Senate Bill S5883A

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5883
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              March 21, 2023
                                ___________
 
 Introduced  by  Sens.  SKOUFIS, GALLIVAN, HELMING, HINCHEY, ORTT -- 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
   providing county correction officers with a  special  optional  twenty
   year retirement plan

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The retirement and social security law is amended by adding
 a new article 14-C to read as follows:
                               ARTICLE 14-C
     OPTIONAL RETIREMENT PLAN FOR COUNTY CORRECTION OFFICERS OR DEPUTY
                SHERIFFS PERFORMING AS CORRECTION OFFICERS
 SECTION 561. DEFINITIONS.
         562. OPTIONAL TWENTY YEAR RETIREMENT PLAN  FOR  CERTAIN  MEMBERS
                WHOSE EMPLOYER ELECTS TO PROVIDE SAME.
         563. ADDITIONAL  PENSION  BENEFIT FOR MEMBERS OF OPTIONAL TWENTY
                YEAR RETIREMENT PLAN.
         564. CONSISTENT PROVISIONS.
   § 561. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE:
   (A) "MEMBER"  SHALL  MEAN  A  PERSON  WHO  IS  EMPLOYED  AS  A  COUNTY
 CORRECTION  OFFICER  OR  A  DEPUTY  SHERIFF  WHO  IS ENGAGED DIRECTLY IN
 CORRECTION OFFICER DUTIES THAT  AGGREGATE  FIFTY  PER  CENTUM  OF  THEIR
 SERVICE  BY  A  COUNTY  WHICH  ELECTS  BY  RESOLUTION OR LOCAL LAW, DULY
 ADOPTED, TO PROVIDE THE BENEFITS AS AUTHORIZED BY THIS ARTICLE.
   (B) "RETIREMENT SYSTEM" SHALL  MEAN  THE  NEW  YORK  STATE  AND  LOCAL
 EMPLOYEES' RETIREMENT SYSTEM.
   (C)  "CREDITABLE SERVICE" SHALL INCLUDE ANY AND ALL SERVICES PERFORMED
 AS A SHERIFF, UNDERSHERIFF OR DEPUTY  SHERIFF,  OR  CORRECTION  OFFICER.
 CREDIT  FOR  SERVICE  AS A MEMBER OR OFFICER OF THE STATE POLICE OR AS A
 PAID FIREMAN, POLICEMAN OR OFFICER OF ANY ORGANIZED FIRE  DEPARTMENT  OR
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05836-02-3
              

 S. 5883                             2
 
 POLICE  FORCE  OR  DEPARTMENT  OF  ANY COUNTY, CITY, VILLAGE, TOWN, FIRE
 DISTRICT OR POLICE DISTRICT, SHALL  ALSO  BE  DEEMED  TO  BE  CREDITABLE
 SERVICE  AND  SHALL  BE INCLUDED IN COMPUTING YEARS OF TOTAL SERVICE FOR
 RETIREMENT PURSUANT TO THIS SECTION, PROVIDED SUCH SERVICE WAS PERFORMED
 BY  THE  MEMBER  WHILE CONTRIBUTING TO THE RETIREMENT SYSTEM PURSUANT TO
 THE PROVISIONS OF THIS ARTICLE OR ARTICLE EIGHT OF THIS CHAPTER.
   § 562. OPTIONAL TWENTY YEAR RETIREMENT PLAN FOR CERTAIN MEMBERS  WHOSE
 EMPLOYER ELECTS TO PROVIDE SAME. (A) ANY MEMBER OF THE RETIREMENT SYSTEM
 MAY  ELECT TO BECOME A MEMBER PURSUANT TO THE PROVISIONS OF THIS SECTION
 WITHIN ONE YEAR AFTER HE OR SHE BECOMES A MEMBER, IF HIS OR HER EMPLOYER
 HAS ELECTED TO MAKE THE BENEFITS PROVIDED BY THIS SECTION  AVAILABLE  TO
 MEMBERS, OR WITHIN ONE YEAR AFTER HIS OR HER EMPLOYER ELECTS TO MAKE THE
 BENEFITS PROVIDED BY THIS SECTION AVAILABLE TO ITS MEMBERS.
   (B)  ELECTIONS  MADE  PURSUANT TO THIS SECTION SHALL BE IN WRITING AND
 SHALL BE DULY ACKNOWLEDGED AND FILED WITH THE  COMPTROLLER.  ANY  MEMBER
 WHO  FILES  SUCH  AN  ELECTION  PURSUANT TO THIS SECTION MAY WITHDRAW IT
 AFTER IT HAS BEEN FILED FOR AT LEAST A YEAR. SUCH WITHDRAWAL SHALL BE BY
 WRITTEN NOTICE DULY ACKNOWLEDGED AND FILED WITH THE COMPTROLLER.
   (C) A MEMBER PARTICIPATING ON THE BASIS OF THIS SECTION AT THE TIME OF
 RETIREMENT SHALL BE ENTITLED TO RETIRE AFTER THE  COMPLETION  OF  TWENTY
 YEARS  OF  TOTAL CREDITABLE SERVICE OR UPON THE ATTAINMENT OF AGE SIXTY-
 TWO, BY FILING AN APPLICATION THEREFOR  IN  A  MANNER  SIMILAR  TO  THAT
 PROVIDED IN THIS CHAPTER.
   (I)  UPON  COMPLETION OF TWENTY YEARS OF SUCH SERVICE AND UPON RETIRE-
 MENT, EACH SUCH MEMBER SHALL RECEIVE A PENSION SUFFICIENT TO PROVIDE HIM
 OR HER WITH A RETIREMENT ALLOWANCE EQUAL TO ONE-FORTIETH OF HIS  OR  HER
 FINAL  AVERAGE  SALARY  FOR  EACH  YEAR OF TOTAL CREDITABLE SERVICES FOR
 WHICH HE OR SHE IS OTHERWISE ENTITLED BUT NOT EXCEEDING IN THE AGGREGATE
 ONE-HALF OF HIS OR HER FINAL AVERAGE SALARY.
   (II) UPON ATTAINMENT OF AGE  SIXTY-TWO  AND  UPON  RETIREMENT  WITHOUT
 COMPLETION  OF  TWENTY  YEARS  OF  SUCH  SERVICE, EACH SUCH MEMBER SHALL
 RECEIVE A PENSION SUFFICIENT TO PROVIDE HIM OR  HER  WITH  A  RETIREMENT
 ALLOWANCE  EQUAL  TO ONE-FORTIETH OF HIS OR HER FINAL AVERAGE SALARY FOR
 EACH YEAR OF CREDITABLE SERVICE. EVERY SUCH MEMBER SHALL ALSO  BE  ENTI-
 TLED TO AN ADDITIONAL PENSION EQUAL TO THE PENSION FOR ANY OTHER CREDIT-
 ABLE  SERVICE  RENDERED AS OTHERWISE PROVIDED FOR IN THIS CHAPTER.  THIS
 LATTER PENSION SHALL NOT INCREASE THE TOTAL ALLOWANCE TO MORE THAN  ONE-
 HALF OF HIS OR HER FINAL AVERAGE SALARY.
   (D)  THE  INCREASED  PENSIONS  TO  SUCH  MEMBERS,  AS PROVIDED BY THIS
 SECTION, SHALL BE PAID FROM ADDITIONAL CONTRIBUTIONS MADE BY THE PARTIC-
 IPATING EMPLOYER ON ACCOUNT OF SUCH MEMBERS. THE ACTUARY OF THE  RETIRE-
 MENT  SYSTEM SHALL COMPUTE THE ADDITIONAL CONTRIBUTION REQUIRED FOR EACH
 MEMBER WHO ELECTS TO RECEIVE THE SPECIAL BENEFITS  PROVIDED  UNDER  THIS
 SECTION. SUCH ADDITIONAL CONTRIBUTIONS SHALL BE COMPUTED ON THE BASIS OF
 CONTRIBUTIONS  DURING  THE PROSPECTIVE SERVICE OF SUCH MEMBER WHICH WILL
 COVER THE LIABILITY OF THE RETIREMENT SYSTEM FOR  SUCH  EXTRA  PENSIONS.
 UPON APPROVAL OF THE COMPTROLLER, SUCH ADDITIONAL CONTRIBUTIONS SHALL BE
 CERTIFIED BY HIM OR HER TO THE CHIEF FISCAL OFFICER OR THE PARTICIPATING
 EMPLOYER.  THE  AMOUNT THEREOF SHALL BE INCLUDED IN THE ANNUAL APPROPRI-
 ATION OF THE PARTICIPATING EMPLOYER. SUCH AMOUNT SHALL BE  PAID  ON  THE
 WARRANT OF THE CHIEF FISCAL OFFICER OF THE PARTICIPATING EMPLOYER TO THE
 PENSION ACCUMULATION FUND OF THE RETIREMENT SYSTEM.
   (E)  IN  COMPUTING  THE TWENTY YEARS OF COMPLETED SERVICE OF A MEMBER,
 FULL CREDIT SHALL BE GIVEN FOR MILITARY SERVICE AS DEFINED  IN  SUBDIVI-
 SIONS  TWENTY-NINE-A  AND  THIRTY  OF  SECTION THREE HUNDRED TWO OF THIS
 CHAPTER.
 S. 5883                             3
 
   (F) EVERY MEMBER PARTICIPATING ON THE BASIS OF THIS SECTION  SHALL  BE
 SEPARATED  FROM  THE  SERVICE ON THE LAST DAY OF THE CALENDAR MONTH NEXT
 SUCCEEDING THE CALENDAR MONTH IN WHICH HE OR SHE ATTAINS AGE  SIXTY-TWO,
 PROVIDED,  HOWEVER, THAT SUCH A MEMBER WHO ATTAINED THE AGE OF SIXTY-TWO
 BEFORE HIS OR HER EMPLOYER ELECTED TO MAKE THE BENEFITS PROVIDED BY THIS
 SECTION  AVAILABLE  TO  HIM  OR HER, OR WHO ATTAINS THE AGE OF SIXTY-TWO
 WITHIN ONE MONTH AFTER HIS OR HER EMPLOYER MAKES  SUCH  BENEFITS  AVAIL-
 ABLE,  TO  BE  ELIGIBLE  FOR  A  PENSION COMPUTED IN ACCORDANCE WITH THE
 PROVISIONS OF THIS SECTION, SHALL BE SEPARATED FROM THE  SERVICE  WITHIN
 THREE MONTHS AFTER HIS OR HER EMPLOYER MAKES SUCH BENEFITS AVAILABLE.
   (G)  THE PROVISIONS OF THIS SECTION SHALL BE CONTROLLING NOTWITHSTAND-
 ING ANY OTHER PROVISION OF THIS ARTICLE TO THE CONTRARY.
   (H) THE BENEFITS OF THIS SECTION SHALL  BE  AVAILABLE  ONLY  TO  THOSE
 MEMBERS  WHOSE  EMPLOYER  ELECTS  TO PROVIDE SUCH BENEFITS BY ADOPTING A
 RESOLUTION OR LOCAL LAW TO SUCH EFFECT AND FILING A CERTIFIED COPY THER-
 EOF WITH THE COMPTROLLER.
   (I) THE BENEFITS PROVIDED BY  THIS  SECTION  SHALL  BE  PAYABLE  TO  A
 MEMBER,  UNLESS AT THE DATE OF RETIREMENT SUCH MEMBER WOULD OTHERWISE BE
 ENTITLED TO A GREATER BENEFIT UNDER OTHER PROVISIONS OF THIS CHAPTER HAD
 HE OR SHE WITHDRAWN FROM THIS SECTION, IN WHICH EVENT SUCH GREATER BENE-
 FITS SHALL BE PAYABLE.
   § 563. ADDITIONAL PENSION BENEFIT FOR MEMBERS OF OPTIONAL TWENTY  YEAR
 RETIREMENT  PLAN.  (A)  A  PARTICIPATING  EMPLOYER WHICH HAS ELECTED, OR
 WHICH ELECTS TO PROVIDE THE BENEFITS OF THE OPTIONAL TWENTY YEAR RETIRE-
 MENT PLAN FOR ITS EMPLOYEES AS SPECIFIED IN THIS ARTICLE  MAY  ELECT  TO
 MAKE  CONTRIBUTIONS  FOR  THE PURPOSE OF PROVIDING AN ADDITIONAL PENSION
 PURSUANT TO THIS SECTION FOR MEMBERS IN ITS EMPLOY WHO ARE ENTITLED TO A
 PENSION PURSUANT TO SECTION FIVE  HUNDRED  SIXTY-TWO  OF  THIS  ARTICLE.
 EVERY MEMBER EMPLOYED BY AN EMPLOYER WHICH HAS ELECTED THE PROVISIONS OF
 SECTION  FIVE  HUNDRED  SIXTY-TWO  OF  THIS ARTICLE AND THIS SECTION MAY
 ELECT TO BE COVERED BY THE PROVISIONS OF THIS SECTION BY FILING WITH THE
 COMPTROLLER, A DULY EXECUTED AND ACKNOWLEDGED FORM PREPARED BY THE COMP-
 TROLLER FOR THAT PURPOSE.
   (B) UPON RETIREMENT, EACH SUCH MEMBER SHALL RECEIVE, FOR EACH YEAR  OF
 SERVICE  IN EXCESS OF TWENTY, AN ADDITIONAL PENSION WHICH SHALL BE EQUAL
 TO ONE-SIXTIETH OF HIS OR HER FINAL AVERAGE SALARY;  PROVIDED,  HOWEVER,
 THAT  THE  TOTAL  ALLOWANCE  PAYABLE  PURSUANT TO THIS SECTION SHALL NOT
 EXCEED THREE-QUARTERS OF SUCH MEMBER'S FINAL AVERAGE SALARY.
   § 564. CONSISTENT PROVISIONS. NOTHING CONTAINED IN THIS ARTICLE  SHALL
 BE  CONSTRUED  TO  OTHERWISE AFFECT THE APPLICABILITY OF ARTICLE ELEVEN,
 FOURTEEN OR FIFTEEN OF THIS CHAPTER. ANY OTHER PROVISIONS OF THIS  CHAP-
 TER  RELATING  TO  MANDATORY CONTRIBUTION TO THE RETIREMENT SYSTEM BASED
 UPON A MEMBER'S DATE OF MEMBERSHIP IN SUCH SYSTEM SHALL NOT BE DEEMED TO
 BE AFFECTED BY THE PROVISIONS OF THIS ARTICLE, AND ANY MEMBER WHO ON THE
 EFFECTIVE DATE OF THIS ARTICLE IS NOT REQUIRED TO CONTRIBUTE  SHALL  NOT
 BE  REQUIRED  TO MAKE ANY CONTRIBUTIONS AS A RESULT OF THIS SECTION. FOR
 THOSE MEMBERS REQUIRED TO CONTRIBUTE  TO  THE  RETIREMENT  SYSTEM,  SUCH
 CONTRIBUTION  SHALL  BE TREATED IN THE SAME MANNER AS SPECIFIED FOR SUCH
 MEMBERS IN ARTICLE FOURTEEN OR FIFTEEN OF THIS CHAPTER.
   § 2. Any past service payments required of a county as a result of the
 adoption of the benefits permitted by this act may be amortized  over  a
 period of up to ten years at the option of such county.
   § 3. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would create Article 14-C in the Retirement and Social Secu-
 rity  Law,  creating  county electable 20-year plans covering any county
 S. 5883                             4
 
 correction officers and deputy sheriffs engaged directly in at least 50%
 correction officer duties. A county may elect to  provide  a  retirement
 benefit  equal to 50% of final average salary after 20 years of service.
 A  county  may further elect to provide for additional 60ths for service
 beyond 20 years. All service rendered as a correction officer,  sheriff,
 undersheriff,  or  deputy  sheriff,  a  member  or  officer of the State
 Police, a paid firefighter, a police  officer,  or  an  officer  of  any
 organized  fire department or police force is creditable. The retirement
 benefit is not to exceed 75% of final average salary.
   If this bill is enacted during the  2023  legislative  session,  there
 will  be  an increase in the annual contributions of any electing county
 for the fiscal year ending  March  31,  2024,  as  approximated  in  the
 following  table.  In future years, these costs will vary as the billing
 rates of the affected members change.
 
 Current Plan   Electing 20-year plan    Electing 20-year plan
                                         plus additional 60ths
     A15             7.5%                     8.5%
     89-e            4.3%                     5.4%
     551             3.3%                     4.4%
     551E            2.0%                     3.1%
 
   In addition to the annual contributions discussed above, there will be
 an immediate past service  cost  that  will  depend  upon  the  members'
 service, salary, tier, current retirement plan, and new retirement plan.
 Once  a  county  elects  to provide this coverage, an exact cost will be
 determined based upon a roster of eligible members provided by the coun-
 ty. The past service cost may be amortized over a period of  up  to  ten
 years.
   Further,  we  anticipate  additional administrative costs to implement
 the provisions of this legislation.
   Internal Revenue Service (IRS)  plan  qualification  issues:  granting
 correction  officers  service credit toward retirement in a 20-year plan
 could jeopardize the Retirement System's governmental  plan  status  and
 its  exemption  from ERISA. This development could result in the loss of
 qualified status, which would mean the loss of tax benefits. This result
 would substantially impair the Retirement System's  value  to  our  more
 than one million participants.
   Prior to the enactment of this legislation, we recommend that a favor-
 able ruling be obtained from the IRS stating that these provisions would
 not  harm the qualification status of the Retirement System. It is esti-
 mated that the costs to obtain such a ruling would be  $38,000  for  the
 services of the IRS, and $1,000 per hour for legal consultants.
   Summary of relevant resources:
   Membership  data as of March 31, 2022 was used in measuring the impact
 of the proposed change, the same data used in the April 1, 2022 actuari-
 al valuation.  Distributions and other statistics can be  found  in  the
 2022  Report  of the Actuary and the 2022 Annual Comprehensive Financial
 Report.
   The actuarial assumptions and methods used are described in the  2020,
 2021,  and  2022  Annual  Report to the Comptroller on Actuarial Assump-
 tions, and the Codes, Rules and Regulations of the State  of  New  York:
 Audit and Control.
   The Market Assets and GASB Disclosures are found in the March 31, 2022
 New  York  State  and  Local  Retirement System Financial Statements and
 Supplementary Information.
 S. 5883                             5
 
   I am a member of the American Academy of Actuaries and meet the Quali-
 fication Standards to render the actuarial opinion contained herein.
   This  fiscal note does not constitute a legal opinion on the viability
 of the proposed change nor is it intended to serve as a  substitute  for
 the professional judgment of an attorney.
   This  estimate,  dated  February  27,  2023, and intended for use only
 during the  2023  Legislative  Session,  is  Fiscal  Note  No.  2023-55,
 prepared  by  the  Actuary  for  the New York State and Local Retirement
 System.