S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5165--A
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              April 12, 2019
                                ___________
 
 Introduced  by  Sen. HOYLMAN -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
   -- recommitted to the Committee  on  Civil  Service  and  Pensions  in
   accordance  with  Senate  Rule 6, sec. 8 -- committee discharged, bill
   amended, ordered reprinted as amended and recommitted to said  commit-
   tee
 
 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.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD02534-03-0

 S. 5165--A                          2
 
   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
 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 $48,675.
   If the proposed legislation is passed, Ms. Falletta would be reclassi-
 fied as a 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 to
 fund the increased retirement allowance  associated  with  the  proposed
 legislation, less any required member contributions paid by Ms.  Fallet-
 ta, 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 $65,254. 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 $318,000.
   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.
   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, 2020 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 2022.
   CENSUS  DATA:  As of June 30, 2019, Ms. Falletta was approximately age
 70, and receiving a pension  of  $48,675  per  year  under  the  maximum
 payment option.

 S. 5165--A                          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 realization of the actuarial assumptions used, as well  as
 certain  demographic  characteristics  of  the  Plan 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 TRS and other New
 York City agencies to implement the proposed legislation.
   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 2020-03 dated February 6,
 2020  was  prepared by the Chief Actuary for the New York City Teachers'
 Retirement System. This estimate is intended for  use  only  during  the
 2020 Legislative Session.