S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7229
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              April 15, 2019
                                ___________
 
 Introduced  by M. of A. EPSTEIN -- read once and referred to the Commit-
   tee on Governmental Employees
 
 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.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY  OF  BILL:  This  proposed  legislation  would  permit Cynthia
 Falletta, a retired Tier 4 member of the New York City Teachers' Retire-
 ment System (TRS), to elect, by filing an application with the Board  of
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD02534-02-9

 A. 7229                             2
 
 Trustees  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: Ms. Falletta retired as a Tier 4 TRS member on October 18,
 2012. She currently receives an annual retirement allowance of $48,459.
   If the proposed legislation is passed, Ms. Falletta would be reclassi-
 fied  as    Tier  1 retired member and her retirement allowance would be
 recalculated as if she had joined a public retirement system within  the
 state upon her commencement of part-time employment as a college assist-
 ant  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 legis-
 lation 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 $65,038. This
 annual increase would apply  prospectively  as  well  as  retroactively,
 adjusted  for  any  COLA,  less  any payments previously made, as of Ms.
 Falletta's October 18, 2012 date of retirement.
   FINANCIAL IMPACT - PRESENT VALUES: The estimated financial  impact  of
 this  proposal  has  been calculated based on the difference between the
 present value of (1) the Tier 1 benefits Ms. Falletta would  receive  if
 this  proposed  legislation were enacted (retroactive to her October 18,
 2012 retirement date) and (2) the Tier 4 benefits 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 Present Value
 of Future Benefits (PVFB) and the Unfunded Accrued  Liability  (UAL)  by
 approximately $300,000.
   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.
   For  purposes  of  this Fiscal Note, since Ms. Falletta is retired and
 collecting a pension, and therefore has no remaining  working  lifetime,
 the entire increase in UAL (or PVFB) would be recognized immediately.
   OTHER COSTS: Not measured in this Fiscal Note are the following:
   *  The  initial,  additional administrative costs of TRS and other New
 York City agencies to implement the proposed legislation.
   CONTRIBUTION TIMING: For the purposes  of  this  Fiscal  Note,  it  is
 assumed  that  the changes in the PVFB and annual employer contributions
 would be reflected for the first time in the  June  30,  2019  actuarial
 valuation of TRS. 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 2021.
   CENSUS DATA: As of June 30, 2018, Ms. Falletta was  approximately  age
 69,  and  receiving  a  pension  of  $48,459  per year under the maximum
 payment option.

 A. 7229                             3
 
   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 TRS.
   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 2019-05 dated April 11,
 2019 was prepared by the Chief Actuary for the New York  City  Teachers'
 Retirement  System.  This  estimate  is intended for use only during the
 2019 Legislative Session.