Bill Text: NY A07782 | 2019-2020 | General Assembly | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relates to allowing certain members of the New York city police pension fund to borrow from contributions.
Spectrum: Partisan Bill (Democrat 20-0)
Status: (Introduced - Dead) 2020-07-01 - print number 7782a [A07782 Detail]
Download: New_York-2019-A07782-Introduced.html
Bill Title: Relates to allowing certain members of the New York city police pension fund to borrow from contributions.
Spectrum: Partisan Bill (Democrat 20-0)
Status: (Introduced - Dead) 2020-07-01 - print number 7782a [A07782 Detail]
Download: New_York-2019-A07782-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 7782 2019-2020 Regular Sessions IN ASSEMBLY May 21, 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 allowing certain members of the New York city police pension fund to borrow from contributions The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraphs 1 and 2 of subdivision b of section 517-c of the 2 retirement and social security law, paragraph 1 as amended and paragraph 3 2 as added by chapter 303 of the laws of 2017, are amended to read as 4 follows: 5 1. A member of the New York state and local employees' retirement 6 system, the New York state and local police and fire retirement system, 7 the New York city employees' retirement system [or], the New York city 8 board of education retirement system or the New York city police pension 9 fund in active service who has credit for at least one year of member 10 service may borrow, no more than once during each twelve month period, 11 an amount not exceeding seventy-five percent of the total contributions 12 made pursuant to section five hundred seventeen of this article (includ- 13 ing interest credited at the rate set forth in subdivision c of such 14 section five hundred seventeen compounded annually) and not less than 15 one thousand dollars, provided, however, that the provisions of this 16 section shall not apply to a New York city uniformed 17 correction/sanitation revised plan member or an investigator revised 18 plan member. 19 2. A member of the New York state and local employees' retirement 20 system who first joins such system on or after January first, two thou- 21 sand eighteen, or a member of the New York city police pension fund who 22 first joins such system on or after January first, two thousand eighteen 23 in active service who has credit for at least one year of member service 24 may borrow, no more than once during each twelve month period, an EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD09957-02-9A. 7782 2 1 amount, not less than one thousand dollars and which would not cause the 2 balance owed pursuant to this section, including any amounts borrowed 3 then outstanding, to exceed (i) fifty percent of the member's total 4 contributions made pursuant to section five hundred seventeen of this 5 article (including interest credited at the rate set forth in subdivi- 6 sion c of such section five hundred seventeen compounded annually); or 7 (ii) fifty thousand dollars, whichever is less. 8 § 2. Subdivisions d and i of section 517-c of the retirement and 9 social security law, subdivision d as added by chapter 920 of the laws 10 of 1990 and subdivision i as amended by chapter 426 of the laws of 2018, 11 are amended to read as follows: 12 d. The rate of interest payable upon loans made pursuant to this 13 section shall: (1) for members of the New York state and local employ- 14 ees' retirement system, be one percent less than the valuation rate of 15 interest adopted for such system, however, in no event shall the rate be 16 less than the rate set forth in subdivision c of section five hundred 17 seventeen of this article; (2) for members of the New York city employ- 18 ees' retirement system, be one percent less than the regular interest 19 rate established pursuant to [subdivision (c) of section 13-101.12] 20 paragraph (c) of subdivision twelve of section 13-101 of the administra- 21 tive code of the city of New York for such system, however, in no event 22 shall the rate be less than the rate set forth in subdivision c of 23 section five hundred seventeen of this article; [and] (3) for members of 24 the New York city board of education retirement system, be one percent 25 less than the regular interest rate established pursuant to subparagraph 26 four of paragraph (b) of subdivision sixteen of section twenty-five 27 hundred seventy-five of the education law for such system, however, in 28 no event shall the rate be less than the rate set forth in subdivision c 29 of section five hundred seventeen of this article; and (4) for members 30 of the New York city police pension fund, be one percent less than the 31 regular interest rate established pursuant to subdivision b of section 32 13-638.2 of the administrative code of the city of New York for such 33 system, however, in no event shall the rate be less than the rate set 34 forth in subdivision c of section five hundred seventeen of this 35 article. Whenever there is a change in the interest rate, it shall be 36 applicable to loans made or renegotiated after the date of such change 37 in the interest rate. 38 i. Notwithstanding the provisions of section five hundred sixteen of 39 this article, whenever a member of such a retirement system, for whom a 40 loan is outstanding, retires, the retirement allowance payable without 41 optional modification shall be reduced by a life annuity which is actu- 42 arially equivalent to the amount of the outstanding loan (all outstand- 43 ing loans shall continue to accrue interest charges until retirement), 44 such life annuity being calculated utilizing the interest rate on thirty 45 year United States treasury bonds as of January first of the calendar 46 year of the effective date of retirement and the mortality tables for 47 options available under section five hundred fourteen of this article. A 48 retiree of the New York city employees' retirement system, board of 49 education retirement system of the city of New York, [or] the New York 50 state and local employees' retirement system, or the New York city 51 police pension fund whose benefit has been so reduced may repay the 52 outstanding balance of the loan at any time. Benefits payable after the 53 repayment of the loan shall not be subject to the actuarial reduction 54 required by this subdivision. 55 § 3. This act shall take effect immediately. FISCAL NOTE.--Pursuant to Legislative Law, Section 50:A. 7782 3 We have estimated the impact of the Loan Bill, on the projected employer contributions of the New York City Police Pension Fund. A brief summary of the new provisions is outlined below: * Members before 1/1/2018 w/ 1+ years of service: * Can borrow up to 75% of total contributions made (including inter- est) * Members hired on/after 1/1/2018 w/ 1+ years of service: * Can borrow up to 50% to total contributions made (including inter- est). * If members retired with outstanding loan balance, retirement allow- ance is reduced by actuarially equivalent annuity equal to amount of outstanding loan. The table below summarizes the additional contributions that result from this bill by year. (in millions) ________________________ Annual Cost ________________________ 2022 7.3 2023 8.3 2024 9.3 2025 10.5 2026 11.5 Specific to this bill, participants are assumed to take the maximum loan allowable at retirement: * 75% of accumulated contributions for members hired before January 1, 2018 * 50% of accumulated contributions for members hired after January 1, 2018 The assumptions used in this analysis were those released by the New York City Office of the Actuary on January 2, 2019 in the "Proposed Changes in Actuarial Assumptions and Methods Used in Determining Employ- er Contributions for Fiscal Years Beginning on and After July 1, 2018 for the New York City Police Pension Fund" document, and subsequently approved by the Police Pension Fund's Board on March 6, 2019. The data used to determine the cost was provided by the Police Pension Fund and was a snapshot of the active plan participants as of July 1, 2018. This fiscal note, dated May 6, 2019, is intended only for use in the 2019 legislative session. The source of this fiscal note is Heidi E. Andorfer, FSA, EA, MAAA, Foster & Foster, Actuaries and Consultants, who is familiar with the immediate and long-term aspects of pension calculations and meets the Qualification Standards of the American Academy of Actuaries necessary to render the actuarial opinions contained herein.
