S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6133--A
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                               May 11, 2017
                                ___________
 
 Introduced  by  Sen.  GOLDEN -- 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  to amend the retirement and social security law, in relation to
   retirement benefits for general members in  the  uniformed  correction
   force of the New York city department of correction
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision d of section 504 of the retirement  and  social
 security  law,  as amended by chapter 18 of the laws of 2012, is amended
 to read as follows:
   d. The early service retirement benefit for  general  members  in  the
 uniformed   correction   force  of  the  New  York  city  department  of
 correction, who are not entitled to an early service retirement  benefit
 pursuant to subdivision c of section five hundred four-a of this article
 or  subdivision  c  of  section  five  hundred four-b of this article or
 subdivision c of section five hundred four-d of  this  article,  or  for
 general  members  in  the  uniformed personnel in institutions under the
 jurisdiction of the department of corrections and community supervision,
 as defined in subdivision i of  section  eighty-nine  of  this  chapter,
 shall  be  a pension equal to one-fiftieth of final average salary times
 years of credited service at the  completion  of  twenty-five  years  of
 service,  [but  not  in excess of fifty percent of final average salary]
 PLUS ONE-SIXTIETH OF  FINAL  AVERAGE  SALARY  TIMES  YEARS  OF  CREDITED
 SERVICE IN EXCESS OF TWENTY-FIVE, provided, however, that the provisions
 of   this  section  shall  not  apply  to  a  New  York  city  uniformed
 correction/sanitation revised plan member.
   § 2. This act shall take effect immediately.

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

                                                            LBD11666-02-8

 S. 6133--A                          2
 
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY  OF BILL: This proposed legislation would amend Retirement and
 Social Security Law (RSSL) Section 504 to modify the service  retirement
 benefit calculation formula for uniformed employees of the New York City
 Department  of  Correction  (Correction) who are members of the New York
 City Employees' Retirement System (NYCERS) and are subject to the  Early
 Service  Retirement  Benefit  Plan  for General Members pursuant to RSSL
 Section 504 (CO-25 Plan). The CO-25 Plan is limited to Tier 3 Correction
 members who joined  NYCERS  prior  to  December  19,  1990  (CO-25  Plan
 Members).
   Effective Date: Upon enactment.
   IMPACT  ON SERVICE RETIREMENT BENEFITS: Currently, upon reaching 25 or
 more years of credited service, CO-25 Plan Members  are  entitled  to  a
 service retirement pension benefit equal to:
   *  1/50th  of  Final  Average  Salary  (FAS) multiplied by 25 Years of
 Service (not to exceed 50% of FAS).
   Under the proposed legislation, if  enacted,  the  service  retirement
 pension benefit for CO-25 Plan Members who retire for service under RSSL
 Section 504(d) after the effective date of the proposed legislation with
 25 or more years of credited service would be equal to:
   * 1/50th of FAS multiplied by 25 years of credited service, plus
   *  1/60th of FAS multiplied by the number of years of credited service
 exceeding 25 (if any).
   FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: Based on the census  data
 and  actuarial  assumptions  and  methods  herein, the enactment of this
 proposed legislation would increase the Actuarial Present Value (APV) of
 Benefits (APVB) for NYCERS by approximately $11.2 million.
   Under the Entry Age Normal cost  method  used  to  determine  employer
 contributions  to  NYCERS,  there  would  be an increase in the Unfunded
 Accrued Liability (UAL) of approximately $10.8 million and  an  increase
 in the APV of future employer Normal Cost of $0.4 million.
   FINANCIAL  IMPACT  - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with
 the Administrative  Code  of  the  City  of  New  York  (ACCNY)  Section
 13-638.2(k-2),  new  UAL attributable to benefit changes are to be amor-
 tized as determined by the Actuary  but  generally  over  the  remaining
 working  lifetime  of  those impacted by the benefit changes. As of June
 30, 2017, the remaining working lifetime of the CO-25  Plan  Members  is
 approximately seven years.
   For  the  purposes  of this Fiscal Note, the increase in UAL was amor-
 tized over a seven-year period (six  payments  under  the  One-Year  Lag
 Methodology) using level dollar payments. This payment plus the increase
 in  the  Normal  Cost results in an increase in annual employer contrib-
 utions of approximately $2.4 million for NYCERS.
   OTHER COSTS: Not measured in this Fiscal Note is the impact on  admin-
 istrative costs or Other Postemployment Benefit (OPEB) costs.
   CONTRIBUTION  TIMING:  For  the  purposes  of  this Fiscal Note, it is
 assumed that the change in the annual employer  contributions  would  be
 reflected  for the first time in the Final June 30, 2017 actuarial valu-
 ation of NYCERS. In accordance with the One-Year Lag Methodology  (OYLM)
 used  to  determine  employer  contributions,  the  increase in employer
 contributions would first be reflected in Fiscal Year 2019.
   CENSUS DATA: The estimates presented herein are based on  census  data
 used  for  the  Preliminary June 30, 2017 actuarial valuation of NYCERS,
 including 130 CO-25 Plan Members with average age of 49.3 years, average
 service of 23.8 years and total salaries of approximately $13.9 million.

 S. 6133--A                          3
 
   ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the UAL,  APVB,  and
 annual  employer  contributions  presented  herein  have been calculated
 based on the same actuarial assumptions and methods in  effect  for  the
 June  30, 2017 (Lag) actuarial valuations used to determine the Prelimi-
 nary  Fiscal  Year 2019 employer contributions of NYCERS with the excep-
 tion of the probability of a CO-25 Plan member working beyond  25  years
 of  service,  which  was  increased to recognize the impact the proposed
 legislation, if enacted, would have on retirement behavior.  Please note
 these assumptions and methods are subject to change as this valuation is
 not considered final until the end of Fiscal Year 2019.
   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,  and  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 2018-42  dated  June  20,
 2018, was prepared by the Chief Actuary for the New York City Employees'
 Retirement  System.  This  estimate  is intended for use only during the
 2018 Legislative Session.