Bill Text: NY A07132 | 2019-2020 | General Assembly | Amended


Bill Title: Relates to allowing retired public employees who participated in World Trade Center rescue, recovery or cleanup operations to seek subsequent employment with the state or a municipal corporation without diminution of retirement benefits.

Spectrum: Bipartisan Bill

Status: (Engrossed) 2019-06-20 - REFERRED TO RULES [A07132 Detail]

Download: New_York-2019-A07132-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         7132--B

                               2019-2020 Regular Sessions

                   IN ASSEMBLY

                                     April 10, 2019
                                       ___________

        Introduced  by  M.  of  A.  ABBATE,  PALUMBO, DenDEKKER -- read once and
          referred to the  Committee  on  Governmental  Employees  --  committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to  said  committee  -- reported and referred to the Committee on Ways
          and Means -- committee discharged, bill amended, ordered reprinted  as
          amended and recommitted to said committee

        AN  ACT  to amend the retirement and social security law, in relation to
          allowing retired public employees  who  participated  in  World  Trade
          Center  rescue,  recovery  or  cleanup  operations  to seek subsequent
          employment with the state or a municipal corporation  without  diminu-
          tion of retirement benefits

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Section 211 of the retirement and social  security  law  is
     2  amended by adding a new subdivision 9 to read as follows:
     3    9.  Notwithstanding any other law, rule or regulation to the contrary,
     4  any person who, prior to the effective date of this subdivision, filed a
     5  notice of participation in World Trade Center rescue, recovery or clean-
     6  up operations, as defined in  section  two  of  this  chapter,  who  has
     7  retired  from  public  employment,  is  entitled to receive a retirement
     8  allowance from a public retirement system and seeks  subsequent  employ-
     9  ment  with  the  state or a municipal corporation shall automatically be
    10  deemed to have been granted a waiver of the retirement earnings  limita-
    11  tion  established  by this section and may be employed by the state or a
    12  municipal corporation without loss, suspension or diminution of  his  or
    13  her  retirement  allowance;  provided,  however,  the provisions of this
    14  subdivision shall not apply to a person who retired as an accidental  or
    15  ordinary disability retirement.
    16    §  2. Section 212 of the retirement and social security law is amended
    17  by adding a new subdivision 4 to read as follows:

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07545-12-9

        A. 7132--B                          2

     1    4. Notwithstanding the provisions of subdivisions one and two of  this
     2  section,  the  earning limitations established by this section shall not
     3  apply to any person who, prior to the effective date  of  this  subdivi-
     4  sion,  filed  a  notice  of  participation in World Trade Center rescue,
     5  recovery  or cleanup operations, as defined in section two of this chap-
     6  ter, has retired from public employment, receives a retirement allowance
     7  from such public retirement system and seeks subsequent employment  with
     8  the  state or a municipal corporation; provided, however, the provisions
     9  of this subdivision shall not apply to a person who retired as an  acci-
    10  dental or ordinary disability retirement.
    11    § 3. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          This  bill would add Subdivision 9 of Section 211 and Subdivision 4 of
        Section 212 of the Retirement and Social Security Law to waive the earn-
        ings limitation for retired members who filed notice of  having  partic-
        ipated  in  the World Trade Center rescue, recover or cleanup operations
        prior to the effective date of these subdivisions. Such members  achiev-
        ing  subsequent  employment  with  the  state or a municipal corporation
        would be able to retire without diminution of their  benefits.  However,
        provisions  of these subdivisions would not apply to members retired for
        accidental or ordinary disability. This act shall take effect immediate-
        ly.
          The annual cost to the employers of members  of  the  New  York  State
        Teachers'  Retirement  System is estimated to be negligible if this bill
        is enacted.
          Member data is from  the  System's  most  recent  actuarial  valuation
        files,  consisting  of  data provided by the employers to the Retirement
        System.  Data distributions and statistics can be found in the  System's
        Comprehensive  Annual  Financial  Report  (CAFR).  System  assets are as
        reported in the System's financial statements, and can also be found  in
        the CAFR. Actuarial assumptions and methods are provided in the System's
        Actuarial Valuation Report.
          The  source  of this estimate is Fiscal Note 2019-14 dated February 4,
        2019 prepared by the Actuary of the New York State Teachers'  Retirement
        System and is intended for use only during the 2019 Legislative Session.
        I,  Richard  A.  Young,  am the Actuary for the New York State Teachers'
        Retirement System. I am a member of the American  Academy  of  Actuaries
        and  I meet the Qualification Standards of the American Academy of Actu-
        aries to render the actuarial opinion contained herein.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY OF BILL: This proposed legislation would amend Retirement  and
        Social  Security Law (RSSL) Sections 211 and 212 to permit service reti-
        rees of any public retirement system in New York State who filed a World
        Trade Center (WTC) Notice of Participation (NOP) prior to the  effective
        date  of  the bill to become reemployed with a public employer without a
        post-retirement reduction or suspension of pension benefits by way of an
        automatic post-retirement earnings waiver.
          EFFECTIVE DATE: UPON ENACTMENT.
          IMPACT ON PENSION PAYMENTS:  Currently,  retirees  of  public  pension
        funds  and  retirement  systems  who return to public service within New
        York, and do not rejoin the applicable public fund or system, are gener-
        ally subject to various post-retirement earnings restrictions. New  York
        City  Retirement  Systems  (NYCRS)  retirees are subject to, among other
        things, post-retirement earnings restrictions as provided  in  New  York
        City Charter Section 1117 and RSSL Sections 211 and 212.

        A. 7132--B                          3

          Those who elect to be covered under the provisions of RSSL Section 212
        are permitted to earn post-retirement earnings from a public employer in
        an  amount  not  exceeding a specific dollar limit in each calendar year
        without loss, suspension, or diminution of their retirement  allowances.
        Once this dollar limit is reached, the retiree's retirement allowance is
        suspended for the remainder of that calendar year.  Generally, there are
        no earnings limitations in, or following, the calendar year in which the
        retiree  attains age 65. Currently, the RSSL Section 212 post-retirement
        earnings limitation in effect for calendar year 2007 and each year ther-
        eafter is $30,000.
          When certain exigent criteria are met and approval  is  given  to  the
        employer  by  a  specially  designated entity, a waiver pursuant to RSSL
        Section 211 may be granted, for a two-year period.  Under  RSSL  Section
        211, there is no salary restriction for reemployment with a public enti-
        ty that is not the former employer.
          Under  the proposed legislation, if enacted, the RSSL Sections 211 and
        212 post-retirement public service earnings waivers  would  be  automat-
        ically  granted  and  NYCRS  retirees  who  filed a WTC NOP prior to the
        effective date of the bill would not be subject to  any  post-retirement
        earnings limitation.
          For illustrative purposes only, the table below presents the estimated
        additional  retirement  allowances  paid if RSSL Section 211 waivers are
        granted in lieu of applying RSSL Section  212  post-retirement  earnings
        limitation  for  various  sample  combinations of post-retirement annual
        earnings and annual retirement allowance amounts.

          Annual Retirement    Annual Post-Retirement Earnings in Calendar Year
             Allowance             $40,000          $50,000         $60,000
              $30,000               $7,500          $12,000         $15,000
              $40,000              $10,000          $16,000         $20,000
              $50,000              $12,500          $20,000         $25,000
              $60,000              $15,000          $24,000         $30,000
              $70,000              $17,500          $28,000         $35,000

          FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In  accordance  with
        Administrative   Code   of   the   City  of  New  York  (ACCNY)  Section
        13-638.2(k-2), new UAL attributable to benefit changes are to  be  amor-
        tized  as  determined  by  the  Actuary but generally over the remaining
        working lifetime of those impacted  by  the  benefit  changes.  However,
        since  changes  in  the  applicable  retirement allowances paid to NYCRS
        retirees under this proposed legislation are not known in  advance,  the
        increase in pension payments due to this legislation would be treated as
        an  actuarial  loss.  These  actuarial  losses would be amortized over a
        15-year period (14 payments under the One-Year Lag  Methodology  (OLYM))
        using level dollar payments.
          The number of NYCRS retirees who could potentially be impacted by this
        proposed  legislation cannot be readily determined. However, the Actuary
        believes the increase in pension payments, if the  proposed  legislation
        is enacted, would be approximately $1.5 million to $2.0 million per year
        for each 100 NYCRS service retirees. This would result in an increase in
        annual  employer  contributions  of $180,000 to $240,000 compounded each
        year (e.g. $240,000 in the first year,  $480,000  in  the  second  year,
        $720,000  in  the  third  year,  etc.) for 14 years and then will remain
        level thereafter, assuming 100 such retirees  are  employed  each  year.
        Future years' costs would depend on factors such as, but not limited to,

        A. 7132--B                          4

        the number of retirees that benefit under the legislation and the amount
        of their earnings and retirement allowances.
          OTHER COSTS: Not measures in this Fiscal Note are the following:
          *  The initial, additional administrative costs of NYCRS and other New
        York City agencies to implement the proposed legislation.
          * The impact of this  proposed  legislation  on  Other  Postemployment
        Benefit (OPEB) costs.
          CONTRIBUTION  TIMING:  For  the  purposes  of  this Fiscal Note, it is
        assumed that the changes in the annual employer contributions  would  be
        reflected  for  the first time in the June 30, 2020 actuarial valuations
        of the NYCRS. In accordance with the OYLM  used  to  determine  employer
        contributions,  the  increase  in  employer contributions would first be
        reflected in Fiscal Year 2022.
          CENSUS DATA: For purposes of analyzing  the  impact  of  the  proposed
        legislation,  illustrative  examples  with various salary and retirement
        allowance amounts have been provided above.
          ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the annual  employer
        contributions presented herein have been calculated based on the actuar-
        ial  assumptions and methods in effect for the June 30, 2018 (Lag) actu-
        arial valuations used to determine  the  Preliminary  Fiscal  Year  2020
        employer contributions of the NYCRS.
          RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
        highly on the actuarial assumptions and methods used and are subject  to
        change  based  on  the realization of potential investment, demographic,
        contribution, and other risks. If actual experience deviates from  actu-
        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.
          STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief  Actu-
        ary  for,  and  independent of, the New York City Retirement Systems and
        Pension Funds. I am a Fellow of the Society of  Actuaries,  an  Enrolled
        Actuary under the Employee Retirement Income and Security Act of 1974, a
        Member of the American Academy of Actuaries, and a Fellow of the Confer-
        ence  of Consulting Actuaries. 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 2019-27 dated May 30,
        2019 was prepared by the Chief Actuary for the New York City  Retirement
        Systems and Pension Funds, Sherry S. Chan. This estimate is intended for
        use only during the 2019 Legislative Session.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          This  bill  will  allow  service  retirees  who  previously  filed and
        received approval for notice of  participation  in  World  Trade  Center
        rescue,  recovery or cleanup operations and become subsequently employed
        with the state or a municipal corporation to be exempt from the earnings
        limitations set forth in section two hundred  twelve.  These  provisions
        shall not apply to disability retirees.
          If  this bill is enacted, we expect few retirees to be affected. There
        would be negligible additional annual costs. However, if  large  numbers
        of  retirees  are  hired  into such positions, there would be additional
        annual costs which would be shared by the state of New York and  all  of
        the participating employers in the System.

        A. 7132--B                          5

          Summary of relevant resources:
          The  membership  data  used  in  measuring  the impact of the proposed
        change was the same as that used in the March 31, 2018  actuarial  valu-
        ation.    Distributions  and  other  statistics can be found in the 2018
        Report of the  Actuary  and  the  2018  Comprehensive  Annual  Financial
        Report.
          The  actuarial assumptions and methods used are described in the 2015,
        2016, 2017 and 2018  Annual  Report  to  the  Comptroller  on  Actuarial
        Assumptions,  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, 2018
        New York State and Local  Retirement  System  Financial  Statements  and
        Supplementary Information.
          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 March 5, 2019, and intended for use only during
        the 2019 Legislative Session, is Fiscal Note No.  2019-49,  prepared  by
        the Actuary for the New York State and Local Retirement System.
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