Bill Text: NY A08754 | 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 the eligibility of New York city transit authority employees for performance of duty disability retirement.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2020-06-10 - print number 8754a [A08754 Detail]

Download: New_York-2019-A08754-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          8754

                               2019-2020 Regular Sessions

                   IN ASSEMBLY

                                    November 25, 2019
                                       ___________

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

        AN  ACT  to amend the retirement and social security law, in relation to
          the eligibility of New  York  city  transit  authority  employees  for
          performance of duty disability retirement

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

     1    Section 1. Section 607-b of the retirement and social security law  is
     2  amended by adding a new subdivision a-1 to read as follows:
     3    a-1.  Any member of the New York city employees' retirement system who
     4  is employed by the New York city transit authority and who  participated
     5  in World Trade Center rescue, recovery or cleanup operations, as defined
     6  in section two of this chapter, who, on or after September eleventh, two
     7  thousand  one,  becomes  physically  or  mentally  incapacitated for the
     8  performance of duties as the natural and proximate result of  an  injury
     9  sustained  in  the  performance  or  discharge of his or her duties as a
    10  result of such participation in World Trade Center rescue,  recovery  or
    11  cleanup  operations  shall  be  paid  a  performance  of duty disability
    12  retirement allowance equal to three-quarters of  final  average  salary,
    13  subject  to section 13-176 of the administrative code of the city of New
    14  York. Any member who has made application or who,  after  the  effective
    15  date  of  the  chapter  of the laws of two thousand nineteen which added
    16  this subdivision, makes application for such performance of duty pension
    17  shall be entitled to invoke the medical review procedure provided for in
    18  subdivision e of section six hundred five of this  article,  subject  to
    19  the terms and conditions set forth in such subdivision.
    20    § 2. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY  OF  BILL: This proposed legislation would amend provisions of
        the Retirement and Social Security Law (RSSL) to  grant  New  York  City
        Transit  Authority (NYCTA) active and retired employees, who are or were

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10018-02-9
        A. 8754                             2

        members of the New  York  City  Employees'  Retirement  System  (NYCERS)
        subject  to  Retirement  and  Social  Security  Law Article 15, and have
        incurred a World Trade Center (WTC) Qualifying Condition, a  performance
        of  duty  disability  retirement equivalent to 75% of the member's Final
        Average Salary  (FAS)  prospectively  as  of  the  effective  date.  The
        proposed  legislation  would  further permit such eligible NYCTA members
        and retirees to utilize the Final Medical Review procedures pursuant  to
        RSSL  Section  605-e  to appeal from NYCERS Medical Board WTC disability
        benefit determinations. Finally, the bill appears to inadvertently grant
        such eligible NYCTA members and retirees  the  ability  to  utilize  the
        presumptions  for  infectious  diseases pursuant to subsection b of RSSL
        Section 607-b. Costs associated with granting  these  presumptions  have
        not been included in this Fiscal Note.
          Effective Date: Upon enactment.
          IMPACT  ON  BENEFITS:  Under the proposed legislation, if enacted, the
        WTC disability benefit for eligible NYCTA WTC retirees would be  revised
        to equal a retirement allowance of:
          * 75% multiplied by FAS,
          Reduced by:
          * 100% of Workers' Compensation benefits (if any) payable (as required
        by RSSL Section 64).
          FINANCIAL  IMPACT  -  OVERVIEW:  The  bill,  if enacted, would provide
        increased benefits for 28 pensioners who  have  been  approved  for  WTC
        benefits.  The bill also potentially provides for increased benefits for
        an unknown number of future pensioners, who have submitted  a  qualified
        WTC  Notice of Participation. Although there are currently approximately
        1,200 active and retired NYCTA members who have  submitted  a  qualified
        WTC  Notice of Participation Form, the number of members from this group
        who could potentially benefit from  this  proposed  legislation  in  the
        future cannot be readily determined.
          The  additional  estimated  financial impact for the unknown number of
        future pensioners who could benefit has been calculated on a  per  event
        basis  equal  to  the  increase  in the Present Value of Future Benefits
        (PVFB) for an average member who could be approved for WTC benefits  and
        who  is assumed to benefit from the proposed legislation. In determining
        the increase in the PVFB for the future members who are assumed to bene-
        fit from the proposed legislation, it has been assumed that 50%  of  the
        members  who  would  retire with a WTC benefit were those who would have
        retired under an Ordinary Disability Retirement (ODR) benefit  and  that
        the  remaining  50%  were  those who would have continued working if the
        proposed legislation were not passed.
          With respect to an individual member,  the  additional  cost  of  this
        proposed legislation could vary greatly depending on the member's length
        of service, age, and salary history.
          FINANCIAL  IMPACT  -  PRESENT VALUES: Based on the census data and the
        actuarial assumptions and methods described  herein,  the  enactment  of
        this  proposed legislation would increase the PVFB for 28 pensioners who
        have been approved for World Trade Center benefits by approximately $6.2
        million.
          In addition, the enactment of this  proposed  legislation  would  also
        increase  the PVFB by approximately $250,000, on average, for each addi-
        tional occurrence of WTC benefits provided under  this  proposed  legis-
        lation.
          FINANCIAL  IMPACT  -  ANNUAL EMPLOYER CONTRIBUTIONS: Enactment of this
        proposed legislation would increase employer contributions,  where  such
        amount  would  depend on the number of members affected as well as other
        A. 8754                             3

        characteristics including the age, years of service, and salary  history
        of each member.
          In accordance with Administrative Code of the City of New York (ACCNY)
        Section 13-638.2(k-2), new Unfunded Accrued Liability (UAL) attributable
        to  benefit changes are to be amortized as determined by the Actuary but
        generally over the remaining working lifetime of those impacted  by  the
        benefit changes.
          For  the  purposes  of  this  Fiscal Note, since the 28 pensioners who
        would benefit are retired, the entire  increase  in  UAL  (or  PVFB)  of
        approximately $6.2 million would be recognized immediately.
          In  addition,  since there is insufficient data currently available to
        estimate the number of members who might be approved for  WTC  benefits,
        the  financial  impact would be recognized at the time of event.  Conse-
        quently, changes in employer contributions for those NYCTA  members  not
        yet  approved  for  WTC  benefits  have been estimated assuming that the
        increase in the PVFB will be financed over a time period  comparable  to
        that  used  for actuarial losses under the Entry Age Normal cost method.
        Using this approach, the additional  PVFB  would  be  amortized  over  a
        closed  15-year  period  (14 payments under the One-Year Lag Methodology
        (OYLM)) using level dollar payments.
          Based on the Actuary's actuarial assumptions and methods in  effect as
        of June 30, 2018, the enactment of this proposed  legislation  is  esti-
        mated to increase annual employer contributions by approximately $29,000
        for each new WTC benefit provided under this proposed legislation.
          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
        Benefit  (OPEB) costs.
          CONTRIBUTION TIMING: For the purposes  of  this  Fiscal  Note,  it  is
        assumed  that  the changes in the PVFB and annual employer contributions
        for those already retired and receiving WTC benefits would be  reflected
        for  the  first  time  in the Final June 30, 2018 actuarial valuation of
        NYCERS. In accordance with the One-Year Lag Methodology (OYLM)  used  to
        determine employer contributions, the increase in employer contributions
        for  these  retirees  would first be reflected in Fiscal Year 2020. With
        respect to future retirees, increases in  employer  contributions  would
        depend upon when members would retire but, generally, increased employer
        contributions will first occur the second fiscal year following approval
        of  the WTC benefit. For the purposes of this Fiscal Note, it is assumed
        that these future retirees will be included for the first  time  in  the
        June  30,  2020  census  data,  and  therefore  the increase in employer
        contributions for future retirees that would benefit from this  proposed
        legislation would first be reflected in Fiscal Year 2022.
          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.
          This data was supplemented by data provided by NYCERS that  identified
        NYCTA  members subject to Article 15 who are currently in receipt of WTC
        disability benefits. NYCERS identified 28  pensioners  with  an  average
        benefit of $32,197.
          The  approximate 1,200 active members who have submitted WTC Notice of
        Participation Forms are a subset of the 16,298 NYCTA employees  who  are
        active  members  in NYCERS as of June 30, 2018 whose date of appointment
        is prior to September 11, 2001 and who are not currently entitled  to  a
        A. 8754                             4

        WTC  benefit equal to 75% of FAS and, therefore, could potentially bene-
        fit from the proposed legislation. These 16,298 active  members  had  an
        average age of approximately 55.6 years, average service of approximate-
        ly  23.3  years,  and  an  average salary of approximately $91,300. This
        group consisted of 16,289 Tier 4 members and 9 Tier 6 members.
          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
        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 2019-42 dated July 19,
        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.