Assembly Bill A8607

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8607
 
                           I N  A S S E M B L Y
 
                             January 12, 2024
                                ___________
 
 Introduced by M. of A. BERGER -- read once and referred to the Committee
   on Governmental Employees
 
 AN ACT authorizing Jonathan Grossman to apply for a recalculation of his
   retirement benefits
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Notwithstanding any provision of law to the contrary, Jona-
 than Grossman, who joined the New York city teachers' retirement  system
 as  a  Tier I member on January 1, 1972, who retired from such system on
 September 28, 2010, and who for reasons not ascribable to his own negli-
 gence had his retirement benefits calculated without the inclusion of  a
 lump  sum  payment  for  accumulated vacation, shall have his retirement
 benefits recalculated with such lump sum  payments,  including  interest
 accruing  from  the  date of retirement, if he shall file an application
 therefor with the state comptroller on or before one year of the  effec-
 tive date of this act.
   § 2. All past service costs of implementing the provisions of this act
 shall be borne by the city of New York.
   § 3. This act shall take effect immediately.
 
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY:  This  proposed  legislation would allow Jonathan Grossman, a
 retired Tier 1 member of the New York City Teachers'  Retirement  System
 (TRS)  to  have his retirement benefits recalculated to include his lump
 sum payment for accumulated vacation in the  calculation  of  his  final
 average salary.
 
          EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
                 by Fiscal Year for the first 25 years ($)
 
                     Year               TRS
                     2025                 0
                     2026           342,000
                     2027                 0
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD06773-02-4
 A. 8607                             2
 
                     2028                 0
                     2029                 0
                     2030                 0
                     2031                 0
                     2032                 0
                     2033                 0
                     2034                 0
                     2035                 0
                     2036                 0
                     2037                 0
                     2038                 0
                     2039                 0
                     2040                 0
                     2041                 0
                     2042                 0
                     2043                 0
                     2044                 0
                     2045                 0
                     2046                 0
                     2047                 0
                     2048                 0
                     2049
 
   The entire initial increase in employer contributions of $342,000 will
 be allocated to New York City.
 
           EXPECTED INCREASE (DECREASE) IN ACTUARIAL LIABILITIES
                            as of June 30, 2024
 
           Present Value (PV)                     TRS
           PV of Benefits:                    $ 309,000
           PV of Employee Contributions:              0
           PV of Employer Contributions:        309,000
           Unfunded Accrued Liabilities:        309,000
 
                AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
 
                                                 TRS
           Number of Payments:                    1
           Fiscal Year of Last Payment:          2026
           Amortization Payment:              $ 342,000
 
   Since  Mr. Grossman is retired and collecting a pension, and therefore
 has no remaining working  lifetime,  the  entire  increase  in  Unfunded
 Accrued Liabilities would be recognized immediately.
   CENSUS  DATA:  The estimates presented herein are based on preliminary
 census data collected as of June 30,  2023.  The  census  data  for  the
 impacted population is summarized below.
 
                                              TRS
           Receiving Members
           - Number Count:                       1
           - Average Age:                     76.0
 
   BACKGROUND:  Mr.  Grossman retired as a Tier 1 TRS member on September
 28, 2010. He  currently  receives  an  annual  retirement  allowance  of
 A. 8607                             3
 
 $103,495  per  year under the 50% Joint and Survivor with Pop-Up payment
 option.
   If  the  proposed  legislation  is  passed,  Mr. Grossman's retirement
 allowance would be recalculated to include in his final average salary a
 lump sum payment he received for unused vacation time, which is a  bene-
 fit that is generally not afforded to TRS retirees. The additional cost,
 less any required member contributions paid by Mr. Grossman, to fund the
 increased  retirement allowance associated with the proposed legislation
 would be paid by the City of New York.
   Tier 1 TRS members  are  generally  permitted  to  take  an  actuarial
 reduction  of  their  retirement  allowance  to  account for deficits in
 member contributions. For purposes of this fiscal note,  it  is  assumed
 that Mr.  Grossman would not pay any owed member contributions resulting
 from  the  recalculation.  Based  on  this assumption and application of
 other Tier 1 benefit calculation provisions, it is  estimated  that  Mr.
 Grossman's  annual retirement allowance would increase to $114,514. This
 annual increase would apply prospectively as well as retroactively, less
 any payments previously made, to Mr. Grossman's September 28, 2010  date
 of retirement.
   ASSUMPTIONS  AND  METHODS:  The  estimates  presented herein have been
 calculated based on the actuarial assumptions and methods to be used for
 the Preliminary Fiscal Year 2025 employer contributions of the  impacted
 retirement systems.
   RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
 highly on the actuarial assumptions, methods,  and  models  used,  demo-
 graphics  of  the  impacted population and other factors such as invest-
 ment, contribution, and other risks. If actual experience deviates  from
 actuarial   assumptions,  the  actual  costs  could  differ  from  those
 presented herein. Quantifying these risks is beyond the  scope  of  this
 Fiscal Note.
   This  Fiscal  Note  is intended to measure pension-related impacts and
 does not include other potential costs (e.g., administrative  and  Other
 Postemployment Benefits).
   STATEMENT OF ACTUARIAL OPINION: Marek Tyszkiewicz and Gregory Zelikov-
 sky  are members of the Society of Actuaries and the American Academy of
 Actuaries. We are members of NYCERS but do not believe  it  impairs  our
 objectivity  and  we  meet  the  Qualification Standards of the American
 Academy of Actuaries to render the actuarial opinion  contained  herein.
 To  the  best  of  our 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 2024-01 dated January  5,
 2024  was prepared by the Chief Actuary for the New York City Retirement
 Systems and Pension Funds. This estimate is intended for use only during
 the 2024 Legislative Session.