S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7090

                            I N  S E N A T E

                             April 27, 2012
                               ___________

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

AN ACT to amend the retirement and social security law, in  relation  to
  refunding  contributions made to the twenty-five year early retirement
  program and the age fifty-seven retirement program by  New  York  city
  transit authority members

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivision d of section 604-c of the retirement and social
security law, as added by chapter 96 of the laws of 1995, is amended  by
adding a new paragraph 15 to read as follows:
  15.  AN  ELIGIBLE  FORMER  PARTICIPANT,  AS DEFINED IN THIS PARAGRAPH,
SHALL BE ENTITLED TO A REFUND OF THE EMPLOYEE  PORTION  OF  HIS  OR  HER
ADDITIONAL  MEMBER CONTRIBUTIONS MADE PURSUANT TO THIS SUBDIVISION WHICH
SHALL INCLUDE ANY AND ALL INTEREST THEREON AT THE RATE OF  FIVE  PERCENT
PER  ANNUM,  COMPOUNDED  ANNUALLY AND SUCH REFUND SHALL BE PAYABLE, UPON
SUCH PARTICIPANT'S APPLICATION PURSUANT  TO  PROCEDURES  PROMULGATED  IN
REGULATIONS OF THE BOARD OF TRUSTEES OF THE RETIREMENT SYSTEM. AN ELIGI-
BLE  FORMER PARTICIPANT SHALL BE A PARTICIPANT WHO IS OR WAS EMPLOYED IN
A TITLE REPRESENTED FOR PURPOSES OF COLLECTIVE BARGAINING BY AN EMPLOYEE
ORGANIZATION REPRESENTING A MAJORITY OF SUPERVISORY EMPLOYEES IN THE NEW
YORK CITY TRANSIT AUTHORITY'S STATIONS DEPARTMENT, RECOGNIZED OR  CERTI-
FIED  PURSUANT TO ARTICLE FOURTEEN OF THE CIVIL SERVICE LAW, AND WHO, ON
OCTOBER FIRST, TWO THOUSAND SIX, WAS EMPLOYED BY THE NEW YORK CITY TRAN-
SIT AUTHORITY IN SUCH TITLE AND WHO WAS A PARTICIPANT IN THE TWENTY-FIVE
YEAR EARLY RETIREMENT PROGRAM PRIOR TO THE STARTING DATE OF  THE  ELIMI-
NATION OF ADDITIONAL MEMBER CONTRIBUTIONS, AS SUCH DATE IS DEFINED IN AN
ELECTION  MADE PURSUANT TO PARAGRAPH TEN OF SUBDIVISION E OF SECTION SIX
HUNDRED FOUR-B OF THIS ARTICLE.
  S 2. Subdivision f of section 604-d of the retirement and social secu-
rity law is amended by adding a new paragraph 15 to read as follows:
  15. AN ELIGIBLE FORMER PARTICIPANT,  AS  DEFINED  IN  THIS  PARAGRAPH,
SHALL  BE  ENTITLED  TO  A  REFUND OF THE EMPLOYEE PORTION OF HIS OR HER
ADDITIONAL MEMBER CONTRIBUTIONS MADE PURSUANT TO THIS SUBDIVISION  WHICH

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD15340-01-2

S. 7090                             2

SHALL  INCLUDE  ANY AND ALL INTEREST THEREON AT THE RATE OF FIVE PERCENT
PER ANNUM, COMPOUNDED ANNUALLY AND SUCH REFUND SHALL  BE  PAYABLE,  UPON
SUCH  PARTICIPANT'S  APPLICATION  PURSUANT  TO PROCEDURES PROMULGATED IN
REGULATIONS OF THE BOARD OF TRUSTEES OF THE RETIREMENT SYSTEM. AN ELIGI-
BLE  FORMER PARTICIPANT SHALL BE A PARTICIPANT WHO IS OR WAS EMPLOYED IN
A TITLE REPRESENTED FOR PURPOSES OF COLLECTIVE BARGAINING BY AN EMPLOYEE
ORGANIZATION REPRESENTING A MAJORITY OF SUPERVISORY EMPLOYEES IN THE NEW
YORK CITY TRANSIT AUTHORITY'S STATIONS DEPARTMENT, RECOGNIZED OR  CERTI-
FIED  PURSUANT TO ARTICLE FOURTEEN OF THE CIVIL SERVICE LAW, AND WHO, ON
OCTOBER FIRST, TWO THOUSAND SIX, WAS EMPLOYED BY THE NEW YORK CITY TRAN-
SIT AUTHORITY IN SUCH TITLE AND WHO WAS A PARTICIPANT IN THE AGE  FIFTY-
SEVEN  RETIREMENT  PROGRAM PRIOR TO THE STARTING DATE OF THE ELIMINATION
OF ADDITIONAL MEMBER CONTRIBUTIONS,  AS  SUCH  DATE  IS  DEFINED  IN  AN
ELECTION  MADE PURSUANT TO PARAGRAPH TEN OF SUBDIVISION E OF SECTION SIX
HUNDRED FOUR-B OF THIS ARTICLE.
  S 3. This act shall take effect immediately.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  PROVISIONS OF PROPOSED LEGISLATION: This  proposed  legislation  would
amend  New  York  State  Retirement  and  Social  Security  Law ("RSSL")
Sections 604-c and 604-d to provide to certain  New  York  City  Transit
Authority  ("NYCTA")  members of the New York City Employees' Retirement
System ("NYCERS") a refund of Additional  Member  Contributions  ("AMC")
that  were  paid while participants of one of the Chapter 96 of the Laws
of 1995 ("Chapter 96/95") Retirement Programs.
  The Effective Date of the proposed legislation would be  the  date  of
enactment.
  This  Fiscal Note assumes that the proposed legislation is intended to
refund interest on AMC in accordance with NYCERS procedures for  credit-
ing interest on member contributions.
  IMPACT  ON  PLAN  PROVISIONS  - ADDITIONAL MEMBER CONTRIBUTIONS: Under
Chapter 96/95, AMC were required under  each  of  the  Early  Retirement
Programs:
  * The Twenty-Five-Year Early Retirement Program ("55/25 Program") and
  * The Age-Fifty-Seven Retirement Program ("57/5 Program").
  Those  NYCERS members who participated in either of such Programs paid
AMC of:
  4.35% of salary for service on and after January 1, 1995 until January
1, 1998,
  2.85% of salary for service on and after January 1, 1998 until  Decem-
ber 2, 2001, and
  1.85% of salary for service on and after December 2, 2001.
  In addition, if such member's job title was considered Physically-Tax-
ing  ("PT"),  an  additional Physically-Taxing AMC ("PTAMC") of 1.98% of
salary was required for all service on and after January 1, 1995.
  As a result of Chapter 10 of the Laws of 2000, many of the NYCTA  Tier
IV  members  of  NYCERS who participated in the Chapter 96/95 Retirement
Program were transferred  into  the  Transit  Twenty-Five-Year  and  Age
Fifty-Five Retirement Program ("Transit 55/25 Program") effective Decem-
ber 15, 2000. For these members, the AMC and PTAMC that had been payable
under  the  Chapter  96/95  Retirement  Programs were no longer required
after January 3, 2001 (i.e.,  the  effective  implementation  date,  the
first payroll period following the transfer date).
  This  proposed  legislation  would  refund, on and after the Effective
Date, to certain Transit 55/25 Program participants with initial Program
participation dates on or before December 15, 2000 who were employed  by
the  Transit  Authority  as Station Supervisors Level 2 as of October 1,

S. 7090                             3

2006, including those who are currently retired, the employee portion of
the AMC and PTAMC, if any, paid for participation in the  Chapter  96/95
Retirement  Programs,  including accrued interest at 5.0% per annum. For
those  who are currently retired, interest would accrue until retirement
date.
  Note, under the Chapter 96/95 Retirement Programs, 50% of the AMC  and
PTAMC  paid  into  such  Programs is considered an employer contribution
while the other 50% is  considered  to  be  the  employee  portion.  The
employee portion of the AMC and PTAMC is refunded to members who decease
prior  to  retirement  or who retire at age 62 or later. If the proposed
legislation were enacted, those impacted Transit 55/25  Program  partic-
ipants  would receive the balance of the accumulated employee portion of
AMC and PTAMC.
  To receive such refund, those eligible participants would be  required
to complete a form and follow procedures to be established by the NYCERS
Board of Trustees.
  FINANCIAL  IMPACT  -  OVERVIEW:  If enacted into the law, the ultimate
employer cost of this proposed legislation would be  determined  by  the
reduction  in  expected  benefits  paid  (due to there no longer being a
requirement to refund  AMC  on  a  future  withdrawal),  offset  by  the
reduction in Fund assets due to the current refund of AMC.
  FINANCIAL  IMPACT  -  ACTUARIAL PRESENT VALUES: With respect to NYCERS
and based on the census  data  and  actuarial  assumptions  and  methods
described  herein,  the  enactment  of  this  proposed legislation would
result in a decrease in the Actuarial Present Value ("APV") of  Benefits
("APVB") of approximately $10,000 as of June 30, 2010.
  In addition, there would be a reduction in Actuarial Asset Value as of
June  30, 2010 to reflect the expected refund of the employee portion of
accumulated Chapter 96/95 Retirement Program AMC and PTAMC, if any,  for
those  impacted  Transit  55/25  Program  participants  of approximately
$320,000.
  Together, the enactment of the proposed legislation would result in  a
net  increase  in  the  APV of Future Employer Normal Costs to NYCERS of
approximately $310,000 as of June 30, 2010.
  FINANCIAL IMPACT - ADDITIONAL ANNUAL EMPLOYER COSTS AND CONTRIBUTIONS:
With respect to NYCERS, the enactment of this proposed legislation would
increase annual employer costs by approximately $40,000 per year.
  Increases in employer contributions would be comparable to  the  esti-
mated increases in employer costs.
  If  enacted  on  or  before June 30, 2012, increased employer contrib-
utions to NYCERS would begin Fiscal Year 2012.
  If enacted after June 30,  2012  and  on  or  before  June  30,  2013,
increased employer contributions to NYCERS would begin Fiscal Year 2013.
  OTHER  COSTS:  Not  measured  in  this  Fiscal Note are any additional
administrative costs or the impact of this proposed legislation  on  the
Manhattan and Bronx Surface Transit Operating Authority ("MaBSTOA").
  CENSUS DATA: The census data used for estimates of APVB, APV of Future
Employer  Normal  Costs  and employer contributions presented herein are
the 187 Tier IV active members of NYCERS who participate in the  transit
55/25  Program and who were employed by the Transit Authority as Station
Supervisors Level 2 as of June 30, 2006 with annual salaries of approxi-
mately $15.7 million included in the June 30, 2006  actuarial  valuation
of NYCERS.
  Of  these 187 Tier IV members of NYCERS who participate in the Transit
55/25 Program and who were employed by the Transit Authority as  Station
Supervisors Level 2 as of June 30, 2006, 57 members with annual salaries

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of  approximately  $4.7  million have AMC (and, in certain cases, PTAMC)
account balances from contributions made under the Chapter 96/95 Retire-
ment Programs. The remaining 130 of these members do not have  such  AMC
or PTAMC account balances.
  Of  the  57 members, 36 were active members as of June 30, 2010 and 18
retired before age 62. In addition, two members deceased before  retire-
ment  and  one  member retired after age 62 and these three members were
already refunded the employee portion of their AMC and PTAMC.
  ACTUARIAL ASSUMPTIONS AND METHODS:  Additional  APVB,  APV  of  Future
Employer  Normal Costs and employer costs have been calculated using the
actuarial assumptions and methods currently in effect for the  June  30,
2010  (Lag) actuarial valuation of NYCERS to determine employer contrib-
utions for Fiscal Year 2012.
  Additional annual employer costs  have  been  estimated  assuming  the
additional  APV  of Future Normal Costs would be financed through future
normal contributions.
  POTENTIAL CHANGES IN ACTUARIAL ASSUMPTIONS AND METHODS: 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 Actuary is currently in the process of  proposing  a  new
package  of  actuarial  assumptions  and  methods for use in determining
employer contributions to NYCERS for Fiscal Year 2012 and after, as  the
current  actuarial  assumptions  no  longer represent the Actuary's best
estimates.
  It is anticipated that the proposed new package of  actuarial  assump-
tions and methods would likely result in a greater increase in APVB than
the  amount determined under the current actuarial assumptions and meth-
ods. Annual employer costs and contributions  would  increase  similarly
assuming that the prior service obligation associated with this increase
in  APVB  were amortized over a period comparable to that required under
the current actuarial methodology.
  Hence, the estimated financial impact of proposed legislation incorpo-
rating the new package of actuarial assumptions and methods is  expected
to differ from the financial impact computed using the actuarial assump-
tions and methods continued from Fiscal Year 2011.
  ECONOMIC  VALUES OF BENEFITS: The actuarial assumptions used to deter-
mine the financial impact of the proposed legislation discussed in  this
Fiscal  Note  are those appropriate for budgetary models and determining
annual employer contributions to NYCERS.
  However, the economic assumptions (current and proposed) that are used
for determining employer contributions  do  not  develop  risk-adjusted,
economic  values  of  benefits.  Such  risk-adjusted, economic values of
benefits would likely differ significantly from those developed  by  the
budgetary models.
  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 2012 Legislative Session. It is Fiscal  Note  2012-02,  dated
January  20,  2012,  prepared by the Chief Actuary for the New York City
Employees' Retirement System.