Senate Bill S6651B

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6651
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                               May 11, 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, the education
   law and the administrative code of the city of New York,  in  relation
   to providing cost-of-living adjustments

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision a of section 78-a of the retirement and  social
 security law, as added by chapter 125 of the laws of 2000, is amended to
 read as follows:
   a.  [A]  EFFECTIVE ON THE FIRST DAY OF SEPTEMBER, TWO THOUSAND TWENTY-
 ONE, A cost-of-living adjustment shall be payable on the basis  provided
 for  in  this  section  to:  (i)  all  pensioners  who have attained age
 [sixty-two] FIFTY-FIVE and have been retired for five years;  (ii)  [all
 pensioners  who  have  attained age fifty-five and have been retired for
 ten years; (iii)] all disability pensioners regardless of age  who  have
 been retired for five years; and [(iv)] (III) all recipients of an acci-
 dental  death  benefit  regardless  of  age who have been receiving such
 benefit for five years.
   § 2. Subdivision a of section 378-a of the retirement and social secu-
 rity law, as added by chapter 125 of the laws of  2000,  is  amended  to
 read as follows:
   a.  [A]  EFFECTIVE ON THE FIRST DAY OF SEPTEMBER, TWO THOUSAND TWENTY-
 ONE, A cost-of-living adjustment shall be payable on the basis  provided
 for  in  this  section  to:  (i)  all  pensioners  who have attained age
 [sixty-two] FIFTY-FIVE and have been retired for five  years;  AND  (ii)
 [all  pensioners  who have attained age fifty-five and have been retired
 for ten years; and (iii)] all disability pensioners  regardless  of  age
 who have been retired for five years.
   §  3. Subdivision a of section 532-a of the education law, as added by
 chapter 125 of the laws of 2000, is amended to read as follows:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD09820-03-1

 S. 6651                             2
 
   a. [A] EFFECTIVE ON THE FIRST DAY OF SEPTEMBER, TWO  THOUSAND  TWENTY-
 ONE,  A cost-of-living adjustment shall be payable on the basis provided
 for in this section  to:  (i)  all  pensioners  who  have  attained  age
 [sixty-two]  FIFTY-FIVE  and have been retired for five years; (ii) [all
 pensioners  who  have  attained age fifty-five and have been retired for
 ten years; (iii)] all disability pensioners regardless of age  who  have
 been retired for five years; and [(iv)] (III) all recipients of an acci-
 dental  death  benefit  regardless  of  age who have been receiving such
 benefit for five years.
   § 4. Subdivision a of section 13-696 of the administrative code of the
 city of New York, as amended by chapter 288 of  the  laws  of  2001,  is
 amended to read as follows:
   a.  [A]  EFFECTIVE ON THE FIRST DAY OF SEPTEMBER, TWO THOUSAND TWENTY-
 ONE, A cost-of-living adjustment shall be payable to retired members  of
 the New York city employees' retirement system, the New York city teach-
 ers'  retirement  system, the New York city police pension fund, the New
 York city fire department pension fund,  the  New  York  city  board  of
 education  retirement  system  or  the  relief  and  pension fund of the
 department of street cleaning provided for in  subchapter  one  of  this
 chapter  on  the  basis provided for in this section to: (i) all retired
 members who have attained  age  [sixty-two]  FIFTY-FIVE  and  have  been
 retired  for five years; (ii) [all retired members who have attained age
 fifty-five and have been retired for ten years; (iii)] all  members  who
 retired  for disability regardless of age who have been retired for five
 years; and [(iv)] (III) all recipients of an  accidental  death  benefit
 regardless of age who have been receiving such benefit for five years.
   § 5. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This  bill  would  provide an increase in the defined benefit cost-of-
 living adjustment (COLA) for New York public retirement systems.  Start-
 ing with a payment in September 2021, COLA will be payable to pensioners
 who have attained age fifty-five and been retired at least five years.
   Insofar  as  this bill affects the New York State and Local Employees'
 Retirement System, pursuant to Section 25 of the Retirement  and  Social
 Security  Law,  the increased costs would be borne entirely by the State
 of New York and would require an itemized  appropriation  sufficient  to
 pay  the  cost of the provision. If this bill were enacted, the increase
 in the present value of benefits would be approximately $407 million.
   Insofar as this bill affects the New York State and Local  Police  and
 Fire  Retirement  System  (PFRS), the increased costs would be shared by
 the State of New York and the participating employers in  the  PFRS.  If
 this  bill  were  enacted, the increase in the present value of benefits
 would be approximately $85 million. The estimated first year cost  would
 be approximately $1.8 million to the State of New York and approximately
 $7.5 million to the participating employers in the PFRS.
   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.

 S. 6651                             3
 
   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 May 7, 2021, and intended for use only during the
 2021  Legislative  Session, is Fiscal Note No. 2021-135, prepared by the
 Actuary for the New York State and Local Retirement System.
   FISCAL NOTE.-- Pursuant to Legislative Law, Section 50:
   In as much as this bill would impact members and employers of the  New
 York  State Teachers' Retirement System (NYSTRS), this bill (legislative
 bill draft 09820-01-1) would amend subdivision a of Section 532-a of the
 Education Law to lower the required eligibility age for the cost-of-liv-
 ing adjustment (COLA) to all pensioners retired for service  to  age  55
 with  five years of retirement. The current COLA eligibility requirement
 is the earlier of: 1) age 62 and five years of retirement, or 2) age  55
 and ten years or retirement. This change would be effective in September
 of 2021.
   The  annual  cost  to the participating employers of members of NYSTRS
 for this benefit is estimated to be $14.3 million or .08% of payroll  if
 this bill is enacted.
   Member  data  is  from  the  System's  most recent actuarial valuation
 files, consisting of data provided by the employers  to  the  Retirement
 System.   Data distributions and statistics can be found in the System's
 Annual Report. System assets and GASB disclosures are  reported  in  the
 System's  financial  statements  and  can  also be found in the System's
 Annual Report. Actuarial assumptions and methods  are  provided  in  the
 System's Actuarial Valuation Report.
   The  source  of this estimate is Fiscal Note 2021-29 dated May 5, 2021
 prepared by the Actuary of  the  New  York  State  Teachers'  Retirement
 System and is intended for use only during the 2021 Legislative Session.
 I,  Richard  A.  Young,  am the Actuary for the New York State Teachers'
 Retirement System. I am a member of the American  Academy  of  Actuaries
 and  I meet the Qualification Standards of the American Academy of Actu-
 aries to render the actuarial opinion contained herein.

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6651--A
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                               May 11, 2021
                                ___________
 
 Introduced by Sen. GOUNARDES -- 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 amend the retirement and social security  law,  the  education
   law  and  the administrative code of the city of New York, in relation
   to providing cost-of-living adjustments
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Subdivision a of section 78-a of the retirement and social
 security law, as added by chapter 125 of the laws of 2000, is amended to
 read as follows:
   a. [A] EFFECTIVE ON THE FIRST DAY OF SEPTEMBER, TWO  THOUSAND  TWENTY-
 ONE,  A cost-of-living adjustment shall be payable on the basis provided
 for in this section  to:  (i)  all  pensioners  who  have  attained  age
 [sixty-two]  FIFTY-FIVE  and have been retired for five years; (ii) [all
 pensioners who have attained age fifty-five and have  been  retired  for
 ten  years;  (iii)] all disability pensioners regardless of age who have
 been retired for five years; and [(iv)] (III) all recipients of an acci-
 dental death benefit regardless of age  who  have  been  receiving  such
 benefit for five years.
   § 2. Subdivision a of section 378-a of the retirement and social secu-
 rity  law,  as  added  by chapter 125 of the laws of 2000, is amended to
 read as follows:
   a. [A] EFFECTIVE ON THE FIRST DAY OF SEPTEMBER, TWO  THOUSAND  TWENTY-
 ONE,  A cost-of-living adjustment shall be payable on the basis provided
 for in this section  to:  (i)  all  pensioners  who  have  attained  age
 [sixty-two]  FIFTY-FIVE  and  have been retired for five years; AND (ii)
 [all pensioners who have attained age fifty-five and have  been  retired
 for  ten  years;  and (iii)] all disability pensioners regardless of age
 who have been retired for five years.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD09820-04-1

 S. 6651--A                          2
 
   § 3. Subdivision a of section 532-a of the education law, as added  by
 chapter 125 of the laws of 2000, is amended to read as follows:
   a.  [A]  EFFECTIVE ON THE FIRST DAY OF SEPTEMBER, TWO THOUSAND TWENTY-
 ONE, A cost-of-living adjustment shall be payable on the basis  provided
 for  in  this  section  to:  (i)  all  pensioners  who have attained age
 [sixty-two] FIFTY-FIVE and have been retired for five years;  (ii)  [all
 pensioners  who  have  attained age fifty-five and have been retired for
 ten years; (iii)] all disability pensioners regardless of age  who  have
 been retired for five years; and [(iv)] (III) all recipients of an acci-
 dental  death  benefit  regardless  of  age who have been receiving such
 benefit for five years.
   § 4. Subdivision a of section 13-696 of the administrative code of the
 city of New York, as amended by chapter 288 of  the  laws  of  2001,  is
 amended to read as follows:
   a.  [A]  EFFECTIVE ON THE FIRST DAY OF SEPTEMBER, TWO THOUSAND TWENTY-
 ONE, A cost-of-living adjustment shall be payable to retired members  of
 the New York city employees' retirement system, the New York city teach-
 ers'  retirement  system, the New York city police pension fund, the New
 York city fire department pension fund,  the  New  York  city  board  of
 education  retirement  system  or  the  relief  and  pension fund of the
 department of street cleaning provided for in  subchapter  one  of  this
 chapter  on  the  basis provided for in this section to: (i) all retired
 members who have attained  age  [sixty-two]  FIFTY-FIVE  and  have  been
 retired  for five years; (ii) [all retired members who have attained age
 fifty-five and have been retired for ten years; (iii)] all  members  who
 retired  for disability regardless of age who have been retired for five
 years; and [(iv)] (III) all recipients of an  accidental  death  benefit
 regardless of age who have been receiving such benefit for five years.
   § 5. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This  bill  would  provide an increase in the defined benefit cost-of-
 living adjustment (COLA) for New York public retirement systems.  Start-
 ing with a payment in September 2021, COLA will be payable to pensioners
 who have attained age fifty-five and been retired at least five years.
   Insofar  as  this bill affects the New York State and Local Employees'
 Retirement System, pursuant to Section 25 of the Retirement  and  Social
 Security  Law,  the increased costs would be borne entirely by the State
 of New York and would require an itemized  appropriation  sufficient  to
 pay  the  cost of the provision. If this bill were enacted, the increase
 in the present value of benefits would be approximately $407 million.
   Insofar as this bill affects the New York State and Local  Police  and
 Fire  Retirement  System  (PFRS), the increased costs would be shared by
 the State of New York and the participating employers in  the  PFRS.  If
 this  bill  were  enacted, the increase in the present value of benefits
 would be approximately $85 million. The estimated first year cost  would
 be approximately $1.8 million to the State of New York and approximately
 $7.5 million to the participating employers in the PFRS.
   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

 S. 6651--A                          3
 
 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 May 7, 2021, and intended for use only during the
 2021 Legislative Session, is Fiscal Note No. 2021-135, prepared  by  the
 Actuary for the New York State and Local Retirement System.
   FISCAL NOTE.-- Pursuant to Legislative Law, Section 50:
   In  as much as this bill would impact members and employers of the New
 York State Teachers' Retirement System (NYSTRS), this bill  (legislative
 bill draft 09820-01-1) would amend subdivision a of Section 532-a of the
 Education Law to lower the required eligibility age for the cost-of-liv-
 ing  adjustment  (COLA)  to all pensioners retired for service to age 55
 with five years of retirement. The current COLA eligibility  requirement
 is  the earlier of: 1) age 62 and five years of retirement, or 2) age 55
 and ten years or retirement. This change would be effective in September
 of 2021.
   The annual cost to the participating employers of  members  of  NYSTRS
 for  this benefit is estimated to be $14.3 million or .08% of payroll if
 this bill is enacted.
   Member data is from  the  System's  most  recent  actuarial  valuation
 files,  consisting  of  data provided by the employers to the Retirement
 System.  Data distributions and statistics can be found in the  System's
 Annual  Report.  System  assets and GASB disclosures are reported in the
 System's financial statements and can also  be  found  in  the  System's
 Annual  Report.  Actuarial  assumptions  and methods are provided in the
 System's Actuarial Valuation Report.
   The source of this estimate is Fiscal Note 2021-29 dated May  5,  2021
 prepared  by  the  Actuary  of  the  New York State Teachers' Retirement
 System and is intended for use only during the 2021 Legislative Session.
 I, Richard A. Young, am the Actuary for the  New  York  State  Teachers'
 Retirement  System.  I  am a member of the American Academy of Actuaries
 and I meet the Qualification Standards of the American Academy of  Actu-
 aries to render the actuarial opinion contained herein.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY  OF  BILL: This proposed legislation, as it relates to the New
 York City Retirement Systems and  Pension  Funds  (NYCRS),  would  amend
 Section  13-696  of  the  Administrative  Code  of  the City of New York
 (ACCNY) to reduce the age of eligibility for the Cost-of-Living  Adjust-
 ment  (COLA) from 62 to 55 for service and vested retirees who have been
 retired for five years from the  New  York  City  Employees'  Retirement
 System (NYCERS), the New York City Teachers' Retirement System (NYCTRS),
 the  New  York City Board of Education Retirement System (BERS), the New
 York City Police Pension Fund (POLICE),  and  the  New  York  City  Fire
 Pension Fund (FIRE).
   Effective  Date:  Upon  enactment  and applicable to COLA on and after
 September 1, 2021.
   BACKGROUND: Currently, COLA is payable to service and vested  retirees
 who have:
   (1) attained age 62 and have been retired for five years or

 S. 6651--A                          4
 
   (2) attained age 55 and have been retired for 10 years.
   Under this proposed legislation, if enacted, the COLA would be payable
 to such retirees who have attained age 55 and have been retired for five
 years.
   The  COLA  for disability retirement and death is payable after having
 been retired for five years and is not affected by the  proposed  legis-
 lation.
   FINANCIAL  IMPACT  -  SUMMARY: The estimated financial impact to NYCRS
 for accelerating the payability of COLA by reducing the age of eligibil-
 ity from 62 to 55 for service and vested retirees who have been  retired
 for  five  years  as  described above is an increase in Present Value of
 Future Benefits (PVFB) of $186.4 million and an increase in  the  annual
 employer  contributions  of $120.1 million. A breakdown of the financial
 impact by System is shown in the table below.
 
                     Additional            Estimated First Year
      NYCRS        Present Value of     Annual Employer Contributions*
                   Future Benefits               ($ Millions)
                    ($ Millions)
 
 NYCERS               $ 66.9                       $ 46.4
 NYCTRS                 51.1                         31.6
 BERS                    0.8                          0.5
 POLICE                 62.0                         38.9
 FIRE                    5.6                          2.7
   Total              $186.4                       $120.1
 * Total NYCRS employer contributions after the first year are  estimated
 to be $11-$12 million per year..
 
   In  accordance  with ACCNY Section 13-638.2(k-2), 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.
   For  the  purposes  of  this  Fiscal  Note  it  has  been assumed that
 increases in UAL attributable to current retirees  would  be  recognized
 immediately  and  that  increases  in UAL attributable to active members
 would be amortized over periods ranging from 12 to 15 years depending on
 the NYCRS (11 to 14 payments, respectively, under the One-Year Lag Meth-
 odology (OYLM)).
   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
 valuations  of  NYCRS.  In  accordance  with  the OYLM used to determine
 employer contributions, the increase  in  employer  contributions  would
 first be reflected in Fiscal Year 2022.
   CENSUS  DATA:  The  estimates presented herein are based on the census
 data used in the June 30, 2020 (Lag) actuarial valuations  of  NYCRS  to
 determine the Preliminary Fiscal Year 2022 employer contributions.
   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 NYCRS.
   The Actuary is proposing a set of changes for use beginning  with  the
 June 30, 2019 (Lag) actuarial valuations of NYCRS to determine the Final
 Fiscal  Year  2021 Employer Contributions (2021 A&M). If the 2021 A&M is

 S. 6651--A                          5
 
 enacted it is estimated that it would produce increases in the PVFB  and
 annual  employer  contributions that are approximately 5-6% smaller 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 NYCRS 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 meth-
 ods 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 (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
 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 2021-46 dated June 9,
 2021 was prepared by the Chief Actuary for the New York City  Employees'
 Retirement  System,  the  New York City Teachers' Retirement System, the
 New York City Board of Education Retirement System, the  New  York  City
 Police Pension Fund, and the New York City Fire Pension Fund. This esti-
 mate is intended for use only during the 2021 Legislative Session.