S T A T E O F N E W Y O R K
________________________________________________________________________
4768--A
2021-2022 Regular Sessions
I N S E N A T E
February 11, 2021
___________
Introduced by Sens. GRIFFO, AKSHAR -- read twice and ordered printed,
and when printed to be committed to the Committee on Civil Service and
Pensions -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee
AN ACT to authorize members of the New York state and New York city
teachers' retirement systems and the New York state and local employ-
ees' retirement system to claim retirement credit for certain private
school teaching service
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Notwithstanding any other provision of law, a member of the
New York state teachers' retirement system or the New York city teach-
ers' retirement system, or any member of the New York state and local
employees' retirement system who is employed by a school district, a
board of cooperative educational services, a vocational education and
extension board, an institution for the instruction of the deaf and
blind as enumerated in section 4201 of the education law or a school
district as enumerated in section 1 of chapter 566 of the laws of 1967,
or who is employed by the state of New York as an institutional teacher
as defined by section 136 of the civil service law, shall be entitled to
obtain credit for up to five years of service rendered as a teacher
employed by a private elementary or secondary school within the state of
New York chartered by or registered with the board of regents, or in a
private college within the state of New York authorized by the board of
regents to grant degrees, which would constitute service as a teacher,
had it been performed within New York state for an employer subject to
the applicable provisions of law governing such retirement system.
§ 2. The crediting of service pursuant to this act shall be in accord-
ance with such rules and regulations as shall be adopted by the retire-
ment board of the New York state teachers' retirement system, the
retirement board of the New York city teachers' retirement system or the
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04353-03-1
S. 4768--A 2
state comptroller, as appropriate, provided that such rules and regu-
lations shall be substantially equivalent to the rules and regulations
otherwise applicable for the crediting of service pursuant to applicable
provisions of law governing each such retirement system, and provided
further that if such provisions have not expired such member makes the
applicable payments required pursuant to the provisions of sections 517
and 613, and paragraph 2 of subdivision b of section 609 of the retire-
ment and social security law.
§ 3. The service credit granted pursuant to this act shall constitute
service for the purpose of both computing the pension payable upon
retirement for service and in determining the total length of service
credited for the purpose of eligibility for a service retirement bene-
fit, but shall not be used in computing final average salary. Provided
further, no such credit shall be allowed for any service for which the
person is receiving a benefit or will be entitled to receive a benefit
at any future time from any other public or private retirement system or
plan in this state, any other state or from the federal government.
§ 4. This act shall take effect June 30, 2021. Effective immediately,
the addition, amendment and/or repeal of any rule or regulation neces-
sary for the implementation of this act on its effective date are
authorized to be made and completed on or before such effective date.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would allow members of certain public retirement systems who
are currently employed by a school district, a board of cooperative
educational services, a vocational education and extension board, an
institution for the deaf and blind or as an institutional teacher to
receive up to five years of service credit in such public retirement
systems for employment as a teacher in private schools in New York
State. However, credit will not be provided for any service for which
the member is receiving a benefit or will be entitled to receive a bene-
fit at any future time from any other public or private retirement
system or plan in this state, any other state or from the federal
government.
The additional service credit granted pursuant to this bill shall
constitute service credit for the purpose of computing the pension paya-
ble upon retirement and shall be used to determine eligibility for a
service benefit. For certain members, contributions will be required in
order to obtain such additional service credit. Each such member will be
required to make a payment of 3% (6% for Tier 6) of current compensation
per year of additional service credit granted pursuant to this bill.
Insofar as it would affect the New York State and Local Employees'
Retirement System (ERS), if this bill is enacted during the 2021 legis-
lative session, it is estimated that the past service cost will average
approximately 15% (12% for Tier 6) of an affected member's compensation
for each year of additional service credit that is purchased.
The exact number of current members as well as future members who
could be affected by this bill cannot be readily determined. Pursuant to
Section 25 of the Retirement and Social Security Law, those costs aris-
ing in ERS would be borne solely by the State of New York.
Internal Revenue Service (IRS) plan qualification issues: granting
service credit for employment rendered to any organization that may
potentially be considered a non-governmental or private employer, such
as certain types of educational institutions described in this bill,
could jeopardize the Retirement System's governmental plan status and
its exemption from ERISA. This development could result in the loss of
qualified status, which would mean the loss of tax benefits. This result
S. 4768--A 3
would substantially impair the System's value to our more than one
million participants.
Prior to the enactment of this bill, we recommend that a favorable
ruling be obtained from the IRS stating that these provisions would not
harm the qualification status of the System. It is estimated that the
costs to obtain such a ruling would be $28,000 for the services of the
IRS, and $800 per hour for legal consultants.
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.
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 February 19, 2021, and intended for use only
during the 2021 Legislative Session, is revised Fiscal Note No. 2021-84,
prepared by the Actuary for the New York State and Local Retirement
System.