S T A T E   O F   N E W   Y O R K
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                                  8754--A
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             November 25, 2019
                                ___________
 
 Introduced by M. of A. CUSICK -- read once and referred to the Committee
   on  Governmental  Employees -- recommitted to the Committee on Govern-
   mental Employees in accordance with Assembly Rule 3, sec. 2 -- commit-
   tee discharged, bill amended, ordered reprinted as amended and  recom-
   mitted to said committee

 AN  ACT  to amend the retirement and social security law, in relation to
   the eligibility of New  York  city  transit  authority  employees  for
   performance of duty disability retirement
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 607-b of the retirement and social security law  is
 amended by adding a new subdivision a-1 to read as follows:
   A-1.  ANY MEMBER OF THE NEW YORK CITY EMPLOYEES' RETIREMENT SYSTEM WHO
 IS EMPLOYED BY THE NEW YORK CITY TRANSIT AUTHORITY AND WHO  PARTICIPATED
 IN WORLD TRADE CENTER RESCUE, RECOVERY OR CLEANUP OPERATIONS, AS DEFINED
 IN SECTION TWO OF THIS CHAPTER, WHO, ON OR AFTER SEPTEMBER ELEVENTH, TWO
 THOUSAND  ONE,  BECOMES  PHYSICALLY  OR  MENTALLY  INCAPACITATED FOR THE
 PERFORMANCE OF DUTIES AS THE NATURAL AND PROXIMATE RESULT OF  AN  INJURY
 SUSTAINED  IN  THE  PERFORMANCE  OR  DISCHARGE OF HIS OR HER DUTIES AS A
 RESULT OF SUCH PARTICIPATION IN WORLD TRADE CENTER RESCUE,  RECOVERY  OR
 CLEANUP  OPERATIONS  SHALL  BE  PAID  A  PERFORMANCE  OF DUTY DISABILITY
 RETIREMENT ALLOWANCE EQUAL TO THREE-QUARTERS OF  FINAL  AVERAGE  SALARY,
 SUBJECT  TO SECTION 13-176 OF THE ADMINISTRATIVE CODE OF THE CITY OF NEW
 YORK. ANY MEMBER WHO HAS MADE APPLICATION OR WHO,  AFTER  THE  EFFECTIVE
 DATE OF THIS SUBDIVISION, MAKES APPLICATION FOR SUCH PERFORMANCE OF DUTY
 PENSION  SHALL  BE  ENTITLED  TO  INVOKE  THE  MEDICAL  REVIEW PROCEDURE
 PROVIDED FOR IN SUBDIVISION E OF SECTION SIX HUNDRED FIVE OF THIS  ARTI-
 CLE, SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN SUCH SUBDIVISION.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10018-04-0
              

 A. 8754--A                          2
 
   SUMMARY  OF  BILL: This proposed legislation would amend provisions of
 the Retirement and Social Security Law (RSSL) to  grant  New  York  City
 Transit  Authority (NYCTA) active and retired employees, who are or were
 members of the New  York  City  Employees'  Retirement  System  (NYCERS)
 subject  to  Retirement  and  Social  Security  Law Article 15, and have
 incurred a World Trade Center (WTC) Qualifying Condition, a  performance
 of  duty  disability  retirement equivalent to 75% of the member's Final
 Average Salary  (FAS)  prospectively  as  of  the  effective  date.  The
 proposed  legislation  would  further permit such eligible NYCTA members
 and retirees to utilize the Final Medical Review procedures pursuant  to
 RSSL Section 605-e to appeal from the NYCERS Medical Board WTC disabili-
 ty  benefit determinations.   Finally, the bill appears to inadvertently
 grant such eligible NYCTA members and retirees the  ability  to  utilize
 the  presumptions  for  infectious  diseases pursuant to subsection b of
 RSSL Section 607-b.  Costs associated with granting  these  presumptions
 have not been included in this Fiscal Note.
   Effective Date: Upon enactment.
   IMPACT  ON  BENEFITS:  Under the proposed legislation, if enacted, the
 WTC disability benefit for eligible NYCTA WTC retirees would be  revised
 to equal a retirement allowance of:
       * 75% multiplied by FAS,
   Reduced by:
       *  100%  of  Workers'  Compensation  benefits (if any) payable (as
       required by RSSL Section 64).
   FINANCIAL IMPACT - OVERVIEW:  The  bill,  if  enacted,  would  provide
 increased  benefits  for  38  pensioners  who have been approved for WTC
 benefits. The bill also potentially provides for increased benefits  for
 an  unknown  number of future pensioners, who have submitted a qualified
 WTC Notice of Participation. Although there are currently  approximately
 1,200  active  and  retired NYCTA members who have submitted a qualified
 WTC Notice of Participation Form, the number of members from this  group
 who  could  potentially  benefit  from  this proposed legislation in the
 future cannot be readily determined.
   The additional estimated financial impact for the  unknown  number  of
 future  pensioners  who could benefit has been calculated on a per event
 basis equal to the increase in the  Present  Value  of  Future  Benefits
 (PVFB)  for an average member who could be approved for WTC benefits and
 who is assumed to benefit from the proposed legislation. In  determining
 the increase in the PVFB for the future members who are assumed to bene-
 fit  from  the proposed legislation, it has been assumed that 50% of the
 members who would retire with a WTC benefit were those  who  would  have
 retired  under  the current Accidental Disability Retirement benefit and
 that the remaining 50% were those who would have  continued  working  if
 the proposed legislation were not passed.
   With  respect  to  an  individual  member, the additional cost of this
 proposed legislation could vary greatly depending on the member's length
 of service, age, and salary history.
   FINANCIAL IMPACT - PRESENT VALUES: Based on the census  data  and  the
 actuarial  assumptions  and  methods  described herein, the enactment of
 this proposed legislation would increase the PVFB for 38 pensioners  who
 have been approved for World Trade Center benefits by approximately $7.9
 million.
   In  addition,  the  enactment  of this proposed legislation would also
 increase the PVFB by approximately $267,400, on average, for each  addi-
 tional  occurrence  of  WTC benefits provided under this proposed legis-
 lation. The proposed legislation would also decrease the  Present  Value

 A. 8754--A                          3
 
 of  Future  Employee  Contributions by approximately $4,800, on average,
 for a total average cost of approximately $272,200 for each approved WTC
 benefit for members who would be helped by the proposed legislation.
   FINANCIAL  IMPACT  -  ANNUAL EMPLOYER CONTRIBUTIONS: Enactment of this
 proposed legislation would increase employer contributions,  where  such
 amount  would  depend on the number of members affected as well as other
 characteristics including the age, years of service, and salary  history
 of each member.
   In accordance with Section 13-638.2(k-2) of the Administrative Code of
 the  City  of  New  York  (ACCNY),  new Unfunded Accrued Liability (UAL)
 attributable to benefit changes are to be amortized as determined by the
 Actuary, but are generally amortized over the remaining working lifetime
 of those impacted by the benefit changes.
   For the purposes of this Fiscal Note,  since  the  38  pensioners  who
 would benefit are retired, and therefore have no remaining working life-
 time, the entire increase in UAL (or PVFB) of approximately $7.9 million
 would be recognized immediately.
   In  addition,  since there is insufficient data currently available to
 estimate the number of members who might be approved for  WTC  benefits,
 the  financial  impact  would be recognized at the time of event. Conse-
 quently, changes in employer contributions for those NYCTA  members  not
 yet  approved  for  WTC  benefits  have been estimated assuming that the
 increase in the PVFB will be financed over the same time period used for
 actuarial losses in accordance with Section 13-638.2(k-2) of the  ACCNY.
 Using  this  approach,  the  additional  PVFB  would be amortized over a
 closed 15-year period (14 payments under the  One-Year  Lag  Methodology
 (OYLM)) using level dollar payments.
   Based  on the Actuary's actuarial assumptions and methods in effect as
 of June 30, 2019, the enactment of this proposed  legislation  is  esti-
 mated to increase annual employer contributions by approximately $32,200
 for each new WTC benefit provided under this proposed legislation.
   CONTRIBUTION  TIMING:  For  the  purposes  of  this Fiscal Note, it is
 assumed that the changes in the PVFB and annual  employer  contributions
 for  those already retired and receiving WTC benefits would be reflected
 for the first time in the Final June 30,  2019  actuarial  valuation  of
 NYCERS.  In accordance with the OYLM used to determine employer contrib-
 utions, the increase in employer contributions for these retirees  would
 first be reflected in Fiscal Year 2021. With respect to future retirees,
 increases in employer contributions would depend upon when members would
 retire but, generally, increased employer contributions will first occur
 the  second  fiscal  year following approval of the WTC benefit. For the
 purposes of this Fiscal Note, it is assumed that these  future  retirees
 will  be  included  for the first time in the June 30, 2021 census data,
 and therefore the increase in employer contributions for future retirees
 that would  benefit  from  this  proposed  legislation  would  first  be
 reflected in Fiscal Year 2023.
   CENSUS  DATA:  The  estimates presented herein are based on the census
 data used in the Preliminary June 30, 2019 (Lag) actuarial valuation  of
 NYCERS  to  determine the Preliminary Fiscal Year 2021 employer contrib-
 utions.
   This data was supplemented by data provided by NYCERS that  identified
 NYCTA  members subject to Article 15 who are currently in receipt of WTC
 disability benefits. NYCERS identified 38 pensioners with an average age
 of approximately 62.4 years and  an  average  benefit  of  approximately
 $39,500.

 A. 8754--A                          4
 
   The  approximate 1,200 active members who have submitted WTC Notice of
 Participation Forms are a subset of the 14,475 NYCTA employees  who  are
 active  members  in NYCERS as of June 30, 2019 whose date of appointment
 is prior to September 11, 2001 and who are not currently entitled  to  a
 WTC  benefit equal to 75% of FAS and, therefore, could potentially bene-
 fit from the proposed legislation. These 14,475 active  members  had  an
 average age of approximately 56.1 years, average service of approximate-
 ly  22.4  years,  and  an  average salary of approximately $93,600. This
 group consisted of 14,465 Tier 4 members and 10 Tier 6 members.
   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,  2019
 (Lag) actuarial valuations used to determine the Preliminary Fiscal Year
 2021 employer contributions of NYCERS.
   RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
 highly on the realization of the actuarial assumptions used, as well  as
 certain  demographic  characteristics  of  NYCERS  and  other  exogenous
 factors such as investment, contribution, and  other  risks.  If  actual
 experience  deviates  from actuarial 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.
   Not measured in this Fiscal Note are the following:
       * The initial, additional administrative costs of NYCERS and other
       New York City agencies to implement the proposed legislation.
       *  The impact of this proposed legislation on Other Postemployment
       Benefit (OPEB) costs.
   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 2020-47 dated June 1,
 2020 was prepared by the Chief Actuary for the New York City  Employees'
 Retirement  System.  This  estimate  is intended for use only during the
 2020 Legislative Session.