S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6972
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                               May 20, 2021
                                ___________
 
 Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
   printed to be committed to the Committee on Cities 1
 
 AN  ACT  to  amend  the  administrative code of the city of New York, in
   relation to certain lung disabilities incurred by members of  the  New
   York city transit authority in certain cases

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The administrative code of the city of New York is  amended
 by adding a new section 13-168.1 to read as follows:
   § 13-168.1 TRANSIT AUTHORITY MEMBERS; PRESUMPTION IN CERTAIN DISEASES.
 NOTWITHSTANDING ANY PROVISION OF THIS CHAPTER OR OF ANY GENERAL, SPECIAL
 OR  LOCAL LAW TO THE CONTRARY, AND FOR THE PURPOSES OF THIS CHAPTER, ANY
 CONDITION OF IMPAIRMENT OF  HEALTH  CAUSED  BY  DISEASES  OF  THE  LUNG,
 RESULTING IN TOTAL OR PARTIAL DISABILITY OR DEATH TO A MEMBER OF THE NEW
 YORK  CITY TRANSIT AUTHORITY, OR A MEMBER OF ITS SUBSIDIARY CORPORATION,
 AS DEFINED IN SECTION TWELVE HUNDRED THREE-A OF THE  PUBLIC  AUTHORITIES
 LAW,  WHERE  SUCH  MEMBER  SUCCESSFULLY PASSED A PHYSICAL EXAMINATION ON
 ENTRY INTO SUCH SERVICE OR SUBSEQUENT THERETO, WHICH EXAMINATION  FAILED
 TO  REVEAL ANY EVIDENCE OF SUCH CONDITION, SHALL BE PRESUMPTIVE EVIDENCE
 THAT IT WAS INCURRED IN THE PERFORMANCE AND DISCHARGE OF DUTY.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: This proposed legislation would amend the Administra-
 tive Code of the City of New York (ACCNY) to add a new Section  13-168.1
 to  provide  a statutory presumption to Tier 1 and Tier 2 members of the
 New York City Employees' Retirement  System  (NYCERS)  who  are  Transit
 Authority   employees,  and  who  become  physically  incapacitated  for
 performance of duty, or die, due to lung disease.
   In determining whether qualifying lung disease was caused  by  employ-
 ment  for  the  Transit Authority, the diagnosis of lung disease, absent
 evidence of such condition upon examination at hire, would  be  presump-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD08575-02-1

 S. 6972                             2
 
 tive evidence that such disability or death was incurred in the perform-
 ance  and discharge of duty entitling such member, or his or her benefi-
 ciary, respectively, to an accident disability retirement or  accidental
 death  benefit.  The  proposed  legislation does not appear to provide a
 mechanism for rebutting such presumption with competent evidence to  the
 contrary.
   Effective Date: Upon enactment.
   FINANCIAL  IMPACT  -  OVERVIEW: There is no data available to estimate
 the number of members who might develop and become disabled  by  or  die
 from  lung  disease,  and  potentially benefit from this proposed legis-
 lation.  Therefore, the estimated financial impact has  been  calculated
 on  a  per  event  basis  equal  to the increase in the Present Value of
 Future Benefits (PVFB) for an average affected member who  is  diagnosed
 with  lung disease as the result of the enactment of the proposed legis-
 lation and who would benefit from the proposed legislation.
   In determining the increase in the PVFB, it has been assumed that 100%
 of the members who would retire with lung disease would  have  continued
 working  and  eventually retired for service if the proposed legislation
 were not passed. The increase in PVFB does  not  include  any  cost  for
 additional  death  benefits  since  the ordinary death benefit for these
 members is more valuable than  the  accidental  death  benefit  in  most
 cases.
   With  respect  to  an  individual  member, the additional cost of this
 proposed legislation varies greatly.
   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 and decrease the Pres-
 ent Value of member contributions, for a net result of  an  increase  in
 the  Present Value of future employer contributions ranging from $32,500
 to $504,600 if one of the eight  members  who  could  benefit  from  the
 proposed  legislation  develops  a  qualifying lung disease. The average
 increase in the Present Value of future employer contributions  for  the
 eight members who could benefit from the proposed legislation is approx-
 imately $207,000.
   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
 characteristics including the age, years of service, and salary  history
 of each member.
   As  there  is  no  data  currently available to estimate the number of
 members who might be diagnosed with disabling lung disease,  the  finan-
 cial  impact  would  be  recognized  at the time of event. Consequently,
 changes in employer contributions have been estimated assuming that  the
 increase  in  the Present Value of future employer contributions will be
 financed over the same time period used for actuarial losses in  accord-
 ance  with  Section 13-638.2(k-2) of the ACCNY. Using this approach, the
 additional Present Value of future employer contributions would be amor-
 tized over a closed 15-year period (14 payments under the  One-Year  Lag
 Methodology) 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 an amount ranging
 from $3,800 to $59,700 if one of the eight  members  who  could  benefit
 from  the  proposed  legislation develops a qualifying lung disease. The
 average increase in annual employer contributions for the eight  members
 who  could  benefit  from  the  proposed  legislation  is  approximately

 S. 6972                             3
 
 $24,500. With respect to the timing, increases in employer contributions
 would depend upon when members would retire due  to  lung  disease  but,
 generally,  increased employer contributions will first occur the second
 fiscal  year following approval of the accident disability or accidental
 death benefit.
   CENSUS DATA: The estimates presented herein are based  on  the  census
 data  used in the Preliminary June 30, 2020 (Lag) actuarial valuation of
 NYCERS to determine the Preliminary Fiscal Year 2022  employer  contrib-
 utions.
   There  are  eight active Tier 1 and Tier 2 Transit Authority employees
 who participate in NYCERS as of June  30,  2020  who  could  potentially
 benefit  from  the  proposed  legislation. These eight active Tier 1 and
 Tier 2 Transit Authority members had an  average  age  of  approximately
 72.3  years, average service of approximately 29.8 years, and an average
 salary of approximately $99,200. This group consisted of  three  Tier  1
 members, and five Tier 2 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.
   The Actuary is proposing a set of changes for use beginning  with  the
 June  30,  2019  (Lag)  actuarial  valuations of NYCERS to determine the
 Final Fiscal Year 2021 Employer Contributions (2021 A&M).  If  the  2021
 A&M  is  enacted,  it  is  estimated  that the Present Value of Employer
 Contributions and annual employer contributions will be approximately 2%
 smaller than the results shown above.
   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 2021-26 dated May 19,
 2021 was prepared by the Chief Actuary for the New York City  Employees'
 Retirement  System.  This  estimate  is intended for use only during the
 2021 Legislative Session.