Senate Bill S6982B

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6982
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                               May 20, 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
   eligibility of uniformed personnel of the New York city department  of
   correction for ordinary disability benefits

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 507-a of the retirement and social security law  is
 amended by adding a new subdivision f to read as follows:
   F.  NOTWITHSTANDING  ANY  OTHER  PROVISION  OF  LAW, THERE SHALL BE NO
 RESTRICTIONS ON THE EARNINGS  FROM  EMPLOYMENT  NOT  IN  PUBLIC  SERVICE
 PERMITTED  TO  A  MEMBER OF THE UNIFORMED PERSONNEL OF THE NEW YORK CITY
 DEPARTMENT OF CORRECTION WHO:
   1. HAS RETIRED PURSUANT TO THE PROVISIONS OF THIS SECTION; AND
   2. WAS SUBJECT TO THE PROVISIONS OF (I) SUBDIVISION D OF SECTION  FIVE
 HUNDRED FOUR OF THIS ARTICLE, (II) SUBDIVISION C OF SECTION FIVE HUNDRED
 FOUR-A  OF  THIS ARTICLE, OR (III) SUBDIVISION C OF SECTION FIVE HUNDRED
 FOUR-B OF THIS ARTICLE PRIOR TO HIS OR HER RETIREMENT, SUBSEQUENT TO THE
 DATE AS OF WHICH HE OR SHE WOULD HAVE BEEN ELIGIBLE FOR SERVICE  RETIRE-
 MENT.
   § 2. This act shall take effect immediately.
 
 
 
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06513-01-1



              

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6982--A
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                               May 20, 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, in  relation  to
   eligibility  of uniformed personnel of the New York city department of
   correction for ordinary disability benefits
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Section 507-a of the retirement and social security law is
 amended by adding a new subdivision f to read as follows:
   F. NOTWITHSTANDING ANY OTHER PROVISION  OF  LAW,  THERE  SHALL  BE  NO
 RESTRICTIONS  ON  THE  EARNINGS  FROM  EMPLOYMENT  NOT IN PUBLIC SERVICE
 PERMITTED TO A MEMBER OF THE UNIFORMED PERSONNEL OF THE  NEW  YORK  CITY
 DEPARTMENT OF CORRECTION WHO:
   1. HAS RETIRED PURSUANT TO THE PROVISIONS OF THIS SECTION; AND
   2.  WAS SUBJECT TO THE PROVISIONS OF (I) SUBDIVISION D OF SECTION FIVE
 HUNDRED FOUR OF THIS ARTICLE, (II) SUBDIVISION C OF SECTION FIVE HUNDRED
 FOUR-A OF THIS ARTICLE, OR (III) SUBDIVISION C OF SECTION  FIVE  HUNDRED
 FOUR-B OF THIS ARTICLE PRIOR TO HIS OR HER RETIREMENT, SUBSEQUENT TO THE
 DATE  AS OF WHICH HE OR SHE WOULD HAVE BEEN ELIGIBLE FOR SERVICE RETIRE-
 MENT.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: This proposed legislation would amend  Section  507-a
 of  the Retirement and Social Security Law (RSSL) by adding a new subdi-
 vision f to remove post-retirement earnings  restrictions  from  private
 sector  employment  for  periods after the applicable service retirement
 eligibility date for certain retired uniformed personnel of the New York
 City Department of Correction who are receiving certain disability bene-
 fits from the New York City Employees' Retirement System (NYCERS).
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD06513-02-1

 S. 6982--A                          2
 
   Effective Date: Upon enactment.
   BACKGROUND:  Currently,  NYCERS  restricts  the  total  calendar  year
 Personal Service Income (PSI) resulting  from  all  public  and  private
 employment  for  certain  retirees,  including certain Tier 3 correction
 officers who receive disability retirement benefits under  RSSL  Section
 507-a (Correction Disability Retiree).
   If  a  Correction Disability Retiree's PSI from all public and private
 employment exceeds the NYCERS PSI limitation for the calendar year, then
 such retiree's disability pension is suspended for 12 months. The NYCERS
 PSI limitation for 2020 was $32,200 and increases  each  year  with  the
 Consumer Price Index.
   IMPACT  ON  BENEFITS:  Under  the  proposed  legislation,  if enacted,
 Correction Disability Retirees, who were Tier 3  correction  members  in
 the  Early  Service  Retirement  Benefit  Plan  for General Members, the
 Correction Officer 20-Year Plan, or the Correction Captain 20-Year Plan,
 would no longer be subject to the PSI limitation for private  employment
 earnings  after  the  date  they  would  have been eligible to receive a
 service retirement in their respective plan.
   For the purposes of this Fiscal Note, it was assumed  that  Correction
 Disability  Retirees  would continue to be limited by other post-retire-
 ment earnings restrictions such as New York City Charter (NYCC)  Section
 1117 and RSSL Section 212.
   NYCC  Section 1117 limits the PSI for any NYCERS retiree to $1,800 per
 year from most public employment within New York  State  (including  New
 York  City).  PSI  from  those sources that exceeds $1,800 per year will
 result in a suspension of the retiree's pension. However,  NYCC  Section
 1117  places  no  limits  on  the amounts of PSI that may be earned from
 private employment. RSSL Section 212 permits a retiree  to  earn  up  to
 $35,000 per year from post-retirement public employment, notwithstanding
 NYCC Section 1117, if certain conditions are met.
   FINANCIAL  IMPACT  -  ANNUAL  EMPLOYER  CONTRIBUTIONS:  The  change in
 employer costs would depend  upon  the  amount  and  timing  of  pension
 payments that would no longer be suspended due to this legislation.
   To  the  extent  the  NYCERS earnings limitation would have applied in
 Calendar Years 2021 and  later,  Correction  Disability  Retirees  whose
 post-retirement  earnings  exceeded  the  PSI  limitation would have had
 their pension suspended for 12 months in years after the date  on  which
 they would have become eligible for service retirement.
   Enactment  of  the legislation would eliminate the suspension of bene-
 fits for those Correction Disability  Retirees  whose  PSI  exceeds  the
 NYCERS  earnings  limitation  after  the  date  on which they would have
 become eligible for service retirement.
   Suspended pensions due to earnings that exceed the NYCERS PSI  limita-
 tion,  are  currently  treated  as  an actuarial gain, and the financial
 impact is recognized at the time of the event. Consequently, changes  in
 employer contributions have been estimated assuming that the increase in
 the  pension  payment  of approximately $154,300 will be financed over a
 time period used under the current  amortization  period  for  actuarial
 gains  and  losses. Using this approach, the additional Present Value of
 Future Benefits (PVFB) would be amortized over a closed  15-year  period
 (14  payments  under  the  One-Year  Lag Methodology (OYLM)) using level
 dollar payments.
   Based on the actuarial assumptions and methods  described  below,  the
 enactment  of  this proposed legislation is estimated to increase annual
 employer contributions by approximately $18,000.

 S. 6982--A                          3
 
   CENSUS DATA: Data for the eight Correction Disability  Retirees  whose
 post-retirement  earnings  exceeded the PSI limitation for calendar year
 2019 was provided by NYCERS. These members had  an  average  pension  of
 approximately $19,300 per year.
   ACTUARIAL  ASSUMPTIONS  AND  METHODS:  The  additional  employer costs
 presented herein have  been  calculated  based  on  the  same  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 NYCERS.
   The  Actuary  is proposing a set of changes for use beginning with 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  annual  employer
 contributions results that are not materially different 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 possible increased administrative costs attributable to enact-
 ment of 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 2021-41 dated June 3,
 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.