Senate Bill S6986B

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6986
 
                        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
   retirement benefits for general members in  the  uniformed  correction
   force of the New York city department of correction

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision d of section 504 of the retirement  and  social
 security  law,  as amended by chapter 18 of the laws of 2012, is amended
 to read as follows:
   d. The early service retirement benefit for  general  members  in  the
 uniformed   correction   force  of  the  New  York  city  department  of
 correction, who are not entitled to an early service retirement  benefit
 pursuant to subdivision c of section five hundred four-a of this article
 or  subdivision  c  of  section  five  hundred four-b of this article or
 subdivision c of section five hundred four-d of  this  article,  or  for
 general  members  in  the  uniformed personnel in institutions under the
 jurisdiction of the department of corrections and community supervision,
 as defined in subdivision i of  section  eighty-nine  of  this  chapter,
 shall  be  a pension equal to one-fiftieth of final average salary times
 years of credited service at the  completion  of  twenty-five  years  of
 service,  [but  not  in excess of fifty percent of final average salary]
 PLUS ONE-SIXTIETH OF  FINAL  AVERAGE  SALARY  TIMES  YEARS  OF  CREDITED
 SERVICE IN EXCESS OF TWENTY-FIVE, provided, however, that the provisions
 of   this  section  shall  not  apply  to  a  New  York  city  uniformed
 correction/sanitation revised plan member.
   § 2. This act shall take effect immediately.
 
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06284-01-1


              

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6986--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
   retirement  benefits  for  general members in the uniformed correction
   force of the New York city department of correction
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subdivision d of section 504 of the retirement and social
 security law, as amended by chapter 18 of the laws of 2012,  is  amended
 to read as follows:
   d.  The  early  service  retirement benefit for general members in the
 uniformed  correction  force  of  the  New  York  city   department   of
 correction,  who are not entitled to an early service retirement benefit
 pursuant to subdivision c of section five hundred four-a of this article
 or subdivision c of section five  hundred  four-b  of  this  article  or
 subdivision  c  of  section  five hundred four-d of this article, or for
 general members in the uniformed personnel  in  institutions  under  the
 jurisdiction of the department of corrections and community supervision,
 as  defined  in  subdivision  i  of section eighty-nine of this chapter,
 shall be a pension equal to one-fiftieth of final average  salary  times
 years  of  credited  service  at  the completion of twenty-five years of
 service, [but not in excess of fifty percent of  final  average  salary]
 PLUS  ONE-SIXTIETH  OF  FINAL  AVERAGE  SALARY  TIMES  YEARS OF CREDITED
 SERVICE IN EXCESS OF TWENTY-FIVE, provided, however, that the provisions
 of  this  section  shall  not  apply  to  a  New  York  city   uniformed
 correction/sanitation revised plan member.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06284-03-1
              

 S. 6986--A                          2
 
   SUMMARY  OF BILL: This proposed legislation would amend Retirement and
 Social Security Law (RSSL) Section 504 by modifying the service  retire-
 ment benefit calculation formula for uniformed employees of the New York
 City  Department  of  Correction (Correction) who are members of the New
 York  City  Employees' Retirement System (NYCERS) and are subject to the
 Early Service Retirement Benefit Plan for General  Members  pursuant  to
 RSSL  Section  504  (CO-25  Plan).  The  CO-25 Plan is limited to Tier 3
 Correction members who joined NYCERS prior to December 19,  1990  (CO-25
 Plan Members).
   Effective Date: Upon enactment.
   IMPACT ON BENEFITS: Currently, upon reaching 25 or more years of cred-
 ited  service,  CO-25  Plan Members are entitled to a service retirement
 pension benefit equal to:
   * 50% of Final Average Salary (FAS).
   Under the proposed legislation, if  enacted,  the  service  retirement
 benefit for CO-25 Plan Members who retire for service under RSSL Section
 504(d)  after  the effective date of the proposed legislation with 25 or
 more years of credited service would be equal to:
   * 50% of FAS for the first 25 years of credited service, plus
   * 1/60th of FAS for each additional year of credited service, or frac-
 tion thereof, exceeding 25 years (if any).
   FINANCIAL IMPACT - PRESENT VALUES: Based on the census data and  actu-
 arial  assumptions  and  methods  herein, the enactment of this proposed
 legislation would increase the Present Value of Future  Benefits  (PVFB)
 by approximately $4.6 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 $4.5 million and an increase in
 the Present Value of future employer Normal Cost of $0.1 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 CO-25 Plan Members
 is approximately 3 years.
   For the purposes of this Fiscal Note, the increase in  UAL  was  amor-
 tized  over a 3-year period (2 payments under the One-Year Lag Methodol-
 ogy (OYLM)) using level dollar payments. This payment plus the  increase
 in  the  Normal  Cost results in an increase in annual employer contrib-
 utions of approximately $2.6 million each 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 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 valuation of NYCERS to
 determine the Preliminary Fiscal Year 2022 employer contributions.
   The 32 NYCERS CO-25 Plan Members as of June 30, 2020  had  an  average
 age  of  approximately 57.8 years, average service of approximately 30.4
 years, and an average salary of approximately $144,800.
   ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the Present Value of
 future  employer  contributions  and   annual   employer   contributions

 S. 6986--A                          3
 
 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 with the exception of the probability of a CO-25 Plan
 Member working beyond 25 years of service, which was increased to recog-
 nize the impact the proposed legislation,  if  enacted,  would  have  on
 retirement behavior.
   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  PVFB  and  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 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
 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  2021-42  dated  June  7,
 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.