S T A T E O F N E W Y O R K
________________________________________________________________________
7040
2021-2022 Regular Sessions
I N A S S E M B L Y
April 21, 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 a
child care leave credit for New York city uniformed correction offi-
cers who are members of the New York city uniformed
correction/sanitation revised plan
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivision h of section 513 of the retirement and social
security law, as amended by chapter 18 of the laws of 2012, is amended
to read as follows:
h. Notwithstanding any other provision of this section, any general
member in the uniformed correction force of the New York city department
of correction AND ANY MEMBER OF THE UNIFORMED FORCE OF THE NEW YORK CITY
DEPARTMENT OF CORRECTION WHO IS A NEW YORK CITY UNIFORMED
CORRECTION/SANITATION REVISED PLAN MEMBER, who is absent without pay for
a child care leave of absence pursuant to regulations of the New York
city department of correction shall be eligible for credit for such
period of child care leave provided such member files a claim for such
service credit with the retirement system by December thirty-first, two
thousand five or within ninety days of the termination of the child care
leave, whichever is later, and contributes to the retirement system an
amount which such member would have contributed during the period of
such child care leave, together with interest thereon. Service credit
provided pursuant to this subdivision shall not exceed one year of cred-
it for each period of authorized child care leave. In the event there is
a conflict between the provisions of this subdivision and the provisions
of any other law or code to the contrary, the provisions of this subdi-
vision shall govern[, provided, however, that the provisions of this
subdivision shall not apply to a member of the uniformed force of the
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06269-02-1
A. 7040 2
New York city department of correction who is a New York city uniformed
correction/sanitation revised plan member].
§ 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: This proposed legislation would amend Section 513 of
the Retirement and Social Security Law (RSSL) to permit Correction
members in the Tier 3 Revised or Enhanced plans of the New York City
Employees' Retirement System (NYCERS) to apply for and purchase up to
one year of service credit for each period of authorized unpaid child
care leave.
Effective Date: Upon enactment.
BACKGROUND: Currently, provisions permitting Correction members to
purchase service credit for the time spent while on authorized unpaid
child care leave do not apply to Correction members in the Tier 3
Revised or Enhanced plans of NYCERS.
Under the proposed legislation, if enacted, Correction members in the
Tier 3 Revised or Enhanced plans of NYCERS who take authorized unpaid
child care leave would be eligible to apply for the purchase of service
credit for the period of leave within 90 days of the termination of such
leave. To purchase such leave, members must contribute to NYCERS the
amount which would have been contributed during the period of such child
care leave, including interest. The maximum service credit that can be
purchased for each period of authorized child care leave is one year.
FINANCIAL IMPACT - PRESENT VALUES: Based on the anticipated number of
members purchasing service and the amount of service they purchase each
year, as well as the actuarial assumptions and methods described herein,
the enactment of this proposed legislation would increase the Present
Value of Future Benefits by approximately $93,700 each year, and
increase the Present Value of member contributions by approximately
$5,900 each year after taking into account the member cost of the
buyback. The net result is an increase in the Present Value of future
employer contributions of approximately $87,800 each year.
FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: Enactment of this
proposed legislation would increase employer contributions, where such
amount would depend on the number of years of eligible child care leave
service credited as well as other characteristics including the age,
years of service, and salary history of the member purchasing the
service.
Since employer contributions to NYCERS generally do not anticipate
future purchases of service by members, the financial impact would be
recognized at the time of event. Consequently, changes in employer
contributions have been estimated assuming that the increase in the
Present Value of future employer contributions will be financed over the
same time period used for actuarial losses in accordance with Section
13-638.2(k-2) of the Administrative Code of the City of New York. Using
this approach, the additional Present Value of future employer contrib-
utions would be amortized over a closed 15-year period (14 payments
under the One-Year Lag Methodology) using level dollar payments.
Based on the Actuary's actuarial assumptions and methods in effect as
of June 30, 2019, the enactment of this proposed legislation is esti-
mated to increase annual employer contributions by approximately $10,400
each year. With respect to the timing, increases in employer contrib-
utions would depend upon when members apply for and purchase the
service. Generally, increased employer contributions will first occur
the second fiscal year following processing and payment of the buyback
application.
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CENSUS DATA: For purposes of this Fiscal Note, it was assumed that the
census data had the same age, gender, and service characteristics as the
census data used in the Preliminary June 30, 2019 (Lag) actuarial valu-
ation of NYCERS to determine the Preliminary Fiscal Year 2021 employer
contributions. Active members' salaries and balances have been adjusted
to reflect estimated salary increases from June 30, 2019 to June 30,
2020.
There are currently 4,730 members in Tier 3 revised or enhanced plans
who could immediately benefit from the proposed legislation. To better
reflect the future impact of the proposed legislation, it was assumed
that the population of the Correction workforce would eventually consist
entirely of Tier 3 enhanced members with the same characteristics as the
current population of Correction members who would benefit from the
proposed legislation. These characteristics include a total of 9,689
(out of 10,015) who could potentially benefit from the proposed legis-
lation, with an average age of approximately 38.6 years, an average
service of approximately 8.3 years, and an average salary of approxi-
mately $92,700.
ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the Present Value of
future employer contributions 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 contrib-
utions of NYCERS.
The Actuary is proposing a set of changes for use in 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, the
change in Present Value of future employer contributions and annual
employer contributions would not be materially different from the result
shown above.
Supplemental data for child care leave service purchased by Correction
Tiers 1, 2, and original 3 members was provided by NYCERS. Based on this
data, an average frequency of four purchases per year was assumed and an
average of nine months of credited service was assumed for each
purchase.
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 to implement the
proposed legislation.
* The impact of this proposed legislation on Other Postemployment
Benefit 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
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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 2021-14 dated March 30,
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.