Bill Text: NY S07498 | 2023-2024 | General Assembly | Introduced

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

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Bill Title: Relates to eligibility for participants in the automotive 25 year/age 50 pension plan with more than 30 years of credited service who remain in active service after age 62 to receive a service retirement benefit equivalent to the standard service retirement benefit received by Tier IV members with the same age and service.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Engrossed) 2024-06-07 - returned to senate [S07498 Detail]

Download: New_York-2023-S07498-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          7498

                               2023-2024 Regular Sessions

                    IN SENATE

                                      June 1, 2023
                                       ___________

        Introduced  by  Sen. JACKSON -- read twice and ordered printed, and when
          printed to be committed to the Committee on Civil Service and Pensions

        AN ACT to amend the retirement and social security law, in  relation  to
          eligibility  for participants in the automotive 25 year/age 50 pension
          plan with more than 30 years of credited service who remain in  active
          service  after  age  62 to receive a service retirement benefit equiv-
          alent to the standard service retirement benefit received by  Tier  IV
          members with the same age and service

          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 603 of the retirement  and  social
     2  security  law,  as amended by chapter 18 of the laws of 2012, is amended
     3  to read as follows:
     4    a. The service retirement benefit specified  in  section  six  hundred
     5  four  of this article shall be payable to members who have met the mini-
     6  mum service requirements upon retirement and attainment  of  age  sixty-
     7  two,  other  than  members who are eligible for early service retirement
     8  pursuant to subdivision c of section six hundred four-b of this article,
     9  subdivision c of section six hundred four-c of this article, subdivision
    10  d of section six hundred  four-d  of  this  article,  subdivision  c  of
    11  section six hundred four-e of this article, subdivision c of section six
    12  hundred  four-f  of  this article, [subdivision c of section six hundred
    13  four-g of this article,] subdivision c of section six hundred four-h  of
    14  this  article  or  subdivision  c  of section six hundred four-i of this
    15  article, provided, however, a member of a teachers' retirement system or
    16  the New York state and local  employees'  retirement  system  who  first
    17  joins such system before January first, two thousand ten or a member who
    18  is  a  uniformed  court officer or peace officer employed by the unified
    19  court system who first becomes a member of the New York state and  local
    20  employees' retirement system before April first, two thousand twelve may
    21  retire  without  reduction of his or her retirement benefit upon attain-

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD09945-02-3
        S. 7498                             2

     1  ment of at least fifty-five years of age and  completion  of  thirty  or
     2  more years of service, provided, however, that a uniformed court officer
     3  or  peace officer employed by the unified court system who first becomes
     4  a member of the New York state and local employees' retirement system on
     5  or  after  January first, two thousand ten and retires without reduction
     6  of his or her retirement benefit upon attainment of at least  fifty-five
     7  years  of age and completion of thirty or more years of service pursuant
     8  to this section shall be  required  to  make  the  member  contributions
     9  required  by subdivision f of section six hundred thirteen of this arti-
    10  cle for all years of credited and creditable service,  provided  further
    11  that  the [the] preceding provisions of this subdivision shall not apply
    12  to a New York city revised plan member.
    13    § 2. Subdivision a of section 603 of the retirement and social securi-
    14  ty law, as amended by section 3-a of chapter 19 of the laws of 2008,  is
    15  amended to read as follows:
    16    a.  The  service  retirement  benefit specified in section six hundred
    17  four of this article shall be payable to members who have met the  mini-
    18  mum  service  requirements  upon retirement and attainment of age sixty-
    19  two, other than members who are eligible for  early  service  retirement
    20  pursuant to subdivision c of section six hundred four-b of this article,
    21  subdivision c of section six hundred four-c of this article, subdivision
    22  d  of  section  six  hundred  four-d  of  this article, subdivision c of
    23  section six hundred four-e of this article, subdivision c of section six
    24  hundred four-f of this article, [subdivision c of  section  six  hundred
    25  four-g  of this article,] subdivision c of section six hundred four-h of
    26  this article or subdivision c of section  six  hundred  four-i  of  this
    27  article  provided,  however, a member who is a peace officer employed by
    28  the unified court system or a member of a teachers' retirement system or
    29  the New York state and local employees'  retirement  system  may  retire
    30  without reduction of his or her retirement benefit upon attainment of at
    31  least  fifty-five years of age and completion of thirty or more years of
    32  service.
    33    § 3. Paragraph 3 of subdivision b of section 604-g of  the  retirement
    34  and social security law, as added by chapter 414 of the laws of 2002, is
    35  amended to read as follows:
    36    3.  Any election to be a participant in the twenty-five year/age fifty
    37  retirement program shall be irrevocable; provided that a participant who
    38  has more than thirty years of credited service and  who has remained  in
    39  active  service  after  reaching  sixty-two  years  of  age may elect to
    40  receive a service  retirement  benefit  calculated  in  accordance  with
    41  subdivision  b  of section six hundred four of this article in lieu of a
    42  service retirement benefit calculated in accordance with  subdivision  c
    43  of this section.
    44    §  4. This act shall take effect immediately; provided that the amend-
    45  ments to subdivision a of section 603 of the retirement and social secu-
    46  rity law made by section one of this act shall be subject to the expira-
    47  tion and reversion of such subdivision pursuant to  subdivision  (b)  of
    48  section  13  of  chapter  683 of the laws of 2003, as amended, when upon
    49  such date the provisions of section two of this act shall take effect.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY OF BILL: This proposed legislation would  amend  Sections  603
        and  604-g  of  the  Retirement and Social Security Law (RSSL) to permit
        Tier 4 and Tier 6 members in the New  York  City  Employees'  Retirement
        System  (NYCERS)  and  the  New  York City Board of Education Retirement
        System (BERS) Automotive 25-Year/Age 50 Plans (Auto 25-Year  Plan)  with
        S. 7498                             3

        30  or  more  years  of  service to receive a service retirement benefit
        calculated under their respective basic plans, if greater.
          Effective Date: Upon enactment.
          IMPACT  ON  BENEFITS:  Currently, Auto 25-Year Plan members who retire
        with 30 or more years of service receive a  service  retirement  benefit
        that is equal to 60% of Final Average Salary (FAS).
          Under  the  proposed  legislation,  the service retirement benefit for
        Auto 25-Year Plan members with 30 or more  years  of  service  would  be
        calculated as the greater of the above, and:
          *  For  Tier  4  members, 60% of FAS plus 1.5% of FAS for each year of
        service beyond 30 years.
          * For Tier 6 members, 55% of FAS plus 2%  of  FAS  for  each  year  of
        service beyond 30 years.
          FINANCIAL  IMPACT  -  PRESENT VALUES: Based on the census data and the
        actuarial assumptions and methods described  herein,  the  enactment  of
        this  proposed  legislation  would  result in an increase in the present
        value of future employer contributions of  approximately  $26.4  million
        for NYCERS and approximately $0.1 million for BERS, for a total increase
        of approximately $26.5 million.
          Under  the Entry Age Normal cost method used to determine the employer
        contributions to NYCERS and BERS, there would  be  an  increase  in  the
        Unfunded  Accrued  Liability (UAL) of approximately $16.7 million and an
        increase in the present value of future employer Normal Cost of approxi-
        mately $9.8 million.
          FINANCIAL IMPACT - ANNUAL EMPLOYER  CONTRIBUTIONS:  The  enactment  of
        this  proposed legislation would result in an initial increase in annual
        employer  contributions  of  approximately  $2,855,000  for  NYCERS  and
        approximately  $9,000 for BERS which is the result of an increase in the
        Normal Cost in addition to the UAL payment.
          The initial increase in employer  contributions  is  estimated  to  be
        $2,372,000  for  New  York  City  and $492,000 for the non-New York City
        obligors.
          New UAL attributable to benefit changes are generally  amortized  over
        the remaining working lifetime of those impacted by the benefit changes.
        The  remaining working lifetime for this group is approximately 14 years
        for NYCERS and 11 years for BERS and the increase in UAL  was  therefore
        amortized  over  a  14-year  period  (13 payments under the One-Year Lag
        Methodology) for NYCERS and over an 11-year  period  (10  payments)  for
        BERS using level dollar payments.
          CENSUS  DATA:  The  estimates presented herein are based on the census
        data used in the June 30, 2022 actuarial valuation of NYCERS and BERS to
        determine the Preliminary Fiscal Year 2024 employer contributions.
          The table below contains a summary of the census data for active  Auto
        25-Year Plan members in NYCERS and BERS as of June 30, 2022.

        System              Active    Average   Average   Average
                            Count     Age       Service   Salary

        NYCERS              1,718     45.7      9.6       $116,700
        BERS                25        51.8      8.0       $98,800

          ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
        been  calculated based on the actuarial assumptions and methods used for
        the Preliminary Fiscal Year 2024 employer contributions  of  NYCERS  and
        BERS.
        S. 7498                             4

          For  the  purposes of this Fiscal Note, it is assumed that the changes
        would be reflected for the first time in the  June  30,  2022  actuarial
        valuations  of  NYCERS and BERS used to determine employer contributions
        for Fiscal Year 2024.
          RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
        highly on the realization of the actuarial assumptions used,  demograph-
        ics  of  the  impacted  population and other factors such as investment,
        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.
          Not measured in this Fiscal Note are the following:
          *  The  initial  additional  administrative  costs  to  implement  the
        proposed legislation.
          STATEMENT OF ACTUARIAL OPINION: I, Marek  Tyszkiewicz,  am  the  Chief
        Actuary  for,  and  independent of, the New York City Retirement Systems
        and Pension Funds. I am an Associate of the Society of Actuaries  and  a
        Member of the American Academy of Actuaries. I am a member of NYCERS but
        do  not  believe  it impairs my objectivity and 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  2023-53  dated  May  19,
        2023  was prepared by the Chief Actuary for the New York City Employees'
        Retirement System and the Board of Education Retirement  System  of  the
        City of New York. This estimate is intended for use only during the 2023
        Legislative Session.