S T A T E O F N E W Y O R K
________________________________________________________________________
8859
I N S E N A T E
May 29, 2018
___________
Introduced by Sen. GOLDEN -- read twice and ordered printed, and when
printed to be committed to the Committee on Civil Service and Pensions
AN ACT to amend the retirement and social security law, in relation to
additional member contributions for certain members under the age
fifty-seven retirement program
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraph 1 of subdivision f of section 604-d of the
retirement and social security law is amended by adding a new subpara-
graph (iv) to read as follows:
(IV) NOTWITHSTANDING THE PROVISIONS OF SUBPARAGRAPH (II) OF THIS PARA-
GRAPH, A PARTICIPANT HOLDING THE TITLE OF CARPENTER, SUPERVISOR CARPEN-
TER, SHIP CARPENTER, SUPERVISOR SHIP CARPENTER, RIGGER, DOCKBUILDER,
SUPERVISOR DOCKBUILDER AND GENERAL SUPERVISOR DOCKBUILDER WHO IS A
PARTICIPANT IN THE AGE FIFTY-SEVEN RETIREMENT PROGRAM AND WHOSE AGE AND
ALLOWABLE SERVICE ARE SUCH THAT HE OR SHE COULD NOT POSSIBLY BE ABLE TO
ACCUMULATE AT LEAST TWENTY-FIVE YEARS OF SERVICE BY THE TIME HE OR SHE
REACHES AGE FIFTY-SEVEN, SHALL NOT BE REQUIRED TO MAKE THE ADDITIONAL
MEMBER CONTRIBUTION PURSUANT TO SUBPARAGRAPH (II) OF THIS PARAGRAPH.
ANY PARTICIPANT IN THE TITLES LISTED IN THIS SUBPARAGRAPH WHO HAS MADE
ADDITIONAL MEMBER CONTRIBUTIONS PURSUANT TO SUBPARAGRAPH (II) OF THIS
PARAGRAPH PRIOR TO THE EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO
THOUSAND SEVENTEEN THAT ADDED THIS SUBPARAGRAPH SHALL RECEIVE A REFUND
OF THE EMPLOYEE PORTION OF SUCH CONTRIBUTIONS PLUS INTEREST PROVIDED
THAT THEIR AGE AND ALLOWABLE SERVICE ARE SUCH THAT HE OR SHE COULD NOT
POSSIBLY BE ABLE TO ACCUMULATE AT LEAST TWENTY-FIVE YEARS OF SERVICE BY
THE TIME HE OR SHE REACHES AGE FIFTY-SEVEN.
§ 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: This proposed legislation would amend New York
Retirement and Social Security Law (RSSL) Section 604-d to exempt from
the physically taxing provisions certain Tier 4 carpenter titles, who
are participants in the New York City Employees' Retirement System
(NYCERS) or the Board of Education Retirement System of the City of New
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11976-04-8
S. 8859 2
York (BERS) Age 57 Retirement Program (57/5 Plan), and who would not
benefit from the early retirement provisions for such physically taxing
titles.
The proposed legislation would affect 57/5 Plan participants in the
physically taxing titles of carpenter, supervisor carpenter, ship
carpenter, supervisor ship carpenter, rigger, dockbuilder, supervisor
dockbuilder, and general supervisor dockbuilder (Eligible Carpenter
Title) who would be unable to reach the requisite 25 years of credited
service in a physically taxing title by age 57, and would therefore be
ineligible to take advantage of the early retirement provisions of the
physically taxing title, which permits retirement at age 50 (with 25
years of credited service).
Under the proposed legislation, Eligible Carpenter Titles who started
in the 57/5 Plan but will not reach 25 years of credited service in a
physically taxing title by age 57 would no longer pay physically taxing
Additional Member Contributions (AMCs) and would receive an immediate
refund of the employee portion (i.e. 50%) of their physically taxing
AMCs plus interest. Such Titles would remain responsible for applicable
basic member contributions and applicable non-physically taxing AMCs for
continued 57/5 Plan participation.
Effective Date: Upon enactment.
FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: Based on the census date
and actuarial assumptions and methods described herein, the enactment of
this proposed legislation would decrease the Actuarial Present Value
(APV) of Benefits (APVB) by approximately $2.1 million, decrease the APV
of future member contributions by approximately $3.5 million and
decrease the Actuarial Asset Value (APV) by approximately $2.0 million
for NYCERS and BERS. The net result is an increase in the APV of future
employer contributions of approximately $3.4 million.
Under the Entry Age Normal cost method used to determine the employer
contributions to NYCERS and BERS, there would be an increase in the
Unfunded Accrued Liability (UAL) of approximately $0.5 million and an
increase in the APV future employer Normal Cost of $2.9 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 amortized
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 members in Eligible Carpenter
Titles is approximately eight years for NYCERS and seven years for BERS.
For the purposes of this Fiscal Note, the increase in UAL was amor-
tized over an eight-year period (seven payments under the One-Year Lag
Methodology) for NYCERS and a seven-year period (six payments under the
One-Year Lag Methodology) for BERS using level dollar payments. This
payment plus the increase in the Normal Cost results in an increase in
annual employer contributions of approximately $526,000 ($514,000 for
NYCERS and $12,000 for BERS).
ESTIMATED FINANCIAL IMPACT ON NYCERS AND BERS IF CERTAIN CARPENTERS
WITHDRAW PHYSICALLY TAXING AMCs FROM THE TIER 4 57/5 PLAN AND CEASE
MAKING SUCH FUTURE AMCs
($000s)
NYCERS BERS Total
Actuarial Asset Value (AAV) $(1,975) $(45) $(2,020)
Actuarial Accrued Liability
S. 8859 3
(AAL) $(1,481) $(43) $(1,524)
Unfunded Accrued Liability
(AAL-AAV) $ 494 $ 2 $ 496
Actuarial Present Value of
Future Employer Normal Cost $ 2,832 $ 77 $ 2,909
Employer Contributions $ 514 $ 12 $ 526
OTHER COSTS: Not measured in this Fiscal Note are the following:
* The initial, additional administrative costs of NYCERS, BERS, and
other New York City agencies to implement the proposed legislation.
* The impact of this proposed legislation on Other Postemployment
Benefit (OPEB) costs.
CONTRIBUTION TIMING: For the purposes of this Fiscal Note, it is
assumed that the changed in the APV of the future employer contributions
and annual employer contributions would be reflected for the first time
in the June 30, 2018 actuarial valuation of NYCERS and BERS. In accord-
ance with the One-Year Lag Methodology (OYLM) used to determine employer
contributions, the increase in employer contributions would be first
reflected in the Fiscal Year 2020
CENSUS DATA: The estimates presented herein are based on census data
used in the Preliminary June 30, 2017 (Lag) actuarial valuation of
NYCERS and BERS to determine Preliminary Fiscal Year 2019 employer
contributions. The following table summarizes the data for the affected
participants:
NYCERS BERS Total
Count 259 7 266
Average Age 54.4 years 54.4 years 54.4 years
Average Service 12.2 years 14.9 years 12.3 years
Average Salary $102,300 $98,900 $102,200
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 and BERS. 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, 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 2018-30 dated May 23,
2018, was prepared by the Chief Actuary for the New York City Employees'
Retirement System and Board of Education Retirement System of the City
of New York. This estimate is intended for use only during the 2018
Legislative Session.