Bill Text: NY S01866 | 2019-2020 | General Assembly | Amended


Bill Title: Increases the amount of money a retiree may earn in a position of public service in the year 2020 and thereafter to $35,000.

Spectrum: Moderate Partisan Bill (Democrat 7-1)

Status: (Engrossed) 2019-06-13 - returned to senate [S01866 Detail]

Download: New_York-2019-S01866-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         1866--B

                               2019-2020 Regular Sessions

                    IN SENATE

                                    January 17, 2019
                                       ___________

        Introduced  by Sens. BRESLIN, ADDABBO, FUNKE, HARCKHAM -- read twice and
          ordered printed, and when printed to be committed to the Committee  on
          Civil  Service  and  Pensions  --  committee discharged, bill amended,
          ordered reprinted as amended and  recommitted  to  said  committee  --
          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
          increasing the retiree earnings cap

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

     1    Section 1. Subdivision 2 of section 212 of the retirement  and  social
     2  security  law,  as amended by chapter 74 of the laws of 2006, is amended
     3  to read as follows:
     4    2. The earning limitations for retired persons in positions of  public
     5  service  under  this  section  shall be in accordance with the following
     6  table:

     7          For the year                               Earnings limitation
     8          1996                                       $12,500
     9          1997                                       $13,500
    10          1998                                       $14,500
    11          1999                                       $15,500
    12          2000                                       $17,000
    13          2001                                       $18,500
    14          2002                                       $20,000
    15          2003                                       $25,000
    16          2004                                       $27,500
    17          2005 and 2006                              $27,500
    18          2007 [and thereafter] through 2019         $30,000
    19          2020 and thereafter                        $35,000
    20    § 2. This act shall take effect immediately.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00537-07-9

        S. 1866--B                          2

          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          This  bill  would amend subdivision 2 of section 212 of the Retirement
        and Social Security Law to increase the earnings limitation for  retired
        members  in  positions  of public employment to $35,000 for the calendar
        year 2020 and thereafter. The earnings limitation for the calendar  year
        2019 is $30,000.
          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 2019-9  dated  January  15,
        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:
          This bill will amend Section 212 of the Retirement and Social Security
        Law  to  set  the  amount a retired person may earn in public employment
        without reduction in retirement allowance during the year 2020 and ther-
        eafter to $35,000.
          If this bill is enacted during the 2019 legislative  session,  insofar
        as  it  would  affect the New York State and Local Employees' Retirement
        System and the New York State  and  Local  Police  and  Fire  Retirement
        System,  the resulting 16.7% increase over the current $30,000 limit, in
        place since 2007, is less than the increase in the consumer price  index
        over  the  same  period  and  thus would not affect retirement patterns.
        Therefore, the annual cost is estimated to be negligible.
          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 January 23,  2019,  and  intended  for  use  only
        during  the  2019  Legislative  Session,  is  Fiscal  Note  No. 2019-34,

        S. 1866--B                          3

        prepared by the Actuary for the New  York  State  and  Local  Retirement
        System.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY  OF BILL: This proposed legislation would amend Retirement and
        Social Security Law (RSSL) Section 212 to increase the earnings limit of
        certain New York City Retirement Systems and Pension Funds (NYCRS) reti-
        rees who return to Public Service.
          Effective Date: Upon enactment.
          IMPACT ON BENEFITS: Retirees who return to Public Service and elect to
        be covered under the provisions of RSSL Section  212  are  permitted  to
        earn  an amount not exceeding a specific dollar limit in a calendar year
        without loss, suspension, or diminution of their retirement  allowances.
        Once  this  dollar  limit is reached, the retiree's pension is suspended
        for the remainder of that calendar year. Generally, there are  no  earn-
        ings  limitations in, or following, the calendar year in which the reti-
        ree attains age 65.
          Currently, the dollar limitation in effect for Calendar Year 2007  and
        thereafter is $30,000.
          Under the proposed legislation, if enacted, the RSSL Section 212 post-
        retirement  Public  Service  earnings  limitation  would be increased to
        $35,000 for Calendar Year 2020 and thereafter.
          FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS:  The  Actuary  esti-
        mates  that the potential impact of the proposed legislation would be to
        increase pension payments in  Calendar  Year  2020  from  the  NYCRS  by
        approximately  $310,000.  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 life-
        time of those impacted by the benefit changes. However, since changes in
        the applicable retirement allowances paid to the NYCRS  retired  members
        under  this  proposed legislation are not known in advance, the increase
        in pension payments due to this legislation has been treated as an actu-
        arial loss. These actuarial losses were amortized over a 15-year  period
        (14  payments  under  the  One-Year  Lag Methodology (OYLM)) using level
        dollar payments for the purpose of this Fiscal Note.
          Overall, the Actuary believes the changes in employer contributions to
        the NYCRS as a result of enactment of the proposed legislation would  be
        approximately $37,000 in the first year. Future years' costs in addition
        to  the  aforementioned  cost  would  depend on factors such as, but not
        limited to, the number of retirees that benefit under the legislation.
          OTHER COSTS: Not measured in this Fiscal Note are the following:
          * The initial, additional administrative costs of the 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 UAL would be reflected for the first
        time in the June 30, 2020 actuarial valuations of the NYCRS. In  accord-
        ance  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, data on retirees reemployed in Public Service was furnished
        by the NYCRS. This data averaged over the past five years was considered
        illustrative of those who could potentially be impacted by this proposed
        legislation. The average for calendar years 2013 to 2017 of  the  number

        S. 1866--B                          4

        of  retirees  that  would  benefit  from  this  proposal legislation was
        approximately 90.
          ACTUARIAL  ASSUMPTIONS  AND  METHODS:  The  changes  in  the  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  2019-20  dated  May  16,
        2019  was prepared by the Chief Actuary for the New York City Employees'
        Retirement System, the New York City Teachers'  Retirement  System,  the
        New  York  City  Board of Education Retirement System, the New York City
        Police Pension Fund, and the New York City Fire Pension Fund. This esti-
        mate is intended for use only during the 2019 Legislative Session.
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