The New York State Senate

 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7971
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               June 4, 2021
                                ___________
 
 Introduced by M. of A. ABBATE -- read once and referred to the Committee
   on Governmental Employees
 
 AN  ACT  to amend the retirement and social security law, in relation to
   additional member contributions for  certain  members  under  the  age
   fifty-seven retirement program

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph 1 of  subdivision  f  of  section  604-d  of  the
 retirement  and  social security law is amended by adding a new subpara-
 graph (iv) to read as follows:
   (IV) NOTWITHSTANDING THE PROVISIONS OF SUBPARAGRAPH (II) OF THIS PARA-
 GRAPH, A PARTICIPANT HOLDING THE TITLE OF CARPENTER, SUPERVISOR  CARPEN-
 TER,  SHIP  CARPENTER,  SUPERVISOR  SHIP CARPENTER, RIGGER, DOCKBUILDER,
 SUPERVISOR DOCKBUILDER AND  GENERAL  SUPERVISOR  DOCKBUILDER  WHO  IS  A
 PARTICIPANT  IN THE AGE FIFTY-SEVEN RETIREMENT PROGRAM AND WHOSE AGE AND
 ALLOWABLE SERVICE ARE SUCH THAT HE OR SHE COULD NOT POSSIBLY BE ABLE  TO
 ACCUMULATE  AT  LEAST TWENTY-FIVE YEARS OF SERVICE BY THE TIME HE OR SHE
 REACHES AGE FIFTY-SEVEN, SHALL NOT BE REQUIRED TO  MAKE  THE  ADDITIONAL
 MEMBER  CONTRIBUTION  PURSUANT  TO  SUBPARAGRAPH (II) OF THIS PARAGRAPH.
 ANY PARTICIPANT IN THE TITLES LISTED IN THIS SUBPARAGRAPH WHO  HAS  MADE
 ADDITIONAL  MEMBER  CONTRIBUTIONS  PURSUANT TO SUBPARAGRAPH (II) OF THIS
 PARAGRAPH PRIOR TO THE EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF  TWO
 THOUSAND  TWENTY-ONE THAT ADDED THIS SUBPARAGRAPH SHALL RECEIVE A REFUND
 OF THE EMPLOYEE PORTION OF SUCH  CONTRIBUTIONS  PLUS  INTEREST  PROVIDED
 THAT  THEIR  AGE AND ALLOWABLE SERVICE ARE SUCH THAT HE OR SHE COULD NOT
 POSSIBLY BE ABLE TO ACCUMULATE AT LEAST TWENTY-FIVE YEARS OF SERVICE  BY
 THE TIME HE OR SHE REACHES AGE FIFTY-SEVEN.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY  OF  BILL:  This  proposed  legislation  would  amend New York
 Retirement and Social Security Law (RSSL) Section 604-d to  exempt  from
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD06522-03-1

 A. 7971                             2
 
 the  physically  taxing  provisions certain Tier 4 carpenter titles, who
 are participants in the  New  York  City  Employees'  Retirement  System
 (NYCERS)  or the Board of Education Retirement System of the City of New
 York  (BERS)  Age  57  Retirement Program (57/5 Plan), and who would not
 benefit from the early retirement provisions for such physically  taxing
 titles.
   The  proposed  legislation  would affect 57/5 Plan participants in the
 physically  taxing  titles  of  carpenter,  supervisor  carpenter,  ship
 carpenter,  supervisor  ship  carpenter, rigger, dockbuilder, supervisor
 dockbuilder, and  general  supervisor  dockbuilder  (Eligible  Carpenter
 Title)  who  would be unable to reach the requisite 25 years of credited
 service in a physically taxing title by age 57, and would  therefore  be
 ineligible  to  take advantage of the early retirement provisions of the
 physically taxing title, which permits retirement at  age  50  (with  25
 years of credited service).
   Under  the proposed legislation, Eligible Carpenter Titles who started
 in the 57/5 Plan but will not reach 25 years of credited  service  in  a
 physically  taxing title by age 57 would no longer pay physically taxing
 Additional Member Contributions (AMCs) and would  receive  an  immediate
 refund  of  the  employee  portion (i.e. 50%) of their physically taxing
 AMCs plus interest. Such Titles would remain responsible for  applicable
 basic member contributions and applicable non-physically taxing AMCs for
 continued 57/5 Plan participation.
   Effective Date: Upon enactment.
   FINANCIAL  IMPACT - PRESENT VALUES: Based on the census data and actu-
 arial assumptions and methods described herein, the  enactment  of  this
 proposed legislation would result in an increase in the present value of
 future  employer contributions for NYCERS and BERS of approximately $5.3
 million.
   Under the Entry Age Normal cost method used to determine the  employer
 contributions  to  NYCERS  and  BERS,  there would be an increase in the
 Unfunded Accrued Liability (UAL) of approximately $2.2  million  and  an
 increase  in  the  present  value of future employer Normal Cost of $3.1
 million. These results are summarized in the table below:
 
   Change in:                             NYCERS       BERS     Total
   Actuarial Value of Assets (AVA)       $(5,162)     $ (70)   $(5,232)
   Accrued Liability (AL)                $(2,998)     $ (41)   $(3,039)
   Unfunded Accrued Liability (AL-AVA)   $ 2,164      $  29    $ 2,193
   Present Value of Future Employer
   Normal Cost                           $ 3,055      $  55    $ 3,110
 
   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 members in Eligible
 Carpenter Titles is approximately eight years for NYCERS and nine  years
 for BERS.
   For  the  purposes  of this Fiscal Note, the increase in UAL was amor-
 tized over an eight-year period (seven payments) for NYCERS and  over  a
 nine-year  period (eight payments) for BERS under the One-Year Lag Meth-
 odology (OYLM) using level dollar payments. When added to the change  in
 Employer Normal Cost, the estimated increase in annual employer contrib-
 utions is approximately $865,000 for NYCERS and $13,000 for BERS.

 A. 7971                             3
 
   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  and
 BERS.  In  accordance  with the OYLM used to determine employer contrib-
 utions, the increase in employer contributions would first be  reflected
 in Fiscal Year 2022.
   CENSUS  DATA:  The estimates presented herein are based on census data
 used in the June 30, 2020 (Lag) actuarial valuation of NYCERS  and  BERS
 to  determine  Preliminary  Fiscal Year 2022 employer contributions. The
 following table summarizes the data for the affected participants:
 
                            NYCERS          BERS       NYCERS & BERS
   Count                      239             5             244
   Average Age            56.6 years     56.4 years     56.6 years
   Average Service        14.7 years     13.0 years     14.7 years
   Average Salary          $101,400        $96,400       $101,300
 
   ACTUARIAL ASSUMPTIONS AND METHODS: The changes  in  the  UAL,  Present
 Value  of  future  employer  contributions, and annual employer contrib-
 utions 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 and BERS.
   The Actuary is proposing a set of changes for use beginning  with  the
 June 30, 2019 (Lag) actuarial valuations of NYCERS and BERS to determine
 the  Final  Fiscal  Year  2021 Employer Contributions (2021 A&M). If the
 2021 A&M is enacted, it is estimated that the Present Value of  Employer
 Contributions  and  the  annual employer contributions would be approxi-
 mately 1% less 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 BERS and other  exoge-
 nous factors such as investment, contribution, and other risks. If actu-
 al  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, BERS, 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.

 A. 7971                             4
 
   FISCAL NOTE IDENTIFICATION: This Fiscal Note  2021-34  dated  May  26,
 2021  was prepared by the Chief Actuary for the New York City Employees'
 Retirement System and the Board of Education Retirement  System  of  the
 City of New York. This estimate is intended for use only during the 2021
 Legislative Session.