S T A T E O F N E W Y O R K
________________________________________________________________________
5088--B
2021-2022 Regular Sessions
I N A S S E M B L Y
February 10, 2021
___________
Introduced by M. of A. ABINANTI, EPSTEIN, DICKENS, THIELE, ENGLEBRIGHT,
SEAWRIGHT, McDONOUGH, PAULIN, FAHY, DeSTEFANO, BUTTENSCHON, SILLITTI,
JACOBSON, MORINELLO, M. MILLER, GANDOLFO, MIKULIN, SALKA, TAGUE,
ANGELINO -- read once and referred to the Committee on Governmental
Employees -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee -- again reported from said
committee with amendments, ordered reprinted as amended and recommit-
ted to said committee
AN ACT to provide temporary retirement incentive for certain public
employees
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. This act enacts into law components of legislation that
would establish an age 55/25 temporary incentive for certain public
employees.
§ 2. Legislative findings. The legislature finds and declares that the
retirement benefit for certain public employees who are above age 55 and
with 25 years of service provided for in this act is intended only to be
temporary in nature for employees who are eligible to receive and quali-
fy for the applicable benefit during the applicable time periods speci-
fied in this act. Further, nothing in this act shall be construed to
create an expectation of a future or continuing retirement benefit for
any public employee who is not eligible to receive and qualify for the
retirement benefits herein during the applicable time periods.
§ 3. Definitions. As used in this act, unless the context clearly
requires otherwise:
(a) "Retirement system" means the New York state and local employees'
retirement system and the New York state teachers' retirement system.
(b) "Teachers' retirement system" means the New York state teachers'
retirement system.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03609-05-1
A. 5088--B 2
(c) "Participating employer" means an educational employer, the state-
operated institutions of the state university of New York, and a commu-
nity college operating under a program of the state university of New
York, and which participates in a retirement system as defined in this
section.
(d) "Educational employer" means a participating employer which is a
school district, a board of cooperative educational services, a voca-
tional education and extension board, an institution for the instruction
of the deaf and of the blind as enumerated in section 4201 of the educa-
tion law, or a school district as enumerated in section 1 of chapter 566
of the laws of 1967, as amended; who employ members who participate in
the New York state teachers' retirement system and the New York state
and local employees' retirement system.
(e) "Eligible employee" means a person who is a member of the New York
State teachers' retirement system or the New York State and local
employees retirement system and who is an employee of an educational or
participating employer as defined in subdivision (c) or (d) of this
section.
(f) "Active service" means service while being paid on the payroll,
provided that (i) a leave of absence with pay shall be deemed active
service; (ii) other approved leave without pay not to exceed twelve
weeks from February 1, 2021 and the commencement of the designated open
period; and (iii) the period of time subsequent to the June 2021 school
term and on or before August 31, 2021 for an eligible employee as
defined in this act who is otherwise in active service on the effective
date of this act shall be deemed active service.
(g) "Open period" means the period beginning with the commencement
date as defined in subdivision (h) of this section; provided, however,
for the state-operated institutions of the state university of New York
and community colleges, the open period shall be as specified by the
appropriate board of trustees, and shall be no less than thirty days but
no longer than ninety days in length; provided however that there shall
be only one such open period and any such period shall not extend beyond
September 11, 2021 for educational employers and shall not extend beyond
December 31, 2021 for the state-operated institutions of the state
university of New York and community colleges. For the purposes of
retirement pursuant to this act, a service retirement application must
be filed with the appropriate retirement system not less than fourteen
days prior to the effective date of the retirement, unless a shorter
time period is permitted under law.
(h) "Commencement date" means the first day the retirement benefit
mandated by this act shall be made available, which shall mean a date or
dates on or after the effective date of this act to be determined by a
participating employer; provided, however, that for an educational
employer, the commencement date shall be June 30, 2021.
§ 4. Notwithstanding any other provision of law, any eligible employee
serving in an eligible title whose participating employer has elected to
participate pursuant to section five of this act and who (a) has been
continuously in the active service of a participating employer from
February 1, 2021 to the date immediately prior to the commencement date
of the applicable open period, (b) files an application for service
retirement that is effective during the open period, and (c) is other-
wise eligible for a service retirement as of the effective date of the
application for retirement shall be entitled to the retirement benefit
provided in section six of this act.
A. 5088--B 3
§ 5. On or before June 30, 2021, a participating employer as defined
in section three of this act, may elect to provide its employees the
retirement incentive authorized by this act by (a) the enactment of a
local law or (b) in the case of a participating or educational employer
which is not empowered to act by local law, by resolution of its govern-
ing body, provided however, no state or local law or resolution enacted
pursuant to this section shall in any manner supersede any local char-
ter, provided further, that for an educational employer such election
must be made by June 30, 2021. For a community college operating under
the program of the state university of New York, such election shall be
made by the board of trustees of such community college subject to the
approval of its sponsor. A copy of such local law or resolution shall be
filed with the appropriate retirement system or systems, and if applica-
ble, on forms provided by such system. The local law or resolution shall
be accompanied by the affidavit of the chief executive officer or the
comparable executive branch of the state shall be deemed to have made
election under this section upon its enactment.
§ 6. Notwithstanding any other provision of law, an eligible employee
who is: (a) a member of a retirement system, and (b) entitled to a
retirement benefit pursuant to section four of this act may retire
during the open period without the reduction of his or her retirement
benefit that would otherwise be imposed by article 11 or 15 of the
retirement and social security law if he or she has attained the age of
55 and has completed at least 25 or more years of creditable service. An
eligible employee who is covered by the provisions of articles 11 and 15
of the retirement and social security law shall retire under the
provisions of articles 11 and 15 of the retirement and social security
law.
§ 7. Notwithstanding any other provision of law, this act shall have
no impact on retirement incentives, options or inducements offered as
part of a contractual agreement between an eligible employee and eligi-
ble employer which were negotiated prior to the effective date of this
act.
§ 8. The pension benefit costs of section six of this act shall be
paid by the participating employers as provided by applicable law for
each retirement system covered by this act over a period not to exceed
five years commencing in state fiscal year ending March 31, 2023.
§ 9. Severability clause. If any clause, sentence, paragraph, subdivi-
sion, section or part of this act shall be adjudged by any court of
competent jurisdiction to be invalid, such judgment shall not affect,
impair, or invalidate the remainder thereof, but shall be confined in
its operation to the clause, sentence, paragraph, subdivision, section
or part thereof directly involved in the controversy in which such judg-
ment shall have been rendered. It is hereby declared to be the intent of
the legislature that this act would have been enacted even if such
invalid provisions had not been included herein.
§ 10. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill (A5088-A) would provide a temporary retirement incentive
during fiscal year 2021-2022. This incentive would permit eligible
members of a participating educational employer to retire without an
early retirement reduction upon attainment of at least age 55 with 25
years of service. Currently 30 years of service are required in order to
retire without reduction. In order to receive this benefit, a member
must retire during the designated open period, beginning on June 30,
2021 and not extending beyond September 11, 2021. Employers who elect to
A. 5088--B 4
participate would pay the cost of the retirement incentive over a period
not to exceed five years, beginning in the state fiscal year ending
March 31, 2023.
The annual cost, over a five-year period, to the participating employ-
ers of members of the New York State Teachers' Retirement System for
this benefit is estimated to be $69.4 million or .40% of payroll if this
bill is enacted.
Member data is from the System's most recent actuarial valuation
files, consisting of data provided by the employers to the Retirement
System. Data distributions and statistics can be found in the System's
Annual Report. System assets are as reported in the System's financial
statements, and can also be found in the System's Annual Report. Actuar-
ial assumptions and methods are provided in the System's Actuarial Valu-
ation Report except rates of retirement have been modified to reflect
participation in the incentive.
The source of this estimate is Fiscal Note 2021-53 dated May 14, 2021
prepared by the Actuary of the New York State Teachers' Retirement
System and is intended for use only during the 2021 Legislative Session.
I, Richard A. Young, am the Actuary for the New York State Teachers'
Retirement System. I am a member of the American Academy of Actuaries
and I meet the Qualification Standards of the American Academy of Actu-
aries to render the actuarial opinion contained herein.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would temporarily allow Tier 2, 3, 4, 5 and 6 members of the
New York State and Local Employees' Retirement System (ERS) and the New
York State Teachers' Retirement System who are employed by educational
institutions to retire without early age reduction at age 55 with 25
years of service. The eligible members must retire within their employ-
er's open election period, which shall be no less than thirty days but
no longer than ninety days and may not extend beyond December 31, 2021.
The cost shall be paid over a period not to exceed five years commencing
in state fiscal year ending March 31, 2023.
If this bill is enacted, insofar as it affects the ERS, the additional
cost for each member who receives these benefits will vary depending on
the member's age, years of service, plan and final average salary. We
estimate that the per-member cost could average approximately 120% of a
member's final average salary.
The exact number of members who would be affected by this cannot be
readily determined.
These costs would be borne entirely by the State of New York. A
precise cost cannot be determined until each member is approved for
retirement under the incentive. After the election deadline, a cost will
be calculated (and billed to the State) based on those benefiting from
this provision.
Summary of relevant resources:
Membership data as of March 31, 2020 was used in measuring the impact
of the proposed change, the same data used in the April 1, 2020 actuari-
al valuation. Distributions and other statistics can be found in the
2020 Report of the Actuary and the 2020 Comprehensive Annual Financial
Report.
The actuarial assumptions and methods used are described in the 2020
Annual Report to the Comptroller on Actuarial Assumptions, and the
Codes, Rules and Regulations of the State of New York: Audit and
Control.
A. 5088--B 5
The Market Assets and GASB Disclosures are found in the March 31, 2020
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 May 18, 2021, and intended for use only during
the 2021 Legislative Session, is Fiscal Note No. 2021-141, prepared by
the Actuary for the New York State and Local Retirement System.