S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8306
 
                             I N  S E N A T E
 
                               May 11, 2020
                                ___________
 
 Introduced by Sens. SAVINO, LANZA -- read twice and ordered printed, and
   when  printed  to  be  committed to the Committee on Civil Service and
   Pensions
 
 AN ACT to amend the administrative code of the  city  of  New  York,  in
   relation  to  extending  the benefits of the variable supplements fund
   for transit police members of the New York city employees'  retirement
   system

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1.  Paragraph (c) of subdivision 1 of section  13-191  of  the
 administrative  code  of the city of New York, as amended by chapter 577
 of the laws of 1992, is amended to read as follows:
   (c) "Beneficiary". Any person who receives a retirement  allowance  by
 reason  of  having  retired,  on  or after [July first, nineteen hundred
 eighty-seven] OCTOBER FIRST, NINETEEN HUNDRED  SIXTY-EIGHT  for  service
 (with  credit  for  twenty  or  more years of service toward the minimum
 period) as a transit police officer; provided, that no person who held a
 rank or position as a transit police superior  officer,  as  defined  in
 subdivision eighty-four of section 13-101 of this title who, on or after
 May  first,  nineteen  hundred ninety-two, subsequently became a transit
 police officer shall be considered a beneficiary unless such person  (1)
 subsequently  performed  at  least  three  years of service as a transit
 police officer  or  (2)  returned  to  service,  from  the  position  of
 sergeant,  as  a transit police officer during the eighteen month proba-
 tionary period, or such other probationary period as may  be  applicable
 or  (3) returned to service as a transit police officer during the three
 year period specified in paragraph (e) of  subdivision  one  of  section
 seventy-five  of  the civil service law, or (4) returned to service as a
 transit police officer as the result of a hearing conducted pursuant  to
 applicable law.
   § 2.  Paragraph (b) of subdivision 1 of section 13-192 of the adminis-
 trative  code  of the city of New York, as amended by chapter 720 of the
 laws of 1994, is amended to read as follows:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD15695-03-0

 S. 8306                             2
 
   (b) "Beneficiary". Any person who receives a retirement  allowance  by
 reason  of  having  retired,  on  or after [July first, nineteen hundred
 eighty-seven,] OCTOBER FIRST, NINETEEN HUNDRED SIXTY-EIGHT, for  service
 (with  credit  for  twenty  or  more years of service toward the minimum
 period)  as  a  transit  police  member and as a transit police superior
 officer; provided, however, that where a person who held or holds a rank
 or position as a transit police superior officer, subsequently and on or
 after May first, nineteen hundred ninety-two became or becomes a transit
 police officer, and while a transit police officer, retired  or  retires
 for service under such circumstances that he or she would have qualified
 as  a  beneficiary  under the provisions of paragraph (c) of subdivision
 one of section 13-191 of this title (other than  the  proviso  thereof),
 but  did  not  or does not qualify as a beneficiary under such paragraph
 (c) because he or she was or is disqualified by the terms of such provi-
 so, such retiree shall nevertheless be deemed to be a beneficiary  under
 the provisions of this section.
   § 3. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: This proposed legislation would amend Sections 13-191
 and  13-192  of the Administrative Code of the City of New York (ACCNY),
 both enacted by Chapter 844 of the Laws of 1987, to extend the eligibil-
 ity provisions providing for the payment of Transit Police Officers' and
 Transit Police Superior Officers' Variable Supplements Funds (VSF) bene-
 fits to certain retirees.
   Specifically, this proposed legislation would provide for payments  to
 former  New  York City Employees' Retirement System (NYCERS) members who
 are retired for service from the  New  York  City  Transit  Police  (TP)
 between  October  1,  1968 and June 30, 1987 (Prior Retirees) with 20 or
 more years of service. These benefits would be paid from  the  following
 VSFs (referred to hereafter as the Impacted VSFs):
   * Transit Police Officers' Variable Supplements Fund (TPOVSF), and
   *   Transit   Police  Superior  Officers'  Variable  Supplements  Fund
 (TPSOVSF).
   Effective Date: Upon enactment.
   IMPACT ON BENEFITS - VSF PAYMENTS: Each of the Impacted VSFs currently
 provides supplemental non-pension benefits to former NYCERS members  who
 retired for service on or after July 1, 1987 as TP with 20 or more years
 of service.
   The  amount  of  VSF  benefits  paid is currently $12,000 per Calendar
 Year.
   These VSF benefits are payable on an annual basis around December 15th
 to eligible former NYCERS members for  their  lifetimes.  There  are  no
 optional  forms  of  payment.  Upon the death of the NYCERS retiree, VSF
 payments cease.
   If the proposed legislation were to be  enacted,  all  Prior  Retirees
 would  become immediately eligible for VSF benefits on the December 15th
 subsequent to the Effective Date and for each year thereafter.
   For the purposes of this Fiscal Note, the  Actuary  has  assumed  that
 benefits  payable  under  this proposed legislation are prospective only
 (i.e. there would be no retroactive payments for VSF benefits due before
 the Effective Date for such Prior Retirees).
   FINANCIAL IMPACT - PRESENT VALUES: Based on the census  data  and  the
 actuarial  assumptions  and  methods  noted herein, the enactment of the
 proposed legislation would increase the Present Value of Future Benefits
 (PVFB) of the Impacted VSFs by approximately $30.2 million  as  of  June
 30, 2019.

 S. 8306                             3
 
   There  are  no  active  TP members of NYCERS and therefore there is no
 mechanism in place for funding the TP VSFs since the VSFs' funding allo-
 cation method normally would be based on the ratio of active  TP  member
 salaries  to salaries of all active members in NYCERS. As a consequence,
 a  transfer  from NYCERS to the Impacted VSFs would be necessary to fund
 the additional VSF benefit obligations.
   FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS: In accordance with  Section
 13-638.2(k2) 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 amor-
 tized over the remaining working lifetime of those impacted by the bene-
 fit changes.
   For the purposes of this Fiscal Note, since those that  would  benefit
 are  retired,  and  therefore  have  no  remaining working lifetime, the
 entire increase in UAL (or PVFB) of $30.2 million  would  be  recognized
 immediately.
   CONTRIBUTION  TIMING:  For  the  purposes  of  this Fiscal Note, it is
 assumed that the first VSF benefit payment would be  made  in  December,
 2020  and therefore, changes in the PVFB, and UAL would be reflected for
 the first time in the June 30, 2019 actuarial valuation  of  NYCERS.  In
 accordance  with  the  One-Year Lag Methodology (OYLM) used to determine
 employer contributions, the increase in employer contributions would  be
 reflected in Fiscal Year 2021.
   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.
   The 414 Prior Retirees as of June 30,  2019  had  an  average  age  of
 approximately 78.9 years.
   ACTUARIAL  ASSUMPTIONS  AND  METHODS:  The changes in the PVFB and UAL
 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 contrib-
 utions 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 initial, additional  adminis-
 trative  costs  of  NYCERS 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

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 and procedures and with the Actuarial Standards of  Practice  issued  by
 the Actuarial Standards Board.
   FISCAL  NOTE  IDENTIFICATION: This Fiscal Note 2020-27 dated April 15,
 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.