S T A T E O F N E W Y O R K
________________________________________________________________________
6955
2021-2022 Regular Sessions
I N A S S E M B L Y
April 14, 2021
___________
Introduced by M. of A. ABBATE -- read once and referred to the Committee
on Governmental Employees
AN ACT to amend the retirement and social security law, in relation to
service retirement benefits for certain members of the New York city
employees' retirement system
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 505 of the retirement and social security law, as
amended by chapter 18 of the laws of 2012, is amended to read as
follows:
§ 505. Service retirement benefits; police/fire members, New York city
uniformed correction/sanitation revised plan members and investigator
revised plan members. a. The normal service retirement benefit for
police/fire members, New York city uniformed correction/sanitation
revised plan members and investigator revised plan members at normal
retirement age shall be a pension equal to fifty percent of final aver-
age salary, less fifty percent of the primary social security retirement
benefit commencing at age sixty-two, as provided in section five hundred
eleven of this article, EXCEPT THAT FOR NEW YORK CITY UNIFORMED
CORRECTION/SANITATION REVISED PLAN MEMBERS OF THE NEW YORK CITY EMPLOY-
EES' RETIREMENT SYSTEM, THE NORMAL SERVICE RETIREMENT BENEFIT SHALL NOT
BE REDUCED BY THE PRIMARY SOCIAL SECURITY RETIREMENT BENEFIT COMMENCING
AT AGE SIXTY-TWO AS PROVIDED IN SECTION FIVE HUNDRED ELEVEN OF THIS
ARTICLE.
b. The early service retirement benefit for police/fire members, New
York city uniformed correction/sanitation revised plan members and
investigator revised plan members shall be a pension equal to two and
one-tenths percent of final average salary times years of credited
service at the completion of twenty years of service or upon attainment
of age sixty-two, increased by one-third of one percent of final average
salary for each month of service in excess of twenty years, but not in
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09882-03-1
A. 6955 2
excess of fifty percent of final average salary, less fifty percent of
the primary social security retirement benefit commencing at age sixty-
two as provided in section five hundred eleven of this article,
provided, however, that New York city police/fire revised plan members,
New York city uniformed correction/sanitation revised plan members and
investigator revised plan members shall not be eligible to retire for
service prior to the attainment of twenty years of credited service, AND
PROVIDED FURTHER THAT FOR NEW YORK CITY UNIFORMED CORRECTION/SANITATION
REVISED PLAN MEMBERS OF THE NEW YORK CITY EMPLOYEES' RETIREMENT SYSTEM,
THE EARLY SERVICE RETIREMENT BENEFIT SHALL NOT BE REDUCED BY THE PRIMARY
SOCIAL SECURITY RETIREMENT BENEFIT COMMENCING AT AGE SIXTY-TWO AS
PROVIDED IN SECTION FIVE HUNDRED ELEVEN OF THIS ARTICLE.
c. A police/fire member, a New York city uniformed
correction/sanitation revised plan member or an investigator revised
plan member who retires with twenty-two years of credited service or
less may become eligible for annual escalation of the service retirement
benefit if he elects to have the payment of his benefit commence on the
date he would have completed twenty-two years and one month or more of
service. In such event, the service retirement benefit shall equal two
percent of final average salary for each year of credited service, less
fifty percent of the primary social security retirement benefit commenc-
ing at age sixty-two as provided in section five hundred eleven of this
article, EXCEPT THAT FOR NEW YORK CITY UNIFORMED CORRECTION/SANITATION
REVISED PLAN MEMBERS OF THE NEW YORK CITY EMPLOYEES' RETIREMENT SYSTEM,
THE SERVICE RETIREMENT BENEFIT SHALL NOT BE REDUCED BY THE PRIMARY
SOCIAL SECURITY RETIREMENT BENEFIT COMMENCING AT AGE SIXTY-TWO AS
PROVIDED IN SECTION FIVE HUNDRED ELEVEN OF THIS ARTICLE.
§ 2. Section 511 of the retirement and social security law is amended
by adding a new subdivision h to read as follows:
H. THIS SECTION SHALL NOT APPLY TO NEW YORK CITY UNIFORMED
CORRECTION/SANITATION REVISED PLAN MEMBERS OF THE NEW YORK CITY EMPLOY-
EES' RETIREMENT SYSTEM WHO RECEIVE A SERVICE RETIREMENT BENEFIT PURSUANT
TO SECTION FIVE HUNDRED FIVE OF THIS ARTICLE OR A DEFERRED VESTED BENE-
FIT PURSUANT TO SECTION FIVE HUNDRED SIXTEEN OF THIS ARTICLE.
§ 3. Subdivision c of section 516 of the retirement and social securi-
ty law, as amended by chapter 18 of the laws of 2012, is amended to read
as follows:
c. The deferred vested benefit of police/fire members, New York city
police/fire revised plan members, New York city uniformed
correction/sanitation revised plan members or investigator revised plan
members shall be a pension commencing at early retirement age equal to
two and one-tenths percent of final average salary times years of cred-
ited service, less fifty percent of the primary social security retire-
ment benefit commencing at age sixty-two, as provided in section five
hundred eleven of this article, EXCEPT THAT FOR NEW YORK CITY UNIFORMED
CORRECTION/SANITATION REVISED PLAN MEMBERS OF THE NEW YORK CITY EMPLOY-
EES' RETIREMENT SYSTEM, THE SERVICE RETIREMENT BENEFIT SHALL NOT BE
REDUCED BY THE PRIMARY SOCIAL SECURITY RETIREMENT BENEFIT COMMENCING AT
AGE SIXTY-TWO AS PROVIDED IN SECTION FIVE HUNDRED ELEVEN OF THIS
ARTICLE. A police/fire member, a New York city police/fire revised plan
member, a New York city uniformed correction/sanitation revised plan
member or investigator revised plan member may elect to receive his
vested benefit commencing at early retirement age or age fifty-five. If
the vested benefit commences before early retirement age, the benefit
shall be reduced by one-fifteenth for each year, if any, that the
member's early retirement age is in excess of age sixty, and by one-
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thirtieth for each additional year by which the vested benefit commences
prior to early retirement age. If such vested benefit is deferred until
after such member's normal retirement age, the benefit shall be computed
and subject to annual escalation in the same manner as provided for an
early retirement benefit pursuant to subdivision c of section five
hundred five of this article.
§ 4. This act shall take effect on the sixtieth day after it shall
have become a law.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: This proposed legislation would amend Sections 505,
511, and 516 of the Retirement and Social Security Law (RSSL) to elimi-
nate the offset equal to 50% of the primary social security benefit in
the service, early service, and vested retirement benefits for Tier 3
Sanitation and Correction members in the original, revised, and enhanced
plans (i.e. the 22-Year Plans) of the New York City Employees' Retire-
ment System (NYCERS) who are subject to Article 14 of the RSSL.
Effective Date: Sixty days after enactment.
IMPACT ON BENEFITS: Currently, the RSSL Article 14 normal service
retirement, early service retirement, and vested retirement benefits for
Sanitation and Correction members in 22-Year Plans are subject to an
offset equal to 50% of the primary social security benefit as defined in
RSSL Section 511 beginning at age 62.
Under the proposed legislation, if enacted, the offset for such bene-
fits would be eliminated resulting in an increase in benefits.
FINANCIAL IMPACT - SUMMARY: The financial impact will increase as the
impacted populations of Tier 3 Sanitation and Correction members of
NYCERS increases over time. The estimated financial impact of removing
the social security offset as described above results in an increase in
Present Value of Future Benefits (PVFB) and an increase in the annual
employer contributions of NYCERS. The estimate of these increases for
Fiscal Years 2022 through 2026 based on the applicable actuarial assump-
tions and methods noted herein, are shown in the table below.
Fiscal Increase in Increase in
Year Present Value of Future Benefits Employer Contributions
($ Millions) ($ Millions)
2022 $246.0 $18.8
2023 $288.3 $21.1
2024 $330.2 $23.2
2025 $376.1 $25.2
2026 $423.2 $27.0
In accordance with Section 13-638.2(k-2) of the Administrative Code of
the City of New York (ACCNY), new Unfunded Accrued Liability (UAL)
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. As of June 30, 2020, the
remaining working lifetime of Sanitation and Correction members subject
to the Article 14 22-Year Plans is approximately 18 years.
For the purposes of this Fiscal Note, the increase in the UAL for
NYCERS was amortized over an 18-year period (17 payments under the One-
Year Lag Methodology (OYLM)) using level dollar payments.
CONTRIBUTION TIMING: For the purposes of this Fiscal Note, it is
assumed that the changes in the PVFB and annual employer contributions
would be reflected for the first time in the June 30, 2020 actuarial
valuation of NYCERS. In accordance with the One-Year Lag Methodology
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(OYLM) used to determine employer contributions, the increase in employ-
er contributions would first be reflected in Fiscal Year 2022.
CENSUS DATA: The estimates presented herein are based on the census
data used in the Preliminary June 30, 2020 (Lag) actuarial valuation of
NYCERS to determine the Preliminary Fiscal Year 2022 employer contrib-
utions.
The 7,338 active NYCERS Tier 3 Sanitation and Correction members
subject to Article 14 22-Year Plans as of June 30, 2020 had an average
age of approximately 36.2 years, average service of approximately 4.8
years, and an average salary of approximately $78,100.
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
(Lag) actuarial valuations used to determine the Preliminary Fiscal Year
2021 employer contributions of NYCERS.
New entrants were projected to replace the members expected to leave
the active population to maintain a steady-state population. New entrant
demographics and future salary increases are consistent with those used
in projections for the New York City Office of Management and Budget in
April 2020 (Preliminary Projections).
The Actuary is proposing a set of changes for use beginning with the
June 30, 2019 (Lag) actuarial valuations of NYCERS to determine the
Final Fiscal Year 2021 Employer Contributions (2021 A&M). If the 2021
A&M is enacted it is estimated that it would produce PVFB and annual
employer contributions results that are not materially different than
the results shown above.
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 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 and other New
York City agencies to implement the proposed legislation.
* Pension costs for future members of NYCERS hired on or after
7/1/2024.
* The impact of this proposed legislation on Other Postemployment
Benefit (OPEB) costs.
* Cost analyses relating to provisions contained in RSSL Section
500(c).
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.
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FISCAL NOTE IDENTIFICATION: This Fiscal Note 2021-15 dated April 2,
2021 was prepared by the Chief Actuary for the New York City Employees'
Retirement System. This estimate is intended for use only during the
2021 Legislative Session.