S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6663
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 23, 2021
                                ___________
 
 Introduced  by  M.  of  A.  ABBATE  -- (at request of the New York State
   Teachers' Retirement System) -- read once and referred to the  Commit-
   tee on Governmental Employees
 
 AN  ACT  to amend the retirement and social security law, in relation to
   the maximum amount certain members of the  New  York  state  teachers'
   retirement  system  may borrow against retirement contributions and to
   making technical corrections thereto
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision a of section 517-b of the retirement and social
 security law, as added by chapter 919 of the laws of 1990, is amended to
 read as follows:
   a.  1. A member of a teachers' retirement system in active service who
 has credit for at least one year of member service may borrow,  no  more
 than  once  during  each  twelve-month  period,  an amount not exceeding
 seventy-five percent of the total contributions made pursuant to section
 five hundred seventeen of this article (including interest  credited  at
 the  rate  set  forth in subdivision c of section five hundred seventeen
 compounded annually) and not less than one thousand dollars.
   2. A MEMBER OF THE NEW YORK  STATE  TEACHERS'  RETIREMENT  SYSTEM  WHO
 FIRST  JOINS SUCH SYSTEM ON OR AFTER JULY FIRST, TWO THOUSAND TWENTY-TWO
 IN ACTIVE SERVICE AND WHO HAS CREDIT FOR AT LEAST  ONE  YEAR  OF  MEMBER
 SERVICE  MAY  BORROW, NO MORE THAN ONCE DURING EACH TWELVE-MONTH PERIOD,
 AN AMOUNT, NOT LESS THAN ONE THOUSAND DOLLARS AND WHICH WOULD NOT  CAUSE
 THE  BALANCE  OWED  PURSUANT  TO  THIS  SECTION,  INCLUDING  ANY AMOUNTS
 BORROWED THEN OUTSTANDING TO EXCEED (I) FIFTY PERCENT  OF  THE  MEMBER'S
 TOTAL  CONTRIBUTIONS  MADE PURSUANT TO SECTION FIVE HUNDRED SEVENTEEN OF
 THIS ARTICLE (INCLUDING INTEREST CREDITED  AT  THE  RATE  SET  FORTH  IN
 SUBDIVISION  C OF THIS SECTION COMPOUNDED ANNUALLY); OR (II) FIFTY THOU-
 SAND DOLLARS, WHICHEVER IS LESS.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10603-01-1
              

 A. 6663                             2
 
   § 2. Subdivision a of section 613-a of the retirement and social secu-
 rity law, as added by chapter 919 of the laws of  1990,  is  amended  to
 read as follows:
   a.  1. A member of a teachers' retirement system in active service who
 has credit for at least one year of member service may borrow,  no  more
 than  once  during  each  twelve-month  period,  an amount not exceeding
 seventy-five percent of the total contributions made pursuant to section
 six hundred thirteen of this article (including interest credited at the
 rate set  forth  in  subdivision  c  of  section  six  hundred  thirteen
 compounded annually) and not less than one thousand dollars.
   2.  A  MEMBER  OF  THE  NEW YORK STATE TEACHERS' RETIREMENT SYSTEM WHO
 FIRST JOINS SUCH SYSTEM ON OR AFTER JULY FIRST, TWO THOUSAND  TWENTY-TWO
 IN  ACTIVE  SERVICE  AND  WHO HAS CREDIT FOR AT LEAST ONE YEAR OF MEMBER
 SERVICE MAY BORROW, NO MORE THAN ONCE DURING EACH  TWELVE-MONTH  PERIOD,
 AN  AMOUNT, NOT LESS THAN ONE THOUSAND DOLLARS AND WHICH WOULD NOT CAUSE
 THE BALANCE  OWED  PURSUANT  TO  THIS  SECTION,  INCLUDING  ANY  AMOUNTS
 BORROWED  THEN  OUTSTANDING, TO EXCEED (I) FIFTY PERCENT OF THE MEMBER'S
 TOTAL CONTRIBUTIONS MADE PURSUANT TO SECTION  SIX  HUNDRED  THIRTEEN  OF
 THIS  ARTICLE  (INCLUDING  INTEREST  CREDITED  AT  THE RATE SET FORTH IN
 SUBDIVISION C OF THIS SECTION COMPOUNDED ANNUALLY); OR (II) FIFTY  THOU-
 SAND DOLLARS, WHICHEVER IS LESS.
   §  3.  Paragraph 2 of subdivision b of section 613-b of the retirement
 and social security law, as added by chapter 303 of the laws of 2017, is
 amended to read as follows:
   2. A member of the New York  state  and  local  employees'  retirement
 system  who first joins such system on or after January first, two thou-
 sand eighteen in active service who has credit for at least one year  of
 member  service  may  borrow, no more than once during each twelve month
 period, an amount, not less than one thousand dollars  and  which  would
 not  cause  the  balance  owed  pursuant  to this section, including any
 amounts borrowed then outstanding, to exceed (i) fifty  percent  of  the
 member's total contributions made pursuant to section [five] SIX hundred
 [seventeen] THIRTEEN of this [chapter] ARTICLE (including interest cred-
 ited  at  the rate set forth in subdivision c of such section [five] SIX
 hundred [seventeen] THIRTEEN compounded annually); or (ii)  fifty  thou-
 sand dollars, whichever is less.
   §  4.  Paragraph  2 of subdivision a of section 1207 of the retirement
 and social security law, as added by chapter 303 of the laws of 2017, is
 amended to read as follows:
   2. A member who first joins such system on or after January first, two
 thousand eighteen in active service who has credit for at least one year
 of member service may borrow, no more than once during each twelve month
 period, an amount, not less than one thousand dollars  and  which  would
 not  cause  the  balance  owed  pursuant  to this section, including any
 amounts borrowed then outstanding, to exceed (i) fifty  percent  of  the
 member's  total  contributions  made  pursuant  to section [five] TWELVE
 hundred [seventeen] FOUR of this [chapter] ARTICLE  (including  interest
 credited  at  the rate set forth in subdivision c of [such] THIS section
 [five hundred seventeen] compounded annually); or  (ii)  fifty  thousand
 dollars, whichever is less.
   §  5.  This act shall take effect immediately; provided, however, that
 sections three and four of this act shall be deemed to have been in full
 force and effect on and after September 12, 2017.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would amend Section 517-b and Section 613-a of  the  Retire-
 ment  and  Social Security Law to limit the amount of a loan that can be

 A. 6663                             3
 
 taken by members of the New York State Teachers' Retirement  System  who
 first  join  such  system  on  or  after  July 1, 2022. The loan amount,
 including the balances of any outstanding loans, may  not  exceed  fifty
 percent  of  the members' total contributions made including interest or
 fifty thousand dollars, whichever is less. Members who joined  prior  to
 July  1,  2022  will  continue to have the current limit of seventy-five
 percent of their total member contributions plus interest. Additionally,
 a member must have one year of service to be eligible to  take  a  loan,
 the  loan  amount  may  not  be  less than one thousand dollars and such
 member may borrow no more than once in a twelve-month period.
   It is estimated that there will be no annual cost to the employers  of
 members  of  the New York State Teachers' Retirement System if this bill
 is enacted, and in fact this bill would reduce the likelihood of members
 hired on or after July 1, 2022 from defaulting on large loan balances at
 retirement, thereby helping to protect the main purpose of  the  retire-
 ment fund - to provide monthly pensions.
   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 2021-2  dated  October  14,
 2020  prepared by the Actuary of the New York State Teachers' Retirement
 System and is intended for use only during the 2021 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.