S T A T E   O F   N E W   Y O R K
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                                  6135--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
   disability retirement of certain New York city correction members
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Paragraph  1  of  subdivision  b  of section 507-a of the
 retirement and social security law, as added by chapter 452 of the  laws
 of 1983, is amended to read as follows:
   1.  Have  at  least  ten  years of total service credit, EXCEPT THAT A
 MEMBER IN THE UNIFORMED PERSONNEL OF THE NEW  YORK  CITY  DEPARTMENT  OF
 CORRECTION  MAY FILE AN APPLICATION WITHOUT REGARD TO LENGTH OF SERVICE,
 and
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: This proposed legislation would modify the  eligibil-
 ity  requirements  of  Retirement and Social Security Law (RSSL) Section
 507-a for certain New York City Department  of  Correction  (Correction)
 members of the New York City Employees' Retirement System (NYCERS).
   For  purposes  of  this  Fiscal  Note,  Covered Participants refers to
 NYCERS Correction members, with the exception of Correction Revised Plan
 Members who are ineligible for Section 507-a disability benefits  pursu-
 ant  to  section  507-a(e), who joined NYCERS from July 27, 1976 through
 March 31, 2012 and are subject to RSSL Article 14.
   Under the proposed legislation, Covered Participant with less than  10
 years of credited service would be entitled to 507-a disability benefits
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11667-03-8
              

 S. 6135--A                          2
 
 without  having  the  burden  to  show that a disability resulted from a
 work-related accident.
   Effective Date: Upon enactment.
   IMPACT  ON COVERAGE: If enacted, the proposed legislation would elimi-
 nate the minimum service eligibility requirements  for  Covered  Partic-
 ipants to qualify for benefits available under RSSL Section 507-a.
   IMPACT ON BENEFITS: Currently, Covered Participants who are determined
 to  be  disabled  by  the NYCERS' Medical Board, and have accumulated at
 least 10 years of service credit, are eligible for an immediate ordinary
 disability retirement (ODR) allowance equal to the greater of:
   1) 1/3 of Final Average Salary (FAS), or
   2) 1/60 of FAS multiplied by credited service.
   If such member is also eligible for Service Retirement, the ODR  bene-
 fit cannot be less than the retirement allowance for Service Retirement.
   Under the proposed legislation, if enacted, the ODR benefit under RSSL
 Section  507-a  would  in  effect  become  available to disabled Covered
 Participants, subject to approval  under  the  applicable  statutes  and
 procedures established by NYCERS, irrespective of service credit accumu-
 lation.
   For  purposes  of  this  Fiscal Note, the Actuary has assumed that the
 proposed Section 507-a benefit  would  only  be  available  to  eligible
 Covered Participants prospectively on and after the Effective Date.
   FINANCIAL IMPACT - OVERVIEW: The ultimate cost of this proposed legis-
 lation  would  be  any  additional  benefits paid to NYCERS participants
 compared with current law.
   The amount and timing of the financial impact of the  proposed  legis-
 lation  would  depend  on  the  number,  salaries,  ages, and lengths of
 service of Covered Participants who become eligible for  507-a  benefits
 and  the  actuarial  assumptions and methods employed by the Actuary for
 such purposes.
   FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: Based on the  anticipated
 group of Covered Participants and based on the 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 $3.9 million as of June 30, 2017.
   Under the Entry Age Normal cost  method  used  to  determine  employer
 contribution  to NYCERS, there would be an increase in the APV of future
 employer normal cost of $13.9  million  offset  by  a  decrease  in  the
 Unfunded Accrued Liability (UAL) of approximately $10.0 million.
   FINANCIAL  IMPACT  - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with
 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 Covered Participants  is
 approximately 17 years.
   For  the  purposes  of this Fiscal Note, the increase in UAL was amor-
 tized over a 17-year period (16 payments under the One-Year Lag  Method-
 ology) using level dollar payments. The payment plus the increase in the
 Normal  Cost  results in an increase in annual employer contributions of
 approximately $335,000 per year.
   OTHER COSTS: Not measures in this Fiscal Note are the following:
   * The possible, additional administrative costs of NYCERS to implement
 the proposed legislation.
   * The impact of this  proposed  legislation  on  Other  Postemployment
 Benefit (OPEB) costs.

 S. 6135--A                          3
 
   CONTRIBUTION  TIMING:  For purposes of this Fiscal Note, it is assumed
 that the changes in the APV of future employer contributions and  annual
 employer contributions would be reflected for the first time in the June
 30,  2018 actuarial valuation 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 2020.
   CENSUS  DATA:  The  estimates presented herein are based on the active
 census data used in the Preliminary June 30, 2017 (Lag) actuarial  valu-
 ation  of  NYCERS to determine the Preliminary Fiscal Year 2019 employer
 contributions, including 9,403 Tier 3 and  6  Corrections  members  with
 salaries of approximately $810.8 million.
   Only  5,074 Covered Participants with salaries of approximately $341.0
 million have less than 10 years of credited service as of June 30, 2017.
 Therefore, the effect of the proposed legislation would be limited to  a
 subset of these 5,074 members who may become disabled before reaching 10
 years of credited service.
   ACTUARIAL  ASSUMPTIONS  AND  METHODS:  The  changes in the UAL, APV of
 future  employer  contributions,  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 Preliminary Fiscal Year 2019 employer
 contributions of NYCERS. Please note these assumptions and  methods  are
 subject  to  change  as this valuation is not considered final until the
 end of Fiscal Year 2019.
   The census data used in the June 30, 2017 (Lag) actuarial valuation of
 NYCERS did not contain any Enhanced Plan members, but the election peri-
 od was still open as of June 30, 2017. Based on information provided  by
 NYCERS,  all  Tier  6 Correction members are assumed to elect to partic-
 ipate in the Enhanced Plan for the purpose of this Fiscal Note.
   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 2018-35  dated  June  11,
 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.