S T A T E O F N E W Y O R K
________________________________________________________________________
4124
2015-2016 Regular Sessions
I N S E N A T E
March 2, 2015
___________
Introduced by Sens. LARKIN, AVELLA, CROCI, FARLEY, FLANAGAN, GALLIVAN,
GOLDEN, LAVALLE, LIBOUS, MARTINS, NOZZOLIO, ORTT, RANZENHOFER,
RITCHIE, ROBACH, SEWARD, SKELOS, YOUNG -- read twice and ordered
printed, and when printed to be committed to the Committee on Finance
AN ACT to amend the retirement and social security law, in relation to
providing credit to members of public retirement systems of the state
for military service; and making an appropriation therefor
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 1000 of the retirement and social security law, as
added by chapter 548 of the laws of 2000, subdivision 9 as added by
chapter 547 of the laws of 2002 and subdivision 10 as added by chapter
18 of the laws of 2012, is amended to read as follows:
S 1000. Military service credit. Notwithstanding any law to the
contrary, a member of a public retirement system of the state, as
defined in subdivision twenty-three of section five hundred one of this
chapter, shall be eligible for credit for military service as hereinaft-
er provided:
1. A member, upon application to such retirement system, may obtain a
total not to exceed three years of service credit for up to three years
of military duty, as defined in section two hundred forty-three of the
military law, if the member was honorably discharged from the military
[and all or part of such military service was rendered during the
following periods: (a) commencing December seventh, nineteen hundred
forty-one and terminating December thirty-first, nineteen hundred
forty-six; (b) commencing June twenty-seventh, nineteen hundred fifty
and terminating January thirty-first, nineteen hundred fifty-five; or
(c) commencing February twenty-eighth, nineteen hundred sixty-one and
terminating May seventh, nineteen hundred seventy-five;
2. A member, upon application to such retirement system, may obtain a
total not to exceed three years of service credit for up to three years
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07385-03-5
S. 4124 2
of military duty, as defined in section two hundred forty-three of the
military law, if honorably discharged therefrom, if all or part of such
services was rendered in the military conflicts referenced below, as
follows:
(a) hostilities participated in by the military forces of the United
States in Lebanon, from the first day of June, nineteen hundred eighty-
three to the first day of December, nineteen hundred eighty-seven, as
established by receipt of the armed forces expeditionary medal, the navy
expeditionary medal, or the marine corps expeditionary medal;
(b) hostilities participated in by the military forces of the United
States in Grenada, from the twenty-third day of October, nineteen
hundred eighty-three to the twenty-first day of November, nineteen
hundred eighty-three, as established by receipt of the armed forces
expeditionary medal, the navy expeditionary medal, or the marine corps
expeditionary medal;
(c) hostilities participated in by the military forces of the United
States in Panama, from the twentieth day of December, nineteen hundred
eighty-nine to the thirty-first day of January, nineteen hundred ninety,
as established by receipt of the armed forces expeditionary medal, the
navy expeditionary medal, or the marine corps expeditionary medal; or
(d) hostilities participated in by the military forces of the United
States, from the second day of August, nineteen hundred ninety, to the
end of such hostilities in case of a veteran who served in the theater
of operations including Iraq, Kuwait, Saudi Arabia, Bahrain, Qatar, the
United Arab Emirates, Oman, the Gulf of Aden, the Gulf of Oman, the
Persian Gulf, the Red Sea, and the airspace above these locations].
[3] 2. A member must have at least five years of credited service (not
including service granted hereunder) to be eligible to receive credit
under this section.
[4] 3. To obtain such credit, a member shall pay such retirement
system, for deposit in the fund used to accumulate employer contrib-
utions, a sum equal to the product of the number of years of military
service being claimed and three percent of such member's compensation
earned during the twelve months of credited service immediately preced-
ing the date that the member made application for credit pursuant to
this section. If permitted by rule or regulation of the applicable
retirement system, the member may pay such member costs by payroll
deduction for a period which shall not exceed the time period of mili-
tary service to be credited pursuant to this section. In the event the
member leaves the employer payroll prior to completion of payment, he or
she shall forward all remaining required payments to the appropriate
retirement system prior to the effective date of retirement. If the full
amount of such member costs is not paid to the appropriate retirement
system prior to the member's retirement, the amount of service credited
shall be proportional to the total amount of the payments made prior to
retirement.
[5] 4. In no event shall the credit granted pursuant to this section,
when added to credit granted for military service with any retirement
system of this state pursuant to this or any other provision of law,
exceed a total of three years.
[6] 5. To be eligible to receive credit for military service under
this section, a member must make application for such credit before the
effective date of retirement. [Notwithstanding the foregoing provisions
of this subdivision, an individual who retired on or after December
twenty-first, nineteen hundred ninety-eight and before the effective
date of this section may make application for credit pursuant to this
S. 4124 3
section within one year following the effective date of this section, in
which event, the cost to the retiree would be based on the twelve month
period immediately preceding retirement.]
[7] 6. All costs for service credited to a member pursuant to this
section, other than the member costs set forth in subdivision [three]
TWO of this section, shall be paid by the state and all employers which
participate in the retirement system in which such member is granted
credit.
[8] 7. A member who has purchased military service credit pursuant to
section two hundred forty-four-a of the military law shall be entitled
to a refund of the difference between the amount paid by the member for
such purchase and the amount that would be payable if service had been
purchased pursuant to this section.
[9] 8. Notwithstanding any other provision of law, in the event of
death prior to retirement, amounts paid by the member for the purchase
of military service credit pursuant to this section shall be refunded,
with interest, to the extent the military service purchased with such
amounts does not produce a greater death benefit than would have been
payable had the member not purchased such credit.
Notwithstanding any other provision of law, in the event of retire-
ment, amounts paid by the member for the purchase of military service
credit pursuant to this section shall be refunded, with interest, to the
extent the military service purchased with such amounts does not produce
a greater retirement allowance than would have been payable had the
member not purchased such credit.
[10.] 9. Anything to the contrary in subdivision [four] THREE of this
section notwithstanding, to obtain such credit, a member who first joins
a public retirement system of the state on or after April first, two
thousand twelve shall pay such retirement system, for deposit in the
fund used to accumulate employer contributions, a sum equal to the prod-
uct of the number of years of military service being claimed and six
percent of such member's compensation earned during the twelve months of
credited service immediately preceding the date that the member made
application for credit pursuant to this section.
S 2. The sum of thirty-one million five hundred thousand dollars
($31,500,000), or so much thereof as may be necessary, is hereby appro-
priated to the department of audit and control out of any moneys in the
state treasury in the general fund to the credit of the state purposes
account, not otherwise appropriated, and made immediately available, for
the purpose of carrying out the provisions of this act. Such moneys
shall be payable on the audit and warrant of the comptroller on vouchers
certified or approved by the head of the appropriate public retirement
system in the manner prescribed by law.
S 3. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would allow up to three (3) years of service credit for
military duty by removing all existing requirements that such military
service be performed during certain war periods, during certain hostil-
ities while in the theater of operations or upon the receipt of an
expeditionary medal. However, the total service credit granted for
active and peacetime military service shall not exceed three (3) years.
Tier 6 members would be required to make a payment of six percent of
current compensation per year of additional service credit granted by
this bill. Members of all other Tiers would be required to make a
payment of three percent of current compensation per year of additional
S. 4124 4
service credit granted by this bill. Members must have at least five (5)
years of credited service (not including military service).
If this bill is enacted, insofar as this proposal affects the New York
State and Local Employees' Retirement System (ERS), it is estimated that
the past service cost will average approximately 12% (9% for Tier 6) of
an affected members' compensation for each year of additional service
credit that is purchased.
Insofar as this proposal affects the New York State and Local Police
and Fire Retirement System (PFRS), it is estimated that the past service
cost will average approximately 17% (14% for Tier 6) of an affected
members' compensation for each year of additional service that is
purchased.
The exact number of current members as well as future members who
could be affected by this legislation cannot be readily determined.
ERS Costs: Pursuant to Section 25 of the Retirement and Social Securi-
ty Law, the increased cost to the New York State and Local Employees'
Retirement System would be borne entirely by the State of New York and
would require an itemized appropriation sufficient to pay the cost of
the provision. Since a member can apply for this service credit at any
time prior to retirement, a precise cost can't be determined until each
member, as well as future members, applies for the service credit. Every
year a cost will be determined (and billed to the state) based on those
benefiting from this provision.
PFRS Costs: These costs would be shared by the State of New York and
the participating employers in the PFRS.
Summary of relevant resources:
The membership data used in measuring the impact of the proposed
change was the same as that used in the March 31, 2014 actuarial valu-
ation. Distributions and other statistics can be found in the 2014
Report of the Actuary and the 2014 Comprehensive Annual Financial
Report.
The actuarial assumptions and methods used are described in the 2010,
2011, 2012, 2013 and 2014 Annual Report to the Comptroller on Actuarial
Assumptions, and the Codes Rules and Regulations of the State of New
York: Audit and Control.
The Market Assets and GASB Disclosures are found in the March 31, 2014
New York State and Local Retirement System Financial Statements and
Supplementary Information.
I am a member of the American Academy of Actuaries and meet the Quali-
fication Standards to render the actuarial opinion contained herein.
This estimate, dated February 11, 2015 and intended for use only
during the 2015 Legislative Session, is Fiscal Note No. 2015-65,
prepared by the Actuary for the New York State and Local Employees'
Retirement System and the New York State and Local Police and Fire
Retirement System.
