Section 1. This act enacts into law legislation relating to retirement
for newly hired employees. Each component is wholly contained within a
Part identified as Parts A through C. The effective date for each
particular provision contained within such Part is set forth in the last
section of such Part. Any provision in any section contained within a
Part, including the effective date of the Part, which makes reference to
a section "of this act", when used in connection with that particular
component, shall be deemed to mean and refer to the corresponding
section of the Part in which it is found. Section three of this act
sets forth the general effective date of this act.
PART A
Section 1. The retirement and social security law is amended by adding
a new article 22 to read as follows:
ARTICLE 22
POLICE AND FIRE RETIREMENT PROVISIONS
SECTION 1200. DEFINITIONS.
1201. APPLICABILITY.
1202. VESTING.
1203. OVERTIME.
1204. MEMBER CONTRIBUTIONS.
1205. RECALCULATION OF BENEFITS.
1206. CONFLICTING PROVISIONS.
S 1200. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE THE TERMS:
A. "MEMBER" SHALL MEAN A PERSON WHO IS EMPLOYED AS A POLICE OFFICER OR
FIREFIGHTER BY ANY EMPLOYER WHO FIRST JOINS THE RETIREMENT SYSTEM ON OR
AFTER JANUARY FIRST, TWO THOUSAND TEN.
B. "RETIREMENT SYSTEM" SHALL MEAN THE NEW YORK STATE AND LOCAL POLICE
AND FIRE RETIREMENT SYSTEM.
S 1201. APPLICABILITY. NOTWITHSTANDING ANY PROVISION OF LAW TO THE
CONTRARY, THE PROVISIONS OF THIS ARTICLE SHALL BE APPLICABLE TO ALL
EMPLOYEES IN THE RETIREMENT SYSTEM WHO FIRST JOINED SUCH SYSTEM ON OR
AFTER JANUARY FIRST, TWO THOUSAND TEN.
S 1202. VESTING. A. IN ORDER TO QUALIFY FOR A SERVICE RETIREMENT BENE-
FIT, MEMBERS SUBJECT TO THE PROVISIONS OF THIS ARTICLE MUST HAVE A MINI-
MUM OF TEN YEARS OF CREDITABLE SERVICE.
B. IN COMPUTING THE YEARS OF TOTAL CREDITABLE SERVICE OF A MEMBER,
FULL CREDIT SHALL BE GIVEN FOR MILITARY SERVICE AS DEFINED IN SUBDIVI-
SIONS TWENTY-NINE-A AND THIRTY OF SECTION THREE HUNDRED TWO OF THIS
CHAPTER.
S 1203. OVERTIME. A MEMBER'S FINAL AVERAGE SALARY SHALL BE CALCULATED
IN ACCORDANCE WITH SUCH PROVISIONS OF ARTICLE EIGHT OR ARTICLE ELEVEN OF
THIS CHAPTER AS GOVERN THE MEMBER'S BENEFITS, EXCEPT THAT EARNINGS CLAS-
SIFIED AS OVERTIME COMPENSATION IN AN AMOUNT IN EXCESS OF FIFTEEN
PERCENT OF A MEMBER'S ANNUAL WAGES NOT CLASSIFIED AS OVERTIME COMPEN-
SATION SHALL BE EXCLUDED FROM SUCH CALCULATION. "OVERTIME COMPENSATION"
SHALL MEAN, FOR PURPOSES OF THIS SECTION, COMPENSATION PAID UNDER ANY
LAW OR POLICY UNDER WHICH EMPLOYEES ARE PAID AT A RATE GREATER THAN
THEIR STANDARD RATE FOR ADDITIONAL HOURS WORKED BEYOND THOSE REQUIRED,
INCLUDING COMPENSATION PAID UNDER SECTION ONE HUNDRED THIRTY-FOUR OF THE
CIVIL SERVICE LAW AND SECTION NINETY OF THE GENERAL MUNICIPAL LAW.
S 1204. MEMBER CONTRIBUTIONS. MEMBERS WHO ARE SUBJECT TO THE
PROVISIONS OF THIS ARTICLE SHALL CONTRIBUTE THREE PERCENT OF ANNUAL
WAGES TO THE RETIREMENT SYSTEM IN WHICH THEY HAVE MEMBERSHIP. MEMBERS
WHO ARE ENROLLED IN A RETIREMENT PLAN THAT LIMITS THE AMOUNT OF CREDITA-
S. 26 3 A. 26
BLE SERVICE A MEMBER CAN ACCRUE SHALL NOT BE REQUIRED TO MAKE CONTRIB-
UTIONS PURSUANT TO THIS SECTION AFTER ACCRUING THE MAXIMUM AMOUNT OF
SERVICE CREDIT ALLOWED BY THE RETIREMENT PLAN IN WHICH THEY ARE
ENROLLED. THE STATE COMPTROLLER SHALL PROMULGATE SUCH REGULATIONS AS MAY
BE NECESSARY AND APPROPRIATE WITH RESPECT TO THE DEDUCTION OF SUCH
CONTRIBUTION FROM MEMBERS' WAGES AND FOR THE MAINTENANCE OF ANY SPECIAL
FUND OR FUNDS WITH RESPECT TO AMOUNTS SO CONTRIBUTED. IN NO WAY SHALL
THE MEMBER CONTRIBUTIONS MADE PURSUANT TO THIS SECTION BE USED TO
PROVIDE FOR PENSION INCREASES OR ANNUITIES OF ANY KIND.
S 1205. RECALCULATION OF BENEFITS. NOTWITHSTANDING ANY OTHER PROVISION
OF LAW, ANY MEMBER WHO HAS JOINED THE RETIREMENT SYSTEM PURSUANT TO THE
PROVISIONS OF ARTICLE FOURTEEN OF THIS CHAPTER ON OR AFTER JULY FIRST,
TWO THOUSAND NINE MAY ELECT TO HAVE HIS OR HER RETIREMENT BENEFITS
CALCULATED PURSUANT TO THIS ARTICLE BY FILING WITHIN ONE HUNDRED TWENTY
DAYS OF THE EFFECTIVE DATE OF THIS SECTION A REQUEST FOR SUCH CALCU-
LATION WITH THE RETIREMENT SYSTEM IN THE FORM AND MANNER PRESCRIBED BY
THE STATE COMPTROLLER.
S 1206. CONFLICTING PROVISIONS. EXCEPT AS OTHERWISE PROVIDED IN THIS
ARTICLE, OR IN CONFLICT THEREWITH, THE PROVISIONS OF ARTICLE ELEVEN OF
THIS CHAPTER, INCLUDING ANY PLAN THAT HAS BEEN ELECTED BY THE EMPLOYER
OR IS OTHERWISE APPLICABLE UNDER ARTICLE EIGHT OF THIS CHAPTER SHALL
GOVERN THE RETIREMENT BENEFITS PROVIDED UNDER THIS ARTICLE. IN THE EVENT
OF ANY CONFLICT BETWEEN THE PROVISIONS OF THIS ARTICLE AND ANY OTHER
PROVISION OF LAW, THIS ARTICLE SHALL GOVERN.
S 2. Subdivision c of section 440 of the retirement and social securi-
ty law, as amended by chapter 63 of the laws of 2007, is amended to read
as follows:
c. Notwithstanding any other provision of law, the provisions and
limitations of this article shall apply, as may be appropriate, to all
police officers and firefighters who last joined a public retirement
system of the state or a municipality thereof, on or after July first,
nineteen hundred seventy-six, but prior to July first, two thousand
nine, AND ALL EMPLOYEES SUBJECT TO THE PROVISIONS OF ARTICLE TWENTY-TWO
OF THIS CHAPTER; PROVIDED, HOWEVER, THAT IN THE CASE OF A CONFLICT
BETWEEN THE PROVISIONS OF THIS ARTICLE AND ARTICLE TWENTY-TWO OF THIS
CHAPTER, THE PROVISIONS OF ARTICLE TWENTY-TWO SHALL BE CONTROLLING.
S 3. Intentionally omitted.
S 4. Section 470 of the retirement and social security law, as amended
by chapter 79 of the laws of 2009, is amended to read as follows:
S 470. Temporary suspension of retirement negotiations. [Until July
first, two thousand eleven, changes] CHANGES negotiated between any
public employer and public employee, as such terms are defined in
section two hundred one of the civil service law, with respect to any
benefit provided by or to be provided by a public retirement system, or
payments to a fund or insurer to provide an income for retirees or
payment to retirees or their beneficiaries, shall be prohibited. [Ther-
eafter, such changes shall be made only pursuant to negotiations between
public employers and public employees conducted on a coalition basis
pursuant to the provisions of this article; provided, however, any such
changes not requiring approval by act of the legislature may be imple-
mented prior to July first, two thousand eleven, if negotiated as a
result of collective bargaining authorized by section six of chapter six
hundred twenty-five of the laws of nineteen hundred seventy-five.]
S 5. Section 480 of the retirement and social security law, as amended
by chapter 79 of the laws of 2009, is amended to read as follows:
S. 26 4 A. 26
S 480. Extension of temporary benefits and supplementation programs.
a. Every temporary right, privilege or benefit conferred pursuant to
the provisions of a general, special or local law (other than pursuant
to articles fourteen and fifteen of this chapter) for any member of a
public retirement system or pension plan funded by the state or one of
its political subdivisions, which is scheduled to expire or terminate at
any time during nineteen hundred seventy-four, nineteen hundred seven-
ty-five, nineteen hundred seventy-six, nineteen hundred seventy-seven,
nineteen hundred seventy-eight, nineteen hundred seventy-nine, nineteen
hundred eighty, nineteen hundred eighty-one, nineteen hundred eighty-
two, nineteen hundred eighty-three, nineteen hundred eighty-four, nine-
teen hundred eighty-five, nineteen hundred eighty-six, nineteen hundred
eighty-seven, nineteen hundred eighty-eight, nineteen hundred eighty-
nine, nineteen hundred ninety, nineteen hundred ninety-one, nineteen
hundred ninety-two, nineteen hundred ninety-three, nineteen hundred
ninety-four, nineteen hundred ninety-five, nineteen hundred ninety-six,
nineteen hundred ninety-seven, nineteen hundred ninety-eight, nineteen
hundred ninety-nine, two thousand, two thousand one, two thousand two,
two thousand three, two thousand four, two thousand five, two thousand
six, two thousand seven, two thousand eight, two thousand nine, two
thousand ten or two thousand eleven, is hereby extended [until July
first, two thousand eleven], notwithstanding the provisions of such
general, special or local law. Notwithstanding the foregoing, nothing
in this section shall be construed to extend the provisions of article
eighteen of this chapter or to affect any statutory deadlines provided
in such article.
b. (i) Any program under which an employer in a public retirement
system funded by the state or one of its political subdivisions assumes
all or part of the contribution which would otherwise be made by its
employees toward retirement, which expires or terminates during nineteen
hundred seventy-four, is hereby extended [until July first, two thousand
eleven], notwithstanding the provisions of any other general, special or
local law, except that commencing with the payroll period the first day
of which is nearest to January first, nineteen hundred seventy-six[, and
until July first, two thousand eleven], the rate of such contribution
assumed by an employer in any of the public retirement systems funded
and maintained by a city, shall be one-half the rate of such contrib-
ution assumed by such employer for the immediately preceding payroll
period except as provided in paragraph (ii) of this subdivision.
(ii) Commencing with the first payroll period the first day of which
is subsequent to October first, two thousand [and until July first, two
thousand eleven], the rate of such contribution assumed by an employer
in the New York city police pension fund and in the New York city fire
department pension fund shall be equal to the rate of such contributions
assumed by such employer for the payroll period preceding January first,
nineteen hundred seventy-six.
c. All supplemental retirement allowances or supplemental pensions
paid to pensioners or beneficiaries of any retirement system supported
in whole or in part by the state or a political subdivision thereof,
which are scheduled to expire at any time during nineteen hundred seven-
ty-five, nineteen hundred seventy-six, nineteen hundred seventy-seven,
nineteen hundred seventy-eight, nineteen hundred seventy-nine, nineteen
hundred eighty, nineteen hundred eighty-one, nineteen hundred eighty-
two, nineteen hundred eighty-three, nineteen hundred eighty-four, nine-
teen hundred eighty-five, nineteen hundred eighty-six, nineteen hundred
eighty-seven, nineteen hundred eighty-eight, nineteen hundred eighty-
S. 26 5 A. 26
nine, nineteen hundred ninety, nineteen hundred ninety-one, nineteen
hundred ninety-two, nineteen hundred ninety-three, nineteen hundred
ninety-four, nineteen hundred ninety-five, nineteen hundred ninety-six,
nineteen hundred ninety-seven, nineteen hundred ninety-eight, nineteen
hundred ninety-nine, two thousand one, two thousand two, two thousand
three, two thousand four, two thousand five, two thousand six, two thou-
sand seven, two thousand eight, two thousand nine, two thousand ten or
two thousand eleven, shall be continued [for an additional year]
notwithstanding any other provision of any general, special or local law
provided, however, that all such supplemental retirement allowances or
supplemental pensions which are scheduled to expire at any time during
two thousand nine shall be continued [for two additional years] notwith-
standing any other provisions of any general, special or local law.
S 6. Section 615 of the retirement and social security law, as amended
by chapter 79 of the laws of 2009, is amended to read as follows:
S 615. Duration. Notwithstanding any other provisions of this chapter
or of any other law, the provisions of article fourteen of this chapter
shall [expire on June thirtieth, two thousand eleven, but shall] no
longer apply to members to whom this article applies on the date article
fifteen of this chapter becomes effective, provided, however, any member
who has retired pursuant to the provisions of article fourteen of this
chapter before the effective date of this article or any beneficiary of
such a member or a beneficiary of a member who dies before the effective
date of this article and who is entitled to a death benefit pursuant to
article fourteen of this chapter shall receive such benefits pursuant to
the provisions of article fourteen of this chapter, except as provided
pursuant to the provisions of section six hundred seventeen of this
article. [All benefits provided by a public retirement system of the
state shall continue with respect to members to which this article is
applicable only until June thirtieth, two thousand eleven.]
S 7. Section 6 of chapter 625 of the laws of 1975, amending the
retirement and social security law relating to the extension of tempo-
rary rights and benefits, as amended by chapter 79 of the laws of 2009,
is amended to read as follows:
S 6. Notwithstanding any inconsistent provisions of this act or of any
general, special or local law, on and after July 1, 1975 [and up to and
including June 30, 2011]: (a) a participating employer in the New York
state and local employees' retirement system or the New York state and
local police and fire retirement system and its employees shall continue
to have the right to negotiate with respect to any benefit provided by
or to be provided by such employer to such employees as members of such
system and not requiring approval by act of the legislature; and (b) a
public authority or public benefit corporation which is not a partic-
ipating employer in the New York state and local employees' retirement
system or the New York city employees' retirement system shall continue
to have the right to negotiate with its employees with respect to bene-
fits to be provided by such employer to such employees upon retirement
and not requiring approval by act of the legislature.
S 8. Notwithstanding any provision of law to the contrary, nothing in
this act shall limit the eligibility of any member of an employee organ-
ization to join a special retirement plan open to him or her pursuant to
a collectively negotiated agreement with any state or local government
employer, where such agreement is in effect on the effective date of
this act and so long as such agreement remains in effect thereafter;
provided, however, that any such eligibility shall not apply upon termi-
nation of such agreement for employees otherwise subject to the
S. 26 6 A. 26
provisions of article twenty-two of the retirement and social security
law.
S 9. Paragraph (d) of subdivision 4 of section 209 of the civil
service law, as amended by chapter 28 of the laws of 2009, is amended to
read as follows:
(d) The provisions of this subdivision shall expire [thirty-four]
THIRTY-SIX years from July first, nineteen hundred seventy-seven, AND
HEREAFTER MAY BE RENEWED EVERY FOUR YEARS.
S 9-a. Subdivision c of section 500 of the retirement and social secu-
rity law, as added by chapter 890 of the laws of 1976, is amended to
read as follows:
c. If the comptroller certifies that the contribution rate under this
article for any participating employer who is participating on the
effective date hereof would be at least one percent higher than the rate
which would be applicable to such employer for an employee who is
subject to article eleven of this chapter and who was hired prior to
July first, nineteen hundred seventy-six, the provisions of this article
shall not apply with respect to such participating employer, PROVIDED,
HOWEVER THAT MEMBERS WHO FIRST JOIN THE NEW YORK STATE AND LOCAL POLICE
AND FIRE RETIREMENT SYSTEM ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN
SHALL NOT BE SUBJECT TO THE PROVISIONS OF THIS ARTICLE. In such event,
the provisions of article eleven AND ARTICLE TWENTY-TWO OF THIS CHAPTER
shall continue to be applicable to such participating employer and its
employees, as provided in section four hundred fifty-one of this chap-
ter. If, as a result of actuarial experience, such employer's contrib-
ution rate should increase to the extent that it is not at least one
percent lower than the contribution rate under this article, then, upon
certification of such fact by the comptroller, the provisions of this
subdivision shall no longer apply with respect to the employees of such
employer who thereafter first join or rejoin a public retirement system.
S 10. This act shall take effect on the thirtieth day after it shall
have become a law.
PART B
Section 1. Subdivision 24 of section 501 of the retirement and social
security law, as amended by chapter 891 of the laws of 1976, is amended
to read as follows:
24. "Wages" shall mean regular compensation earned by and paid to a
member by a public employer, EXCEPT THAT FOR MEMBERS WHO FIRST JOIN THE
STATE AND LOCAL EMPLOYEES' RETIREMENT SYSTEM ON OR AFTER JANUARY FIRST,
TWO THOUSAND TEN, OVERTIME COMPENSATION PAID IN ANY YEAR IN EXCESS OF
THE OVERTIME CEILING, AS DEFINED BY THIS SUBDIVISION, SHALL NOT BE
INCLUDED IN THE DEFINITION OF WAGES. "OVERTIME COMPENSATION" SHALL
MEAN, FOR PURPOSES OF THIS SECTION, COMPENSATION PAID UNDER ANY LAW OR
POLICY UNDER WHICH EMPLOYEES ARE PAID AT A RATE GREATER THAN THEIR STAN-
DARD RATE FOR ADDITIONAL HOURS WORKED BEYOND THOSE REQUIRED, INCLUDING
COMPENSATION PAID UNDER SECTION ONE HUNDRED THIRTY-FOUR OF THE CIVIL
SERVICE LAW AND SECTION NINETY OF THE GENERAL MUNICIPAL LAW. THE "OVER-
TIME CEILING" SHALL MEAN FIFTEEN THOUSAND DOLLARS PER ANNUM ON JANUARY
FIRST, TWO THOUSAND TEN, AND SHALL BE INCREASED BY THREE PERCENT EACH
YEAR THEREAFTER. For the purpose of calculation a member's primary
federal social security retirement or disability benefit, wages shall,
in any calendar year, be limited to the portion of the member's wages
which would be subject to tax under section three thousand one hundred
twenty-one of the internal revenue code of nineteen hundred fifty-four,
S. 26 7 A. 26
or any predecessor or successor provision relating thereto, if such
member was employed by a private employer.
S 2. Subdivisions a and b of section 502 of the retirement and social
security law, as amended by chapter 389 of the laws of 1998, are amended
to read as follows:
a. A member who first joins a public retirement system of this state
on or after June thirtieth, nineteen hundred seventy-six shall not be
eligible for service retirement benefits hereunder until such member has
rendered a minimum of five years of creditable service after July first,
nineteen hundred seventy-three, EXCEPT THAT A MEMBER WHO FIRST JOINS THE
NEW YORK STATE AND LOCAL EMPLOYEES' RETIREMENT SYSTEM ON OR AFTER JANU-
ARY FIRST, TWO THOUSAND TEN SHALL NOT BE ELIGIBLE FOR SERVICE RETIREMENT
BENEFITS PURSUANT TO THIS ARTICLE UNTIL SUCH MEMBER HAS RENDERED A MINI-
MUM OF TEN YEARS OF CREDITED SERVICE.
b. A member who previously was a member of a public retirement system
of this state shall not be eligible for service retirement benefits
hereunder until such member has rendered a minimum of five years of
service which is creditable pursuant to section five hundred thirteen of
this article. A MEMBER WHO FIRST JOINS THE NEW YORK STATE AND LOCAL
EMPLOYEES' RETIREMENT SYSTEM ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN
SHALL NOT BE ELIGIBLE FOR SERVICE RETIREMENT BENEFITS PURSUANT TO THIS
ARTICLE UNTIL SUCH MEMBER HAS RENDERED A MINIMUM OF TEN YEARS OF CREDIT-
ED SERVICE.
S 3. Subdivision c of section 504 of the retirement and social securi-
ty law, as amended by chapter 174 of the laws of 1989, is amended to
read as follows:
c. The early service retirement benefit for general members, except
for general members whose early retirement benefit is specified in
subdivision d of this section, shall be the service retirement benefit
specified in subdivision a or b of this section, as the case may be,
without social security offset, reduced by one-fifteenth for each of the
first two years by which early retirement precedes age sixty-two, plus a
further reduction of: (1) one-thirtieth; OR (2) ONE-TWENTIETH FOR
MEMBERS WHO FIRST JOIN THE NEW YORK STATE AND LOCAL EMPLOYEES' RETIRE-
MENT SYSTEM ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN, for each year
by which early retirement precedes age sixty. At age sixty-two, the
benefit shall be reduced by fifty percent of the primary social security
retirement benefit, as provided in section five hundred eleven of this
article.
S 4. Subdivision a of section 516 of the retirement and social securi-
ty law, as amended by chapter 389 of the laws of 1998, is amended to
read as follows:
a. A member who has five or more years of credited service OR TEN OR
MORE YEARS OF CREDITED SERVICE FOR MEMBERS WHO FIRST JOIN THE NEW YORK
STATE AND LOCAL EMPLOYEES' RETIREMENT SYSTEM ON OR AFTER JANUARY FIRST,
TWO THOUSAND TEN upon termination of employment shall be entitled to a
deferred vested benefit as provided herein.
S 5. Subdivision l of section 601 of the retirement and social securi-
ty law, as added by chapter 414 of the laws of 1983, is amended to read
as follows:
l. "Wages" shall mean regular compensation earned by and paid to a
member by a public employer, EXCEPT THAT FOR MEMBERS WHO FIRST JOIN THE
NEW YORK STATE AND LOCAL EMPLOYEES' RETIREMENT SYSTEM OR THE NEW YORK
STATE TEACHERS' RETIREMENT SYSTEM ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TEN, OVERTIME COMPENSATION PAID IN ANY YEAR IN EXCESS OF THE OVER-
TIME CEILING, AS DEFINED BY THIS SUBDIVISION, SHALL NOT BE INCLUDED IN
S. 26 8 A. 26
THE DEFINITION OF WAGES. "OVERTIME COMPENSATION" SHALL MEAN, FOR
PURPOSES OF THIS SECTION, COMPENSATION PAID UNDER ANY LAW OR POLICY
UNDER WHICH EMPLOYEES ARE PAID AT A RATE GREATER THAN THEIR STANDARD
RATE FOR ADDITIONAL HOURS WORKED BEYOND THOSE REQUIRED, INCLUDING
COMPENSATION PAID UNDER SECTION ONE HUNDRED THIRTY-FOUR OF THE CIVIL
SERVICE LAW AND SECTION NINETY OF THE GENERAL MUNICIPAL LAW. THE "OVER-
TIME CEILING" SHALL MEAN FIFTEEN THOUSAND DOLLARS PER ANNUM ON JANUARY
FIRST, TWO THOUSAND TEN, AND SHALL BE INCREASED BY THREE PER CENT EACH
YEAR THEREAFTER.
S 6. Subdivisions a and b of section 602 of the retirement and social
security law, as amended by chapter 389 of the laws of 1998, are amended
to read as follows:
a. A member who first joins a public retirement system of this state
on or after July first, nineteen hundred seventy-six shall not be eligi-
ble for service retirement benefits hereunder until such member has
rendered a minimum of five years of credited service, EXCEPT THAT A
MEMBER WHO FIRST JOINS THE NEW YORK STATE AND LOCAL EMPLOYEES' RETIRE-
MENT SYSTEM OR THE NEW YORK STATE TEACHERS' RETIREMENT SYSTEM ON OR
AFTER JANUARY FIRST, TWO THOUSAND TEN SHALL NOT BE ELIGIBLE FOR SERVICE
RETIREMENT BENEFITS PURSUANT TO THIS ARTICLE UNTIL SUCH MEMBER HAS
RENDERED A MINIMUM OF TEN YEARS OF CREDITED SERVICE.
b. A member who previously was a member of a public retirement system
of this state shall not be eligible for service retirement benefits
hereunder until such member has rendered a minimum of five years of
service which is credited pursuant to section six hundred nine of this
article. A MEMBER WHO FIRST JOINS THE NEW YORK STATE AND LOCAL EMPLOY-
EES' RETIREMENT SYSTEM OR THE NEW YORK STATE TEACHERS' RETIREMENT SYSTEM
ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN SHALL NOT BE ELIGIBLE FOR
SERVICE RETIREMENT BENEFITS PURSUANT TO THIS ARTICLE UNTIL SUCH MEMBER
HAS RENDERED A MINIMUM OF TEN YEARS OF CREDITED SERVICE.
S 7. Subdivision a of section 603 of the retirement and social securi-
ty law, as amended by section 3 of chapter 19 of the laws of 2008, is
amended to read as follows:
a. The service retirement benefit specified in section six hundred
four of this article shall be payable to members who have met the mini-
mum service requirements upon retirement and attainment of age sixty-
two, other than members who are eligible for early service retirement
pursuant to subdivision c of section six hundred four-b of this article,
subdivision c of section six hundred four-c of this article, subdivision
d of section six hundred four-d of this article, subdivision c of
section six hundred four-e of this article, subdivision c of section six
hundred four-f of this article, subdivision c of section six hundred
four-g of this article, subdivision c of section six hundred four-h of
this article or subdivision c of section six hundred four-i of this
article, provided, however, [a member who is a peace officer employed by
the unified court system or] a member of a teachers' retirement system
or the New York state and local employees' retirement system WHO FIRST
JOINS SUCH SYSTEM BEFORE JANUARY FIRST, TWO THOUSAND TEN OR A MEMBER WHO
IS A UNIFORMED COURT OFFICER OR PEACE OFFICER EMPLOYED BY THE UNIFIED
COURT SYSTEM may retire without reduction of his or her retirement bene-
fit upon attainment of at least fifty-five years of age and completion
of thirty or more years of service, PROVIDED, HOWEVER, THAT A UNIFORMED
COURT OFFICER OR PEACE OFFICER EMPLOYED BY THE UNIFIED COURT SYSTEM WHO
FIRST BECOMES A MEMBER OF THE NEW YORK STATE AND LOCAL EMPLOYEES'
RETIREMENT SYSTEM ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN AND
RETIRES WITHOUT REDUCTION OF HIS OR HER RETIREMENT BENEFIT UPON ATTAIN-
S. 26 9 A. 26
MENT OF AT LEAST FIFTY-FIVE YEARS OF AGE AND COMPLETION OF THIRTY OR
MORE YEARS OF SERVICE PURSUANT TO THIS SECTION SHALL BE REQUIRED TO MAKE
THE MEMBER CONTRIBUTIONS REQUIRED BY SUBDIVISION F OF SECTION SIX
HUNDRED THIRTEEN OF THIS ARTICLE FOR ALL YEARS OF CREDITED AND CREDITA-
BLE SERVICE.
S 8. Subdivision i of section 603 of the retirement and social securi-
ty law, as amended by chapter 19 of the laws of 2008, is amended to read
as follows:
i. 1. A member of a teachers' retirement system or the New York state
and local employees' retirement system who has met the minimum service
requirements but who has less than thirty years of credited service OR A
MEMBER WHO FIRST JOINS THE NEW YORK STATE AND LOCAL EMPLOYEES' RETIRE-
MENT SYSTEM OR THE NEW YORK STATE TEACHERS' RETIREMENT SYSTEM ON OR
AFTER JANUARY FIRST, TWO THOUSAND TEN may retire prior to normal retire-
ment age, but no earlier than attainment of age fifty-five, in which
event, unless such person is a member of the New York city teachers'
retirement system who is otherwise eligible for early service retirement
pursuant to subdivision c of section six hundred four-i of this article,
the amount of his or her retirement benefit otherwise computed without
optional modification shall be reduced in accordance with the following
schedule:
(i) for each of the first twenty-four full months that retirement
predates age sixty-two, one-half of one per centum per month; PROVIDED,
HOWEVER, THAT FOR MEMBERS WHO FIRST JOIN THE NEW YORK STATE AND LOCAL
EMPLOYEES' RETIREMENT SYSTEM OR THE NEW YORK STATE TEACHERS' RETIREMENT
SYSTEM ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN, SUCH AMOUNTS SHALL
BE EQUAL TO ONE-FIFTEENTH PER YEAR; and
(ii) for each full month that retirement predates age sixty, one-quar-
ter of one per centum per month; PROVIDED, HOWEVER, THAT FOR MEMBERS WHO
FIRST JOIN THE NEW YORK STATE AND LOCAL EMPLOYEES' RETIREMENT SYSTEM OR
THE NEW YORK STATE TEACHERS' RETIREMENT SYSTEM ON OR AFTER JANUARY
FIRST, TWO THOUSAND TEN, SUCH AMOUNTS SHALL BE EQUAL TO ONE-TWENTIETH
PER YEAR, but in no event shall retirement be permitted prior to attain-
ment of age fifty-five.
2. A member of the New York city employees' retirement system or the
board of education retirement system of the city of New York who has met
the minimum service requirement, but who is not (a) a participant in the
twenty-five-year early retirement program, as defined in paragraph ten
of subdivision a of section six hundred four-c of this article (as added
by chapter ninety-six of the laws of nineteen hundred ninety-five), or
(b) a participant in the age fifty-seven retirement program, as defined
in paragraph three of subdivision b of section six hundred four-d of
this article, or (c) a New York city transit authority member, as
defined in paragraph one of subdivision a of section six hundred four-b
of this article, may retire prior to normal retirement age, but no
earlier than attainment of age fifty-five, in which event, unless such
person is a member of the board of education retirement system of such
city who is otherwise eligible for early service retirement pursuant to
subdivision c of section six hundred four-i of this article, the amount
of his or her retirement benefit computed without optional modification
shall be reduced in accordance with the following schedule:
(i) for each of the first twenty-four full months that retirement
predates age sixty-two, one-half of one per centum per month; and
(ii) for each full month that retirement predates age sixty, one-quar-
ter of one per centum per month, but in no event shall retirement be
permitted prior to attainment of age fifty-five.
S. 26 10 A. 26
S 8-a. Section 603 of the retirement and social security law is
amended by adding a new subdivision t to read as follows:
T. MEMBERS WHO JOIN THE NEW YORK STATE TEACHERS' RETIREMENT SYSTEM ON
OR AFTER JANUARY FIRST, TWO THOUSAND TEN, SHALL BE ELIGIBLE TO RETIRE
WITHOUT REDUCTION OF HIS OR HER RETIREMENT BENEFIT UPON ATTAINMENT OF AT
LEAST FIFTY-SEVEN YEARS OF AGE AND COMPLETION OF THIRTY OR MORE YEARS OF
SERVICE. MEMBERS WHO RETIRE PURSUANT TO THE PROVISIONS OF THIS SUBDIVI-
SION SHALL BE REQUIRED TO MAKE THE MEMBER CONTRIBUTIONS REQUIRED BY
SUBDIVISION G OF SECTION SIX HUNDRED THIRTEEN OF THIS ARTICLE FOR ALL
YEARS OF CREDITED AND CREDITABLE SERVICE.
S 8-b. Subdivisions a and b of section 604 of the retirement and
social security law, as amended by chapter 266 of the laws of 1998, are
amended to read as follows:
a. The service retirement benefit at normal retirement age for a
member with less than twenty years of credited service, OR LESS THAN
TWENTY-FIVE YEARS CREDITED SERVICE FOR A MEMBER WHO JOINS THE NEW YORK
STATE TEACHERS' RETIREMENT SYSTEM ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TEN, shall be a retirement allowance equal to one-sixtieth of final
average salary times years of credited service.
b. The service retirement benefit at normal retirement age for a
member with twenty years or more of credited service, OR WITH
TWENTY-FIVE OR MORE YEARS CREDITED SERVICE FOR A MEMBER WHO FIRST JOINS
THE NEW YORK STATE TEACHERS' RETIREMENT SYSTEM ON OR AFTER JANUARY
FIRST, TWO THOUSAND TEN, shall be a retirement allowance equal to one-
fiftieth of final average salary times years of credited service not in
excess of thirty years.
S 8-c. Paragraph 2 of subdivision b of section 609 of the retirement
and social security law, as added by chapter 414 of the laws of 1983, is
amended to read as follows:
2. Previous service credit shall not be granted unless such member
applies therefor and repays the amount refunded by a public retirement
system of the state for service rendered after July first, nineteen
hundred seventy-six together with interest through the date of repayment
at the rate of five percent per annum compounded annually and three
percent of the wages earned for service prior to that date together with
interest from July first, nineteen hundred seventy-six through the date
of payment at the rate of five percent per annum compounded annually and
three percent of the wages earned for service which predates the date of
entry into the retirement system together with interest at the rate of
five percent per annum compounded annually from the date of such service
until the date of payment. ANYTHING IN THIS PARAGRAPH TO THE CONTRARY
NOTWITHSTANDING, IN ORDER TO OBTAIN CREDIT FOR PREVIOUS SERVICE, MEMBERS
WHO FIRST JOIN THE NEW YORK STATE TEACHERS' RETIREMENT SYSTEM ON OR
AFTER JANUARY FIRST, TWO THOUSAND TEN SHALL PAY THREE AND ONE-HALF
PERCENT OF WAGES EARNED FOR SERVICE WHICH PREDATES THE DATE OF ENTRY
INTO THE RETIREMENT SYSTEM TOGETHER WITH INTEREST AT THE RATE OF FIVE
PERCENT PER ANNUM COMPOUNDED ANNUALLY FROM THE DATE OF SUCH SERVICE
UNTIL THE DATE OF PAYMENT.
S 9. Subdivision a of section 612 of the retirement and social securi-
ty law, as amended by chapter 659 of the laws of 1999, is amended to
read as follows:
a. A member who has five or more years of credited service, OR TEN OR
MORE YEARS OF CREDITED SERVICE FOR A MEMBER WHO FIRST JOINED THE NEW
YORK STATE AND LOCAL EMPLOYEES' RETIREMENT SYSTEM OR THE NEW YORK STATE
TEACHERS' RETIREMENT SYSTEM ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN,
upon termination of employment, other than a member who is entitled to a
S. 26 11 A. 26
deferred vested benefit pursuant to any other provision of this article,
shall be entitled to a deferred vested benefit at normal retirement age
computed in accordance with the provisions of section six hundred four
of this article. A member of a teachers' retirement system or the New
York state and local employees' retirement system who has five or more
years of credited service, OR TEN OR MORE YEARS OF CREDITED SERVICE FOR
A MEMBER WHO FIRST BECOMES A MEMBER OF THE NEW YORK STATE AND LOCAL
EMPLOYEES' RETIREMENT SYSTEM OR THE NEW YORK STATE TEACHERS' RETIREMENT
SYSTEM ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN, upon termination of
employment shall be entitled to a deferred vested benefit prior to
normal retirement age, but no earlier than age fifty-five, computed in
accordance with the provisions of subdivision i of section six hundred
three of this article.
S 9-a. Section 613 of the retirement and social security law is
amended by adding two new subdivisions f and g to read as follows:
F. ANYTHING IN SUBDIVISION A OF THIS SECTION TO THE CONTRARY NOTWITH-
STANDING A MEMBER EMPLOYED AS A UNIFORMED COURT OFFICER OR PEACE OFFICER
IN THE UNIFIED COURT SYSTEM WHO FIRST JOINS THE NEW YORK STATE AND LOCAL
EMPLOYEES' RETIREMENT SYSTEM ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN
SHALL CONTRIBUTE FOUR PERCENT OF ANNUAL WAGES TO THE NEW YORK STATE AND
LOCAL EMPLOYEES' RETIREMENT SYSTEM. THE HEAD OF THE NEW YORK STATE AND
LOCAL EMPLOYEES' RETIREMENT SYSTEM SHALL PROMULGATE SUCH REGULATIONS AS
MAY BE NECESSARY AND APPROPRIATE WITH RESPECT TO THE DEDUCTION OF SUCH
CONTRIBUTION FROM MEMBERS' WAGES AND FOR THE MAINTENANCE OF ANY SPECIAL
FUND OR FUNDS WITH RESPECT TO AMOUNTS SO CONTRIBUTED.
G. MEMBERS WHO FIRST JOIN THE NEW YORK STATE TEACHERS' RETIREMENT
SYSTEM ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN SHALL CONTRIBUTE
THREE AND ONE-HALF PERCENT OF ANNUAL WAGES TO THE NEW YORK STATE TEACH-
ERS' RETIREMENT SYSTEM. THE HEAD OF THE NEW YORK STATE TEACHERS' RETIRE-
MENT SYSTEM SHALL PROMULGATE SUCH REGULATIONS AS MAY BE NECESSARY AND
APPROPRIATE WITH RESPECT TO THE DEDUCTION OF SUCH CONTRIBUTION FROM
MEMBERS' WAGES AND FOR THE MAINTENANCE OF ANY SPECIAL FUND OR FUNDS WITH
RESPECT TO AMOUNTS SO CONTRIBUTED.
S 10. Paragraph 1 of subdivision b of section 902 of the retirement
and social security law, as amended by chapter 110 of the laws of 2000,
is amended to read as follows:
1. An eligible employee (i) with a date of membership in a retirement
system on or after July twenty-seventh, nineteen hundred seventy-six AND
BEFORE JANUARY FIRST, TWO THOUSAND TEN, and (ii) who has ten or more
years of membership or ten or more years of credited service with a
retirement system under the provisions of article fourteen or fifteen of
this chapter shall not be required to contribute to a retirement system
pursuant to section five hundred seventeen or six hundred thirteen of
this chapter as of the cessation date.
S 11. Intentionally omitted.
S 12. Intentionally omitted.
S 13. Section 90 of the general municipal law, as amended by chapter
576 of the laws of 1964, is amended to read as follows:
S 90. Payment of overtime compensation to public officers or employ-
ees. The governing board of each municipal corporation or other civil
division or political subdivision of the state, or in the city of New
York, the mayor, by ordinance, local law, resolution, order or rule, may
provide for the payment of overtime compensation to any or all public
officers except elective officers and those officers otherwise excluded
by law and to any or all public employees under their jurisdiction at
the regular basic pay rate of such officers or employees for all time
S. 26 12 A. 26
such officers or employees are required to work in excess of their regu-
larly established hours of employment or at such other rate as such
governing board, or in the city of New York, the mayor, may authorize.
The amounts received as overtime compensation under this section shall
be regarded as salary or compensation for any of the purposes of any
pension or retirement system of which the officer or employee receiving
the same is a member, EXCEPT AS SET FORTH IN SECTIONS FIVE HUNDRED ONE,
SIX HUNDRED ONE, AND TWELVE HUNDRED THREE OF THE RETIREMENT AND SOCIAL
SECURITY LAW. Such overtime compensation shall not be regarded as sala-
ry or compensation for the purpose of determining the right to any
increase of salary or any salary increment on account of length of
service or otherwise. No such overtime compensation shall be construed
to constitute a promotion.
S 14. Section 1 of chapter 729 of the laws of 1994 relating to affect-
ing the health insurance benefits and contributions of retired employees
of school districts and certain boards, as amended by chapter 30 of the
laws of 2009, is amended to read as follows:
Section 1. From on and after June 30, 1994 [until May 15, 2010,] a
school district, board of cooperative educational services, vocational
education and extension board or a school district as enumerated in
section 1 of chapter 566 of the laws of 1967, as amended, shall be
prohibited from diminishing the health insurance benefits provided to
retirees and their dependents or the contributions such board or
district makes for such health insurance coverage below the level of
such benefits or contributions made on behalf of such retirees and their
dependents by such district or board unless a corresponding diminution
of benefits or contributions is effected from the present level during
this period by such district or board from the corresponding group of
active employees for such retirees.
S 15. Legislative intent. The legislature hereby finds and declares
its intent, in addition to the retirement benefit changes provided for
in this act, to enact legislation, in conjunction with the executive,
which would offer a three-month period during calendar year 2010, during
which members of the collective bargaining unit of the New York State
United Teachers ("NYSUT") within the New York state teachers retirement
system and the New York state and local employees' retirement system who
have reached fifty-five years of age and have accumulated twenty-five
years of service as a member of either such retirement system, may
retire early without penalty.
S 16. This act shall take effect January 1, 2010; provided, however,
that the amendments to subdivision a of section 603 of the retirement
and social security law made by section seven of this act, shall not
affect the expiration of such subdivision and shall be deemed to expire
therewith.
PART C
Section 1. Subdivisions a and b of section 602 of the retirement and
social security law, as amended by chapter 389 of the laws of 1998, are
amended to read as follows:
a. [A] EXCEPT AS PROVIDED IN SUBDIVISION B-1 OF THIS SECTION, A member
who first joins a public retirement system of this state on or after
July first, nineteen hundred seventy-six shall not be eligible for
service retirement benefits hereunder until such member has rendered a
minimum of five years of credited service.
S. 26 13 A. 26
b. [A] EXCEPT AS PROVIDED IN SUBDIVISION B-1 OF THIS SECTION, A member
who previously was a member of a public retirement system of this state
shall not be eligible for service retirement benefits hereunder until
such member has rendered a minimum of five years of service which is
credited pursuant to section six hundred nine of this article.
S 2. Section 602 of the retirement and social security law is amended
by adding a new subdivision b-1 to read as follows:
B-1. NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION A OR B OF THIS
SECTION OR ANY OTHER PROVISION OF LAW TO THE CONTRARY, (I) A MEMBER OF
THE NEW YORK CITY TEACHERS' RETIREMENT SYSTEM WHO HOLDS A POSITION
REPRESENTED BY THE RECOGNIZED TEACHER ORGANIZATION FOR COLLECTIVE
BARGAINING PURPOSES, AND WHO BECAME SUBJECT TO THE PROVISIONS OF THIS
ARTICLE AFTER THE EFFECTIVE DATE OF THIS SUBDIVISION, OR (II) A MEMBER
OF THE NEW YORK CITY BOARD OF EDUCATION RETIREMENT SYSTEM WHO HOLDS A
POSITION REPRESENTED BY THE RECOGNIZED TEACHER ORGANIZATION FOR COLLEC-
TIVE BARGAINING PURPOSES, AND WHO BECAME SUBJECT TO THE PROVISIONS OF
THIS ARTICLE AFTER THE EFFECTIVE DATE OF THIS SUBDIVISION, SHALL NOT BE
ELIGIBLE FOR SERVICE RETIREMENT BENEFITS HEREUNDER UNTIL SUCH MEMBER HAS
RENDERED A MINIMUM OF TEN YEARS OF CREDITED SERVICE.
S 3. Subdivision a of section 612 of the retirement and social securi-
ty law, as amended by chapter 659 of the laws of 1999, is amended to
read follows:
a. [A] EXCEPT AS PROVIDED IN SUBDIVISION A-1 OF THIS SECTION, A member
who has five or more years of credited service upon termination of
employment, other than a member who is entitled to a deferred vested
benefit pursuant to any other provision of this article, shall be enti-
tled to a deferred vested benefit at normal retirement age computed in
accordance with the provisions of section six hundred four of this arti-
cle. [A] EXCEPT AS PROVIDED IN SUBDIVISION A-1 OF THIS SECTION, A member
of a teachers' retirement system or the New York state and local employ-
ees' retirement system who has five or more years of credited service
upon termination of employment shall be entitled to a deferred vested
benefit prior to normal retirement age, but no earlier than age fifty-
five, computed in accordance with the provisions of subdivision i of
section six hundred three of this article.
S 4. Section 612 of the retirement and social security law is amended
by adding a new subdivision a-1 to read as follows:
A-1. NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION A OF THIS SECTION
OR ANY OTHER PROVISION OF LAW TO THE CONTRARY, (I) A MEMBER OF THE NEW
YORK CITY TEACHERS' RETIREMENT SYSTEM WHO HOLDS A POSITION REPRESENTED
BY THE RECOGNIZED TEACHER ORGANIZATION FOR COLLECTIVE BARGAINING
PURPOSES, WHO BECAME SUBJECT TO THE PROVISIONS OF THIS ARTICLE AFTER THE
EFFECTIVE DATE OF THIS SUBDIVISION, AND WHO HAS TEN OR MORE YEARS OF
CREDITED SERVICE, OR (II) A MEMBER OF THE NEW YORK CITY BOARD OF EDUCA-
TION RETIREMENT SYSTEM WHO HOLDS A POSITION REPRESENTED BY THE RECOG-
NIZED TEACHER ORGANIZATION FOR COLLECTIVE BARGAINING PURPOSES, WHO
BECAME SUBJECT TO THE PROVISIONS OF THIS ARTICLE AFTER THE EFFECTIVE
DATE OF THIS SUBDIVISION, AND WHO HAS TEN OR MORE YEARS OF CREDITED
SERVICE, OTHER THAN SUCH A MEMBER OF EITHER OF SUCH RETIREMENT SYSTEMS
WHO IS ENTITLED TO A DEFERRED VESTED BENEFIT PURSUANT TO ANY OTHER
PROVISION OF THIS ARTICLE, SHALL, UPON TERMINATION OF EMPLOYMENT, BE
ENTITLED TO A DEFERRED VESTED BENEFIT AT NORMAL RETIREMENT AGE COMPUTED
IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED FOUR OF THIS
ARTICLE. NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION A OF THIS
SECTION OR ANY OTHER PROVISION OF LAW TO THE CONTRARY, A MEMBER OF THE
NEW YORK CITY TEACHERS' RETIREMENT SYSTEM WHO HOLDS A POSITION REPRES-
S. 26 14 A. 26
ENTED BY THE RECOGNIZED TEACHER ORGANIZATION FOR COLLECTIVE BARGAINING
PURPOSES, WHO BECAME SUBJECT TO THE PROVISIONS OF THIS ARTICLE AFTER THE
EFFECTIVE DATE OF THIS SUBDIVISION, AND WHO HAS TEN OR MORE YEARS OF
CREDITED SERVICE, SHALL, UPON TERMINATION OF EMPLOYMENT, BE ENTITLED TO
A DEFERRED VESTED BENEFIT PRIOR TO NORMAL RETIREMENT AGE, BUT NO EARLIER
THAN AGE FIFTY-FIVE, COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF
SUBDIVISION I OF SECTION SIX HUNDRED THREE OF THIS ARTICLE.
S 5. Paragraph 1 of subdivision b of section 911 of the retirement and
social security law, as amended by chapter 110 of the laws of 2000, is
amended to read as follows:
1. [An] SUBJECT TO THE PROVISIONS OF PARAGRAPH ONE-A OF THIS SUBDIVI-
SION, AN eligible member (i) with a date of membership in a retirement
system on or after July twenty-seventh, nineteen hundred seventy-six and
(ii) who has ten or more years of membership or ten or more years of
credited service with a retirement system under the provisions of arti-
cle fourteen or fifteen of this chapter shall not be required to
contribute to a retirement system pursuant to section five hundred
seventeen or six hundred thirteen of this chapter as of the cessation
date.
S 6. Subdivision b of section 911 of the retirement and social securi-
ty law is amended by adding a new paragraph 1-a to read as follows:
1-A. NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH ONE OF THIS SUBDIVI-
SION OR ANY OTHER PROVISION OF LAW TO THE CONTRARY, A MEMBER OF THE NEW
YORK CITY TEACHERS' RETIREMENT SYSTEM OR THE NEW YORK CITY BOARD OF
EDUCATION RETIREMENT SYSTEM:
(I) WHO IS A TWENTY-SEVEN YEAR PARTICIPANT IN THE AGE FIFTY-FIVE
RETIREMENT PROGRAM (AS DEFINED IN PARAGRAPH TWELVE OF SUBDIVISION A OF
SECTION SIX HUNDRED FOUR-I OF THIS CHAPTER), AND
(II) WHO BECOMES SUBJECT TO THE PROVISIONS OF ARTICLE FIFTEEN OF THIS
CHAPTER AFTER THE EFFECTIVE DATE OF THIS PARAGRAPH, SHALL CONTRIBUTE TO
A RETIREMENT SYSTEM PURSUANT TO SECTION SIX HUNDRED THIRTEEN OF THIS
CHAPTER UNTIL HE OR SHE HAS COMPLETED TWENTY-SEVEN YEARS OF CREDITED
SERVICE.
S 7. Paragraph 2 of subdivision e of section 604-i of the retirement
and social security law, as added by chapter 19 of the laws of 2008, is
amended to read as follows:
2. A twenty-five-year participant in the age fifty-five retirement
program (as defined in paragraph eleven of subdivision a of this
section) shall contribute additional member contributions until the
later of (i) June twenty-ninth, two thousand eight, or (ii) the date on
which he or she has completed twenty-five years of credited service. A
twenty-seven-year participant in the age fifty-five retirement program
shall contribute additional member contributions only until he or she
has completed twenty-seven years of credited service; PROVIDED, HOWEVER,
THAT A TWENTY-SEVEN-YEAR PARTICIPANT IN THE AGE FIFTY-FIVE RETIREMENT
PROGRAM WHO BECOMES SUBJECT TO THE PROVISIONS OF THIS ARTICLE AFTER THE
EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND NINE THAT
AMENDED THIS PARAGRAPH SHALL CONTRIBUTE ADDITIONAL MEMBER CONTRIBUTIONS
FOR ALL YEARS OF CREDITED SERVICE AS PROVIDED IN SUBPARAGRAPH (II) OF
PARAGRAPH ONE OF THIS SUBDIVISION.
S 8. Subdivision d of section 13-582 of the administrative code of the
city of New York is amended to read as follows:
d. [Interest] 1. SUBJECT TO THE PROVISIONS OF PARAGRAPH TWO OF THIS
SUBDIVISION, INTEREST shall be allowed on the participant's tax-deferred
account in the annuity savings fund at the same rate and in accordance
S. 26 15 A. 26
with the same rules and procedures applicable to any account in the
annuity savings fund, as provided in this chapter.
2. NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH ONE OF THIS SUBDIVI-
SION, OR ANY OTHER PROVISION OF LAW, OR ANY RETIREMENT BOARD RULE, REGU-
LATION OR RESOLUTION TO THE CONTRARY, ON OR AFTER THE FIRST BUSINESS DAY
IMMEDIATELY FOLLOWING THE EFFECTIVE DATE OF THIS PARAGRAPH, INTEREST
SHALL BE ALLOWED AT THE RATE OF SEVEN PERCENT PER ANNUM, COMPOUNDED
ANNUALLY, ON THE TAX-DEFERRED ACCOUNT IN THE ANNUITY SAVINGS FUND OF
PARTICIPANTS (I) WHO HOLD A POSITION REPRESENTED BY THE RECOGNIZED
TEACHER ORGANIZATION FOR COLLECTIVE BARGAINING PURPOSES, OR (II) WHO
HELD SUCH A POSITION AT THE TIME THEY RETIRED OR DISCONTINUED SERVICE
WITH VESTED RIGHTS TO A RETIREMENT ALLOWANCE AND ELECTED TO DEFER
COMMENCEMENT OF DISTRIBUTION OF THEIR TAX-DEFERRED ACCOUNTS IN ACCORD-
ANCE WITH SUBDIVISION G OF THIS SECTION.
S 9. Section 13-582 of the administrative code of the city of New York
is amended by adding two new subdivisions n and o to read as follows:
N. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, OR ANY RETIREMENT BOARD
RULE, REGULATION OR RESOLUTION TO THE CONTRARY, THE AMENDMENT TO SUBDI-
VISION D OF THIS SECTION ENACTED BY THE CHAPTER OF THE LAWS OF TWO THOU-
SAND NINE WHICH ADDED THIS SUBDIVISION SHALL NOT AFFECT THE RATE OF
INTEREST BEING CHARGED ON NEW LOANS FROM THE TAX-DEFERRED ANNUITY
PROGRAM, AND THE RATE OF INTEREST THAT WAS BEING CHARGED ON SUCH LOANS
IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF THIS SUBDIVISION SHALL BE
USED FOR NEW LOANS FROM THE TAX-DEFERRED ANNUITY PROGRAM MADE ON OR
AFTER THE EFFECTIVE DATE OF THIS SUBDIVISION, UNLESS THE RETIREMENT
BOARD, IN ACCORDANCE WITH ITS AUTHORITY PURSUANT TO PARAGRAPH TWO OF
SUBDIVISION L OF THIS SECTION, AS ADDED BY CHAPTER FIVE HUNDRED SEVEN-
TEEN OF THE LAWS OF NINETEEN HUNDRED NINETY-THREE, SHALL AMEND ITS RULES
AND REGULATIONS GOVERNING LOANS FROM THE TAX-DEFERRED ANNUITY PROGRAM TO
ESTABLISH A DIFFERENT RATE OF INTEREST APPLICABLE TO SUCH LOANS.
O. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, OR ANY RETIREMENT BOARD
RULE, REGULATION OR RESOLUTION TO THE CONTRARY, WHERE A PARTICIPANT IN
THE TAX-DEFERRED ANNUITY PROGRAM HAS ELECTED TO TRANSFER ALL OR A
PORTION OF THE AMOUNT CREDITED TO HIS OR HER TAX-DEFERRED ACCOUNT IN THE
ANNUITY SAVINGS FUND TO A TAX-DEFERRED ACCOUNT IN THE VARIABLE ANNUITY
SAVINGS FUND, THE RETIREMENT SYSTEM SHALL EFFECTUATE SUCH TRANSFER AS
EXPEDITIOUSLY AS IS ADMINISTRATIVELY FEASIBLE.
S 10. Subdivision 20 of section 2575 of the education law, as added by
chapter 509 of the laws of 1993, is amended by adding a new paragraph
(e) to read as follows:
(E) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, OR ANY RULE OR REGU-
LATION, OR THE PROVISIONS OF ANY RETIREMENT BOARD RESOLUTION TO THE
CONTRARY:
(1) ON OR AFTER THE FIRST BUSINESS DAY IMMEDIATELY FOLLOWING THE
EFFECTIVE DATE OF THIS PARAGRAPH, INTEREST SHALL BE ALLOWED AT THE RATE
OF SEVEN PERCENT PER ANNUM, COMPOUNDED ANNUALLY, ON THE TAX-DEFERRED
ACCOUNTS IN THE ANNUITY SAVINGS FUND OF PARTICIPANTS (I) WHO HOLD A
POSITION REPRESENTED BY THE RECOGNIZED TEACHER ORGANIZATION FOR COLLEC-
TIVE BARGAINING PURPOSES, OR (II) WHO HELD SUCH A POSITION AT THE TIME
THEY RETIRED OR DISCONTINUED SERVICE WITH VESTED RIGHTS TO A RETIREMENT
ALLOWANCE AND ELECTED TO DEFER COMMENCEMENT OF DISTRIBUTION OF THEIR
TAX-DEFERRED ACCOUNTS IN ACCORDANCE WITH PARAGRAPH (C) OF THIS SUBDIVI-
SION; AND
(2) THE PROVISIONS OF SUBPARAGRAPH ONE OF THIS PARAGRAPH SHALL NOT
AFFECT THE RATE OF INTEREST BEING CHARGED ON NEW LOANS FROM THE TAX-DE-
FERRED ANNUITY PROGRAM, AND THE RATE OF INTEREST THAT WAS BEING CHARGED
S. 26 16 A. 26
ON SUCH LOANS IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF THIS PARAGRAPH
SHALL BE USED FOR NEW LOANS FROM THE TAX-DEFERRED ANNUITY PROGRAM MADE
ON OR AFTER THE EFFECTIVE DATE OF THIS PARAGRAPH, UNLESS THE RULES AND
REGULATIONS GOVERNING LOANS FROM THE TAX-DEFERRED ANNUITY PROGRAM ARE
AMENDED PURSUANT TO PARAGRAPH (D) OF THIS SUBDIVISION TO ESTABLISH A
DIFFERENT RATE OF INTEREST APPLICABLE TO SUCH LOANS; AND
(3) WHERE A PARTICIPANT IN THE TAX-DEFERRED ANNUITY PROGRAM HAS
ELECTED TO TRANSFER ALL OR A PORTION OF THE AMOUNT CREDITED TO HIS OR
HER TAX-DEFERRED ACCOUNT IN THE ANNUITY SAVINGS FUND TO A TAX-DEFERRED
ACCOUNT IN THE VARIABLE ANNUITY SAVINGS FUND, THE RETIREMENT SYSTEM
SHALL EFFECTUATE SUCH TRANSFER AS EXPEDITIOUSLY AS IS ADMINISTRATIVELY
FEASIBLE.
S 11. This act shall take effect immediately.
S 2. Severability clause. If any clause, sentence, paragraph, subdivi-
sion, section or part of this act shall be adjudged by any court of
competent jurisdiction to be invalid, such judgment shall not affect,
impair, or invalidate the remainder thereof, but shall be confined in
its operation to the clause, sentence, paragraph, subdivision, section
or part thereof directly involved in the controversy in which such judg-
ment shall have been rendered. It is hereby declared to be the intent of
the legislature that this act would have been enacted even if such
invalid provisions had not been included herein.
S 3. This act shall take effect immediately provided, however, that
the applicable effective date of Parts A through C of this act shall be
as specifically set forth in the last section of such Parts.
FISCAL NOTE.--PROVISIONS OF PART C OF THE PROPOSED LEGISLATION - OVER-
VIEW: With respect to the New York City Retirement Systems ("NYCRS"),
Part C of this proposed legislation would amend New York State Retire-
ment and Social Security Law ("RSSL") Sections 602, 604-i, 612 and
911.b, Administrative Code of the City of New York ("ACNY") Section
13-582 and Education Law ("Ed Law") Section 2575 to provide changes in
the service eligibility requirements for certain members for Vested and
Service Retirement benefits, to revise the duration of payability for
member contributions for certain Tier IV members hired on and after the
Effective Date, and to provide a change to the rate of interest to be
credited on Fixed Fund account balances of certain participants in the
Tax Deferred Annuity ("TDA") Programs of the New York City Teachers'
Retirement System ("NYCTRS") and the New York City Board of Education
Retirement System ("BERS").
The Effective Date of the proposed legislation would be the date of
enactment.
IMPACT ON SECTIONS OF LAW: The proposed legislation would amend the
following provisions of law for certain new NYCRS members hired on and
after the Effective Date ("New Members") and also impact certain exist-
ing members on the Effective Date with respect to certain TDA
provisions.
SECTION OF LAW PROVISIONS BEING AMENDED
TIER I-IV PROVISIONS
ACNY 13-582.d Provisions relating to
NYCTRS TDA.
ACNY 12-582.n.o Provisions relating to
NYCTRS TDA loans.
TIER IV PROVISIONS
RSSL Sec. 602.a,b Service Retirement ("SR")
eligibility.
RSSL Sec. 604-i Additional Member
S. 26 17 A. 26
Contributions ("AMC").
RSSL Sec. 612.a Eligibility for Vested
benefits.
RSSL Sec. 911.b Limitations on Basic Member
Contributions
TDA PROVISIONS AND TDA LOANS FOR BERS
Ed Law Sec. 2575 TDA provisions and TDA
loans for BERS.
IMPACT ON NYCRS RETIREMENT PLANS - NON-TDA PROVISIONS: Part C of the
proposed legislation would cover certain Tier IV New Members of NYCTRS
and BERS and impact provisions of the following Plans:
* Basic Tier IV Plan Provisions ("Basic 62/5 Plan") and
* Optional Age Fifty-five Retirement Program for New York City Teach-
ers and certain other members ("Age 55 Program").
IMPACT ON ELIGIBILITY PROVISIONS - NON-TDA PROVISIONS: Under the
proposed legislation, certain New Members hired on and after the Effec-
tive Date would become subject to the following revised Service Retire-
ment and Vesting eligibility requirements:
SERVICE RETIREMENT
Under the proposed legislation, the minimum service required for a
Service Retirement benefit in the Basic 62/5 Plan would be increased to
10 years from 5 years of credited service.
VESTING
Under the proposed legislation, the minimum service required for a
Vested benefit in the Basic 62/5 Plan would be increased to 10 years
from 5 years of credited service.
While such New Members would participate in the Age 55 Program, in the
event a participant terminated employment prior to meeting the eligibil-
ity requirements of the Age 55 Program for Service Retirement, the bene-
fits payable upon vesting, retirement, disability or death would be
based on the provisions of the Basic 62/5 Plan.
IMPACT ON MEMBER CONTRIBUTIONS - NON-TDA PROVISIONS: Currently, Basic
Member Contributions ("BMC") of 3.0% of salary for Tier IV members are
required (per Chapter 126 of the Laws of 2000) for only the first 10
years of membership or the first 10 years of credited service, whichever
occurs earliest.
Under the proposed legislation, certain New Members would be required
to pay BMC for all years of credited service up to a maximum of 27
years.
Currently, under the existing Age 55 Program, only those participants
subject to the 27-year provisions are required to contribute AMC of
1.85% of salary to a maximum of 27 years of credited service.
Under Part C of the proposed legislation, New Member 27-year partic-
ipants in the Age 55 Program after the Effective Date would be required
to contribute AMC for all years of credited service.
FINANCIAL IMPACT - OVERVIEW: If enacted into law, the ultimate employ-
er cost of this proposed legislation would be determined by the net
change in benefits paid, offset by any increases in member contrib-
utions, and by the reduced amount of interest credited to TDA Fixed Fund
account balances.
FINANCIAL IMPACT - NON-TDA PROVISIONS - ACTUARIAL PRESENT VALUES -
CURRENT MEMBERS: Based on the census data and the actuarial assumptions
and methods currently in effect, the enactment of this proposed legis-
lation would not change the APV of benefits, the APV of member contrib-
utions or the APV of future salary of current members of NYCTRS or BERS
as of June 30, 2008.
S. 26 18 A. 26
IMPACT ON NYCRS RETIREMENT PLANS - TDA PROVISIONS: The proposed
legislation changes to the TDA provisions would cover both existing
members and New Members of NYCTRS and BERS in Tier I, Tier II, Tier III
and Tier IV whose job titles are represented in collective bargaining by
the United Federation of Teachers ("UFT") ("Covered Members").
These TDA changes would impact all such NYCTRS and BERS members
regardless of the Plan in which they participate.
BACKGROUND - EARNINGS ON TDA ACCOUNTS - CURRENT LAW: Under current
law, eligible members of NYCTRS who elect to participate in the TDA
Program select from among the following funds to allocate their TDA
account balances (100.0% in one Fund or proportions (delineated in mini-
mum 5.0% increments)) within the following six alternative funds:
* A Fixed Fund that provides a guaranteed annual rate of return of
8.25% per annum (for periods on and after July 1, 1988), or
* Five separate Variable Funds (i.e., Diversified Equity Fund, Stable
Value Fund, International Equity Fund, Inflation Protection Fund or
Socially Responsive Equity Fund) that provide alternative risk/reward
characteristics.
Eligible BERS members who participate in the TDA Program select only
from the Fixed Fund and the Diversified Equity Fund.
At retirement after age 59 1/2, TDA participants may receive their TDA
account balances payable as a lump sum, as a monthly annuity based on
annuitization factors used by the NYCTRS or BERS Qualified Pension Plan
("QPP") Programs, respectively, or in other amounts they elect subject
to the Internal Revenue Code ("IRC") Minimum Required Distribution
("MRD") rules for those age 70 1/2 or greater.
BACKGROUND - EARNINGS ON TDA ACCOUNTS - PROPOSED LAW: Under the
proposed legislation, the interest crediting rate for TDA participants
in the Fixed Fund for Covered Members would be decreased (i.e., 8.25%
per annum would decrease to 7.0% per annum).
FINANCIAL IMPACT - TDA FIXED FUND ASSETS - OVERVIEW: If enacted into
law, the ultimate change in employer cost of this proposed legislation
would equal the change in benefits payable by NYCTRS and BERS arising
from revised TDA provisions.
Simplistically, this change in employer cost would equal the cumula-
tive reduction in obligations between crediting 8.25% per annum and 7.0%
per annum on TDA Fixed Fund account balances for Covered Members.
However, financing this change in obligations is not simplistic.
Under current law, TDA Fixed Fund assets of NYCTRS and BERS are co-in-
vested with NYCTRS QPP assets.
The Investment Policy for NYCTRS QPP assets reflects a broad asset
allocation of 70% equity-like securities and 30% bond-like securities.
The actuarial assumptions currently in effect include an Actuarial
Interest Rate ("AIR") assumption of 8.0% per annum that is consistent
with an assumption that the NYCTRS QPP assets are expected to earn an
average of 8.0% per year. To the extent that TDA Fixed Fund assets earn
more than 8.25% per year (i.e., the crediting rate on TDA Fixed Fund
account balances), actuarial gains occur. To the extent that TDA Fixed
Fund assets earn less than 8.25% per year, actuarial losses occur.
To the extent TDA Fixed Fund account balances are shifted to Variable
Funds or vice versa, there are also impacts on the potential cost of the
TDA Programs.
Under the proposed legislation, access to and earnings payable on the
Variable Funds would not change.
Under current actuarial practice, the Actuary spreads through the
Actuarial Asset Valuation Method ("AAVM") over six years and then over
S. 26 19 A. 26
the expected future working lifetimes of NYCTRS QPP and BERS QPP active
members the investment gains/losses attributable to the TDA Fixed Fund
earnings equaling more/less than the 8.25% per annum TDA Fixed Fund
Interest Crediting Rate.
In particular, the Actuary includes in the NYCTRS QPP and BERS QPP
actuarial valuations a modest load to the Actuarial Present Value of
Benefits ("APVB") equal to approximately 2.3% of their respective TDA
Fixed Fund assets. This amount is intended to represent a portion of the
anticipated difference between the expected earnings on TDA Fixed Fund
assets and the TDA Fixed Fund Interest Crediting Rate. These obligations
are financed over the expected future working lifetimes of NYCTRS QPP
and BERS QPP active members.
FINANCIAL IMPACT - TDA FIXED FUND ASSETS - RISK ADJUSTED: As noted
earlier, the expected long-term actuarial loss on TDA Fixed Fund assets,
under the current actuarial assumptions, is .25% of TDA Fixed Fund
assets, per year.
However, on a risk-adjusted basis, the economic implications are more
significant. Specifically, TDA Fixed Fund account balances are credited
with interest at a rate of 8.25% per annum, not subject to any risk to
the TDA participants.
To earn the AIR assumption of 8.0% per annum, (or the 8.25% per annum
crediting rate), TDA Fixed Fund assets are subject to considerable
investment risk.
Were NYCTRS to set aside TDA Fixed Fund assets whose characteristics
had a comparable level of certainty of payment, it would have to invest
in some form of risk-free asset class such as U.S. Treasury securities.
Although a TDA participant may move, following a modest notification
period, his or her TDA account balance between the Fixed Fund and the
Variable Funds, the Actuary has assumed an average TDA Fixed Fund hold-
ing period of 10 years. Comparing the expected yield on 10-year U.S.
Treasury securities would then be a reasonable, risk-adjusted benchmark.
Over time, intermediate-term U.S. Treasury securities may be expected
to earn a real rate of return of approximately 2.5% per year. Combined
with a long-term assumption for inflation of 2.5% per year, a total rate
of return for intermediate-term Treasury securities would equal approxi-
mately 5.0% per year.
Comparing the current risk-free TDA Fixed Fund interest crediting rate
of 8.25% per annum with a long-term expected, market place, risk-free
yield of 5.0% per year on intermediate-term U.S. Treasury securities
indicates that TDA account balances are being credited with an expected
3.25% per year greater rate of return on a risk-adjusted basis than the
expected earnings on the supporting TDA Fixed Fund assets.
Thus, on an economically robust, risk-adjusted basis, the crediting of
TDA account balances with interest at either 7.0% or 8.25% per annum is
more expensive than reported on a non-risk-adjusted basis.
FINANCIAL IMPACT - TDA VARIABLE ANNUITY CONVERSIONS: In addition, the
Actuary holds as obligations of the NYCTRS QPP and BERS QPP, amounts to
reflect the actuarial losses anticipated upon the conversion of some TDA
account balances into Variable Annuities. This reflects the fact that
the annuity factors used for such conversion, by law, are not actuarial-
ly equivalent to what the Actuary assumes in the actuarial valuations.
Under the proposed legislation, TDA participants would be permitted to
transfer their TDA Fixed Fund account balances to one or more of the
Variable Funds as soon as feasible under the direction of the Plan
administrators of each NYCTRS and BERS.
S. 26 20 A. 26
However, it is not expected that enactment of the proposed legislation
would result in substantial numbers of TDA participants transferring
their TDA Fixed Fund account balances to TDA Variable Funds.
FINANCIAL IMPACT - TDA FIXED FUND - SUMMARY: Annual investment returns
on the TDA Fixed Fund assets that exceed the guaranteed amounts to be
credited to the TDA Fixed Fund accounts produce actuarial gains.
Conversely, annual investment returns less than the guaranteed amounts
to be credited to the TDA Fixed Fund accounts produce actuarial losses.
Under the current AIR assumption of 8.0% per annum, an aggregate long-
term net actuarial loss of .25% on TDA Fixed Fund account balances is
expected. This loss ultimately increases employer costs.
The Actuary anticipates that enactment of the proposed legislation
with respect to the decrease to 7.0% per annum from 8.25% per annum of
the Interest Crediting Rate on TDA Fixed Fund account balances in NYCTRS
and BERS would become effective in the Fiscal Year containing the Effec-
tive Date.
If enacted before June 30, 2010, the Actuary would likely reduce
Fiscal Year 2010 employer contributions to reflect that there would be
fewer TDA Fixed Fund account balances expected to be credited at 8.25%
per annum.
As of June 30, 2008, TDA Fixed Fund account balances equaled approxi-
mately $8.970 billion for NYCTRS and $456.8 million for BERS.
Assuming a portion of the TDA Fixed Fund account balances would be
transferred to the TDA Variable Funds following enactment of this
proposed legislation, the Actuary would likely apply the 2.3% load to
only non-UFT TDA account balances.
If the proposed legislation were enacted on or before June 30, 2010,
the impact of reducing expected TDA Fixed Fund actuarial losses would
result in decreases in Fiscal Year 2010 employer contributions of
approximately $18.7 million for NYCTRS and $.4 million for BERS.
It is anticipated that the annualized expected reduction in Fiscal
Year 2010 employer contributions to NYCTRS and BERS would continue for
future years.
PROJECTED CHANGES IN EMPLOYER CONTRIBUTIONS - CURRENT ACTUARIAL
ASSUMPTIONS AND METHODS: If the proposed legislation were enacted and
effective for certain New Members on or after the Effective Date, these
New Members would first join the NYCRS during Fiscal Year 2010 and first
be included in the June 30, 2010 actuarial valuations of the NYCRS used
to determine Fiscal Year 2012 employer contributions.
However, since most New Members of NYCTRS and BERS impacted by this
proposed legislation would likely not be hired until September 2010 and
would first be included in the June 30, 2011 actuarial valuations of the
NYCRS, the first significant impact of the proposed legislation with
respect to non-TDA provisions would likely be on the Fiscal Year 2013
employer contributions.
The proposed changes to the TDA provisions would first impact the
Fiscal Year 2010 employer contributions.
The following Table 1 presents an estimate of the reduction in employ-
er contributions that would occur based on current actuarial assumptions
and methods:
Table 1
Estimated Reductions in Employer Contributions
If Proposed Legislation is Enacted to be Effective
On or Before June 30, 2010*
S. 26 21 A. 26
Under Current Actuarial Assumptions and Methods
($ Millions)
Fiscal Year NYCTRS BERS Total
2010 18.7 0.4 19.1
2011 17.6 0.4 18.0
2012 16.6 0.3 16.9
2013 23.2 0.5 23.7
2014 29.5 0.7 30.2
2015 35.9 0.8 36.7
2016 42.5 1.0 43.5
2017 49.0 1.2 50.2
2018 55.6 1.4 57.0
2019 62.6 1.5 64.1
* Based on projection assumptions set forth in Actuarial Assumptions
and Methods Section and as noted herein. Includes both impact of non-TDA
provisions with first significant impact in Fiscal Year 2013 and TDA
provisions with impact in Fiscal Year 2010 and later.
The estimated reductions in employer contributions shown in Table 1
are based upon the following projection assumptions:
* Level workforce (i.e., new employees are hired to replace those who
leave active status).
* Projected salary increase consistent with those used in projections
presented to the New York City Office of Management and Budget
("NYCOMB") on February 20, 2009 ("February Projections").
* New entrant salaries consistent with those used in the February
Projections.
These "open group" projections include future new entrants introduced
into the census data models to project the future workforces.
As of each future actuarial valuation date, the current "closed group"
actuarial assumptions and valuation methodology are used.
Under this methodology only Plan Participants as of each actuarial
valuation date are utilized to determine Actuarial Present Values,
employer costs and employer contributions.
To the extent Plan designs do not change markedly over time, such
closed group actuarial methodology is well suited to funding a Retire-
ment System.
FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES - POTENTIAL METHODOLOGY:
The impact of enactment of the proposed legislation provided in this
Fiscal Note has been based on the continued use of the current actuarial
assumptions and methods.
However, the current actuarial assumptions and methods do not repre-
sent the only possible approach for funding the NYCRS.
Historically, actuarial assumptions and methods have been reviewed on
average every five years in connection with an actuarial experience
study mandated by New York City Charter Section 96.
Following this review, the Actuary generally proposes changes in actu-
arial assumptions and methods that he believes appropriate and reason-
ably related to such experience period and future expectations.
The next such review is anticipated during Fiscal Year 2011 or 2012.
If enacted, the proposed legislation would increase the duration of
member contributions of New Members of the NYCTRS and BERS. This
increase may possibly impact the timing of their election to retire for
service and hence, their future working lifetimes. As such, the Actuary
S. 26 22 A. 26
will be considering alternative actuarial methodologies that could,
directly or indirectly, reflect the impact of future new entrants as
early as the Fiscal Year of enactment.
The Actuary may also consider revising the amortization periods for
financing certain costs in order to reflect the expected change in the
average working lifetimes of New Members hired after enactment of this
proposed legislation.
Note: The Actuary has not committed to any particular methodology for
determining employer costs and employer contributions in connection with
the upcoming, experience review of actuarial assumptions and methods.
However, the Actuary intends to consider seriously the potential impli-
cations for financing the NYCRS that could arise should the benefits and
the expected future working lifetimes of certain New Members after the
Effective Date differ from those of current new entrants.
FINANCIAL IMPACT - ENTRY AGE NORMAL COSTS: Entry Age Normal Costs can
provide a useful basis to compare the value of alternative benefit
programs. For each member who enters a NYCRS, there is a theoretical
net annual employer cost to be paid for such member while such member
remains actively employed (i.e., the Entry Age Normal Cost ("EANC")).
In addition, such EANC may be expressed as a percentage of salary
earned over a working lifetime and referred to as the Entry Age Normal
Rate ("EANR").
Under the proposed legislation and based on the actuarial assumptions
noted herein, the EANC and EANR of New Members would be less than the
EANC and EANR for comparable new members entering at the same attained
age and gender under the current NYCRS provisions.
A summary of the change in EANC by NYCRS for entry age 25, 30 and 35
follows:
Table 2
Comparison of Representative Employer Entry Age Normal Rates*
To Implement Proposed Legislation Impacting Certain
New Members of NYCTRS and BERS
EANR Under Proposed Legislation
Retirement Entry Age 25 Entry Age 30 Entry Age 35
System
Male Female Male Female Male Female
NYCTRS 5.68% 5.99% 6.39% 6.79% 6.99% 7.53%
BERS 3.72% 4.19% 4.21% 4.80% 4.47% 5.21%
EANR Under Current Law**
NYCTRS 7.08% 7.40% 7.79% 8.21% 8.46% 9.02%
BERS 5.07% 5.58% 5.55% 6.18% 5.80% 6.61%
Reduction in EANR Due to Proposed Legislation
NYCTRS 1.40% 1.41% 1.40% 1.42% 1.47% 1.49%
BERS 1.35% 1.39% 1.34% 1.38% 1.33% 1.40%
S. 26 23 A. 26
* Based on salaries paid over entire working lifetime.
** EANR were determined as of June 30, 2008 and do not vary signif-
icantly over time, absent benefit and/or actuarial assumption changes.
FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS FISCAL YEARS 2010, 2011 and
2012 - CURRENT METHODOLOGY: Based on the census data and the actuarial
assumptions and methods currently in effect, and assuming enactment to
be effective on or before June 30, 2010, the enactment of this proposed
legislation would, with respect to the changes in TDA provisions, result
in changes in employer contributions to NYCTRS and BERS for Fiscal Years
2010, 2011 and 2012.
FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS FISCAL YEAR 2013 AND BEYOND
- CURRENT METHODOLOGY: If enacted to be effective on or before June 30,
2010, the first significant number of New Members would join NYCTRS and
BERS during September 2010 and be included in the June 30, 2011 (Lag)
actuarial valuations of those NYCRS. Based on the actuarial assumptions
and methods currently in effect, those provisions under the proposed
legislation that affect New Members would first significantly impact
employer contributions to NYCTRS and BERS for Fiscal Year 2013.
OTHER COSTS: Not measured in this Fiscal Note is the impact of this
proposed legislation on Other Post-Employment Benefit ("OPEB") costs.
Also not measured are the initial and ongoing additional administrative
costs of NYCTRS and BERS and their participating employers to implement
the proposed legislation.
CENSUS DATA: The starting census data used for the calculations
presented herein are the census data used in the June 30, 2008 (Lag)
actuarial valuations of NYCTRS and BERS.
The census data used for the estimates of additional APVB and employer
contributions presented herein of the non-TDA portions of the proposed
legislation are based on average salaries of new entrants in the June
30, 2008 (Lag) actuarial valuations of NYCTRS and BERS.
The metrics for new members of NYCTRS were approximately 25% male, age
34 and 75% female, age 34 and a combined average salary of $48,239.
The metrics for new members of BERS were approximately 25% male, age
41 and 75% female, age 44 and a combined average salary of $33,774.
The census data used for estimates of the impact on employer contrib-
utions of the TDA portion of the proposed legislation presented herein
are those active participants included in the June 30, 2008 (Lag) actu-
arial valuations of the NYCTRS and BERS.
For NYCTRS, this consisted of 2,401 Tier I, 1,224 Tier II and 69,273
Tier IV TDA participants included in the June 30, 2008 (Lag) actuarial
valuation of NYCTRS.
For BERS, this consisted of 108 Tier I, 58 Tier II and 11,799 Tier IV
TDA participants included in the June 30, 2008 (Lag) actuarial valuation
of BERS.
ACTUARIAL ASSUMPTIONS AND METHODS: The additional APVB, EANR and
employer contributions under current methodology presented herein have
been calculated based on the actuarial assumptions and methods in effect
for the June 30, 2008 (Lag) actuarial valuations of NYCTRS and BERS.
Employer contributions under current methodology have been estimated
assuming the additional APVB would be financed through future normal
contributions.
Projections of salaries, reflecting the impact of estimated contractu-
al wage increases, include information provided by NYCOMB. These and
other projection assumptions (such as projected expenses) are set forth
in the February Projections.
S. 26 24 A. 26
New entrants were projected to replace the NYCRS members expected to
leave the active population to maintain a steady-state population.
The following Table 3 presents the total number of active employees
used in the projections, assuming a level work force, and the net number
of New Members as of each June 30 from 2009 to 2017.
Table 3
Active* and Net New Members of NYCTRS and BERS*
Used in the Projections for Table 1
NYCTRS BERS
June 30 Net New Net New
Actives Members Actives Members
2009 112,472 0 22,702 0
2010 112,472 0 22,702 0
2011 112,472 6,330 22,702 1,582
2012 112,472 12,213 22,702 3,096
2013 112,472 17,705 22,702 4,553
2014 112,472 22,846 22,702 5,940
2015 112,472 27,652 22,702 7,241
2016 112,472 32,181 22,702 8,457
2017 112,472 36,461 22,702 9,595
* Active members included in the projections assume a level work force
based on the June 30, 2008 (Lag) actuarial valuation census data. For
simplification, all New Members in TRS and 15% of the New Members in
BERS are assumed to be UFT Members.
The changes in employer contributions and costs have been estimated
assuming that changes in the Actuarial Present Values of Future Employer
Costs would be financed through future normal contributions.
Information on TDA Fixed Fund and TDA Variable Fund account balances
used to estimate the impact on employer costs of the TDA portion of the
legislation presented herein also reflect financial information provided
by the accountants of NYCTRS and BERS.
STATEMENT OF ACTUARIAL OPINION: I, Robert C. North, Jr., am the Chief
Actuary for the New York City Retirement Systems. 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.
FISCAL NOTE IDENTIFICATION: This estimate is intended for use only
during the 2009 Legislative Session. It is Fiscal Note 2009-17, dated
November 17, 2009, prepared by the Chief Actuary of the New York City
Teachers' Retirement System and the New York City Board of Education
Retirement System.
FISCAL NOTE.--This bill would (1) create new benefits for new members
who first join the New York State and Local Employees' Retirement
System, the New York State Teachers' Retirement System, the New York
City Teachers' Retirement System, the New York City Employees' Retire-
ment System or the New York City Board of Education Retirement System on
or after January 1, 2010 (2) create a new plan in the New York State and
Local Police and Fire Retirement System.
Insofar as this bill would affect the New York State and Local Employ-
ees' Retirement System (ERS), the significant plan design changes for
members who join on or after January 1, 2010 include:
1. Employee contributions of 3% of pay for all years of service,
except
S. 26 25 A. 26
- State correction officer contributions would be limited to 30 years
of service, &
- uniformed court officers/peace officers employed by the Unified
Court System would contribute 4% of pay for all years of service.
2. Ten year vesting,
3. Larger early retirement reductions would be in place for members
retiring prior to age 62, and the waiver of reduction with 30 years
would be eliminated except for uniformed court officers/peace officers
employed by the Unified Court System,
4. Annual overtime pay in excess of $15,000 would not be included in
the definition of wages and final average salary. This overtime pay
limitation would increase by 3% annually.
If this bill is enacted, we will calculate new plan rates for all ERS
members who first enter on or after January 1, 2010. The long term
expected annual employer contribution rate for new general members will
be approximately 8.9% as compared to the current expected long term
annual employer contribution rate for Tier 4 general members of approxi-
mately 11.0% of payroll. For fiscal year ending March 31, 2010, since
the average Tier 4 employer contribution rate is approximately 7%, the
new plan rate would be approximately 5.7%.
For ERS members in 20 or 25 year retirement plans that allow retire-
ment without regard to age, the long term reductions would vary by plan
and be less than 2% of salary, with the fiscal year ending March 31,
2010 reductions averaging approximately 1%.
Insofar as this bill would affect the New York State and Local Police
and Fire Retirement System (PFRS), the significant plan design changes
for members who join on or after January 1, 2010 include:
1. An employee contribution of 3% of pay will be required for all
years of service, except that a member who is enrolled in a plan that
limits the amount of creditable service which may be accrued will not be
required to contribute after accruing the maximum amount of creditable
service under such plan,
2. Overtime pay in an amount in excess of 15% of a member's annual
wages not classified as overtime pay shall be excluded from a member's
final average salary,
3. Ten year vesting.
If this bill is enacted, we will calculate new plan rates for all PFRS
members who first enter on or after January 1, 2010. The long term
expected annual employer contribution rate would change as follows:
-1.8% for municipal 20 year plans with additional 60ths (benefits for
members hired on or after 7/1/2009 are now computed under Article 14),
-0.6% for the state 20 year plan with additional 60ths (benefits for
members hired on or after 7/1/2009 are now computed under Article 14),
-2.6% for 20 year plans (benefits for members hired on or after
7/1/2009 are now computed under Article 14),
-3.0% for 25 year plans with additional 60ths, 25 year plans, and
regular plans previously non-contributory.
This estimate, dated November 16, 2009, and intended for use only
during the 2009 Legislative Session, is Fiscal Note No. 2009-297,
prepared by the Actuary for the ERS and PFRS.
FISCAL NOTE.--This bill would amend various sections of the Education
Law and the Retirement and Social Security Law to implement a new
retirement benefit structure (Tier 5) for members who first join a
public retirement system of the state (or New York City) on or after
January 1, 2010. The following provisions are with respect to members of
the New York State Teachers' Retirement System. Members would be eligi-
S. 26 26 A. 26
ble for a service retirement benefit after rendering a minimum of ten
years of credited service and attainment of age 55. The service retire-
ment benefit formula for a member with less than twenty-five years of
service would be equal to one-sixtieth of final average salary times the
years of service. The service retirement benefit formula for a member
with twenty-five or more years of service would be equal to one-fiftieth
of final average salary times the years of service (not in excess of
thirty). Years of service in excess of thirty shall provide an addi-
tional retirement benefit equal to three two-hundredths of final average
salary. Members retiring prior to age 62 would have their retirement
benefit reduced by one-fifteenth per year for each of the first two
years retirement predates age 62 and by one-twentieth per year for each
year retirement predates age 60. However, members who are at least age
57 with 30 or more years of credited service would be permitted to
retire without reduction. Members would be required to contribute three
and one-half percent of annual salary for ALL years of service.
The current required employer contribution rate for the New York State
Teachers' Retirement System is 6.19% of pay, applicable to 7/1/09 -
6/30/10 member salaries and to be collected in the fall of 2010. This
rate is applicable to the salaries of all members, regardless of tier.
In that this proposed benefit structure is only applicable to members
joining on or after January 1, 2010, it will be at least several years
before it has a noticeable impact on the employer contribution rate. The
cost savings impact of this change will become more significant with
time as the number of post-1/1/10 members grows as a percentage of the
total membership.
Our "new entrant rate", a hypothetical employer contribution rate that
would occur if we started a new Retirement System without any assets, is
equal to 11.8% of pay under the current benefit structure. This can be
thought of as the cost of the benefit structure for new entrants, based
on current actuarial assumptions. Under the proposed benefit structure,
this new entrant rate would be equal to 8.7% of pay.
The source of this estimate is Fiscal Note 2009-92 dated November 16,
2009 prepared by the Actuary of the New York State Teachers' Retirement
System and is intended for use only during the 2009 Legislative Session.