Senate Bill S5526

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5526
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                              March 10, 2021
                                ___________
 
 Introduced  by  Sen. ADDABBO -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
 
 AN ACT authorizing Jonathan Grossman to apply for a recalculation of his
   retirement benefits
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Notwithstanding any provision of law to the contrary, Jona-
 than  Grossman, who joined the New York city teachers' retirement system
 as a Tier I member on January 1, 1972, who retired from such  system  on
 September 28, 2010, and who for reasons not ascribable to his own negli-
 gence  had his retirement benefits calculated without the inclusion of a
 lump sum payment for accumulated vacation,  shall  have  his  retirement
 benefits  recalculated  with  such lump sum payments, including interest
 accruing from the date of retirement, if he shall  file  an  application
 therefor  with the state comptroller on or before one year of the effec-
 tive date of this act.
   § 2. All past service costs of implementing the provisions of this act
 shall be borne by the city of New York.
   § 3. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: The proposed legislation would  provide  to  Jonathan
 Grossman, a retired Tier 1 member of the New York City Teachers' Retire-
 ment  System (TRS), an election, by filing an application with the State
 Comptroller within one year of the effective date on which the  proposed
 legislation  is  passed, to have his retirement benefits recalculated to
 include his lump sum payment for accumulated vacation in the calculation
 of his final average salary.
   Effective Date: Upon enactment.
   BACKGROUND: Mr. Grossman retired as a Tier 1 TRS member  on  September
 28,  2010.  He  currently  receives  an  annual  retirement allowance of
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD03628-02-1
              

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 $102,523 per year under the 50% Joint and Survivor with  Pop-Up  payment
 option.
   If  the  proposed  legislation  is  passed,  Mr. Grossman's retirement
 allowance would be recalculated to include in his final average salary a
 lump sum payment he received for unused vacation time, which is a  bene-
 fit  that  is  generally not afforded TRS retirees. The additional cost,
 less any required member contributions paid by Mr. Grossman, to fund the
 increased retirement allowance associated with the proposed  legislation
 would fall upon the City of New York.
   Because Tier 1 TRS members are generally permitted to take an actuari-
 al  reduction  of  their retirement allowance to account for deficits in
 member contributions, for purposes of this fiscal note,  it  is  assumed
 that  Mr. Grossman would not pay any owed member contributions resulting
 from the recalculation. Based on  this  assumption  and  application  of
 other  Tier  1  benefit calculation provisions, it is estimated that Mr.
 Grossman's annual retirement allowance would increase to $113,542.  This
 annual increase would apply prospectively as well as retroactively, less
 any  payments previously made, to Mr. Grossman's September 28, 2010 date
 of retirement.
   FINANCIAL IMPACT - PRESENT VALUES: The estimated financial  impact  of
 this  proposal  has  been calculated based on the difference between the
 present value of (1) the benefits Mr.   Grossman would receive  if  this
 proposed legislation were enacted (retroactive to his September 28, 2010
 retirement  date)  and (2) the benefits that are currently and have been
 paid to Mr.  Grossman.
   Based on the actuarial assumptions and methods described  herein,  the
 enactment  of this proposed legislation would increase the Present Value
 of Future Benefits (PVFB) and the Unfunded Accrued  Liability  (UAL)  of
 TRS by approximately $263,000 as of June 30, 2021.
   FINANCIAL  IMPACT  - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with
 Administrative  Code  of  the  City  of   New   York   (ACCNY)   Section
 13-638.2(k-2),  new  UAL attributable to benefit changes are to be amor-
 tized as determined by the Actuary  but  generally  over  the  remaining
 working lifetime of those impacted by the benefit changes.
   For  purposes  of  this Fiscal Note, since Mr. Grossman is retired and
 collecting a pension, and therefore has no remaining  working  lifetime,
 the entire increase in UAL (or PVFB) would be recognized immediately.
   OTHER COSTS: Not measured in this Fiscal Note are the following:
   *  The  initial,  additional administrative costs of TRS and other New
 York City agencies to implement the proposed legislation.
   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,  2021  actuarial
 valuation of TRS. In accordance with the One-Year Lag Methodology (OYLM)
 used  to  determine  employer  contributions,  the  increase in employer
 contributions would be reflected in Fiscal Year 2023.
   CENSUS DATA: As of June 30, 2021, Mr. Grossman will  be  approximately
 age  74,  and  will receive a pension of $102,523 per year under the 50%
 Joint and Survivor with Pop-Up payment option.
   ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the  PVFB  presented
 herein have been calculated based on the actuarial assumptions and meth-
 ods  in  effect  for the June 30, 2019 (Lag) actuarial valuation used to
 determine the Preliminary Fiscal Year  2021  employer  contributions  of
 TRS.
   The Actuary is proposing a set of changes for use in the June 30, 2019
 (Lag)  actuarial  valuations  of  TRS to determine the Final Fiscal Year

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 2021 Employer Contributions (2021 A&M). If the 2021 A&M is enacted,  the
 increase in PVFB would not be materially different from the result shown
 above.
   RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
 highly on the actuarial assumptions and methods used and are subject  to
 change  based  on  the realization of potential investment, demographic,
 contribution, and other risks. If actual experience deviates from  actu-
 arial  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.
   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.
   FISCAL  NOTE  IDENTIFICATION:  This Fiscal Note 2021-09 dated March 9,
 2021 was prepared by the Chief Actuary for the New York  City  Teachers'
 Retirement  System.    This estimate is intended for use only during the
 2021 Legislative Session.