S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5592--A
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                              April 19, 2017
                                ___________
 
 Introduced  by  Sen. HOYLMAN -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
   -- recommitted to the Committee  on  Civil  Service  and  Pensions  in
   accordance  with  Senate  Rule 6, sec. 8 -- committee discharged, bill
   amended, ordered reprinted as amended and recommitted to said  commit-
   tee
 
 AN  ACT  relating  to  granting Tier I status to Cynthia Falletta in the
   Teachers' Retirement System of the City of New York with a  membership
   date of June 1, 1972
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Notwithstanding any inconsistent provision of law,  Cynthia
 Falletta, a member of the Teachers' Retirement System of the City of New
 York  (TRSNYC) with Tier IV status, who was employed by the City Univer-
 sity of New York from June 1, 1972 until April 8, 1976 and from June 22,
 1976 to October 28, 1976, and was a member of  the  Board  of  Education
 Retirement  System  from  December  12,  1990 until February 28, 1994 at
 which point she became a member of the Teachers'  Retirement  System  of
 the  City  of  New  York,  and who for reasons not ascribable to her own
 negligence was retroactively enrolled as a Tier IV member,  shall,  upon
 submission  of an application filed with the Board of Trustees of TRSNYC
 on or before the thirty-first day of December next succeeding  the  date
 on  which  this act shall have become a law, be reclassified as a Tier I
 member with June 1, 1972 as her date of membership and shall be entitled
 to every right, benefit and privilege which would have been available to
 her in accordance with Tier I status, and the City of New York shall  be
 responsible  for  all  costs  to  provide  the Tier I benefit to Cynthia
 Falletta, provided, however that Cynthia Falletta shall  be  responsible
 for  contributing  the  required member contributions for Tier I member-
 ship.
   § 2. This act shall take effect immediately.

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

                                                            LBD09751-03-8

 S. 5592--A                          2
 
   FISCAL NOTE.--Pursuant to Legislative Law Section 50:
   SUMMARY OF BILL: The proposed legislation would permit Cynthia Fallet-
 ta,  a  retired  Tier 4 member of the New York City Teachers' Retirement
 System (TRS), to elect, by filing an application with the Board of Trus-
 tees of TRS within the end of the calendar year in  which  the  proposed
 legislation  is  passed,  to be reclassified as a Tier 1 member and have
 her retirement allowance recalculated and paid under  Tier  1  (Plan  A)
 benefit calculation provisions.
   Effective Date: Upon Enactment.
   BACKGROUND  -  GENERAL: Ms. Falletta retired as a Tier 4 TRS member on
 October 18, 2012. She currently receives an annual retirement  allowance
 of $48,243.
   If the proposed legislation is passed, Ms. Falletta would be reclassi-
 fied  as  a Tier 1 member and her retirement allowance would be recalcu-
 lated as if she had joined a public retirement system within  the  state
 upon  her  commencement  of  part-time employment as a college assistant
 with the City University of New York in 1972. The additional cost,  less
 any  required  member  contributions  paid  by Ms. Falletta, to fund the
 increased retirement allowance associated with the proposed  legislation
 would fall upon the City of New York.
   Because Tier 1 TRS members are generally permitted to take an actuari-
 al  reduction  of  their retirement allowance to account for deficits in
 member contributions, for purposes of this fiscal note,  it  is  assumed
 that  Ms. Falletta would not pay any owed member contributions resulting
 from the reclassification. Based on this assumption and  application  of
 other  Tier  1  benefit calculation provisions, it is estimated that Ms.
 Falletta's annual retirement allowance would increase to  $64,822.  This
 annual increase would apply prospectively as well as retroactively, less
 any payments previously made, to Ms. Falletta's October 18, 2012 date of
 retirement.
   FINANCIAL  IMPACT  - ACTUARIAL PRESENT VALUES: The estimated financial
 impact of this proposal has been  calculated  based  on  the  difference
 between  the  actuarial  present  value  of  (1) the Tier 1 benefits Ms.
 Falletta would receive if this proposed legislation were enacted (retro-
 active to her October 18, 2012 retirement date) and (2) the Tier 4 bene-
 fits that are currently and have been paid to Ms. Falletta.
   Based on the actuarial assumptions and methods described  herein,  the
 enactment  of  this  proposed  legislation  would increase the Actuarial
 Present Value of Benefits (APVB)  and  the  Unfunded  Accrued  Liability
 (UAL) of TRS by approximately $285,000 as of June 30, 2018.
   FINANCIAL  IMPACT  - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with
 Section 13.638.2(k-2) of the Administrative Code of the City of New York
 (ACCNY), new UAL attributable to benefit changes are to be amortized  as
 determined by the Actuary but generally over the remaining working life-
 time of those impacted by the benefit changes.
   For  this  proposed  legislation,  since  Ms.  Falletta is retired and
 collecting a pension, and therefore has no remaining  working  lifetime,
 the  entire increase in UAL of $285,000 would be recognized in the first
 year.
   CONTRIBUTION TIMING: If enacted during the 2018  Legislative  Session,
 the  retirement  allowance payable to Ms. Falletta would likely first be
 reflected in the June 30, 2018 census data. In accordance with the  One-
 Year  Lag  methodology  used  to  determine  employer contributions, the
 increase in employer contributions would first be reflected  for  Fiscal
 Year 2020.

 S. 5592--A                          3
 
   OTHER  COSTS:  This  Fiscal Note does not measure administrative costs
 associated with implementing this proposed legislation.
   CENSUS  DATA:  As  of June 30, 2017 Ms. Falletta was approximately age
 68, and receiving a pension  of  $48,243  per  year  under  the  maximum
 payment option.
   ACTUARIAL  ASSUMPTIONS  AND  METHODS:  The  additional  APVB  and  UAL
 presented herein have  been  calculated  based  on  the  same  actuarial
 assumptions  and methods in effect for the June 20, 2016 (Lag) actuarial
 valuation used to determine the Preliminary Fiscal  Year  2018  employer
 contributions  of  TRS.  Please  note  these assumptions and methods are
 subject to change as this valuation is not considered  final  until  the
 end of the Fiscal Year 2018.
   STATEMENT  OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu-
 ary for, and independent of, the New York City  Retirement  Systems  and
 Pension  Funds.  I  am a Fellow of the Society of Actuaries, an Enrolled
 Actuary under the Employee Retirement Income and Security  Act  of  1974
 (ERISA),  a Member of the American Academy of Actuaries, and a Fellow of
 the Conference of Consulting Actuaries. I meet the Qualification  Stand-
 ards  of the American Academy of Actuaries to render the actuarial opin-
 ion contained herein. To the best of my knowledge, the results contained
 herein have been prepared in accordance with generally accepted actuari-
 al principles and procedures and with the Actuarial Standards  of  Prac-
 tice issued by the Actuarial Standards Board.
   FISCAL  NOTE  IDENTIFICATION: This Fiscal Note 2018-09 dated March 23,
 2018, was prepared by the Chief Actuary for the New York City  Teachers'
 Retirement  System.  This  estimate  is intended for use only during the
 2018 Legislative Session.