S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  1866--B
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             January 17, 2019
                                ___________
 
 Introduced  by Sens. BRESLIN, ADDABBO, FUNKE, HARCKHAM -- read twice and
   ordered printed, and when printed to be committed to the Committee  on
   Civil  Service  and  Pensions  --  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 retirement and social security law, in  relation  to
   increasing the retiree earnings cap
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision 2 of section 212 of the retirement  and  social
 security  law,  as amended by chapter 74 of the laws of 2006, is amended
 to read as follows:
   2. The earning limitations for retired persons in positions of  public
 service  under  this  section  shall be in accordance with the following
 table:
 
         For the year                               Earnings limitation
         1996                                       $12,500
         1997                                       $13,500
         1998                                       $14,500
         1999                                       $15,500
         2000                                       $17,000
         2001                                       $18,500
         2002                                       $20,000
         2003                                       $25,000
         2004                                       $27,500
         2005 and 2006                              $27,500
         2007 [and thereafter] THROUGH 2019         $30,000
         2020 AND THEREAFTER                        $35,000
   § 2. This act shall take effect immediately.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD00537-07-9

 S. 1866--B                          2
 
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This  bill  would amend subdivision 2 of section 212 of the Retirement
 and Social Security Law to increase the earnings limitation for  retired
 members  in  positions  of public employment to $35,000 for the calendar
 year 2020 and thereafter. The earnings limitation for the calendar  year
 2019 is $30,000.
   The  annual  cost  to  the  employers of members of the New York State
 Teachers' Retirement System is estimated to be negligible if  this  bill
 is enacted.
   Member  data  is  from  the  System's  most recent actuarial valuation
 files, consisting of data provided by the employers  to  the  Retirement
 System.   Data distributions and statistics can be found in the System's
 Comprehensive Annual Financial  Report  (CAFR).  System  assets  are  as
 reported  in the System's financial statements, and can also be found in
 the CAFR. Actuarial assumptions and methods are provided in the System's
 Actuarial Valuation Report.
   The source of this estimate is Fiscal Note 2019-9  dated  January  15,
 2019  prepared by the Actuary of the New York State Teachers' Retirement
 System and is intended for use only during the 2019 Legislative Session.
 I, Richard A. Young, am the Actuary for the  New  York  State  Teachers'
 Retirement  System.  I  am a member of the American Academy of Actuaries
 and I meet the Qualification Standards of the American Academy of  Actu-
 aries to render the actuarial opinion contained herein.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill will amend Section 212 of the Retirement and Social Security
 Law  to  set  the  amount a retired person may earn in public employment
 without reduction in retirement allowance during the year 2020 and ther-
 eafter to $35,000.
   If this bill is enacted during the 2019 legislative  session,  insofar
 as  it  would  affect the New York State and Local Employees' Retirement
 System and the New York State  and  Local  Police  and  Fire  Retirement
 System,  the resulting 16.7% increase over the current $30,000 limit, in
 place since 2007, is less than the increase in the consumer price  index
 over  the  same  period  and  thus would not affect retirement patterns.
 Therefore, the annual cost is estimated to be negligible.
   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.
   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 23,  2019,  and  intended  for  use  only
 during  the  2019  Legislative  Session,  is  Fiscal  Note  No. 2019-34,

 S. 1866--B                          3
 
 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 Retirement and
 Social Security Law (RSSL) Section 212 to increase the earnings limit of
 certain New York City Retirement Systems and Pension Funds (NYCRS) reti-
 rees who return to Public Service.
   Effective Date: Upon enactment.
   IMPACT ON BENEFITS: Retirees who return to Public Service and elect to
 be covered under the provisions of RSSL Section  212  are  permitted  to
 earn  an amount not exceeding a specific dollar limit in a calendar year
 without loss, suspension, or diminution of their retirement  allowances.
 Once  this  dollar  limit is reached, the retiree's pension is suspended
 for the remainder of that calendar year. Generally, there are  no  earn-
 ings  limitations in, or following, the calendar year in which the reti-
 ree attains age 65.
   Currently, the dollar limitation in effect for Calendar Year 2007  and
 thereafter is $30,000.
   Under the proposed legislation, if enacted, the RSSL Section 212 post-
 retirement  Public  Service  earnings  limitation  would be increased to
 $35,000 for Calendar Year 2020 and thereafter.
   FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS:  The  Actuary  esti-
 mates  that the potential impact of the proposed legislation would be to
 increase pension payments in  Calendar  Year  2020  from  the  NYCRS  by
 approximately  $310,000.  In  accordance with Administrative Code of the
 City of New York (ACCNY) Section  13-638.2(k-2),  new  Unfunded  Accrued
 Liability  (UAL)  attributable to benefit changes are to be amortized as
 determined by the Actuary but generally over the remaining working life-
 time of those impacted by the benefit changes. However, since changes in
 the applicable retirement allowances paid to the NYCRS  retired  members
 under  this  proposed legislation are not known in advance, the increase
 in pension payments due to this legislation has been treated as an actu-
 arial loss. These actuarial losses were amortized over a 15-year  period
 (14  payments  under  the  One-Year  Lag Methodology (OYLM)) using level
 dollar payments for the purpose of this Fiscal Note.
   Overall, the Actuary believes the changes in employer contributions to
 the NYCRS as a result of enactment of the proposed legislation would  be
 approximately $37,000 in the first year. Future years' costs in addition
 to  the  aforementioned  cost  would  depend on factors such as, but not
 limited to, the number of retirees that benefit under the legislation.
   OTHER COSTS: Not measured in this Fiscal Note are the following:
   * The initial, additional administrative costs of the NYCRS 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  changes  in the UAL would be reflected for the first
 time in the June 30, 2020 actuarial valuations of the NYCRS. In  accord-
 ance  with  the  OYLM  used  to  determine  employer  contributions, the
 increase in employer contributions would first be  reflected  in  Fiscal
 Year 2022.
   CENSUS  DATA:  For  purposes  of  analyzing the impact of the proposed
 legislation, data on retirees reemployed in Public Service was furnished
 by the NYCRS. This data averaged over the past five years was considered
 illustrative of those who could potentially be impacted by this proposed
 legislation. The average for calendar years 2013 to 2017 of  the  number

 S. 1866--B                          4
 
 of  retirees  that  would  benefit  from  this  proposal legislation was
 approximately 90.
   ACTUARIAL  ASSUMPTIONS  AND  METHODS:  The  changes  in  the  employer
 contributions presented herein have been calculated based on the actuar-
 ial assumptions and methods in effect for the June 30, 2018 (Lag)  actu-
 arial  valuations  used  to  determine  the Preliminary Fiscal Year 2020
 employer contributions of the NYCRS.
   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  2019-20  dated  May  16,
 2019  was prepared by the Chief Actuary for the New York City Employees'
 Retirement System, the New York City Teachers'  Retirement  System,  the
 New  York  City  Board of Education Retirement System, the New York City
 Police Pension Fund, and the New York City Fire Pension Fund. This esti-
 mate is intended for use only during the 2019 Legislative Session.