S T A T E O F N E W Y O R K
________________________________________________________________________
4079--B
2019-2020 Regular Sessions
I N A S S E M B L Y
February 1, 2019
___________
Introduced by M. of A. JOYNER, LUPARDO, VANEL, WILLIAMS, HYNDMAN, ORTIZ,
D'URSO, LENTOL, ENGLEBRIGHT, CRESPO, ZEBROWSKI, JAFFEE, DICKENS,
BRAUNSTEIN, MOSLEY, BARRON, GUNTHER, TAYLOR, RAMOS, ARROYO, LAVINE,
PERRY, DenDEKKER, COOK, BARNWELL, BLAKE, DAVILA -- Multi-Sponsored by
-- M. of A. DINOWITZ, EPSTEIN, HEVESI, SIMON -- read once and referred
to the Committee on Governmental Employees -- committee discharged,
bill amended, ordered reprinted as amended and recommitted to said
committee -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee
AN ACT to amend the general municipal law and the retirement and social
security law, in relation to increasing certain special accidental
death benefits
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivision c of section 208-f of the general municipal
law, as amended by chapter 179 of the laws of 2018, is amended to read
as follows:
c. Commencing July first, two thousand [eighteen] NINETEEN the special
accidental death benefit paid to a widow or widower or the deceased
member's children under the age of eighteen or, if a student, under the
age of twenty-three, if the widow or widower has died, shall be esca-
lated by adding thereto an additional percentage of the salary of the
deceased member (as increased pursuant to subdivision b of this section)
in accordance with the following schedule:
calendar year of death
of the deceased member per centum
1977 or prior [236%] 246.1%
1978 [226.2%] 236%
1979 [216.7%] 226.2%
1980 [207.5%] 216.7%
1981 [198.5%] 207.5%
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07653-06-9
A. 4079--B 2
1982 [189.8%] 198.5%
1983 [181.4%] 189.8%
1984 [173.2%] 181.4%
1985 [165.2%] 173.2%
1986 [157.5%] 165.2%
1987 [150.0%] 157.5%
1988 [142.7%] 150.0%
1989 [135.7%] 142.7%
1990 [128.8%] 135.7%
1991 [122.1%] 128.8%
1992 [115.7%] 122.1%
1993 [109.4%] 115.7%
1994 [103.3%] 109.4%
1995 [97.4%] 103.3%
1996 [91.6%] 97.4%
1997 [86.0%] 91.6%
1998 [80.6%] 86.0%
1999 [75.4%] 80.6%
2000 [70.2%] 75.4%
2001 [65.3%] 70.2%
2002 [60.5%] 65.3%
2003 [55.8%] 60.5%
2004 [51.3%] 55.8%
2005 [46.9%] 51.3%
2006 [42.6%] 46.9%
2007 [38.4%] 42.6%
2008 [34.4%] 38.4%
2009 [30.5%] 34.4%
2010 [26.7%] 30.5%
2011 [23.0%] 26.7%
2012 [19.4%] 23.0%
2013 [15.9%] 19.4%
2014 [12.6%] 15.9%
2015 [9.3%] 12.6%
2016 [6.1%] 9.3%
2017 [3.0%] 6.1%
2018 [0.0%] 3.0%
2019 0.0%
§ 2. Subdivision c of section 361-a of the retirement and social secu-
rity law, as amended by chapter 179 of the laws of 2018, is amended to
read as follows:
c. Commencing July first, two thousand [eighteen] NINETEEN the special
accidental death benefit paid to a widow or widower or the deceased
member's children under the age of eighteen or, if a student, under the
age of twenty-three, if the widow or widower has died, shall be esca-
lated by adding thereto an additional percentage of the salary of the
deceased member, as increased pursuant to subdivision b of this section,
in accordance with the following schedule:
calendar year of death
of the deceased member per centum
1977 or prior [236%] 246.1%
1978 [226.2%] 236%
1979 [216.7%] 226.2%
1980 [207.5%] 216.7%
1981 [198.5%] 207.5%
1982 [189.8%] 198.5%
A. 4079--B 3
1983 [181.4%] 189.8%
1984 [173.2%] 181.4%
1985 [165.2%] 173.2%
1986 [157.5%] 165.2%
1987 [150.0%] 157.5%
1988 [142.7%] 150.0%
1989 [135.7%] 142.7%
1990 [128.8%] 135.7%
1991 [122.1%] 128.8%
1992 [115.7%] 122.1%
1993 [109.4%] 115.7%
1994 [103.3%] 109.4%
1995 [97.4%] 103.3%
1996 [91.6%] 97.4%
1997 [86.0%] 91.6%
1998 [80.6%] 86.0%
1999 [75.4%] 80.6%
2000 [70.2%] 75.4%
2001 [65.3%] 70.2%
2002 [60.5%] 65.3%
2003 [55.8%] 60.5%
2004 [51.3%] 55.8%
2005 [46.9%] 51.3%
2006 [42.6%] 46.9%
2007 [38.4%] 42.6%
2008 [34.4%] 38.4%
2009 [30.5%] 34.4%
2010 [26.7%] 30.5%
2011 [23.0%] 26.7%
2012 [19.4%] 23.0%
2013 [15.9%] 19.4%
2014 [12.6%] 15.9%
2015 [9.3%] 12.6%
2016 [6.1%] 9.3%
2017 [3.0%] 6.1%
2018 [0.0%] 3.0%
2019 0.0%
§ 3. This act shall take effect July 1, 2019.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would amend both the General Municipal Law and the Retire-
ment and Social Security Law to increase the salary used in the computa-
tion of the special accidental death benefit by 3% in cases where the
date of death was before 2019.
Insofar as this bill would amend the Retirement and Social Security
Law, it is estimated that there would be an additional annual cost of
approximately $547,000 above the approximately $12.5 million current
annual cost of this benefit. This cost would be shared by the State of
New York and all participating employers of the New York State and Local
Police and Fire Retirement System.
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, 2018 actuarial valu-
ation. Distributions and other statistics can be found in the 2018
Report of the Actuary and the 2018 Comprehensive Annual Financial
Report.
A. 4079--B 4
The actuarial assumptions and methods used are described in the 2015,
2016, 2017 and 2018 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, 2018
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 fiscal note does not constitute a legal opinion on the viability
of the proposed change nor is it intended to serve as a substitute for
the professional judgment of an attorney.
This estimate, dated January 24, 2019, and intended for use only
during the 2019 Legislative Session, is Fiscal Note No. 2019-38,
prepared by the Actuary for the New York State and Local Retirement
System.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: This proposed legislation would amend General Munici-
pal Law (GML) Section 208-f(c) to increase certain Special Accidental
Death Benefits (SADB) for surviving spouses, dependent children, and
certain other individuals (Eligible Beneficiaries) of former uniformed
employees of the City of New York and the New York City Health and
Hospitals Corporation, and for certain former employees of the Tribor-
ough Bridge and Tunnel Authority, who were members of certain New York
City Pension Funds or Retirement Systems (NYCRS) and died as a natural
and proximate result of an accident sustained in the performance of
duty.
Effective Date: July 1, 2019.
BACKGROUND: Under the GML, the basic SADB is defined as:
The salary of the deceased member at date of death (or, in certain
instances, a greater salary based on a higher rank or other
status)(Final Salary), less the following payments to an Eligible Bene-
ficiary:
* Any NYCRS death benefit as adjusted by any Supplementation or Cost-
of-Living Adjustment (COLA),
* Any Social Security death benefit, and
* Any Workers' Compensation benefit.
The SADB is paid to the deceased member's surviving spouse, if alive.
If the spouse is no longer alive, the SADB is paid to the deceased
member's children until age eighteen or until age twenty-three if a
student. If neither a spouse nor a dependent child is alive, the SADB
may be paid to certain other individuals, if eligible, in accordance
with certain laws related to the World Trade Center attack.
The GML also provides that the SADB is subject to escalation based on
the calendar year in which the former member died. The SADB has tradi-
tionally been increased by a cumulative, incremental percentage of Final
Salary based on the calendar year of the member's death.
IMPACT ON BENEFITS: With respect to the NYCRS, the proposed legis-
lation would impact the SADB payable to certain survivors of members of
the:
* New York City Employees' Retirement System (NYCERS),
* New York City Police Pension Fund (POLICE), or
* New York City Fire Pension Fund (FIRE),
and who were employed by one of the following employers in certain
positions:
* New York City Police Department - Uniformed Position,
A. 4079--B 5
* New York City Fire Department - Uniformed Position,
* New York City Department of Sanitation - Uniformed Position,
* New York City Housing Authority - Uniformed Position,
* New York City Transit Authority - Uniformed Position,
* New York City Department of Correction - Uniformed Position,
* New York City - Uniformed Position as Emergency Medical Technician
(EMT),
* New York City Health and Hospitals Corporation - Uniformed Position
as EMT, or
* Triborough Bridge and Tunnel Authority - Bridge and Tunnel Position.
Under the proposed legislation, effective July 1, 2019, an additional
3.0% of Final Salary would be applied to the SADB paid due to deaths
occurring in each calendar year on and after 1977. The SADB for deaths
occurring prior to 1977 would receive the same escalation as deaths
occurring in 1977.
FINANCIAL IMPACT - PRESENT VALUES: Based on the Eligible Beneficiaries
of deceased NYCRS members who would be impacted by this proposed legis-
lation and the actuarial assumptions and methods described herein, the
enactment of this proposed legislation would increase the Present Value
of Future Benefits (PVFB) by approximately $49.2 million.
FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: As a result of the
past four decades' practice of providing 3.0% COLAs on the SADB each
year, and the likelihood that COLAs will continue to be granted in the
future, the Actuary assumes that the SADB benefit will continue to
increase 3% per year in the future in determining the NYCRS employer
contributions. Therefore, the costs of this proposed legislation have
already been accounted for and will not result in a further increase in
employer contributions. There will, however, be a decrease in employer
contributions if the proposed legislation is not enacted.
In accordance with Administrative Code of the City of New York (ACCNY)
Section 13-638.2(k-2), new Unfunded Accrued Liability attributable to
benefit changes are to be amortized as determined by the Actuary but
generally over the remaining working lifetime of those impacted by the
benefit changes. However, since changes in the SADB COLA paid are not
known in advance, the decrease in expected pension payments due to this
legislation not passing would be treated as an actuarial gain. These
actuarial gains would be amortized over a 15-year period (14 payments
under the One-Year Lag Methodology (OYLM)) using level dollar payments.
This would result in a decrease in NYCRS annual employer contributions
of approximately $5.8 million each year.
OTHER COSTS: Not measured in this Fiscal Note are the following:
* The initial, additional administrative costs of NYCERS, POLICE, and
FIRE and other New York City agencies to implement the proposed legis-
lation.
CONTRIBUTION TIMING: For the purposes of this Fiscal Note, it is
assumed that the changes in the PVFB and annual employer contributions
if this proposed legislation fails to pass, would be reflected for the
first time in the Final June 30, 2020 actuarial valuations of NYCERS,
POLICE, and FIRE. In accordance with the OYLM used to determine employer
contributions, the decrease in employer contritions would first be
reflected in Fiscal Year 2022.
CENSUS DATA: The estimates presented herein are based on upon the
census data for such Eligible Beneficiaries provided by the NYCRS.
Retirement System Number of Decreased Annual Accidental
Members with Death Benefit
A. 4079--B 6
Eligible Survivors Prior to Proposed
July 1, 2019
Increase
($ Millions)
NYCERS 39 $ 3.1
POLICE 398 44.0
FIRE 631 74.1
Total 1,068 $121.2
ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the PVFB and annual
employer contributions presented herein have been calculated based on
the actuarial assumptions and methods in effect for the June 30, 2018
(Lag) actuarial valuations used to determine the Preliminary Fiscal Year
2020 employer contributions of NYCERS, POLICE, and FIRE.
RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend
highly on the actuarial assumptions and methods used and are subject to
change based on the realization of potential investment, demographic,
contribution, and other risks. If actual experience deviates from actu-
arial assumptions, the actual costs could differ from those presented
herein. Costs are also dependent on the actuarial methods used, and
therefore different actuarial methods could produce different results.
Quantifying these risks is beyond the scope 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, a
Member of the American Academy of Actuaries, and a Fellow of the Confer-
ence of Consulting Actuaries. I meet the Qualification Standards of the
American Academy of Actuaries to render the actuarial opinion contained
herein. To the best of my knowledge, the results contained herein have
been prepared in accordance with generally accepted actuarial principles
and procedures and with the Actuarial Standards of Practice issued by
the Actuarial Standards Board.
FISCAL NOTE IDENTIFICATION: This Fiscal Note 2019-21 dated May 17,
2019 was prepared by the Chief Actuary for the New York City Employees'
Retirement System, the New York City Police Pension Fund, and New York
City Fire Pension Fund. This estimate is intended for use only during
the 2019 Legislative Session.