S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6981
 
                        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
   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.
 
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06522-01-1

              

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6981--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
   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:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD06522-02-1

 S. 6981--A                          2
 
   SUMMARY OF BILL:  This  proposed  legislation  would  amend  New  York
 Retirement  and  Social Security Law (RSSL) Section 604-d to exempt from
 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

 S. 6981--A                          3
 
 Employer Normal Cost, the estimated increase in annual employer contrib-
 utions is approximately $865,000 for NYCERS and $13,000 for BERS.
   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

 S. 6981--A                          4
 
 and  procedures  and  with the Actuarial Standards of Practice issued by
 the Actuarial Standards Board.
   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.