Assembly Bill A8003

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8003
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              April 17, 2025
                                ___________
 
 Introduced by M. of A. BAILEY -- read once and referred to the Committee
   on Governmental Employees
 
 AN  ACT  to amend the retirement and social security law, in relation to
   allowing for certain members of a  public  retirement  system  of  the
   state to apply for credit for military service

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1.  Section 1000 of the retirement and social security law  is
 amended by adding a new subdivision 5-a to read as follows:
   5-A.  NOTWITHSTANDING  THE  PROVISIONS  OF  SUBDIVISION  FIVE  OF THIS
 SECTION, A MEMBER, WHO IS  INELIGIBLE  TO  RECEIVE  THE  CREDIT  ALLOWED
 PURSUANT TO THIS SECTION SOLELY BECAUSE SUCH MEMBER RETIRED ON OR BEFORE
 MAY THIRTY-FIRST, TWO THOUSAND SIXTEEN, SHALL BE ELIGIBLE TO RECEIVE THE
 CREDIT ALLOWED PURSUANT TO THIS SECTION IF SUCH MEMBER MAKES APPLICATION
 FOR  SUCH  CREDIT ON OR BEFORE DECEMBER THIRTY-FIRST, TWO THOUSAND TWEN-
 TY-SIX. THE SERVICE CREDIT AVAILABLE PURSUANT TO THIS SUBDIVISION SHALL,
 WHEN CALCULATED, APPLY ONLY TO BENEFITS RECEIVED BY THE MEMBER AFTER THE
 DATE SUCH MEMBER MAKES APPLICATION FOR SUCH CREDIT  AND  NO  RETROACTIVE
 BENEFIT PAYMENTS SHALL BE MADE TO SUCH APPLICANT PURSUANT TO THIS SUBDI-
 VISION.  TO  OBTAIN  CREDIT PURSUANT TO THIS SUBDIVISION, A MEMBER SHALL
 PAY SUCH RETIREMENT SYSTEM, FOR DEPOSIT IN THE FUND USED  TO  ACCUMULATE
 EMPLOYER  CONTRIBUTIONS,  A  SUM  EQUAL  TO THE PRODUCT OF THE NUMBER OF
 YEARS OF MILITARY SERVICE  BEING  CLAIMED  AND  THREE  PERCENT  OF  SUCH
 MEMBER'S  COMPENSATION  EARNED DURING THE LAST TWELVE CONSECUTIVE MONTHS
 OF CREDITED SERVICE PRECEDING THE DATE THAT THE MEMBER RETIRED.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would allow former members who retired on or before May  31,
 2016  to  apply  to receive military service credit pursuant to §1000 of
 the Retirement and Social Security Law (RSSL). If approved, the  retire-
 ment  benefit  will be recalculated as of the date of application and no
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09349-02-5
              

 A. 8003                             2
 
 retroactive benefits will be paid. Retirees would be required to  pay  a
 sum  equal to the product of number of years of military service granted
 multiplied by three percent (3%) of compensation earned during the  last
 twelve  consecutive  months  of  credited  service preceding the date of
 retirement. Such retirees may receive up to three (3) years  of  service
 credit for their military service. Application must be made on or before
 December 31, 2026.
   Insofar  as  this bill affects the New York State and Local Employees'
 Retirement System (NYSLERS), pursuant to Section 25  of  the  RSSL,  the
 increased  costs  would  be  borne entirely by the State of New York and
 would require an itemized appropriation sufficient to pay  the  cost  of
 the  provision.  If  this  bill were enacted during the 2025 Legislative
 Session, the increase in the present value of benefits would be approxi-
 mately $72.2 million, which is estimated to average 10% of  an  affected
 retiree's  final  average  salary  (FAS)  per year of additional service
 granted. After the application deadline, a precise cost will  be  deter-
 mined  (and  billed  to the State of New York) based on those benefiting
 from this provision.
   Insofar as this bill affects the New York State and Local  Police  and
 Fire  Retirement  System (NYSLPFRS), the increased costs would be shared
 by the State of New  York  and  the  local  participating  employers  in
 NYSLPFRS  and  would  be spread over future billing cycles. If this bill
 were enacted during the 2025 Legislative Session, the increase in  pres-
 ent  value  of  benefits  would be approximately $63.8 million, which is
 estimated to average 13% of an affected retiree's FAS per year of  addi-
 tional service granted.
 
 NYSLPFRS                      Increase in present   Increase in required
                               value of benefits     contributions
 Pensioners                    $ 63.8 mn             $ 0.0 mn
 Actives Tiers 1-5 (Closed)    $ 0.0 mn              $ 26.2 mn
 Actives Tier 6 (Open)         $ 0.0 mn              $ 37.6 mn
 Total                         $ 63.8 mn             $ 63.8 mn
 
   In NYSLPFRS, this benefit improvement will be funded by increasing the
 billing  rates charged annually to cover both retrospective and prospec-
 tive benefit increases. The annual contribution required of all  partic-
 ipating  employers  in  NYSLPFRS is 0.1% of billable salary, or approxi-
 mately $872,000 to the State of New York and approximately $3.8  million
 to the local participating employers. This is a permanent annual cost.
   Further,  we  anticipate  some  administrative  costs to implement the
 provisions of this legislation.
   The estimated NYSLERS cost above is based on approximately 4,600 reti-
 rees, with average FAS of approximately $51,000, who  may  benefit  from
 this  bill.  The estimated NYSLPFRS cost above is based on approximately
 1,900 retirees, with average FAS of approximately $88,000, who may bene-
 fit from this bill. A precise cost cannot be calculated until each reti-
 ree applies for the additional service credit.
   Summary of relevant resources:
   Membership data as of March 31, 2024 was used in measuring the  impact
 of the proposed change, the same data used in the April 1, 2024 actuari-
 al  valuation.  Distributions  and  other statistics can be found in the
 2024 Report of the Actuary and the 2024 Annual  Comprehensive  Financial
 Report.  The actuarial assumptions and methods used are described in the
 2024  Annual Report to the Comptroller on Actuarial Assumptions, and the
 Codes, Rules and Regulations  of  the  State  of  New  York:  Audit  and
 A. 8003                             3
 
 Control.  The  Market Assets and GASB Disclosures are found in the March
 31, 2024 New York State and Local Retirement System Financial Statements
 and Supplementary Information.
   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 April 9, 2025, and intended for use only during
 the 2025 Legislative Session, is Fiscal Note No. 2025-77. As Chief Actu-
 ary of the New York State and Local Retirement System, I, Aaron Schottin
 Young, hereby certify that this analysis complies with applicable  Actu-
 arial  Standards of Practice as well as the Code of Professional Conduct
 and Qualification Standards for Actuaries Issuing Statements of Actuari-
 al Opinion of the American Academy of Actuaries, of which I am a member.