S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  8122--A
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                               May 15, 2025
                                ___________
 
 Introduced  by  Sen. JACKSON -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
   -- committee discharged, bill amended, ordered  reprinted  as  amended
   and recommitted to said committee
 
 AN  ACT to amend the administrative code of the city of New York and the
   retirement and social security law, in relation to permitting  certain
   New  York  city correction and sanitation members to borrow from their
   accumulated member contributions; and to repeal certain provisions  of
   the retirement and social security law relating thereto
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph 8 of  subdivision  d  of  section  445-a  of  the
 retirement  and  social security law is REPEALED and paragraphs 9 and 10
 are renumbered paragraphs 8 and 9.
   § 2. Paragraph 8 of subdivision d of section 445-b of  the  retirement
 and  social  security law is REPEALED and paragraphs 9 and 10 are renum-
 bered paragraphs 8 and 9.
   § 3. Paragraph 12 of subdivision d of section 445-c of the  retirement
 and  social  security  law  is REPEALED and paragraphs 13, 14 and 15 are
 renumbered paragraphs 12, 13 and 14.
   § 4. Paragraph 9 of subdivision e of section 504-a of  the  retirement
 and social security law is REPEALED.
   §  5. Paragraph 13 of subdivision e of section 504-b of the retirement
 and social security law is REPEALED.
   § 6. Paragraph 10 of subdivision e of section 504-d of the  retirement
 and social security law is REPEALED.
   §  7.  Paragraph 9 of subdivision e of section 604-a of the retirement
 and social security law is REPEALED.
   § 8. Subdivision a of section 13-140 of the administrative code of the
 city of New York, as amended by chapter 642 of  the  laws  of  1985,  is
 amended to read as follows:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01270-03-5
              

 S. 8122--A                          2
 
   a. Any member in city service who shall have been a member continuous-
 ly  at  least  three years, may borrow from the contingent reserve fund,
 subject to such rules and regulations as may be approved by such  board,
 an  amount  not  exceeding THE SUM OF (I) seventy-five per centum of the
 amount  in  [his  or  her]  SUCH MEMBER'S account in the annuity savings
 fund, (II) ALL ADDITIONAL CONTRIBUTIONS, TOGETHER WITH INTEREST THEREON,
 MADE BY SUCH MEMBER PURSUANT TO SECTION FOUR HUNDRED FORTY-FIVE-A OF THE
 RETIREMENT AND SOCIAL SECURITY LAW, (III) ALL ADDITIONAL  CONTRIBUTIONS,
 TOGETHER  WITH INTEREST THEREON, MADE BY SUCH MEMBER PURSUANT TO SECTION
 FOUR HUNDRED FORTY-FIVE-B OF THE RETIREMENT AND SOCIAL SECURITY LAW, AND
 (IV) ALL ADDITIONAL CONTRIBUTIONS, TOGETHER WITH INTEREST THEREON,  MADE
 BY  SUCH  MEMBER  PURSUANT  TO  SECTION FOUR HUNDRED FORTY-FIVE-C OF THE
 RETIREMENT AND SOCIAL SECURITY LAW. The rate of interest payable on  any
 loan  made  under  this  section shall be two per centum higher than the
 rate of regular interest creditable to the account of  the  member.  The
 amount so borrowed, together with interest on any unpaid balance thereof
 shall  be  repaid  to  the  retirement  system  in equal installments by
 deduction from the compensation of the member at the  time  the  compen-
 sation  is paid, but such installments shall be at least five per centum
 of the member's earnable compensation. All  payments  of  principal  and
 interest made by such member shall be credited to the contingent reserve
 fund.
   §  9.  Paragraph 1 of subdivision b of section 517-c of the retirement
 and social security law, as amended by section 1 of part JJ  of  chapter
 55 of the laws of 2023, is amended to read as follows:
   1.  A  member  of  the  New York state and local employees' retirement
 system, the New York state and local police and fire retirement  system,
 the  New York city employees' retirement system, the New York city board
 of education retirement system or the New York city police pension  fund
 in active service who has credit for at least one year of member service
 may borrow, no more than once during each twelve month period, an amount
 not  exceeding  seventy-five  percent  of  the  total contributions made
 pursuant to section FIVE HUNDRED FOUR-A (INCLUDING INTEREST CREDITED  AT
 THE  RATE  SET FORTH IN SUBPARAGRAPH (II) OF PARAGRAPH EIGHT OF SUBDIVI-
 SION E OF SUCH SECTION FIVE HUNDRED FOUR-A COMPOUNDED ANNUALLY), SECTION
 FIVE HUNDRED FOUR-B (INCLUDING INTEREST CREDITED AT THE RATE  SET  FORTH
 IN  SUBPARAGRAPH  (II)  OF  PARAGRAPH  TWELVE  OF  SUBDIVISION E OF SUCH
 SECTION FIVE HUNDRED FOUR-B COMPOUNDED ANNUALLY), SECTION  FIVE  HUNDRED
 FOUR-D  (INCLUDING  INTEREST CREDITED AT THE RATE SET FORTH  IN SUBPARA-
 GRAPH (II) OF PARAGRAPH NINE OF  SUBDIVISION  E  OF  SUCH  SECTION  FIVE
 HUNDRED  FOUR-D  COMPOUNDED ANNUALLY), OR SECTION five hundred seventeen
 of this article (including interest credited at the rate  set  forth  in
 subdivision  c of such section five hundred seventeen compounded annual-
 ly) and not less than one thousand dollars, provided, however, that  the
 provisions of this section shall not apply to a New York city [uniformed
 correction/sanitation  revised  plan  member or an] investigator revised
 plan member.
   § 10. Paragraph 1 of subdivision b of section 613-b of the  retirement
 and  social security law, as amended by chapter 303 of the laws of 2017,
 is amended to read as follows:
   1. A member of the New York  state  and  local  employees'  retirement
 system,  the  New York city employees' retirement system or the New York
 city board of education retirement system  in  active  service  who  has
 credit  for at least one year of member service may borrow, no more than
 once during each twelve month period, an amount not  exceeding  seventy-
 five  percent  of  the  total contributions made pursuant to section SIX
 S. 8122--A                          3
 
 HUNDRED FOUR-A (INCLUDING INTEREST CREDITED AT THE  RATE  SET  FORTH  IN
 SUBPARAGRAPH  (II)  OF  PARAGRAPH EIGHT OF SUBDIVISION E OF SUCH SECTION
 SIX HUNDRED FOUR-A COMPOUNDED ANNUALLY) OR SECTION six hundred  thirteen
 (including  interest  credited at the rate set forth in subdivision c of
 such section six hundred thirteen compounded annually) and not less than
 one thousand dollars.
   § 11. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY: This proposed legislation  would  permit  members  of  NYCERS
 Sanitation  and  Correction Officers 20-Year plans to take loans against
 their accumulated Additional Member Contributions (AMC)  with  interest,
 and  permit  members  of  the  NYCERS Uniformed Sanitation and Uniformed
 Correction Officers 22-Year plans to take loans  against  their  accumu-
 lated Basic Member Contributions (BMC) with interest.
 
          EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
           by Fiscal Year for the first 25 years ($ in Millions)
                          Year      NYCERS
                          2026      9.0
                          2027      8.9
                          2028      8.8
                          2029      8.7
                          2030      8.5
                          2031      8.4
                          2032      8.4
                          2033      8.3
                          2034      8.2
                          2035      8.2
                          2036      8.1
                          2037      1.8
                          2038      1.8
                          2039      1.8
                          2040      1.7
                          2041      1.7
                          2042      1.7
                          2043      1.7
                          2044      1.7
                          2045      1.7
                          2046      1.7
                          2047      1.7
                          2048      1.8
                          2049      1.8
                          2050      1.8
 Projected  contributions  include future new hires that may be impacted.
 For Fiscal Year 2051 and beyond, the expected increase in normal cost as
 a level percent of pay for impacted new entrants is approximately 0.04%.
 Potential costs related to lost investment  earnings  are  not  included
 above.
 
   The entire increase in employer contributions will be allocated to New
 York City.
   PRESENT  VALUE  OF  BENEFITS:  The  Present  Value  of Benefits is the
 discounted expected value of benefits paid to  current  members  if  all
 assumptions are met, including future service accrual and pay increases.
 Future new hires are not included in this present value.
 S. 8122--A                          4
 
          INITIAL INCREASE (DECREASE) IN ACTUARIAL PRESENT VALUES
                    as of June 30, 2024 ($ in Millions)
                Present Value (PV)                   NYCERS
                (1) PV of Employer Contributions:      64.2
                (2) PV of Employee Contributions:       0.0
                Total PV of Benefits (1) + (2):        64.2
 
   UNFUNDED  ACCRUED  LIABILITY  (UAL): Actuarial Accrued Liabilities are
 the portion of the Present Value of Benefits allocated to past  service.
 Changes  in UAL were amortized over the expected remaining working life-
 time of those impacted using level dollar payments.
 
                AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
                                                   NYCERS
                Increase (Decrease) in UAL:        45.7 M
                Number of Payments:                    11
                Amortization Payment:               6.3 M
 
   CENSUS DATA: The estimates presented herein are based  on  preliminary
 census  data  collected  as  of  June  30, 2024. The census data for the
 impacted population is summarized below.
 
                                                    NYCERS
                Active Members
                - Number Count:                     13,728
                - Average Age:                        43.3
                - Average Service:                    11.8
                - Average Salary:                  118,600
 
   IMPACT ON MEMBER  BENEFITS:  The  proposed  legislation  would  permit
 members  of  the Sanitation 20-Year Plan and Correction Officers 20-Year
 Plans to borrow up to 75% (100% for Tier 1 and Tier 2) of their AMC. The
 proposed legislation would also permit members of the Uniformed  Sanita-
 tion  Force  22-Year Plan and Uniformed Correction Force 22-Year Plan to
 borrow up to 75% of their BMC. For members  of  the  Sanitation  20-Year
 Plan and Correction Officers 20-Year Plans, the loans on AMC would be in
 addition to currently permissible loans on BMC.
   Employer  contributions will increase if a member takes a loan and the
 assets earn more than the rate of interest charged for the loan,  or  if
 there is an outstanding loan balance at retirement.
   Currently,  member contributions are invested with other NYCERS assets
 which are expected to earn 7.0% per annum. When an active member borrows
 member contributions from NYCERS, the loan is repaid  with  interest  at
 6.0%  per annum prior to retirement. The potential costs related to lost
 investment earnings are not included  in  the  costs  measured  in  this
 fiscal note.
   In  the  event  an  outstanding loan balance exists at retirement, the
 balance of the unpaid loan is converted to an annuity based on the yield
 on 30-year U.S. Treasury securities and deducted from the annual retire-
 ment allowance otherwise payable. This conversion is made on an actuari-
 al basis that is different than the basis  used  to  determine  employer
 contributions  to  NYCERS, and unpaid loans therefore result in costs to
 employers.
   ASSUMPTIONS AND METHODS: The  estimates  presented  herein  have  been
 calculated  based  on the Revised 2021 Actuarial Assumptions and Methods
 of the impacted retirement systems. In addition:
 S. 8122--A                          5
 
   * New entrants were assumed to replace exiting members so  that  total
 payroll increases by 3% each year for impacted groups. New entrant demo-
 graphics were developed based on data for recent new hires and actuarial
 judgement.
   *  It has been assumed that the yield on 30-year U.S. Treasury securi-
 ties would equal 3.5% per year, and that 25%  of  member  balances  (BMC
 and, if permissible, AMC) would be taken as loans at retirement.
   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). This Fiscal Note does not reflect any chapter
 laws that may have been enacted during the current legislative session.
   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 2025-71 dated May 23,
 2025 was prepared by the Chief Actuary for the New York City  Retirement
 Systems  and  Pension Funds and is intended for use only during the 2025
 Legislative Session.