Bill Text: NY S06984 | 2021-2022 | General Assembly | Amended
Bill Title: Provides that New York city correction officers may file for disability without ten years of service.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2022-06-13 - PRINT NUMBER 6984B [S06984 Detail]
Download: New_York-2021-S06984-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 6984--B 2021-2022 Regular Sessions IN SENATE May 20, 2021 ___________ 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 -- 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 disability retirement of certain New York city correction members The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraph 1 of subdivision b of section 507-a of the 2 retirement and social security law, as added by chapter 452 of the laws 3 of 1983, is amended to read as follows: 4 1. Have at least ten years of total service credit, except that a 5 member in the uniformed personnel of the New York city department of 6 correction may file an application without regard to length of service, 7 and 8 § 2. This act shall take effect immediately. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: SUMMARY OF BILL: This proposed legislation would modify the eligibil- ity requirements of Retirement and Social Security Law (RSSL) Section 507-a for certain New York City Department of Correction (Correction) members of the New York City Employees' Retirement System (NYCERS). For the purposes of this Fiscal Note, Covered Participants refers to NYCERS Correction members who are subject to RSSL Article 14, but excludes non-Enhanced Revised Plan Correction Members. Under the proposed legislation, Covered Participants with less than 10 years of credited service would be entitled to 507-a disability benefits without having to show the disability resulted from a work-related acci- dent. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD06299-04-2S. 6984--B 2 Effective Date: Upon enactment. IMPACT ON BENEFITS: Currently, Covered Participants who are determined to be disabled by the NYCERS' Medical Board, and have accumulated at least 10 years of service credit, are eligible for an immediate ordinary disability retirement (ODR) allowance pursuant to RSSL Section 507-a equal to the greater of: 1) 1/3 of Final Average Salary (FAS), or 2) 1/60 of FAS multiplied by credited service. If such member is also eligible for Service Retirement, the ODR bene- fit cannot be less than the retirement allowance for Service Retirement. Under the proposed legislation, if enacted, the ODR benefit under RSSL Section 507-a would become available to disabled Covered Participants, subject to approval under the applicable statutes and procedures estab- lished by NYCERS, irrespective of service credit accumulation. For the purposes of this Fiscal Note, the Actuary has assumed that the proposed Section 507-a benefit would only be available to eligible Covered Participants prospectively on and after the Effective Date. FINANCIAL IMPACT - PRESENT VALUES: The ultimate cost of this proposed legislation would be any additional benefits paid to NYCERS participants compared with current law. The timing of the financial impact of the proposed legislation would depend on the number, salaries, age, and lengths of service of Covered Participants who become eligible for 507-a benefits and the actuarial assumptions and methods employed by the Actu- ary for such purposes. Based on the anticipated Covered Participants and the actuarial assumptions and methods described herein, the enactment of this proposed legislation would increase the Present Value of Future Benefits (PVFB) by approximately $1.9 million. Under the Entry Age Normal cost method used to determine the employer contributions to NYCERS, there would be a decrease in the Unfunded Accrued Liability (UAL) of approximately $15.6 million, offset by an increase in the Present Value of future employer Normal Cost of $17.5 million. FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with Administrative Code of the City of New York (ACCNY) Section 13-638.2(k-2), new UAL attributable to benefit changes are to be amor- tized as determined by the Actuary but generally over the remaining working lifetime of those impacted by the benefit changes. As of June 30, 2021, the remaining working lifetime of the Covered Participants is approximately 16 years. For the purposes of this Fiscal Note, the increase in UAL was amor- tized over a 16-year period (15 payments under the One-Year Lag Method- ology (OYLM)) using level dollar payments. This payment plus the increase in the Normal Cost results in an increase in annual employer contributions of approximately $408,000 per year. CONTRIBUTION TIMING: For the purposes of this Fiscal Note, it is assumed that the changes in the Present Value of future employer contributions and annual employer contributions would be reflected for the first time in the Final June 30, 2021 actuarial valuation of NYCERS. In accordance with the OYLM used to determine employer contributions, the increase in employer contributions would first be reflected in Fiscal Year 2023. CENSUS DATA: The estimates presented herein are based on the census data used in the Preliminary June 30, 2021 (Lag) actuarial valuation of NYCERS to determine the Preliminary Fiscal Year 2023 employer contrib- utions.S. 6984--B 3 There were 4,128 Covered Participants with less than 10 years of cred- ited service as of June 30, 2021 and they had an average age of approxi- mately 36.5 years, average service of approximately 5.5 years, and an average salary of approximately $93,000. ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the Present Value of future employer contributions and annual employer contributions presented herein have been calculated based on the actuarial assumptions and methods in effect for the Preliminary June 30, 2021 (Lag) actuarial valuations used to determine the Preliminary Fiscal Year 2023 employer contributions of NYCERS. 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 NYCERS 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 methods 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 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. STATEMENT OF ACTUARIAL OPINION: I, Michael J. Samet, am the Interim Chief Actuary for, and independent of, the New York City Retirement Systems and Pension Funds. 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. 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 2022-66 dated May 31, 2022 was prepared by the Interim Chief Actuary for the New York City Employees' Retirement System. This estimate is intended for use only during the 2022 Legislative Session.
