S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7281
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               May 17, 2023
                                ___________
 
 Introduced by M. of A. EACHUS -- read once and referred to the Committee
   on Governmental Employees
 
 AN ACT in relation to granting retroactive tier IV membership in the New
   York city employees' retirement system to Ryan D. O'Connor
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Notwithstanding any other provision of law to the contrary,
 Ryan D. O'Connor, an employee of the New York city transit authority and
 a member of the New York city  employees'  retirement  system,  who  was
 employed  with  the New York city transit authority on January 19, 2012,
 who for reasons not ascribable to his own negligence, failed to become a
 member of such retirement system during such  employment  with  the  New
 York city transit authority until September 10, 2012, shall be deemed to
 have  joined  the  New York city employees' retirement system on January
 19, 2012 and shall be granted Tier IV status in such retirement  system,
 if,  within  one year of the effective date of this act, he shall file a
 written request with the New York city employees' retirement system.
   § 2. No contributions made to the New York city employees'  retirement
 system by Ryan D. O'Connor shall be returned or refunded to him pursuant
 to this act.
   § 3. All past service costs of implementing the provisions of this act
 shall be borne by the city of New York.
   § 4. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY  OF  BILL:  This  proposed  legislation  would  permit Ryan D.
 O'Connor, an active Tier 6  member  of  the  New  York  City  Employees'
 Retirement  System  (NYCERS),  to  elect,  by filing an application with
 NYCERS within one year of the effective date, membership in the  Tier  4
 NYCERS 57/5 Plan.
   Effective Date: Upon enactment.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07071-02-3
 A. 7281                             2
              

 
   BACKGROUND:  Mr.  O'Connor commenced employment with the New York City
 Transit Authority (NYCTA) on January 19, 2012  and  subsequently  joined
 NYCERS in September 2012. In the nine-month period between the commence-
 ment  of  his employment and the date on which he joined NYCERS, Chapter
 18 of the Laws of 2012, or Tier 6, was enacted. Therefore, Mr.  O'Connor
 joined NYCERS as a Tier 6 member.
   The  proposed  legislation  would  allow  Mr.  O'Connor to apply for a
 retroactive NYCERS membership date of  January  19,  2012,  which  would
 entitle  him  to  Tier  4  membership,  without  a refund of past Tier 6
 contributions, in the NYCERS 57/5 Plan. A change from Tier 6 to  Tier  4
 would result in an earlier date of retirement eligibility, lower overall
 prospective  employee contribution rates, a larger benefit, and a three-
 year (as opposed to a five-year) final average salary.
   While the past service costs for this member would normally  be  borne
 by the NYCTA, the proposed legislation assigns such costs to the City of
 New York.
   FINANCIAL  IMPACT - PRESENT VALUES: Based on the actuarial assumptions
 and methods described herein, the enactment of this proposed legislation
 would result in an increase in the  present  value  of  future  employer
 contributions of approximately $106,900.
   This  net  increase is a result of an increase in the Present Value of
 Future Benefits (PVFB) of approximately $41,500 and a  decrease  in  the
 present value of member contributions of approximately $65,400.
   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 $51,100 and an increase in the
 present value of future employer Normal Cost of approximately $55,800.
   The estimated financial impact of this proposed legislation  has  been
 calculated  based  on  the  difference  between (1) the present value of
 benefits Mr. O'Connor would receive if the Tier 4 57/5 Plan were elected
 and (2) the present value of the benefits  Mr.  O'Connor  would  receive
 under the Tier 6 63/5 Plan.
   FINANCIAL  IMPACT  -  ANNUAL  EMPLOYER CONTRIBUTIONS: The enactment of
 this proposed legislation would result in an initial increase in  annual
 employer contributions of approximately $8,900 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.
 The remaining working lifetime for  Mr.  O'Connor  is  approximately  21
 years  and  the  increase  in UAL was therefore amortized over a 21-year
 period (20 payments under the  One-Year  Lag  Methodology)  using  level
 dollar payments.
   CENSUS  DATA:  As of June 30, 2022, Mr. O'Connor was approximately age
 36, had approximately 10 years of service, and a salary of approximately
 $97,700.
   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,  2023  actuarial
 valuation  of NYCERS used to determine employer contributions for Fiscal
 Year 2025.
   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-
 A. 7281                             3
 
 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.
   *  The  impact  of  this  proposed legislation on Other Postemployment
 Benefit (OPEB) costs.
   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 2023-42 dated May 4, 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.