S T A T E O F N E W Y O R K
________________________________________________________________________
9620
I N A S S E M B L Y
March 28, 2022
___________
Introduced by M. of A. ABBATE -- read once and referred to the Committee
on Governmental Employees
AN ACT to amend the education law, in relation to providing for the
automatic enrollment of employees of the city of New York eligible to
join the New York city board of education retirement system
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraph (b) of subdivision 18 of section 2575 of the
education law, as added by chapter 536 of the laws of 1986, is amended
to read as follows:
(b) (1) Notwithstanding the provisions of paragraph (a) of subdivision
one of this section or any provision of the rules and regulations or any
other provision of law to the contrary, membership in the board of
education retirement system shall include any provisional employee in
education service who elects to become a member in the manner prescribed
by the applicable provisions of subparagraph two [or], subparagraph
three OR SUBPARAGRAPH FOUR of this paragraph.
(2) Any such provisional employee who is not a member of the New York
city employees' retirement system at the time he or she elects to become
a member of the board of education retirement system may make such an
election of membership by filing with the board of education retirement
system a duly executed and acknowledged application for membership.
(3) Any such provisional employee who is a member of the New York city
employees' retirement system at the time he or she elects to become a
member of the board of education retirement system may make such an
election of membership by filing simultaneously with the board of educa-
tion retirement system a duly executed and acknowledged application for
membership and a duly executed and acknowledged request that his or her
membership and service credit in the New York city employees' retirement
system be transferred to the board of education retirement system.
(4)(I) BEGINNING JULY FIRST, TWO THOUSAND TWENTY-THREE, UPON THE ENTRY
INTO EMPLOYMENT OF ANY EMPLOYEE ELIGIBLE TO ELECT MEMBERSHIP IN THE
RETIREMENT SYSTEM PURSUANT TO SUBPARAGRAPHS ONE, TWO AND THREE OF THIS
PARAGRAPH OR ANY OTHER APPLICABLE PROVISION OF LAW, AND PROVIDED SUCH
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11454-06-2
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EMPLOYEE IS NOT A MEMBER IN THE RETIREMENT SYSTEM OR ANY OTHER PUBLIC
RETIREMENT SYSTEM OF THE CITY OR STATE OF NEW YORK AS OF SUCH ENTRY DATE
IN COVERED EMPLOYMENT, SUCH EMPLOYEE SHALL BE ENROLLED IN THE RETIREMENT
SYSTEM EFFECTIVE NINETY-ONE DAYS AFTER THE COMMENCEMENT OF EMPLOYMENT.
NOTWITHSTANDING THE PRECEDING, IF SUCH EMPLOYEE FILES WITH THE RETIRE-
MENT SYSTEM AN APPLICATION TO OPT OUT OF MEMBERSHIP WITHIN NINETY DAYS
AFTER COMMENCEMENT OF EMPLOYMENT, THE RETIREMENT SYSTEM SHALL REFRAIN
FROM ENROLLING SUCH EMPLOYEE UNLESS AND UNTIL SUCH EMPLOYEE SUBSEQUENTLY
FILES AN APPLICATION FOR MEMBERSHIP WITH THE RETIREMENT SYSTEM, OR IS
OTHERWISE SUBSEQUENTLY MANDATED TO ENROLL BY THE RULES AND REGULATIONS
OF THE RETIREMENT SYSTEM OR ANY APPLICABLE LAW. THE EMPLOYER AND THE
APPLICABLE UNION FOR THE RETIREMENT SYSTEM SHALL JOINTLY PROVIDE WRITTEN
NOTICE TO THE EMPLOYEE INFORMING THE EMPLOYEE THAT HE OR SHE HAS THE
OPTION TO OPT OUT OF THE AUTOMATIC ENROLLMENT PROGRAM. SUCH NOTICE SHALL
BE PROVIDED TO THE EMPLOYEE ON THREE OCCASIONS: ON OR BEFORE THE THIRTI-
ETH DAY, THE SIXTIETH DAY AND THE NINETIETH DAY PRIOR TO AUTOMATIC
ENROLLMENT IN THE RETIREMENT SYSTEM. THE AUTOMATIC ENROLLMENT OF ELIGI-
BLE EMPLOYEES AS PROVIDED FOR IN THIS SUBPARAGRAPH SHALL NOT BE
CONSTRUED TO MODIFY THE RIGHT OF ELIGIBLE EMPLOYEES TO JOIN THE RETIRE-
MENT SYSTEM AS OF THE FIRST DATE OF COVERED EMPLOYMENT BY FILING AN
APPLICATION FOR MEMBERSHIP WITH THE RETIREMENT SYSTEM. THE EMPLOYER
SHALL INFORM THE EMPLOYEE IN WRITING OF THE RIGHT TO JOIN THE SYSTEM AS
WELL AS THE FACT THAT THE EMPLOYEE SHALL BE ENROLLED IN THE RETIREMENT
SYSTEM ON THE NINETY-FIRST DAY AFTER COMMENCEMENT OF EMPLOYMENT, UNLESS
SUCH EMPLOYEE FILES WITH THE RETIREMENT SYSTEM AN APPLICATION TO OPT OUT
OF MEMBERSHIP PRIOR TO SUCH DATE. ANY ELIGIBLE EMPLOYEE WHO ELECTS TO
OPT OUT OF MEMBERSHIP IN THE RETIREMENT SYSTEM WITHIN THE NINETY DAY
PERIOD SHALL RETAIN THE RIGHT TO JOIN SUCH SYSTEM BY SUBSEQUENTLY FILING
AN APPLICATION FOR MEMBERSHIP SO LONG AS SUCH EMPLOYEE REMAINS IN
COVERED EMPLOYMENT.
(II) EVERY CURRENT EMPLOYEE WHO IS ELIGIBLE FOR MEMBERSHIP IN THE
RETIREMENT SYSTEM ON JULY FIRST, TWO THOUSAND TWENTY-THREE, AND WHO IS
NOT A MEMBER IN THE RETIREMENT SYSTEM OR ANY OTHER PUBLIC RETIREMENT
SYSTEM OF THE CITY OR STATE OF NEW YORK, SHALL BE ENROLLED IN THE
RETIREMENT SYSTEM EFFECTIVE OCTOBER FIRST, TWO THOUSAND TWENTY-THREE,
UNLESS SUCH EMPLOYEE FILES WITH THE RETIREMENT SYSTEM AN APPLICATION TO
OPT OUT OF MEMBERSHIP BEFORE OCTOBER FIRST, TWO THOUSAND TWENTY-THREE.
SUCH AUTOMATIC ENROLLMENT IN THE RETIREMENT SYSTEM SHALL NOT BE
CONSTRUED TO WAIVE ANY OF THE ELIGIBILITY REQUIREMENTS FOR PREVIOUS
SERVICE CREDIT.
(III) THE AUTOMATIC ENROLLMENT OF ELIGIBLE EMPLOYEES AS PROVIDED FOR
IN THIS SUBPARAGRAPH SHALL NOT BE CONSTRUED TO MODIFY THE RIGHTS AND
OBLIGATIONS OF ANY EMPLOYEE WHOSE PARTICIPATION IN THE RETIREMENT SYSTEM
IS MANDATED BY THE RULES AND REGULATIONS OF THE RETIREMENT SYSTEM OR ANY
APPLICABLE LAW, AND SUCH MANDATED MEMBERS MAY NOT OPT OUT OF MEMBERSHIP.
(IV) IF AN EMPLOYEE WHO IS AUTOMATICALLY ENROLLED IN THE RETIREMENT
SYSTEM PURSUANT TO THE PROVISIONS OF THIS PARAGRAPH IS A MEMBER OF A
UNION, THE RETIREMENT SYSTEM SHALL PROVIDE WRITTEN NOTICE TO THE UNION
OF THE EMPLOYEE'S ENROLLMENT WITHIN THIRTY DAYS OF THE EMPLOYEE'S
ENROLLMENT IN THE RETIREMENT SYSTEM.
(V) THE PROVISIONS OF THIS SUBPARAGRAPH SHALL APPLY TO FULL-TIME
EMPLOYEES AND PART-TIME EMPLOYEES. THE PROVISIONS OF THIS SUBPARAGRAPH
SHALL NOT APPLY TO PROVISIONAL EMPLOYEES.
§ 2. Paragraph (f) of subdivision 18 of section 2575 of the education
law, as added by chapter 749 of the laws of 1992, is amended to read as
follows:
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(f) Notwithstanding the provisions of paragraph (a) of subdivision one
of this section or any provision of the rules and regulations or any
other provision of law to the contrary, membership in the board of
education retirement system shall include any person employed by the New
York city police department in the title of school crossing guard who
becomes a member in the manner prescribed by the provisions of subdivi-
sion g of section 13-638.4 of the administrative code of the city of New
York OR BY THE PROVISIONS OF SUBPARAGRAPH FOUR OF PARAGRAPH (B) OF THIS
SUBDIVISION.
§ 3. This act shall take effect July 1, 2023. Effective immediately
the addition, amendment and/or repeal of any rule or regulation neces-
sary for the implementation of this act on its effective date are
authorized to be made and completed on or before such date.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: This proposed legislation would amend Section 2575 of
the Education Law to require certain new and existing New York City
Board of Education Retirement System (BERS) eligible employees, who are
non-provisional, not currently mandated to join BERS, and who are not
otherwise already a member in a public retirement system within the
State, to be enrolled into BERS membership within stated time periods
unless the employees timely opt out of such membership.
Under current law, certain BERS eligible employees, including provi-
sional employees in competitive or labor class titles and employees in
non-competitive and exempt class titles, have the option of joining BERS
by filing an application for membership at any time during employment
with a BERS participating employer. Permanent employees in the compet-
itive or labor class, who are employed in BERS eligible positions, are
currently mandated into BERS membership.
The proposed legislation would require BERS to enroll new non-provi-
sional and non-permanent eligible employees (e.g., non-competitive and
exempt class titles) into BERS membership, within 90 days of employment,
unless the employee files an application with BERS to opt out of member-
ship within the 90-day period. An existing non-provisional and non-per-
manent eligible employee who is not already a BERS member will be
enrolled as a BERS member on October 1, 2023, unless such employee files
an application with BERS to opt out of membership by September 30, 2023.
A BERS eligible employee who timely opts out of BERS automatic enroll-
ment may still join BERS at any time during employment with a partic-
ipating employer upon the filing of an application. A BERS eligible
employee who would be subject to automatic enrollment may voluntarily
join BERS prior to the automatic enrollment date. The proposed legis-
lation would have no effect on employees who are, under existing
provisions of law, required to become BERS members.
The proposed legislation also requires BERS participating employers
and affected unions to provide multiple scheduled written notices of the
applicable provisions to new employees and requires BERS to provide
written notice to the employee's union within 30 days of the employee's
enrollment into BERS.
Effective Date: July 1, 2023.
FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: If enacted into law,
the ultimate employer cost for this proposed legislation would be based
on the number, ages, years of service, and salary of those employees
that would have otherwise not elected to become members of BERS.
Based on the data and these statistics herein, and assuming no BERS
eligible employee opts out of participation, the Office of the Actuary
(OA) has estimated the following costs for this legislation:
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* The additional annual employer contribution will be $12.9 million if
no prior years of service are purchased by these individuals.
* The additional annual employer contribution will be $19.7 million if
all years of prior service eligible for buyback are purchased by these
individuals.
Note that the first year's additional annual employer contribution
will likely be significantly larger than these amounts due to the accel-
eration of membership for certain individuals. However, the present
value of the future liabilities for each of these respective contrib-
ution streams does not change.
Finally, for purposes of determining the portion of the annual employ-
er contribution attributable to the buyback of prior service, we have
assumed an amortization period of 15 years (14 payments under the One-
Year Lag Methodology used in the actuarial valuation).
CONTRIBUTION TIMING: For the purposes of this Fiscal Note, it is
assumed that since the proposed legislation requires BERS to enroll all
existing eligible employees (who are not already members and who do not
opt out) into BERS on October 1, 2023, the increase in employer contrib-
utions for BERS could be first reflected as early as in Fiscal Year
2025.
CENSUS DATA: The estimates presented herein are based on information
provided by BERS for 19,644 individuals who are non-provisional and not
currently members of BERS, but could voluntarily elect to participate.
This group consists of 18,306 part-time and 1,338 full-time employees,
is 71% female, and has an average age of 36.6 years, average annual
salary of approximately $31,700, and average service since date of hire
of 4.5 years.
The OA was advised that employees in Payroll Codes 056, 744, 745, 746,
and 747 work part-time and earned 0.67 years, 0.28 years, 0.78 years,
0.68 years, and 0.05 years of service per year on average, respectively.
Employees in Payroll Codes 740 and 742 are generally full-time employ-
ees.
Finally, the OA was advised that approximately 55% of eligible employ-
ees who are not currently BERS members are assumed to eventually join
BERS. These assumptions are reflected in the OA's calculations.
ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the Present Value of
future employer contributions and annual employer contributions
presented herein have been calculated based on the actuarial assumptions
and methods in effect for the June 30, 2021 (Lag) actuarial valuations
used to determine the Preliminary Fiscal Year 2023 employer contrib-
utions of BERS.
These estimates assume that the fractional years of service as
described above remains unchanged in the future. These estimates also
assume a level workforce (i.e., the number, salary, age, and service
characteristics of the added group remain approximately the same in
future years).
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 BERS 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 meth-
ods 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:
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* The potential savings to other New York City Retirement Systems and
Pension Funds (NYCRS) as the result of these employees becoming members
in BERS instead of another NYCRS.
* The initial, additional administrative costs of BERS and other New
York City agencies to implement the proposed legislation.
* The impact of this proposed legislation on Other Postemployment
Benefit (OPEB) costs.
* The cost of potential Tax-Deferred Annuity (TDA) plan participation
and benefits.
STATEMENT OF ACTUARIAL OPINION: I, Michael J. Samet, am the Interim
Chief Actuary for, and independent of, the New York City Retirement
Systems and Pension Funds. I am a Fellow of the Society of Actuaries and
a Member of the American Academy of 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 2022-04 dated March 17,
2022 was prepared by the Interim Chief Actuary for the New York City
Board of Education Retirement System. This estimate is intended for use
only during the 2022 Legislative Session.