S T A T E   O F   N E W   Y O R K
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                                  4768--A
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             February 11, 2021
                                ___________
 
 Introduced  by  Sens.  GRIFFO, AKSHAR -- read twice and ordered printed,
   and when printed to be committed to the Committee on Civil Service and
   Pensions -- committee discharged, bill amended, ordered  reprinted  as
   amended and recommitted to said committee
 
 AN  ACT  to  authorize  members  of the New York state and New York city
   teachers' retirement systems and the New York state and local  employ-
   ees'  retirement system to claim retirement credit for certain private
   school teaching service
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Notwithstanding any other provision of law, a member of the
 New  York  state teachers' retirement system or the New York city teach-
 ers' retirement system, or any member of the New York  state  and  local
 employees'  retirement  system  who  is employed by a school district, a
 board of cooperative educational services, a  vocational  education  and
 extension  board,  an  institution  for  the instruction of the deaf and
 blind as enumerated in section 4201 of the education  law  or  a  school
 district  as enumerated in section 1 of chapter 566 of the laws of 1967,
 or who is employed by the state of New York as an institutional  teacher
 as defined by section 136 of the civil service law, shall be entitled to
 obtain  credit  for  up  to  five years of service rendered as a teacher
 employed by a private elementary or secondary school within the state of
 New York chartered by or registered with the board of regents, or  in  a
 private  college within the state of New York authorized by the board of
 regents to grant degrees, which would constitute service as  a  teacher,
 had  it  been performed within New York state for an employer subject to
 the applicable provisions of law governing such retirement system.
   § 2. The crediting of service pursuant to this act shall be in accord-
 ance with such rules and regulations as shall be adopted by the  retire-
 ment  board  of  the  New  York  state  teachers' retirement system, the
 retirement board of the New York city teachers' retirement system or the
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD04353-03-1

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 state comptroller, as appropriate, provided that such  rules  and  regu-
 lations  shall  be substantially equivalent to the rules and regulations
 otherwise applicable for the crediting of service pursuant to applicable
 provisions  of  law  governing each such retirement system, and provided
 further that if such provisions have not expired such member  makes  the
 applicable  payments required pursuant to the provisions of sections 517
 and 613, and paragraph 2 of subdivision b of section 609 of the  retire-
 ment and social security law.
   §  3. The service credit granted pursuant to this act shall constitute
 service for the purpose of  both  computing  the  pension  payable  upon
 retirement  for  service  and in determining the total length of service
 credited for the purpose of eligibility for a service  retirement  bene-
 fit,  but  shall not be used in computing final average salary. Provided
 further, no such credit shall be allowed for any service for  which  the
 person  is  receiving a benefit or will be entitled to receive a benefit
 at any future time from any other public or private retirement system or
 plan in this state, any other state or from the federal government.
   § 4. This act shall take effect June 30, 2021. 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 effective date.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would allow members of certain public retirement systems who
 are  currently  employed  by  a  school district, a board of cooperative
 educational services, a vocational education  and  extension  board,  an
 institution  for  the  deaf  and blind or as an institutional teacher to
 receive up to five years of service credit  in  such  public  retirement
 systems  for  employment  as  a  teacher  in private schools in New York
 State.  However, credit will not be provided for any service  for  which
 the member is receiving a benefit or will be entitled to receive a bene-
 fit  at  any  future  time  from  any other public or private retirement
 system or plan in this state,  any  other  state  or  from  the  federal
 government.
   The  additional  service  credit  granted  pursuant to this bill shall
 constitute service credit for the purpose of computing the pension paya-
 ble upon retirement and shall be used to  determine  eligibility  for  a
 service  benefit. For certain members, contributions will be required in
 order to obtain such additional service credit. Each such member will be
 required to make a payment of 3% (6% for Tier 6) of current compensation
 per year of additional service credit granted pursuant to this bill.
   Insofar as it would affect the New York  State  and  Local  Employees'
 Retirement  System (ERS), if this bill is enacted during the 2021 legis-
 lative session, it is estimated that the past service cost will  average
 approximately  15% (12% for Tier 6) of an affected member's compensation
 for each year of additional service credit that is purchased.
   The exact number of current members as  well  as  future  members  who
 could be affected by this bill cannot be readily determined. Pursuant to
 Section  25 of the Retirement and Social Security Law, those costs aris-
 ing in ERS would be borne solely by the State of New York.
   Internal Revenue Service (IRS)  plan  qualification  issues:  granting
 service  credit  for  employment  rendered  to any organization that may
 potentially be considered a non-governmental or private  employer,  such
 as  certain  types  of  educational institutions described in this bill,
 could jeopardize the Retirement System's governmental  plan  status  and
 its  exemption  from ERISA. This development could result in the loss of
 qualified status, which would mean the loss of tax benefits. This result

 S. 4768--A                          3
 
 would substantially impair the System's  value  to  our  more  than  one
 million participants.
   Prior  to  the  enactment  of this bill, we recommend that a favorable
 ruling be obtained from the IRS stating that these provisions would  not
 harm  the  qualification  status of the System. It is estimated that the
 costs to obtain such a ruling would be $28,000 for the services  of  the
 IRS, and $800 per hour for legal consultants.
   Summary of relevant resources:
   Membership  data as of March 31, 2020 was used in measuring the impact
 of the proposed change, the same data used in the April 1, 2020 actuari-
 al valuation. Distributions and other statistics can  be  found  in  the
 2020  Report  of the Actuary and the 2020 Comprehensive Annual Financial
 Report.
   The actuarial assumptions and methods used are described in  the  2020
 Annual  Report  to  the  Comptroller  on  Actuarial Assumptions, and the
 Codes, Rules and Regulations  of  the  State  of  New  York:  Audit  and
 Control.
   The Market Assets and GASB Disclosures are found in the March 31, 2020
 New  York  State  and  Local  Retirement System Financial Statements and
 Supplementary Information.
   I am a member of the American Academy of Actuaries and meet the Quali-
 fication Standards to render the actuarial opinion contained herein.
   This fiscal note does not constitute a legal opinion on the  viability
 of  the  proposed change nor is it intended to serve as a substitute for
 the professional judgment of an attorney.
   This estimate, dated February 19, 2021,  and  intended  for  use  only
 during the 2021 Legislative Session, is revised Fiscal Note No. 2021-84,
 prepared  by  the  Actuary  for  the New York State and Local Retirement
 System.