S T A T E O F N E W Y O R K
________________________________________________________________________
8760
I N S E N A T E
July 14, 2020
___________
Introduced by Sen. SAVINO -- read twice and ordered printed, and when
printed to be committed to the Committee on Rules
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:
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
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10018-05-0
S. 8760 2
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
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
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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.
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-
S. 8760 4
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.
