S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6578
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              April 19, 2023
                                ___________
 
 Introduced  by  M.  of A. PHEFFER AMATO -- read once and referred to the
   Committee on Governmental Employees
 
 AN ACT to amend the retirement and social security law and the  adminis-
   trative  code  of  the city of New York, in relation to death benefits
   for members of the uniformed force of the New York city department  of
   sanitation  and  members  of  the uniformed 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 b of section 448 of the retirement and social
 security law is amended by adding a new paragraph 3 to read as follows:
   3. PROVIDED FURTHER, NOTWITHSTANDING ANY OTHER PROVISION OF THIS ARTI-
 CLE TO THE CONTRARY, WHERE A MEMBER IS IN THE UNIFORMED FORCE OF THE NEW
 YORK CITY DEPARTMENT OF SANITATION OR THE UNIFORMED  FORCE  OF  THE  NEW
 YORK  CITY  DEPARTMENT  OF CORRECTION, AND WOULD HAVE BEEN ENTITLED TO A
 SERVICE RETIREMENT BENEFIT AT THE TIME OF HIS OR HER DEATH AND WHERE HIS
 OR HER DEATH OCCURS ON OR AFTER JULY FIRST, TWO  THOUSAND  TWENTY-THREE,
 THE BENEFICIARY OR BENEFICIARIES MAY ELECT TO RECEIVE, IN A LUMP SUM, AN
 AMOUNT  PAYABLE  WHICH  SHALL BE EQUAL TO THE PENSION RESERVE THAT WOULD
 HAVE BEEN ESTABLISHED HAD THE MEMBER RETIRED ON THE DATE OF HIS  OR  HER
 DEATH,  OR THE VALUE OF THE DEATH BENEFIT AND THE RESERVE-FOR-INCREASED-
 TAKE-HOME-PAY, IF ANY, WHICHEVER IS GREATER.
   § 2. Subdivision b of section 508 of the retirement and social securi-
 ty law, as amended by chapter 476 of the laws of  2018,  is  amended  to
 read as follows:
   b.  A  member of a retirement system subject to the provisions of this
 article who is a police officer, firefighter, correction officer, inves-
 tigator revised plan member or sanitation worker and is in a plan  which
 permits  immediate  retirement  upon completion of a specified period of
 service without regard to age or who is subject  to  the  provisions  of
 section  five  hundred  four or five hundred five of this article, shall
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08424-02-3
              

 A. 6578                             2
 
 upon completion of ninety days  of  service  be  covered  for  financial
 protection  in  the  event of death in service pursuant to this subdivi-
 sion.
   1. Such death benefit shall be equal to three times the member's sala-
 ry  raised  to the next highest multiple of one thousand dollars, but in
 no event shall it exceed three times the  maximum  salary  specified  in
 section one hundred thirty of the civil service law or, in the case of a
 member  of  a  retirement system other than the New York city employees'
 retirement system, or in the case of a  member  of  the  New  York  city
 employees'   retirement   system  who  is  a  New  York  city  uniformed
 correction/sanitation revised plan member  or  an  investigator  revised
 plan member, the specific limitations specified for age of entrance into
 service  contained  in subparagraphs (b), (c), (d), (e) and (f) of para-
 graph two of subdivision a of this section.
   2. PROVIDED FURTHER, NOTWITHSTANDING ANY OTHER PROVISION OF THIS ARTI-
 CLE TO THE CONTRARY, WHERE A MEMBER IS IN THE UNIFORMED FORCE OF THE NEW
 YORK CITY DEPARTMENT OF SANITATION OR THE UNIFORMED  FORCE  OF  THE  NEW
 YORK  CITY  DEPARTMENT  OF CORRECTION, AND WOULD HAVE BEEN ENTITLED TO A
 SERVICE RETIREMENT BENEFIT AT THE TIME OF HIS OR HER DEATH AND WHERE HIS
 OR HER DEATH OCCURS ON OR AFTER JULY FIRST, TWO  THOUSAND  TWENTY-THREE,
 THE BENEFICIARY OR BENEFICIARIES MAY ELECT TO RECEIVE, IN A LUMP SUM, AN
 AMOUNT  PAYABLE  WHICH  SHALL BE EQUAL TO THE PENSION RESERVE THAT WOULD
 HAVE BEEN ESTABLISHED HAD THE MEMBER RETIRED ON THE DATE OF HIS  OR  HER
 DEATH,  OR THE VALUE OF THE DEATH BENEFIT AND THE RESERVE-FOR-INCREASED-
 TAKE-HOME-PAY, IF ANY, WHICHEVER IS GREATER.
   § 3. Subdivision b of section 606 of the retirement and social securi-
 ty law, as amended by chapter 476 of the laws of  2018,  is  amended  to
 read as follows:
   b.  A  member of a retirement system subject to the provisions of this
 article who is a police  officer,  firefighter,  correction  officer  or
 sanitation  worker  and  is in a plan which permits immediate retirement
 upon completion of a specified period of service without regard  to  age
 or  who is subject to the provisions of section six hundred four of this
 article, shall upon completion of ninety days of service be covered  for
 financial  protection  in the event of death in service pursuant to this
 subdivision.
   1. Such death benefit shall be equal to three times the member's sala-
 ry raised to the next highest multiple of one thousand dollars,  but  in
 no  event  shall  it  exceed three times the maximum salary specified in
 section one hundred thirty of the civil service law or, in the case of a
 member of a retirement system other than the New  York  city  employees'
 retirement  system,  the  specific  limitations  specified  for  age  of
 entrance into service contained in subparagraphs (b), (c), (d), (e)  and
 (f) of paragraph two of subdivision a of this section.
   2. PROVIDED FURTHER, NOTWITHSTANDING ANY OTHER PROVISION OF THIS ARTI-
 CLE TO THE CONTRARY, WHERE A MEMBER IS IN THE UNIFORMED FORCE OF THE NEW
 YORK  CITY  DEPARTMENT  OF  SANITATION OR THE UNIFORMED FORCE OF THE NEW
 YORK CITY DEPARTMENT OF CORRECTION, AND WOULD HAVE BEEN  ENTITLED  TO  A
 SERVICE RETIREMENT BENEFIT AT THE TIME OF HIS OR HER DEATH AND WHERE HIS
 OR  HER  DEATH OCCURS ON OR AFTER JULY FIRST, TWO THOUSAND TWENTY-THREE,
 THE BENEFICIARY OR BENEFICIARIES MAY ELECT TO RECEIVE, IN A LUMP SUM, AN
 AMOUNT PAYABLE WHICH SHALL BE EQUAL TO THE PENSION  RESERVE  THAT  WOULD
 HAVE  BEEN  ESTABLISHED HAD THE MEMBER RETIRED ON THE DATE OF HIS OR HER
 DEATH, OR THE VALUE OF THE DEATH BENEFIT AND THE  RESERVE-FOR-INCREASED-
 TAKE-HOME-PAY, IF ANY, WHICHEVER IS GREATER.
 A. 6578                             3
 
   § 4. Section 13-148 of the administrative code of the city of New York
 is amended by adding a new subdivision d to read as follows:
   D.  NOTWITHSTANDING ANY OTHER PROVISION OF THIS ARTICLE TO THE CONTRA-
 RY, WHERE A MEMBER IS IN THE UNIFORMED FORCE OF THE DEPARTMENT OF  SANI-
 TATION OR THE UNIFORMED FORCE OF THE DEPARTMENT OF CORRECTION, AND WOULD
 HAVE BEEN ENTITLED TO A SERVICE RETIREMENT BENEFIT AT THE TIME OF HIS OR
 HER  DEATH AND WHERE HIS OR HER DEATH OCCURS ON OR AFTER JULY FIRST, TWO
 THOUSAND TWENTY-THREE, THE BENEFICIARY OR  BENEFICIARIES  MAY  ELECT  TO
 RECEIVE,  IN  A  LUMP SUM, AN AMOUNT PAYABLE WHICH SHALL BE EQUAL TO THE
 PENSION RESERVE THAT WOULD HAVE BEEN ESTABLISHED HAD THE MEMBER  RETIRED
 ON  THE  DATE OF HIS OR HER DEATH, OR THE VALUE OF THE DEATH BENEFIT AND
 THE RESERVE-FOR-INCREASED-TAKE-HOME-PAY, IF ANY, WHICHEVER IS GREATER.
   § 5. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: This proposed legislation would amend  Sections  448,
 508,  and  606  of  the  Retirement  and  Social Security Law (RSSL) and
 Section 13-148 of the Administrative  Code  of  the  City  of  New  York
 (ACCNY) to provide an alternative death benefit for Correction and Sani-
 tation  members  in  all Tiers and Plans of the New York City Employees'
 Retirement System (NYCERS).
   Effective Date: Upon enactment for deaths occurring on or  after  July
 1, 2023.
   IMPACT  ON  BENEFITS:  Currently,  NYCERS  Correction  and  Sanitation
 members are generally entitled to a  lump  sum  ordinary  death  benefit
 equal  to  a  multiple  of  salary plus the return of member accumulated
 contributions and increased-take-home-pay (ITHP), if  any.  These  death
 benefits are generally calculated as three times the final year's salary
 raised to the next highest multiple of $1,000. Some of these death bene-
 fits are subject to salary caps and other reductions.
   Under the proposed legislation, the ordinary death benefit for members
 who are otherwise eligible to receive a service retirement benefit would
 be  the  greater  of  their  current  death  benefit or the value of the
 pension reserve that would have been established had they retired on the
 date of their death. The pension reserve is the  present  value  of  all
 payments  expected  to  be made on account of any pension, or benefit in
 lieu of any pension, granted under provisions of law and  computed  upon
 the  basis  of adopted mortality tables with regular interest (inclusive
 of accumulated member contributions and ITHP, if any). This type of lump
 sum pension reserve death benefit is sometimes referred to  as  a  Death
 Gamble, and is afforded, in a similar form, to Tier 1 NYCERS members.
   FINANCIAL  IMPACT  -  PRESENT VALUES: Based on the census data and the
 actuarial assumptions and methods described  herein,  the  enactment  of
 this  proposed  legislation  would  result in an increase in the Present
 Value of Future Benefits (PVFB) and present  value  of  future  employer
 contributions of approximately $17.3 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 $11.3 million and an increase
 in the present value of future employer  Normal  Cost  of  approximately
 $6.0 million.
   FINANCIAL  IMPACT  -  ANNUAL  EMPLOYER CONTRIBUTIONS: The enactment of
 this proposed legislation would result in an initial increase in  annual
 employer contributions of approximately $2.2 million which is the result
 of an increase in the Normal Cost in addition to the UAL payment.
   New  UAL  attributable to benefit changes are generally amortized over
 the remaining working lifetime of those impacted by the benefit changes.
 A. 6578                             4
 
 The remaining working lifetime for this group is approximately 12  years
 and  the  increase  in UAL was therefore amortized over a 12-year period
 (11 payments under the One-Year  Lag  Methodology)  using  level  dollar
 payments.
   CENSUS  DATA:  The  estimates presented herein are based on the census
 data used in the June 30, 2022 actuarial valuation of NYCERS  to  deter-
 mine the Preliminary Fiscal Year 2024 employer contributions.
   The 6,738 NYCERS Correction members as of June 30, 2022 had an average
 age  of  approximately 42.2 years, average service of approximately 11.5
 years, and an average salary of approximately $120,500.
   The 7,572 NYCERS Sanitation members as of June 30, 2022 had an average
 age of approximately 43.1 years, average service of  approximately  11.7
 years, and an average salary of approximately $104,600.
   ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
 been  calculated based on the actuarial assumptions and methods used for
 the Preliminary Fiscal Year 2024 employer contributions of NYCERS.
   For the purposes of this Fiscal Note, it is assumed that  the  changes
 would  be  reflected  for  the first time in the June 30, 2022 actuarial
 valuation of NYCERS used to determine employer contributions for  Fiscal
 Year 2024.
   RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
 highly on the realization of the actuarial assumptions used,  demograph-
 ics  of  the  impacted population, and other factors such as investment,
 contribution, and other risks. If actual experience deviates from  actu-
 arial  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  to  implement  the
 proposed legislation.
   STATEMENT OF ACTUARIAL OPINION: I, Marek  Tyszkiewicz,  am  the  Chief
 Actuary  for,  and  independent of, the New York City Retirement Systems
 and Pension Funds. I am an Associate of the Society of Actuaries  and  a
 Member of the American Academy of Actuaries. I am a member of NYCERS but
 do  not  believe  it impairs my objectivity and 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 2023-28 dated  April  12,
 2023  was prepared by the Chief Actuary for the New York City Employees'
 Retirement System. This estimate is intended for  use  only  during  the
 2023 Legislative Session.