Bill Text: NY S05780 | 2013-2014 | General Assembly | Amended
Bill Title: Relates to the dates of hostilities participated in by the military forces of the United States in Lebanon.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2014-03-04 - PRINT NUMBER 5780A [S05780 Detail]
Download: New_York-2013-S05780-Amended.html
S T A T E O F N E W Y O R K
________________________________________________________________________
5780--A
2013-2014 Regular Sessions
I N S E N A T E
June 14, 2013
___________
Introduced by Sen. GRIFFO -- read twice and ordered printed, and when
printed to be committed to the Committee on Civil Service and Pensions
-- recommitted to the Committee on Civil Service and Pensions in
accordance with Senate Rule 6, sec. 8 -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
AN ACT to amend the retirement and social security law, in relation to
military service credit
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Paragraph (a) of subdivision 2 of section 1000 of the
2 retirement and social security law, as added by chapter 548 of the laws
3 of 2000, is amended to read as follows:
4 (a) hostilities participated in by the military forces of the United
5 States in Lebanon, from the [first] TWENTY-FIRST day of [June] AUGUST,
6 nineteen hundred [eighty-three] EIGHTY-TWO to the first day of December,
7 nineteen hundred eighty-seven, as established by receipt of the armed
8 forces expeditionary medal, the navy expeditionary medal, or the marine
9 corps expeditionary medal;
10 S 2. Notwithstanding any other provision of law to the contrary, none
11 of the provisions of this act shall be subject to section 25 of the
12 retirement and social security law.
13 S 3. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would extend the benefits of Chapter 548, Laws of 2000 to
members of public retirement systems in New York State who rendered any
military service during the period of conflict in Lebanon from
8/21/82-12/1/87. Currently, the period is defined to be 6/1/83-12/1/87.
The total service credit granted for any military service shall not
exceed three (3) years. Members must have at least five years of credit-
ed service (not including military service). Tier 1-5 members would be
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01487-08-4
S. 5780--A 2
required to make a payment of three percent of their most recent compen-
sation per year of additional service credit granted by this bill. Tier
6 members would be required to make a payment of six percent of their
most recent compensation per year of additional service credit.
If this bill is enacted, insofar as this proposal affects the New York
State and Local Employees' Retirement System (ERS), it is estimated that
the past service cost will average approximately 12% (9% for Tier 6) of
an affected members' compensation for each year of additional service
credit that is purchased.
Insofar as this proposal affects the New York State and Local Police
and Fire Retirement System (PFRS), it is estimated that the past service
cost will average approximately 17% (14% for Tier 6) of an affected
members' compensation for each year of additional service that is
purchased.
The exact number of current members as well as future members who
could be affected by this legislation cannot be readily determined.
ERS Costs: These costs would be shared by the State of New York and
the participating employers in the ERS.
PFRS Costs: These costs would be shared by the State of New York and
the participating employers in the PFRS.
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, 2013 actuarial valu-
ation. Distributions and other statistics can be found in the 2013
Report of the Actuary and the 2013 Comprehensive Annual Financial
Report.
The actuarial assumptions and methods used are described in the 2010,
2011, 2012 and 2013 Annual Report to the Comptroller on Actuarial
Assumptions, and the Codes Rules and Regulations of the State of New
York: Audit and Control.
The Marker Assets and GASB Disclosures are found in the March 31, 2013
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 estimate, dated October 28, 2013 and intended for use only during
th 2014 Legislative Session, is Fiscal Note No. 2014-13, prepared by the
Actuary for the New York State and Local Employees' Retirement System
and the New York State and Local Police and Fire Retirement System.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would amend subdivision 2 of Section 1000 of the Retirement
and Social Security Law by revising the starting date of hostilities
participated in by the military forces of the United States in Lebanon
from June 1, 1983 to August 21, 1982 for military service crediting
purposes. To obtain credit, a member must make payments as required in
Section 1000 of the Retirement and Social Security Law. Tier 1, 2, 3, 4
and 5 members are required to pay three percent of salary earned during
the twelve months of credited service immediately preceding the year in
which a claim is made for each year of military service. Tier 6 members
are required to pay six percent of salary earned during the twelve
months of credited service immediately preceding the year in which a
claim is made for each year of military service.
It is not possible to determine the total annual cost to the employers
of members of the New York State Teachers' Retirement System since the
total amount of service credit which would be claimed under this bill
cannot be estimated. However, the cost to the employers of members of
S. 5780--A 3
the New York State Teachers' Retirement System is estimated to be
$21,700 per year of service credited for Tier 1 and 2 members, $20,500
per year of service credited for Tier 3 and 4 members, $20,400 per year
of service credited for Tier 5 members and $15,000 per year of service
credited for Tier 6 members if this bill is enacted. These costs would
be offset by member payments required under Section 1000 of the Retire-
ment and Social Security Law.
The source of this estimate is Fiscal Note 2014-18 dated February 24,
2014 prepared by the Actuary of the New York State Teachers' Retirement
System and is intended for use only during the 2014 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:
PROVISIONS OF PROPOSED LEGISLATION: The proposed legislation would
amend Retirement and Social Security Law ("RSSL") section 1000 paragraph
(a) of subdivision 2 to change the beginning date of the Lebanon
conflict from June 1, 1983 to August 21, 1982 to match the dates recog-
nized by the Federal Government. This would allow any member of the New
York City Retirement Systems ("NYCRS") who had military service during
the hostilities participated in by the military forces of the United
States in Lebanon between August 21, 1982 and May 31, 1983 the opportu-
nity to obtain service credit for that period of time if other require-
ments to obtain military service credit are met.
The Effective Date of the proposed legislation would be the date of
enactment.
The Actuary has presumed that retirees as of the enactment of this
proposed legislation would not be eligible to purchase additional mili-
tary service provided by this proposed legislation.
IMPACT ON BENEFITS: For purposes of the respective NYCRS, each year of
military service credit purchased would apply toward providing the
member with a year of benefit accrual under the particular benefit
formula covering the member.
The NYCRS include: New York City Employees' Retirement System
("NYCERS"), New York City Teachers' Retirement System ("NYCTRS"), New
York City Board of Education Retirement System ("BERS"), New York City
Police Pension Fund ("POLICE") and New York Fire Department Pension Fund
("FIRE").
In certain circumstances, the member also may be entitled to utilize
such military service as qualifying service for benefit eligibility
purposes.
For purposes of this Fiscal Note, it has been assumed that members who
purchase military service in accordance with this proposed legislation
would generally be entitled to count such service for benefit accrual
purposes and for the purpose of qualifying for benefits.
MEMBERS IMPACTED: Insofar as this proposed legislation relates to the
NYCRS, the number of members who could potentially benefit from this
proposed legislation cannot be readily determined.
For illustrative purposes only, a table is included in this Fiscal
Note presenting the estimated financial impact per member assuming that
the affected member purchases service credit for the entire August 21,
1982 to May 31, 1983 period.
FINANCIAL IMPACT - OVERVIEW: With respect to an individual member, the
additional cost of this proposed legislation would depend on the
member's length of service not including the military service being
S. 5780--A 4
purchased, the years of military service being purchased, age, salary
history and Plan in which the member participates.
With respect to employers participating in the NYCRS, the ultimate
employer cost of this proposed legislation would be determined by the
increase in benefits to be paid, the impact of certain benefits commenc-
ing earlier, shorter working lifetimes and the reduction in certain
future member contributions.
FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: With respect to the NYCRS
and based on the census data and assumptions herein, the enactment of
this proposed legislation would increase the Actuarial Present Value
("APV") of benefits ("APVB") by approximately $13,400 for NYCERS,
$13,200 for NYCTRS, $8,100 for BERS, $22,900 for POLICE and $26,500 for
FIRE per year of service credit purchased as of June 30, 2014.
In addition, with respect to the NYCRS, the APV of future member
contributions (primarily attributable to the payments by members of 3.0%
of salary per year of military service purchased) would increase by
approximately $2,100 for NYCERS, $2,300 for NYCTRS, $1,300 for BERS,
$3,300 for POLICE and $3,400 for FIRE per year of service credit
purchased as of June 30, 2014.
Consequently, with respect to the NYCRS, the APV of net future employ-
er contributions would increase by approximately $11,300 for NYCERS,
$10,900 for NYCTRS, $6,800 for BERS, $19,600 for POLICE and $23,100 for
FIRE per year of service credit purchased as of June 30, 2014.
FINANCIAL IMPACT - ADDITIONAL EMPLOYER COSTS: Enactment of this
proposed legislation would increase employer costs, where such amounts
depend on the number of members affected and upon the amount of military
service being credited as well as other characteristics including the
age, salary history and Plan in which the member participates.
With the respect to the NYCRS, based on the Actuary's actuarial
assumptions and methods in effect as of June 30, 2013, the enactment of
this proposed legislation is estimated to increase annual employer costs
by approximately $1,300 for NYCERS, $1,300 for NYCTRS, $800 for BERS,
$2,300 for POLICE and $2,700 for FIRE per year of service credit
purchased.
The real cost of the enactment of this proposed legislation would be
the additional benefits paid.
FINANCIAL IMPACT - ADDITIONAL EMPLOYER CONTRIBUTIONS: With respect to
the NYCRS, increases in employer contributions would depend upon when
the members purchase the military service permitted by the proposed
legislation and such service is credited to their records, but would
ultimately be comparable to the increases in employer costs.
FINANCIAL IMPACT - SUMMARY: The following table summarizes the esti-
mated financial impact of this proposed legislation on the NYCRS assum-
ing one member in each System is eligible and purchases service for the
period from August 21, 1982 to May 31, 1983:
Estimated Financial Impact to Allow Members of the NYCRS
To Purchase Certain Military Service Credit
as of June 30, 2014
(Assumes One Member in Each System
Purchases 0.778 Years{1} of Service Each)
($ Thousands)
Estimated
S. 5780--A 5
Additional Additional
Additional APV of Future Annual
Retirement APV of Employer Employer
System Benefits Contributions{2} Costs{3}
NYCERS $10.46 $8.79 $1.04
NYCTRS 10.29 8.50 1.01
BERS 6.27 5.27 0.62
POLICE 17.79 15.25 1.81
FIRE 20.64 17.94 2.12
{1} .778 years represents the length of time from August 21, 1982 to
May 31, 1983.
{2} Equals increase in APVB minus increase in APV of future member
contributions.
{3} Estimated Additional Annual Employer Costs are determined without
regard to the funded status of the Retirement Systems and represent the
best estimates of the ultimate annual financial burden of the proposed
legislation and assume that any additional APV of Future Employer
Contributions, as they arise, are amortized as actuarial losses over 15
years (14 payments). Estimated Additional Annual Employer Contributions
would ultimately approximate estimated Additional Annual Employer Costs.
If enacted during the 2014 Legislative Session and if these affected
members and their amount of military service being credited were identi-
fied on or before June 30, 2014, this proposed legislation would be
expected to increase employer contributions, if any, to the NYCRS begin-
ning Fiscal Year 2016.
OTHER COSTS: The enactment of this proposed legislation would result
in some administrative expenses for the NYCRS and costs for Other Post-
Employment Benefits ("OPEB").
CENSUS DATA: The census data used for estimates of APV of benefits and
employer contributions presented herein are the active members included
in the June 30, 2013 (Lag) actuarial valuations of NYCERS, NYCTRS, BERS,
POLICE and FIRE used to determine the Preliminary Fiscal Year 2015
employer contributions.
ACTUARIAL ASSUMPTIONS AND METHODS: The additional APV of benefits and
employer contributions presented herein have been estimated as of June
30, 2014 on a hypothetical basis for illustrative purposes with each
eligible member purchasing 0.778 years of military service.
As benefiting from the provisions of this proposed legislation is
dependent upon actions by Plan members and the timing and amounts of
military service to be purchased are unknown, the financial impact would
likely be realized upon receipt by the Actuary of updated service credit
information.
Consequently, changes in employer contributions have been estimated
assuming the increase in the APV of Future Employer Contributions would
be financed over a time period comparable to that used for actuarial
losses under the Entry Age Actuarial Cost Method. Using this approach,
the Additional APV of Future Employer Contributions would be amortized
over a closed 15-year period (14 payments under One-Year Lag Methodol-
ogy) using level dollar payments.
ECONOMIC VALUES OF BENEFITS: The actuarial assumptions used to deter-
mine the financial impact of the proposed legislation discussed in this
Fiscal Note are those appropriate for budgetary models and determining
annual employer contributions to the NYCRS.
S. 5780--A 6
However, the economic assumptions that are used for determining
employer contributions do not develop risk-adjusted, economic values of
benefits. Such risk-adjusted, economic values of benefits would likely
differ significantly from those developed by the budgetary models.
STATEMENT OF ACTUARIAL OPINION: I, Robert C. North, Jr., am the Chief
Actuary for the New York City Retirement Systems. I am a Fellow of the
Society of Actuaries and a Member of the American Academy of Actuaries.
I meet the Qualification Standards of the American Academy of Actuaries
to render the actuarial opinion contained herein.
FISCAL NOTE IDENTIFICATION: This estimate is intended for use only
during the 2014 Legislative Session. It is Fiscal Note 2014-07, dated
February 12, 2014 prepared by the Chief Actuary of the New York City
Retirement Systems.
