S T A T E   O F   N E W   Y O R K
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                                  7834

                            I N  S E N A T E

                              June 13, 2014
                               ___________

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

AN ACT relating to granting retroactive retiree  status  to  former  New
  York city public-school teacher Israel Baum

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

  Section 1. Notwithstanding any provision of law to the contrary, Isra-
el Baum, a member of the  New  York  city  teachers'  retirement  system
having  Tier  III  status, who was employed as a teacher by the New York
City Board of Education from February 1, 1974 until his death on Septem-
ber 20, 2009, and who became a member of the  New  York  city  teachers'
retirement  system on October 1, 1977, and who, for reasons not ascriba-
ble to his own negligence, was not able to complete the retirement proc-
ess before his untimely  death,  shall  be  deemed  to  have  officially
retired from the New York City Board of Education on September 20, 2009,
if,  on  or  before  December 31, 2014, Mr. Baum's widow, Rochelle Baum,
files a written application therefor,  including  a  retirement  benefit
option  election  and election of the beneficiary of such benefits, with
the head of the New York city  teachers'  retirement  system;  and  upon
receipt  of  such  application,  the head of the New York city teachers'
retirement system shall  calculate  Israel  Baum's  retirement  benefits
retroactive  to  September 20, 2009 and thereafter and pay such benefits
accordingly as if he had retired on September 20, 2009.   The amount  of
benefits  payable  pursuant to this act shall be reduced by the ordinary
death benefit which has been paid to Rochelle Baum, less the retroactive
sum of previous years that is owed to Mrs. Baum, the exact amount to  be
calculated  actuarially.  Due to the length of his service, Mr. Baum was
eligible to retire with full pension  benefits.  Mr.  Baum's  intent  to
retire  was evidenced by the fact that he, along with his wife, Rochelle
Baum, attended a special seminar for teachers  given  in  February  2009
called  "Getting  Ready  for  Retirement";  this  seminar  was expressly
designed for those members of the retirement system who were planning to
retire within the year. The Baums received a letter  dated  January  22,
2009  confirming  their  participation.  At  the seminar, the Baums were

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

                                                           LBD08354-05-4

S. 7834                             2

given a package of documents and an overview regarding retirement proce-
dures and benefits. Mr. Baum also submitted an informal designated  date
of retirement as requested. Subsequently, on June 22, 2009, Mr. and Mrs.
Baum  attended  a personal session at the Board of Education in downtown
Brooklyn for the purpose of discussing Mr. Baum's retirement.  The Baums
discussed the various retirement allowance options and decided that they
would select Option 1 - Equal Pay Option, which would allow the  benefi-
ciary  to  receive monthly payments equal to 100% of his reduced retire-
ment allowance payments. The beneficiary  of  Israel  Baum's  retirement
allowance was to be his wife, Rochelle Baum.
  S 2. Any costs incurred as a result of the enactment of this act shall
be borne by the New York City Board of Education.
  S 3. This act shall take effect immediately.
  FISCAL NOTE -- Pursuant to Legislative Law, Section 50:
  PROVISIONS  OF  PROPOSED  LEGISLATION:  The proposed legislation would
authorize the New York City Teachers' Retirement  System  ("NYCTRS")  to
pay  pension  benefits  to  the  widow of Mr. Israel Baum (Mrs. Rochelle
Baum) as if Mr. Baum had retired for service on September 20, 2009  (his
date of death), elected a 100% Joint & Survivor form of payment and died
immediately thereafter.
  BACKGROUND:  Mr. Baum became a Tier III member of NYCTRS on October 1,
1977.
  He died on September 20, 2009 without having filed a  Service  Retire-
ment  application  with  NYCTRS.  Accordingly,  NYCTRS paid on or around
February 18, 2010 an Ordinary Death Benefit equal  to  three  times  Mr.
Baum's  last  year's  salary plus his accumulated contributions plus the
interest to his widow, Mrs. Rochelle Baum. These amounts are  summarized
as follows:

*Three times last year's salary     $324,419.85
*Accumulated contributions            86,982.30
*Interest to date of payment           7,428.28
                                    $418,830.43

  The  proposed  legislation,  if enacted, would authorize NYCTRS to pay
pension benefits to Mrs. Baum as if Israel Baum had retired for  service
on  his  date of death of September 20, 2009 and elected  a 100% Joint &
Survivor option with Mrs. Baum as his beneficiary, offset by  the  Ordi-
nary Death Benefit ("ODB") that has previously been paid.
  The  100%  Joint & Survivor benefit that would be payable to Mrs. Baum
has been estimated to be approximately  $59,900  per  year.  The  actual
implementation  of  this  legislation  including  any recognition of the
difference in taxability of the ODB as compared to the  Service  Retire-
ment  benefit  would be determined by NYCTRS if the proposed legislation
is enacted.
  All costs associated with the implementation of this  proposed  legis-
lation would be borne by the New York City Board of Education.
  The  Effective  Date  of the proposed legislation would be the Date of
Enactment.
  FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: The  estimated  financial
impact  of  this  proposed  legislation has been calculated based on the
difference between (1) the Service Retirement benefits Mrs.  Baum  would
receive if this prosed legislation were enacted and (2) the ODB that has
already been paid to Mrs. Baum.
  Based  on  the actuarial assumptions and methods described herein, the
enactment of this proposed  legislation  would  increase  the  Actuarial

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Present  Value  of  Benefits ("APVB") and the Unfunded Actuarial Accrued
Liability ("UAAL") of NYCTRS by approximately $1,287,000 as of June  30,
2014  prior to offsetting for the ODB that Mrs. Baum has previously been
paid. This amount includes the monthly payment that Mrs. Baum would have
received  from September 2009 to June 2014 and the post-retirement Death
Benefit that would have been paid to Mrs. Baum  upon  Mr.  Baum's  death
(had  Mr.  Baum retired for service on his date of death and elected the
100% Joint & Survivor benefit with Mrs. Baum as his beneficiary) brought
forward to June 30, 2014 in accordance with NYCTRS Policies  and  Proce-
dures regarding delayed interest calculations.
  The  ODB  previously  paid  to Mrs. Baum brought forward with compound
interest of 7% per annum from September 20, 2009 to  June  30,  2014  is
approximately $563,000. Therefore, the net increase in the APVB and UAAL
of NYCTRS would be approximately $724,000 as of June 30, 2014.
  FINANCIAL  IMPACT - ANNUAL EMPLOYER COSTS AND ANNUAL EMPLOYER CONTRIB-
UTIONS: In accordance with Section 13.638.2(k-2) of  the  Administrative
Code  of the City of New York ("ACNY"), new UAAL attributable to benefit
changes are to be amortized as determined by the Actuary  but  generally
over  the  remaining  working  lifetime of those impacted by the benefit
changes. For this proposed legislation, Mrs.  Baum would be collecting a
pension and therefore the entire increase in UAAL of $724,000  based  on
the  Actuary's  actuarial  assumptions and methods in effect on June 30,
2013 would be recognized in the first year.
  CONTRIBUTION TIMING: If enacted during the 2014 Legislative Session on
or before June 30, 2014, the pension payable to Mrs. Baum  would  likely
first  be reflected in the June 30, 2014 census data. In accordance with
the One-Year Lag methodology used to determine  employer  contributions,
increased  employer contributions would be consistent with the increased
employer costs and would be determined for Fiscal Year 2016.
  If enacted during the 2014 Legislative Session after June 30, 2014 but
on or before June 30, 2015, the pension payable to Mrs. Baum would like-
ly first be reflected in the June 30, 2015  census  data  and  increased
employer contributions would be determined for Fiscal Year 2017.
  ACTUARIAL  ASSUMPTIONS  AND  METHODS: The additional APVB and UAAL for
employer contribution purposes presented herein have been calculated  by
using  the  actuarial assumptions and methods in effect for the June 30,
2013 (Lag) actuarial  valuation  used  to  determine  Fiscal  Year  2015
employer contributions of NYCTRS.
  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 NYCTRS.
  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 2014 Legislative Session. It is Fiscal  Note  2014-13,  dated
April 7, 2014 prepared by the Chief Actuary for the New York City Teach-
ers' Retirement System.