Bill Text: NY A07663 | 2019-2020 | General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relates to automotive members of the New York city employees' retirement system.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2020-04-08 - print number 7663a [A07663 Detail]

Download: New_York-2019-A07663-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          7663

                               2019-2020 Regular Sessions

                   IN ASSEMBLY

                                      May 14, 2019
                                       ___________

        Introduced by M. of A. ABBATE -- read once and referred to the Committee
          on Governmental Employees

        AN  ACT  to amend the retirement and social security law, in relation to
          automotive members of the New York city employees' retirement system

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

     1    Section  1.  Subparagraph  (ii)  of  paragraph  2  of subdivision d of
     2  section 604-g of the retirement and social security law, as  amended  by
     3  chapter 18 of the laws of 2012, is amended to read as follows:
     4    (ii)  In  the case of a participant who is not a New York city revised
     5  plan member, such vested benefit shall become payable [on  the  earliest
     6  date on which such discontinued member could have retired for service if
     7  such discontinuance had not occurred] as follows:
     8    (A) at the later of age sixty-two or the age at discontinuance, if the
     9  member had completed at least ten years of credited service; or
    10    (B)  at  the later of age sixty-three or the age at discontinuance, if
    11  the member had completed at least eight, but fewer  than  ten  years  of
    12  credited service; or
    13    (C)  at  the  later of age sixty-four or the age of discontinuance, if
    14  the member had completed at least six, but fewer  than  eight  years  of
    15  credited service; or
    16    (D)  at  the  later of age sixty-five or the age of discontinuance, if
    17  the member had completed at least five, but  fewer  than  six  years  of
    18  credited service;
    19    or,  in  the case of a participant who is a New York city revised plan
    20  member, such vested benefit shall become payable at age sixty-three.
    21    § 2. Subdivision e of section 604-g of the retirement and social secu-
    22  rity law is amended by adding a new paragraph 13 to read as follows:
    23    13. In addition to the deferred vested benefit calculated pursuant  to
    24  subdivision  d  of  this section, a participant who is eligible for such
    25  benefit shall receive a life annuity (calculated in accordance with  the

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD04327-02-9
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     1  method  set  forth in subdivision i of section six hundred thirteen-b of
     2  this article) which is actuarially equivalent to the difference  between
     3  (i)  the contributions required by paragraph one of this subdivision and
     4  (ii)  the  additional  member contributions required by subdivision d of
     5  section six hundred four-c of this article, as added by chapter  ninety-
     6  six  of  the  laws  of  nineteen ninety-five, together with the interest
     7  credited on such contributions.
     8    § 3. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY OF BILL: This proposed legislation would amend  Section  604-g
        of  the Retirement and Social Security Law (RSSL) to provide early paya-
        bility, and an annuity based on the accumulation of  certain  Additional
        Members  Contributions (AMCs), to certain vested members in the New York
        City Employees' Retirement System  (NYCERS)  Automotive  25-Year/Age  50
        Plan (Auto 25-Year Plan).
          Effective Date: Upon enactment.
          IMPACT  ON  PAYABILITY:  Currently,  Tier 4 vested members in the Auto
        25-Year Plan can begin collecting their pension:
          * At the later of age 50 or what would have been their  25th  year  of
        credited service
          The proposed legislation would instead enable Tier 4 Auto 25-Year Plan
        vested members to begin collecting their pension as follows:
          * At age 62 with at least 10 years of credited service
          * At age 63 with at least 8 years of credited service
          * At age 64 with at least 6 years of credited service
          * At age 65 or older with at least 5 years of credited service
          Tier  6  Auto  25-Year Plan members would remain eligible for a vested
        benefit:
          * At age 63 or older with at least 10 years of credited service.
          IMPACT ON BENEFITS: The proposed legislation would further provide  to
        both  Tier  4  and 6 Auto 25-Year Plan vested members an annuity benefit
        equal to the difference between the following:
          * AMCs required in the Auto 25-Year Plan (4.83% of salary), and
          * AMCs required in the Tier 4  55/25  Retirement  Plan  (ranging  from
        1.85% to 4.35% of salary depending on dates of the service rendered).
          The difference in the AMC balances above are to be annuitized pursuant
        to the method set out in loan provisions in 613-b(i)(i.e. the actuarial-
        ly  equivalent  of  a life annuity using the interest rate on 30-year US
        treasury bonds as of January first of the calendar  year  of  retirement
        and the mortality tables for payment options under RSSL section 610).
          Note:
          *  This  annuity  would only be available to vested members and not to
        Auto-25 Year Plan service retirees (i.e. retirees with 25 or more  years
        of credited service).
          *  For the purposes of determining the costs enumerated in this fiscal
        note, it has been assumed that Tier 4 vested members who would have been
        eligible for earlier payability (i.e. at the later of  age  50  or  what
        would  have  been  25 years of service) under current provisions of law,
        would still be eligible for such  earlier  payability,  given  Constitu-
        tional  protections,  notwithstanding the bill's omission of such eligi-
        bility.
          FINANCIAL IMPACT - PRESENT VALUES: Based on the actuarial  assumptions
        and methods described herein, the enactment of this proposed legislation
        would  increase  the Present Value of Future Benefits (PVFB) by approxi-
        mately $26.1 million.
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          Under the Entry Age Normal cost method used to determine the  employer
        contributions  to  NYCERS,  there  would  be an increase in the Unfunded
        Accrued Liability (UAL) of approximately $15.3 million and  an  increase
        in the Present Value of future employer Normal Cost of $10.8 million.
          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. As of June
        30, 2018, the remaining working lifetime of Auto 25-Year Plan members is
        approximately 14 years.
          For the purposes of this Fiscal Note, the increase in  UAL  was  amor-
        tized  over a 14-year period (13 payments under the One-Year Lag Method-
        ology (OYLM))  using  level  dollar  payments.  This  payment  plus  the
        increase  in  the  Normal Cost results in an increase in annual employer
        contributions of approximately $3.4 million each year.
          OTHER COSTS: Not measured in this Fiscal Note are the following:
          The initial, additional administrative costs of NYCERS and  other  New
        York City agencies to implement the proposed legislation.
          The  impact of this proposed legislation on Other Postemployment Bene-
        fit (OPEB) costs.
          CONTRIBUTION TIMING: For the purposes  of  this  Fiscal  Note,  it  is
        assumed  that  the changes in the PVFB and annual employer contributions
        would be reflected for the first time in the  June  30,  2018  actuarial
        valuation  of  NYCERS.  In  accordance  with  the OYLM used to determine
        employer contributions, the increase  in  employer  contributions  would
        first be reflected in Fiscal Year 2020.
          CENSUS  DATA:  The  estimates presented herein are based on the census
        data used in the Preliminary June 30, 2018 (Lag) actuarial valuation  of
        NYCERS  to  determine the Preliminary Fiscal Year 2020 employer contrib-
        utions.
          The 1,604 NYCERS Auto 25-Year Plan members as of June 30, 2018 include
        1,504 active members and 100 non-active members. The active members  had
        an  average age of approximately 45.2 years, average service of approxi-
        mately 8.6 years, and an average salary of approximately $101,400.
          ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the PVFB and  annual
        employer  contributions  presented  herein have been calculated based on
        the actuarial assumptions and methods in effect for the  June  30,  2018
        (Lag) actuarial valuations used to determine the Preliminary Fiscal Year
        2020 employer contributions of NYCERS.
          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
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        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 2019-12 dated April 26,
        2019 was prepared by the Chief Actuary for the New York City  Employees'
        Retirement  System.  This  estimate  is intended for use only during the
        2019 Legislative Session.