Senate Bill S6422A

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6422
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                              April 27, 2021
                                ___________
 
 Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
 
 AN  ACT  to amend the retirement and social security law, in relation to
   participation in  certain  retirement  plans  by  active  and  retired
   members and staff of the New York city council

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision a of section 445-d of the retirement and social
 security law, as added by chapter 96 of the laws of 1995, is amended  by
 adding two new paragraphs 16 and 17 to read as follows:
   16.  "ACTIVE  OR  RETIRED  EMPLOYEE  OF THE COUNCIL OF THE CITY OF NEW
 YORK" SHALL MEAN ALL DULY SWORN MEMBERS OF THE CITY COUNCIL AS  WELL  AS
 ALL  SALARIED  EMPLOYEES WHO COMPRISE THE STAFF OF THE CITY COUNCIL ON A
 FULL-TIME OR PART-TIME BASIS WHO ARE EITHER IN  ACTIVE  SERVICE  ON  THE
 EFFECTIVE DATE OF THIS PARAGRAPH OR WHO ARE RETIRED FROM SUCH SERVICE.
   17.  "RETIRED  EMPLOYEE  OF THE COUNCIL OF THE CITY OF NEW YORK" SHALL
 MEAN ALL DULY SWORN MEMBERS OF THE NEW YORK CITY COUNCIL AS WELL AS  ALL
 SALARIED EMPLOYEES WHO COMPRISE THE STAFF OF THE CITY COUNCIL ON A FULL-
 TIME OR PART-TIME BASIS WHO ARE RETIRED FROM ACTIVE SERVICE.
   §  2.  Paragraphs  1  and  6  of subdivision b of section 445-d of the
 retirement and social security law, as added by chapter 96 of  the  laws
 of 1995, are amended to read as follows:
   1. Subject to the provisions of paragraphs five and six of this subdi-
 vision,  any  person  who  is  a New York city eligible member in active
 service on the enactment date of the  age  fifty-five  improved  benefit
 retirement  program  may elect to become a participant in the age fifty-
 five improved benefit retirement program by filing, within  ninety  days
 after  such enactment date, a duly executed application for such partic-
 ipation with the retirement system of which such  person  is  a  member,
 provided  he or she is a New York city eligible member in active service
 on the date such application is filed.  NOTWITHSTANDING THIS  PROVISION,
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD06799-04-1

 S. 6422                             2
 
 A  NEW YORK CITY ELIGIBLE MEMBER IN ACTIVE SERVICE ON THE ENACTMENT DATE
 OF THE AGE FIFTY-FIVE IMPROVED BENEFIT  RETIREMENT  PROGRAM  WHO  IS  AN
 ACTIVE  OR  RETIRED  EMPLOYEE OF THE COUNCIL OF THE CITY OF NEW YORK MAY
 ELECT  TO  PARTICIPATE IN THE AGE FIFTY-FIVE IMPROVED BENEFIT RETIREMENT
 PROGRAM AT ANY TIME SUBSEQUENT TO THE ENACTMENT DATE OF SUCH PROGRAM.
   6. Notwithstanding any other provision of law  to  the  contrary,  any
 person  who  is  eligible  to  elect  to become a participant in the age
 fifty-five improved benefit retirement program pursuant to paragraph one
 or two of this subdivision for the full ninety-day period  provided  for
 in  such  applicable  paragraph,  and  who  fails  to timely file a duly
 executed application for such participation with the appropriate retire-
 ment system, shall not thereafter be eligible to become a participant in
 such program. THE PROVISIONS OF THIS PARAGRAPH  SHALL  NOT  BAR  PARTIC-
 IPATION  IN SUCH PROGRAM, HOWEVER, BY A NEW YORK CITY ELIGIBLE MEMBER IN
 ACTIVE SERVICE ON THE ENACTMENT DATE  OF  THE  AGE  FIFTY-FIVE  IMPROVED
 BENEFIT  RETIREMENT  PROGRAM WHO IS AN ACTIVE OR RETIRED EMPLOYEE OF THE
 COUNCIL OF THE CITY OF NEW YORK.
   § 3. Paragraph 1 of subdivision c of section 445-d of  the  retirement
 and  social security law, as added by chapter 96 of the laws of 1995, is
 amended to read as follows:
   1. Non-physically taxing service retirement. Notwithstanding any other
 provision of law to the contrary, a participant in  the  age  fifty-five
 improved benefit retirement program:
   (i)  who  is  otherwise  eligible to retire for service with immediate
 payability of a retirement allowance pursuant to section 13-162  of  the
 administrative code or section thirty of the BERS rules and regulations;
 and
   (ii) who has completed twenty-five or more years of credited CPP qual-
 ifying service; and
   (iii) who has attained age fifty-five; and
   (iv)  who, subject to the provisions of paragraph ten of subdivision d
 of this section, has paid, before the effective date of retirement,  all
 additional  member contributions and interest (if any) required by para-
 graphs one, four, five and six of subdivision d of this section, OR, FOR
 A NEW YORK CITY ELIGIBLE MEMBER IN ACTIVE SERVICE ON THE ENACTMENT  DATE
 OF  THE  AGE  FIFTY-FIVE  IMPROVED  BENEFIT RETIREMENT PROGRAM WHO IS AN
 ACTIVE OR RETIRED EMPLOYEE OF THE COUNCIL OF THE CITY OF NEW  YORK,  WHO
 HAS  PAID ALL ADDITIONAL MEMBER CONTRIBUTIONS PURSUANT TO PARAGRAPH FIVE
 OF SUBDIVISION D OF THIS SECTION; and
   (v) who shall be a participant in the age fifty-five improved  benefit
 retirement program in active service at the time so specified for his or
 her  retirement;  shall,  subject  to the provisions of paragraph ten of
 subdivision d of this section, be permitted to  retire  with  a  minimum
 retirement  age  of fifty-five, and the benefit reduction provisions set
 forth in subdivision a of section four hundred forty-two of this article
 shall not be applied to the calculation of such participant's retirement
 benefit.
   FOR A NEW YORK CITY ELIGIBLE MEMBER IN ACTIVE SERVICE ON THE ENACTMENT
 DATE OF THE AGE FIFTY-FIVE IMPROVED BENEFIT RETIREMENT PROGRAM WHO IS  A
 RETIRED  EMPLOYEE OF THE COUNCIL OF THE CITY OF NEW YORK, HOWEVER, THERE
 SHALL BE NO REQUIREMENT OF ACTIVE SERVICE AT  THE  TIME  OF  FILING  FOR
 RETIREMENT PROVIDED THAT SUCH EMPLOYEE HAS MET THE OTHER REQUIREMENTS OF
 THIS PARAGRAPH.
   § 4. Subdivision a of section 604-c of the retirement and social secu-
 rity  law,  as  added  by  chapter 96 of the laws of 1995, is amended by
 adding two new paragraphs 14 and 15 to read as follows:

 S. 6422                             3
 
   14. "ACTIVE OR RETIRED EMPLOYEE OF THE COUNCIL  OF  THE  CITY  OF  NEW
 YORK"  SHALL MEAN ALL DULY SWORN MEMBERS OF THE NEW YORK CITY COUNCIL AS
 WELL AS ALL SALARIED EMPLOYEES WHO COMPRISE THE STAFF OF THE CITY  COUN-
 CIL  ON  A FULL-TIME OR PART-TIME BASIS WHO ARE EITHER IN ACTIVE SERVICE
 ON  THE  EFFECTIVE  DATE  OF  THIS  PARAGRAPH  OR  WHO RETIRED FROM SUCH
 SERVICE.
   15. "RETIRED EMPLOYEE OF THE COUNCIL OF THE CITY OF  NEW  YORK"  SHALL
 MEAN  ALL DULY SWORN MEMBERS OF THE NEW YORK CITY COUNCIL AS WELL AS ALL
 SALARIED EMPLOYEES WHO COMPRISE THE STAFF OF THE CITY COUNCIL ON A FULL-
 TIME OR PART-TIME BASIS WHO ARE RETIRED FROM ACTIVE SERVICE.
   § 5. Paragraphs 1 and 7 of subdivision  b  of  section  604-c  of  the
 retirement  and  social security law, as added by chapter 96 of the laws
 of 1995, are amended to read as follows:
   1. Subject to the provisions of paragraphs five, six and seven of this
 subdivision, any person who is employed in  a  New  York  city  eligible
 position  on the enactment date of the twenty-five-year early retirement
 program, and who is a New York city eligible member in active service on
 such enactment date, may elect to become a participant  in  the  twenty-
 five-year  early  retirement program by filing, within ninety days after
 the enactment date of the twenty-five-year early retirement  program,  a
 duly  executed  application  for  such participation with the retirement
 system of which such person is a member, provided he or  she  is  a  New
 York city eligible member in active service on the date such application
 is  filed.  NOTWITHSTANDING  THIS  PROVISION,  A  NEW YORK CITY ELIGIBLE
 MEMBER IN ACTIVE SERVICE ON THE ENACTMENT DATE OF  THE  TWENTY-FIVE-YEAR
 EARLY  RETIREMENT  PROGRAM  WHO  IS AN ACTIVE OR RETIRED EMPLOYEE OF THE
 COUNCIL OF THE CITY OF NEW YORK MAY ELECT TO PARTICIPATE IN THE  TWENTY-
 FIVE-YEAR  EARLY RETIREMENT PROGRAM AT ANY TIME SUBSEQUENT TO THE ENACT-
 MENT DATE OF SUCH PROGRAM.
   7. Notwithstanding any other provision of law  to  the  contrary,  any
 person  who  is eligible to elect to become a participant in the twenty-
 five-year early retirement program pursuant to paragraph one or  two  of
 this  subdivision  for  the  full ninety-day period provided for in such
 applicable subparagraph, and who fails to timely file  a  duly  executed
 application  for  such  participation  with  the  appropriate retirement
 system, shall not thereafter be eligible to become a participant in such
 program. THE PROVISIONS OF THIS PARAGRAPH SHALL NOT BAR PARTICIPATION IN
 SUCH PROGRAM, HOWEVER, BY A NEW YORK  CITY  ELIGIBLE  MEMBER  IN  ACTIVE
 SERVICE  ON  THE ENACTMENT DATE OF THE TWENTY-FIVE-YEAR EARLY RETIREMENT
 PROGRAM WHO IS AN ACTIVE OR RETIRED EMPLOYEE OF THE COUNCIL OF THE  CITY
 OF NEW YORK.
   §  6. Paragraph  1 of subdivision c of section 604-c of the retirement
 and social security law, as added by chapter 96 of  the   laws of  1995,
 is amended to read as follows:
   1.  Non-physically  taxing  service  retirement.  A participant in the
 twenty-five year early retirement program:
   (i) who has completed twenty-five or more years of  credited  service;
 and
   (ii) who has attained age fifty-five; and
   (iii) who, subject to the provisions of paragraph ten of subdivision d
 of  this section, has paid, before the effective date of retirement, all
 additional member contributions and interest (if any) required by  para-
 graphs one, four, five and six of subdivision d of this section, OR, FOR
 A  NEW YORK CITY ELIGIBLE MEMBER IN ACTIVE SERVICE ON THE ENACTMENT DATE
 OF THE TWENTY-FIVE-YEAR EARLY RETIREMENT PROGRAM WHO  IS  AN  ACTIVE  OR
 RETIRED  EMPLOYEE  OF  THE COUNCIL OF THE CITY OF NEW YORK, WHO HAS PAID

 S. 6422                             4
 
 ALL ADDITIONAL MEMBER CONTRIBUTIONS PURSUANT TO PARAGRAPH FIVE OF SUBDI-
 VISION D OF THIS SECTION; and
   (iv)  who  files  with  the  retirement system of which he or she is a
 member an application for service retirement setting forth at what  time
 he or she desires to be retired, OR, FOR A NEW YORK CITY ELIGIBLE MEMBER
 IN  ACTIVE  SERVICE  ON THE ENACTMENT DATE OF THE TWENTY-FIVE-YEAR EARLY
 RETIREMENT PROGRAM WHO IS A RETIRED EMPLOYEE OF THE COUNCIL OF THE  CITY
 OF  NEW  YORK, WHO FILES AN APPLICATION FOR PARTICIPATION IN THE RETIRE-
 MENT PLAN DESCRIBED BY THIS SECTION; and
   (v) who shall be a participant in the twenty-five-year  early  retire-
 ment  program  in active service at the time so specified for his or her
 retirement; shall be retired pursuant to the provisions  of  this  para-
 graph affording early service retirement.
   FOR A NEW YORK CITY ELIGIBLE MEMBER IN ACTIVE SERVICE ON THE ENACTMENT
 DATE  OF  THE TWENTY-FIVE-YEAR EARLY RETIREMENT PROGRAM WHO IS A RETIRED
 EMPLOYEE OF THE COUNCIL OF THE CITY OF NEW YORK, HOWEVER, THERE SHALL BE
 NO REQUIREMENT OF ACTIVE SERVICE AT THE TIME OF  FILING  FOR  RETIREMENT
 PROVIDED THAT SUCH EMPLOYEE HAS MET THE OTHER REQUIREMENTS OF THIS PARA-
 GRAPH.
   §  7. Notwithstanding any other provision of law to the contrary, none
 of the provisions of this act shall  be  subject  to  the  appropriation
 requirement of section 25 of the retirement and social security law.
   § 8. This act shall take effect on the ninetieth day  after  it  shall
 have become a law. The board of trustees of the New York city employees'
 retirement system shall prescribe rules or regulations before the effec-
 tive  date of this act to provide that any New York city eligible member
 in active service on the enactment date of the age  fifty-five  improved
 benefit  retirement  program  or  the  twenty-five-year early retirement
 program who is an active or retired employee of the council of the  city
 of  New  York,  as defined in sections 445-d and 604-c of the retirement
 and social security law, shall be given an application to join  the  age
 fifty-five  improved  benefit retirement program or the twenty-five-year
 early retirement program, as  applicable  and  as  established  by  such
 sections, if such member is made newly eligible by this act.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY  OF  BILL: This proposed legislation would amend provisions of
 the Retirement and Social Security Law (RSSL) to reopen the 55/25  Plans
 for  active  or retired Tier 2 and 4 City Council employees who were New
 York City Employees' Retirement System (NYCERS) members and employed  in
 such position as of June 28, 1995.
   Effective Date: The 90th day after enactment.
   BACKGROUND:  Currently,  Tier 2 or Tier 4 members who were employed in
 an Eligible Position on June 28, 1995 had an option, pursuant to Chapter
 96 of the Laws of 1995, to join the 55/25 Plans by  filing  an  election
 form  with  NYCERS  within 90 days. Eligible Members who failed to elect
 the 55/25 Plans, or other plans enacted by  Chapter  96,  are  generally
 participants in a Basic 62/5 Plan.
   Under the proposed legislation, if enacted, active and retired members
 who  were  City  Council  employees on June 28, 1995 would be allowed to
 join the 55/25 Plans at  any  time  after  the  Effective  Date  of  the
 proposed  legislation.  Such  members would be required to pay any addi-
 tional member contributions required by the 55/25 Plans.
   IMPACT ON PAYABILITY: Currently, members in  a  Basic  62/5  Plan  can
 begin collecting an unreduced pension at age 62 with at least five years
 of  service,  or as early as age 55 with benefit reductions depending on
 their age of retirement. Electing  the  55/25  Plans  would  allow  such

 S. 6422                             5
 
 members  to  begin collecting an unreduced pension, assuming at least 25
 years of service, at age 55.
   Members  who have already retired with at least 25 years of service at
 retirement but whose benefit was reduced due to their age at retirement,
 would be able to elect to join the 55/25 Plans and have  their  benefits
 recalculated. They would also receive a retroactive payment equal to the
 difference between their current benefit and revised benefit as of their
 retirement date.
   ADDITIONAL  MEMBER  CONTRIBUTIONS:  Members  of  the  55/25  Plans are
 required to make, in addition to the Basic Member  Contributions  (BMCs)
 of  3%,  Additional  Member  Contributions  (AMCs) ranging from 1.85% to
 4.35% (depending on the dates of service rendered) until the  attainment
 of  25  or  30  years of credited service, depending on Tier. Active and
 retired members who join the Plans  through  this  legislation  will  be
 required  to  contribute any AMCs, with interest, they would have had to
 make had they joined the plans in 1995. It has been assumed that  inter-
 est  on  such  AMCs  would  cease accruing on the earlier of the date of
 payment or retirement date.
   FINANCIAL IMPACT - PRESENT VALUES: Based on the anticipated  group  of
 members  electing  to join the 55/25 Plans and the actuarial assumptions
 and methods described herein, the enactment of this proposed legislation
 would increase the Present Value of Future Benefits (PVFB)  by  approxi-
 mately  $2.5  million, and increase the Present Value of member contrib-
 utions by approximately $1.3  million  after  taking  into  account  the
 required  retroactive AMCs. The net result is an increase in the Present
 Value of future employer contributions of approximately $1.2 million.
   Under the Entry Age Normal cost method used to determine the  employer
 contributions  to  NYCERS,  there  would  be an increase in the Unfunded
 Accrued Liability (UAL)  of  approximately  $1.6  million  offset  by  a
 decrease  in  the  Present  Value of future employer Normal Cost of $0.4
 million.
   FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In  accordance  with
 Section 13-638.2(k-2) of the Administrative Code of the City of New York
 (ACCNY),  new UAL attributable to benefit changes are to be amortized as
 determined by the Actuary, but are generally amortized over the  remain-
 ing  working  lifetime  of  those impacted by the benefit changes. As of
 June 30, 2020, the remaining working lifetime of the active NYCERS  City
 Council  members  assumed  to elect the 55/25 Plans is approximately six
 years.
   For the purposes of this Fiscal Note, the increase in UAL  for  active
 members  was  amortized  over a six-year period (five payments under the
 One-Year Lag Methodology) using level dollar payments. For  members  who
 would  benefit  that  have terminated employment or are retired, and are
 assumed to have no remaining working lifetime, the  entire  increase  in
 UAL  would  be  recognized  immediately.  These  payments  offset by the
 decrease in the Normal Cost results in an increase  in  annual  employer
 contributions  of approximately $1.1 million in the first year. Employer
 contributions after the first year are estimated to increase by approxi-
 mately $175,000 per year.
   CONTRIBUTION TIMING: For the purposes  of  this  Fiscal  Note,  it  is
 assumed  that  the  changes  in  the  Present  Value  of future employer
 contributions 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 (OYLM)  used  to  determine
 employer  contributions,  the  increase  in employer contributions would
 first be reflected in Fiscal Year 2022.

 S. 6422                             6
 
   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.  This was supplemented by historical census data used to identi-
 fy the population of eligible members.
   The 20 NYCERS City Council members assumed to elect the 55/25 Plans as
 of June 30, 2020 include 15 active members, two deferred vested members,
 and  three  retirees.  The active members had an average age of approxi-
 mately 52.5 years, average service of approximately 29.3 years,  and  an
 average  salary  of  approximately $105,100. The deferred vested members
 had an average age of approximately 57.0 years, and average  service  of
 approximately  31.5  years.  The  retired  members had an average age of
 approximately 67.0 years, and an average annual benefit of approximately
 $45,700.
   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.
   To  determine the impact of the elective nature of the proposed legis-
 lation, a subgroup of NYCERS City Council members was developed based on
 who could potentially benefit actuarially.  The  net  Present  Value  of
 future  employer  costs  (i.e. the PVFB less the Present Value of future
 member contributions) of each  member's  benefit  was  determined  under
 their current plan and under the 55/25 Plan. If the net Present Value of
 future  employer  cost under the 55/25 Plan was greater than or equal to
 the Present Value of future employer cost  under  the  member's  current
 plan, the member was deemed to benefit actuarially.
   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 it is
 estimated that it would  produce  increases  in  the  Present  Value  of
 Employer  Contributions  and  annual  employer  contributions  that  are
 approximately 1-2% larger 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.
   * The impact of this  proposed  legislation  on  Other  Postemployment
 Benefit (OPEB) 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

 S. 6422                             7
 
 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 2021-23 dated April 23,
 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.