Assembly Bill A10834

                                BILL NUMBER:A10834

TITLE  OF BILL:  An act to grant Bruce Kerr a retroactive system member-
ship date and tier I status in the New York city  employees'  retirement
system

PURPOSE:    To grant Bruce Kerr a retroactive system membership date and
tier I status in the New York City employees' retirement system

SUMMARY OF PROVISIONS:  Section 1 allows to Mr. Kerr, currently a member
of Tier II to apply for Tier I status because of reasons not  ascribable
to  his  own  negligence  failed to become a member of the New York City
employees retirement system under Tier I.

Section 2 requires that no contributions to the retirement system  shall
be  returned  to  Mr.  Kerr and that such contributions shall be used to
offset any past service cost incurred due to the implementation of  this
act.

Section 3 is an immediate effective date.

Section 4 is the fiscal note.

JUSTIFICATION:    This bill would allow Mr. Bruce Kerr, a member of Tier
who for reasons not ascribable to his own negligence failed to become  a
member  of the New York City Employees' Retirement System until June 30,
              

1976. This bill allows Mr. Kerr to obtain Tier I status for his  employ-
ment  as  an  Assistant to the Administrative Assistant in New York City
Mayor's Office from September 1969 to April 1970, and from February 1971
to September 1972 as Community Liaison Trainee for  the  New  York  City
Department of Hospitals.

LEGISLATIVE HISTORY: 2009: S.6397 - Referred to Rules.

FISCAL IMPLICATIONS:

FISCAL NOTE. -- PROVISIONS OF PROPOSED LEGISLATION - OVERVIEW

The  proposed  legislation would permit one individual who was initially
hired during September 1969 by the city of New York (the"City"),  worked
intermittently  in  the 1970's and initially began membership in the New
York City Employees' Retirement System ("NYCERS") on. June 30, 1976,  to
be  deemed  to  have become a member of NYCERS of September 5, 1969. The
Effective Date of the proposed legislation would be the date  of  enact-
ment.

IMPACT  ON BENEFITS:  In general, the employees who joined NYCERS during
Calendar Year 1976 prior to July 27, 1976 are eligible  to  receive  the
benefits  available under the Tier II provisions of NYCERS. Such members
are also permitted to buy back service with the City that occurred prior
to joining NYCERS.

The one NYCERS member who is potentially impacted by the proposed legis-
lation has already paid to NYCERS amounts  sufficient  to  purchase  all
pre-membership  service  in Tier II and to include all such City service
as Tier II credited service.

Under  this  proposed legislation, if enacted, the one NYCERS member who
would benefit" if such member made an appropriate, timely application to
NYCERS on or before December 31, 2010, would be deemed to  have  been  a
member  of  NYCERS  retroactive to September 5, 1969 and entitled to the
benefits available to Tier I members of NYCERS.

Tier I Career Pension Plan ("CPP") benefits are eligible  for  unreduced
benefits from attainment of age 55 and completion of 25 years of credit-
ed  service  and are also eligible for Tier I Increased Service Fraction
("ISF") unreduced benefits after  the  attainment  of  age  55  with  no
service agreement.

Under  Tier  II provisions, Modified CPP benefits and Modified ISF bene-
fits commence unreduced from attainment of age 62 or on a reduced  basis
prior to age 62.

The benefits available to Tier I members of NYCERS are generally greater
than  those  available  to  Tier II members of NYCERS.   Rates of member
contributions are also greater for Tier  I  members  than  for  Tier  II
members.

Note,  it  is  the  understanding  of  the  Actuary  that the one member
impacted by the proposed legislation had an  opportunity  to  elect  the
Optional  Age Fifty-Five and Improved Benefit Retirement Program enacted
under Chapter 96 of the Laws of 1995. Such Program would  have  provided
unreduced  retirement  benefits from attainment of age 55 and completion
of 25 years of credited service. This one member, however, did not elect
to participate in that Program.

It should also be noted that  the  rates  of  member  contributions  are
greater for Tier I members than for Tier II members.

For  the one member who, under the proposed legislation, would be deemed
a Tier I member, there would be a deficiency in the accumulated value of
unpaid Tier I member contributions. If not repaid, this deficiency would
impact the value of Tier I CPP benefits.

Overall, since Tier II benefits commencing at and after age 62 are unre-
duced and Tier II required member contributions are  less  than  Tier  I
required  member  contributions, and where salary does not significantly
increase in the Final Average Salary  period,  the  amount  of  benefits
determined  under  Tier II provisions could be greater than those deter-
mined under Tier I provisions.

In addition, it is the understanding of the Actuary that the one  member
impacted  by  this  proposed legislation had an opportunity to elect the
Optional Age Fifty-Five and Improved Benefit Retirement Program  enacted

under  Chapter  96 of the Laws of 1995. Such program would have provided
unreduced retirement benefits from attain m.of age 55 and completion  of
25 years of credited service. This one member, however, did not elect to
participate in that program.

FINANCIAL  IMPACT  -  ACTUARIAL PRESENT VALUES:   Based on the actuarial
assumption and methods described herein, the enactment of this  proposed
legislation  would  increase  the  Actuarial  Present  Value of Benefits
("APVB") of NYCERS by approximately $40,000 as of June 30, 2008.

In addition, based on the actuarial assumptions  and  methods  described
herein,  the  enactment  of this proposed legislation would increase the
Actuarial Present Value of Benefits ("APVB") of NYCERS by  approximately
$40,000 as of June 30, 2008.

In  addition,  based  on the actuarial assumptions and methods described
herein, the Actuarial Present Value of  Future  Salaries  ("APVSAL")  of
NYCERS would decrease by approximately $110,000 as of June 30, 2008.

FINANCIAL  IMPACT - ANNUAL EMPLOYER COSTS:  Based on the Actuary's actu-
arial assumptions and methods in effect on June 30, 2008, the  enactment
of  this  proposed legislation would increase first year annual employer
costs to NYCERS by approximately $8,000.

FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS:  If enacted during  the  2010
Legislative  Session  on  or  before  June  30,  2010, and if the member
believed to be impacted by this proposed legislation elects revised Tier
status, that revised Tier status would likely first be reflected in  the
June 30, 2010 census data. In accordance with the One-Year Lag methodol-
ogy   used  to  determine  employer  contributions,  increased  employer
contributions would be determined for Fiscal Year 2010.

If enacted during the 2010 Legislative Session after June 30,  2010  and
on  or  before  June 30, 2011, increased employer contributions would be
determined for Fiscal Year 2013.

For Fiscal Years 2012 and after, the additional  annual  employer  costs
for this proposed legislation would be expected to approximate the addi-
tional annual employer costs.

CENSUS  DATA:    Estimates  of  Tier  I and Tier II benefits for the one
member known to be impacted by  this  proposed  legislation  have  been.
based on member information as of June 30, 2008 supplied by NYCERS.

ACTUARIAL ASSUMPTIONS AND METHODS:  The APBV, APVSAL, employer costs and
employer  contributions  shown  herein have been. determined using esti-
mated benefits and the applicable actuarial assumptions and  methods  in
effect for the June 30, 2008 (Lag) actuarial valuation of NYCERS.

Additional  employer contributions have been assumed to begin during the
second Fiscal Year following the June 30 as of which a  change  in  Tier
status  would  first  be  expected. The June 30 date has been assumed to

occur as of the next June 30 following enactment of the proposed  legis-
lation.

STATEMENT  OF  ACTUARIAL OPINION:  I, Robert C. North, Jr., am the Chief
Actuary for the City of New York Retirement Systems. I am  a  Fellow  of
the Society of Actuaries and a Member of the American Academy of Actuar-
ies.  I  meet the Qualification Standards of the Academy of Actuaries to
render the actuarial opinion contained herein.

FISCAL NOTE IDENTIFICATION:   This estimate is  intended  for  use  only
during  the 2009 Legislative Session. It is Fiscal Note 201042-1E, dated
April 9, 2010, prepared by the Chief  Actuary  for  the  New  York  City
Employees' Retirement System.

EFFECTIVE DATE: Immediately.