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.