declared public health related state of emergency
 declared by the Governor, provided that such retirees hired during  such
 state of emergency are hired and continue to be employed for the purpose
 of combatting COVID-19.
   Insofar  as  this bill affects the New York State and Local Retirement
 System (NYSLRS), if this legislation is enacted during the 2020 legisla-
 tive session, we expect there  would  be  negligible  additional  annual
 costs.    However, if large numbers of retirees are hired into positions
 with lucrative earning levels over long periods of time, there could  be
 additional  annual  costs which would be shared by the state of New York
 and all of the participating employers in the NYSLRS.
   Summary of relevant resources:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD15822-05-0

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   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.
   This estimate, dated March 16, 2020, and intended for use only  during
 the  2020  Legislative  Session, is Fiscal Note No. 2020-98, 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, as it relates to  the  New
 York  City  Pension  Funds  and  Retirement Systems (NYCRS), would amend
 Retirement and Social Security Law (RSSL)  Section  212  to  remove  the
 earnings limit of certain NYCRS retirees who have returned to employment
 in Public Service during a declared public health related state of emer-
 gency.
   Effective Date: Upon enactment.
   IMPACT  ON PENSION PAYMENTS: Retirees who return to Public Service and
 elect to be covered under the provisions of RSSL Section 212 are permit-
 ted to earn an amount not exceeding a specific dollar limit in a  calen-
 dar  year  without  loss,  suspension, or diminution of their retirement
 allowances. Once this dollar limit is reached, the retiree's pension  is
 suspended  for the remainder of that calendar year. Generally, there are
 no earnings limitations in, or following, the calendar year in which the
 retiree attains age 65.
   Currently, the dollar limitation in effect for Calendar Year 2020  and
 thereafter is $35,000.
   Under the proposed legislation, if enacted, the RSSL Section 212 post-
 retirement  Public  Service  earnings  limitation  would  be removed for
 retired health care workers hired during a declared public heath related
 state of emergency who are hired for  the  purpose  of  combatting  such
 public health crises.
   For illustrative purposes only, the table below presents the estimated
 additional  retirement  allowances paid if RSSL Section 212 post-retire-
 ment earnings limitation were removed for various sample combinations of
 post-retirement annual earnings and annual retirement allowance  amounts
 for  those retirees who are currently employed in post-retirement public
 employment and are subject to post-retirement earnings limits.
 
 Annual Retirement        Annual Post-Retirement Earnings in Calendar Year
 Allowance                     $40,000        $50,000        $60,000
 $30,000                       $3,800          $9,000        $12,500
 $40,000                       $5,000         $12,000        $16,700
 $50,000                       $6,300         $15,000        $20,800

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 $60,000                       $7,500         $18,000        $25,000
 $70,000                       $8,800         $21,000        $29,200
 
   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 Unfunded Accrued Liability attributable to benefit  changes
 are  to  be  amortized  as  determined by the Actuary, but are generally
 amortized over the remaining working lifetime of those impacted  by  the
 benefit  changes.  However,  since  changes in the applicable retirement
 allowances paid to NYCRS retirees under this  proposed  legislation  are
 not  known  in  advance,  the  increase  in pension payments due to this
 legislation would be treated as an actuarial loss. These actuarial loss-
 es would be amortized over a 15-year period (14 payments under the  One-
 Year Lag Methodology (OYLM)) using level dollar payments.
   The number of NYCRS retirees who could potentially be impacted by this
 proposed  legislation  cannot  be readily determined. Actual costs would
 depend on factors such as, but not limited to, the  number  of  retirees
 that  benefit under the legislation and the amount of their earnings and
 retirement allowances.
   Note, however, that  to  the  extent  that  the  proposed  legislation
 results  in  the  rehiring  of  retirees  who  would  not have otherwise
 returned to post-employment public service absent the  legislation,  the
 legislation is anticipated to create no additional pension cost, and may
 mitigate  cost that would have been realized from additional pensionable
 wages paid to existing NYCRS members and/or additional new hires.
   CONTRIBUTION TIMING: For the purposes  of  this  Fiscal  Note,  it  is
 assumed  that  the changes in the annual employer contributions would be
 reflected for the first time in the June 30, 2020  actuarial  valuations
 of  the  NYCRS.  In  accordance with the OYLM used to determine employer
 contributions, the increase in employer  contributions  would  first  be
 reflected in Fiscal Year 2022.
   CENSUS  DATA:  For  purposes  of  analyzing the impact of the proposed
 legislation, illustrative examples with various  salary  and  retirement
 allowance amounts have been provided above.
   ACTUARIAL  ASSUMPTIONS AND METHODS: The changes in the annual employer
 contributions presented herein have been calculated based on the actuar-
 ial assumptions and methods in effect for the June 30, 2019 (Lag)  actu-
 arial  valuations  used  to  determine  the Preliminary Fiscal Year 2021
 employer contributions of NYCRS.
   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 NYCRS 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  meth-
 ods  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 NYCRS 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

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 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 2020-13 dated  March  16,
 2020  was prepared by the Chief Actuary for the New York City Retirement
 Systems and Pension Funds. This estimate is intended for use only during
 the 2020 Legislative Session.