Bill Text: NY S06571 | 2017-2018 | General Assembly | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relates to increasing lump sum payments; inceases lump sum payments for eligible members of the New York state and local police and fire retirement system, and sheriffs, undersheriffs, deputy sheriffs and correction officers, who are employed in certain counties from twenty-five to thirty-five percent of the actuarial equivalent of his or her retirement allowance at the time of retirement if he or she retires five years after being eligible to retire.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2018-02-01 - PRINT NUMBER 6571B [S06571 Detail]

Download: New_York-2017-S06571-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                         6571--A
                               2017-2018 Regular Sessions
                    IN SENATE
                                      June 5, 2017
                                       ___________
        Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
          printed to be committed to the Committee on Rules  --  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
        AN  ACT  to amend the retirement and social security law, in relation to
          increasing lump sum payments
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
     1    Section 1. Paragraph e of subdivision 2 of section 1100 of the retire-
     2  ment  and  social  security  law, as added by chapter 523 of the laws of
     3  2013, is amended to read as follows:
     4    e. Any member who files for retirement after being eligible to  retire
     5  for  five years may elect to receive a [twenty-five] thirty-five percent
     6  lump sum payment of the actuarial equivalent of his  or  her  retirement
     7  allowance at the time of retirement.
     8    § 2. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, section 50:
          This  bill  would  allow larger lump sum payments to be made under the
        Partial Lump Sum (PLS) program for certain members of the New York State
        and Local Police and Fire Retirement System and the New York  State  and
        Local Employees' Retirement System.  Currently, members who are eligible
        for  the  PLS  program  and  who file for service retirement after being
        eligible to retire for 5 or more years may elect to  receive  a  partial
        lump  sum payment of up to 25% of the present value of their actuarially
        determined retirement allowance (their "reserve") at retirement,  and  a
        smaller  annual  retirement  allowance thereafter.   This proposal would
        allow a member who files for service retirement after being eligible  to
        retire  for 5 or more years to be eligible to receive a partial lump sum
        of up to 35% of their reserve in exchange for a reduction in their annu-
        al retirement allowance of up to 35%  thereafter.  For  example,  a  new
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11770-03-8
        S. 6571--A                          2
        retiree  with an initial annual pension of $100,000 could have a reserve
        of approximately $1.2 million,  and  could  receive  a  PLS  payment  of
        $420,000 and a reduced annual pension of $65,000.
          If  this  bill is enacted, there would be administrative costs associ-
        ated with redesigned estimate and option forms. There would not be costs
        associated with the lump sum payment options  since  payments  would  be
        determined on an actuarially equivalent basis.
          However,  the  ratcheting  upward  of  the maximum lump sum benefit is
        eroding the original intent of the pension plan, first presented in  the
        March  30,  1920  Report  of the Commission on Pensions, namely, that "a
        satisfactory pension plan must provide as a  minimum,  a  superannuation
        benefit", which is defined as a lifetime monthly payment made to someone
        who is retired from work.
          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, 2017  actuarial  valu-
        ation.    Distributions  and  other  statistics can be found in the 2017
        Report of the  Actuary  and  the  2017  Comprehensive  Annual  Financial
        Report.
          The  actuarial assumptions and methods used are described in the 2015,
        2016, and 2017 Annual Report to the  Comptroller  on  Actuarial  Assump-
        tions,  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, 2017
        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 January 4, 2018, and intended for use only during
        the  2018  Legislative  Session, is Fiscal Note No. 2018-27, prepared by
        the Actuary for the New York State and Local Retirement System.