Bill Text: NY S05902 | 2019-2020 | General Assembly | Amended


Bill Title: Provides a cost-of-living adjustment for New York public retirement systems.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2020-06-04 - PRINT NUMBER 5902E [S05902 Detail]

Download: New_York-2019-S05902-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         5902--E

                               2019-2020 Regular Sessions

                    IN SENATE

                                      May 16, 2019
                                       ___________

        Introduced by Sen. GOUNARDES -- 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 commit-
          tee --  committee  discharged,  bill  amended,  ordered  reprinted  as
          amended  and  recommitted  to  said  committee  --  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 committee -- committee discharged,
          bill amended, ordered reprinted as amended  and  recommitted  to  said
          committee

        AN  ACT  to  amend the retirement and social security law, the education
          law and the administrative code of the city of New York,  in  relation
          to providing cost-of-living adjustments

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

     1    Section 1. Subdivision a of section 78-a of the retirement and  social
     2  security law, as added by chapter 125 of the laws of 2000, is amended to
     3  read as follows:
     4    a. [A] Effective on the first day of September, two thousand twenty, a
     5  cost-of-living  adjustment shall be payable on the basis provided for in
     6  this section to: (i) all pensioners who have  attained  age  [sixty-two]
     7  fifty-five  and  have  been retired for five years; (ii) [all pensioners
     8  who have attained age fifty-five and have been retired  for  ten  years;
     9  (iii)] all disability pensioners regardless of age who have been retired
    10  for  five  years; and [(iv)] (iii) all recipients of an accidental death
    11  benefit regardless of age who have been receiving such benefit for  five
    12  years.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07921-08-0

        S. 5902--E                          2

     1    § 2. Subdivision a of section 378-a of the retirement and social secu-
     2  rity  law,  as  added  by chapter 125 of the laws of 2000, is amended to
     3  read as follows:
     4    a. [A] Effective on the first day of September, two thousand twenty, a
     5  cost-of-living  adjustment shall be payable on the basis provided for in
     6  this section to: (i) all pensioners who have  attained  age  [sixty-two]
     7  fifty-five  and have been retired for five years; and (ii) [all pension-
     8  ers who have attained age fifty-five  and  have  been  retired  for  ten
     9  years;  and  (iii)] all disability pensioners regardless of age who have
    10  been retired for five years.
    11    § 3. Subdivision a of section 532-a of the education law, as added  by
    12  chapter 125 of the laws of 2000, is amended to read as follows:
    13    a. [A] Effective on the first day of September, two thousand twenty, a
    14  cost-of-living  adjustment shall be payable on the basis provided for in
    15  this section to: (i) all pensioners who have  attained  age  [sixty-two]
    16  fifty-five  and  have  been retired for five years; (ii) [all pensioners
    17  who have attained age fifty-five and have been retired  for  ten  years;
    18  (iii)] all disability pensioners regardless of age who have been retired
    19  for  five  years; and [(iv)] (iii) all recipients of an accidental death
    20  benefit regardless of age who have been receiving such benefit for  five
    21  years.
    22    § 4. Subdivision a of section 13-696 of the administrative code of the
    23  city  of  New  York,  as  amended by chapter 288 of the laws of 2001, is
    24  amended to read as follows:
    25    a. [A] Effective on the first day of September, two thousand twenty, a
    26  cost-of-living adjustment shall be payable to retired members of the New
    27  York city employees' retirement system,  the  New  York  city  teachers'
    28  retirement  system,  the New York city police pension fund, the New York
    29  city fire department pension fund, the New York city board of  education
    30  retirement  system  or  the relief and pension fund of the department of
    31  street cleaning provided for in subchapter one of this  chapter  on  the
    32  basis  provided for in this section to: (i) all retired members who have
    33  attained age [sixty-two] fifty-five  and  have  been  retired  for  five
    34  years;  (ii)  [all  retired members who have attained age fifty-five and
    35  have been retired for ten years; (iii)]  all  members  who  retired  for
    36  disability  regardless  of age who have been retired for five years; and
    37  [(iv)] (iii) all recipients of an accidental death benefit regardless of
    38  age who have been receiving such benefit for five years.
    39    § 5. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY OF BILL: This proposed legislation would amend Section  13-696
        of the Administrative Code of the City of New York (ACCNY) to reduce the
        age  of  eligibility for the Cost-of-Living Adjustment (COLA) from 62 to
        55 for service and vested retirees who have been retired for five  years
        from  the  New  York City Employees' Retirement System (NYCERS), the New
        York City Teachers' Retirement System (NYCTRS), the New York City  Board
        of  Education Retirement System (BERS), the New York City Police Pension
        Fund (POLICE), and the New York City Fire Pension Fund  (FIRE),  collec-
        tively  known  as the New York City Retirement Systems and Pension Funds
        (NYCRS).
          Effective Date: Upon enactment.
          BACKGROUND: Currently, COLA is payable to service and vested  retirees
        who have:
          (1) attained age 62 and have been retired for five years or
          (2) attained age 55 and have been retired for ten years.

        S. 5902--E                          3

          Under this proposed legislation, if enacted, the COLA would be payable
        to such retirees who have attained age 55 and have been retired for five
        years.
          The  COLA  for disability retirement and death is payable after having
        been retired for five years and is not affected by the  proposed  legis-
        lation.
          FINANCIAL  IMPACT  -  SUMMARY: The estimated financial impact to NYCRS
        for reducing the age of eligibility for COLA from 62 to 55  for  service
        and  vested  retirees  who have been retired for five years as described
        above is an increase in Present  Value  of  Future  Benefits  (PVFB)  of
        $194.9  million  and an increase in the annual employer contributions of
        $115.3 million. A breakdown of the financial impact by System  is  shown
        in the table below.
                                Additional           Estimated First Year
               NYCRS      Present Value of Future      Annual Employer
                           Benefits ($ Millions)        Contributions*
                                                         ($ Millions)
             NYCERS              $ 72.8                     $ 47.4
             NYCTRS                51.0                       28.0
             BERS                   0.9                        0.6
             POLICE                64.3                       36.6
             FIRE                   5.9                        2.7
               Total             $194.9                     $115.3
        *  Employer contributions after the first year are estimated to be $11 -
        $12 million per year.
          In accordance with 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 are generally amortized over the  remain-
        ing working lifetime of those impacted by the benefit changes.
          For  the  purposes  of  this  Fiscal  Note  it  has  been assumed that
        increases in UAL attributable to current retirees  would  be  recognized
        immediately  and  that  increases  in UAL attributable to active members
        would be amortized over periods ranging from 12 to 15 years depending on
        NYCRS (11 to 14 payments, respectively, under the One-Year Lag Methodol-
        ogy (OYLM)).
          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,  2019  actuarial
        valuations  of  NYCRS.  In  accordance  with  the OYLM used to determine
        employer contributions, the increase  in  employer  contributions  would
        first be reflected in Fiscal Year 2021.
          CENSUS  DATA:  The  estimates presented herein are based on the census
        data used in the Preliminary June 30, 2019 (Lag) actuarial valuations of
        NYCRS to determine the Preliminary Fiscal Year  2021  employer  contrib-
        utions.
          ACTUARIAL  ASSUMPTIONS AND METHODS: The changes in the PVFB and annual
        employer contributions presented herein have been  calculated  based  on
        the  same  actuarial  assumptions and methods in effect for the June 30,
        2019 (Lag) actuarial valuations used to determine the Preliminary Fiscal
        Year 2021 employer contributions of NYCRS.
          RISK AND UNCERTAINTY: The costs presented in this Fiscal  Note  depend
        highly  on the realization of the actuarial assumptions used, as well as
        certain demographic characteristics of NYCRS and other exogenous factors
        such as investment, contribution, and other risks. If actual  experience
        deviates  from actuarial assumptions, the actual costs could differ from
        those presented herein. Costs are also dependent on the actuarial  meth-

        S. 5902--E                          4

        ods  used,  and  therefore  different  actuarial  methods  could produce
        different results.  Quantifying these risks is beyond the scope of  this
        Fiscal Note.
          Not measured in this Fiscal Note are the following:
          *  The  initial,  additional  administrative  costs  to  implement the
        proposed legislation.
          * The impact of this  proposed  legislation  on  Other  Postemployment
        Benefit (OPEB) costs.
          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  2020-38  dated  May  15,
        2020  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 2020 Legislative Session.
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