S T A T E O F N E W Y O R K
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6981--A
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 Civil Service and Pensions
-- committee discharged, bill amended, ordered reprinted as amended
and recommitted to said committee
AN ACT to amend the retirement and social security law, in relation to
additional member contributions for certain members under the age
fifty-seven retirement program
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraph 1 of subdivision f of section 604-d of the
retirement and social security law is amended by adding a new subpara-
graph (iv) to read as follows:
(IV) NOTWITHSTANDING THE PROVISIONS OF SUBPARAGRAPH (II) OF THIS PARA-
GRAPH, A PARTICIPANT HOLDING THE TITLE OF CARPENTER, SUPERVISOR CARPEN-
TER, SHIP CARPENTER, SUPERVISOR SHIP CARPENTER, RIGGER, DOCKBUILDER,
SUPERVISOR DOCKBUILDER AND GENERAL SUPERVISOR DOCKBUILDER WHO IS A
PARTICIPANT IN THE AGE FIFTY-SEVEN RETIREMENT PROGRAM AND WHOSE AGE AND
ALLOWABLE SERVICE ARE SUCH THAT HE OR SHE COULD NOT POSSIBLY BE ABLE TO
ACCUMULATE AT LEAST TWENTY-FIVE YEARS OF SERVICE BY THE TIME HE OR SHE
REACHES AGE FIFTY-SEVEN, SHALL NOT BE REQUIRED TO MAKE THE ADDITIONAL
MEMBER CONTRIBUTION PURSUANT TO SUBPARAGRAPH (II) OF THIS PARAGRAPH.
ANY PARTICIPANT IN THE TITLES LISTED IN THIS SUBPARAGRAPH WHO HAS MADE
ADDITIONAL MEMBER CONTRIBUTIONS PURSUANT TO SUBPARAGRAPH (II) OF THIS
PARAGRAPH PRIOR TO THE EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO
THOUSAND TWENTY-ONE THAT ADDED THIS SUBPARAGRAPH SHALL RECEIVE A REFUND
OF THE EMPLOYEE PORTION OF SUCH CONTRIBUTIONS PLUS INTEREST PROVIDED
THAT THEIR AGE AND ALLOWABLE SERVICE ARE SUCH THAT HE OR SHE COULD NOT
POSSIBLY BE ABLE TO ACCUMULATE AT LEAST TWENTY-FIVE YEARS OF SERVICE BY
THE TIME HE OR SHE REACHES AGE FIFTY-SEVEN.
§ 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06522-02-1
S. 6981--A 2
SUMMARY OF BILL: This proposed legislation would amend New York
Retirement and Social Security Law (RSSL) Section 604-d to exempt from
the physically taxing provisions certain Tier 4 carpenter titles, who
are participants in the New York City Employees' Retirement System
(NYCERS) or the Board of Education Retirement System of the City of New
York (BERS) Age 57 Retirement Program (57/5 Plan), and who would not
benefit from the early retirement provisions for such physically taxing
titles.
The proposed legislation would affect 57/5 Plan participants in the
physically taxing titles of carpenter, supervisor carpenter, ship
carpenter, supervisor ship carpenter, rigger, dockbuilder, supervisor
dockbuilder, and general supervisor dockbuilder (Eligible Carpenter
Title) who would be unable to reach the requisite 25 years of credited
service in a physically taxing title by age 57, and would therefore be
ineligible to take advantage of the early retirement provisions of the
physically taxing title, which permits retirement at age 50 (with 25
years of credited service).
Under the proposed legislation, Eligible Carpenter Titles who started
in the 57/5 Plan but will not reach 25 years of credited service in a
physically taxing title by age 57 would no longer pay physically taxing
Additional Member Contributions (AMCs) and would receive an immediate
refund of the employee portion (i.e. 50%) of their physically taxing
AMCs plus interest. Such Titles would remain responsible for applicable
basic member contributions and applicable non-physically taxing AMCs for
continued 57/5 Plan participation.
Effective Date: Upon enactment.
FINANCIAL IMPACT - PRESENT VALUES: Based on the census data and actu-
arial assumptions and methods described herein, the enactment of this
proposed legislation would result in an increase in the present value of
future employer contributions for NYCERS and BERS of approximately $5.3
million.
Under the Entry Age Normal cost method used to determine the employer
contributions to NYCERS and BERS, there would be an increase in the
Unfunded Accrued Liability (UAL) of approximately $2.2 million and an
increase in the present value of future employer Normal Cost of $3.1
million. These results are summarized in the table below:
Change in: NYCERS BERS Total
Actuarial Value of Assets (AVA) $(5,162) $ (70) $(5,232)
Accrued Liability (AL) $(2,998) $ (41) $(3,039)
Unfunded Accrued Liability (AL-AVA) $ 2,164 $ 29 $ 2,193
Present Value of Future Employer
Normal Cost $ 3,055 $ 55 $ 3,110
FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with
Section 13-638.2(k-2) of the Administrative Code of the City of New York
(ACCNY), new UAL attributable to benefit changes are to be amortized as
determined by the Actuary, but are generally amortized over the remain-
ing working lifetime of those impacted by the benefit changes. As of
June 30, 2020, the remaining working lifetime of the members in Eligible
Carpenter Titles is approximately eight years for NYCERS and nine years
for BERS.
For the purposes of this Fiscal Note, the increase in UAL was amor-
tized over an eight-year period (seven payments) for NYCERS and over a
nine-year period (eight payments) for BERS under the One-Year Lag Meth-
odology (OYLM) using level dollar payments. When added to the change in
S. 6981--A 3
Employer Normal Cost, the estimated increase in annual employer contrib-
utions is approximately $865,000 for NYCERS and $13,000 for BERS.
CONTRIBUTION TIMING: For the purposes of this Fiscal Note, it is
assumed that the changes in the Present Value of future employer
contributions and annual employer contributions would be reflected for
the first time in the June 30, 2020 actuarial valuation of NYCERS and
BERS. In accordance with the OYLM used to determine employer contrib-
utions, the increase in employer contributions would first be reflected
in Fiscal Year 2022.
CENSUS DATA: The estimates presented herein are based on census data
used in the June 30, 2020 (Lag) actuarial valuation of NYCERS and BERS
to determine Preliminary Fiscal Year 2022 employer contributions. The
following table summarizes the data for the affected participants:
NYCERS BERS NYCERS & BERS
Count 239 5 244
Average Age 56.6 years 56.4 years 56.6 years
Average Service 14.7 years 13.0 years 14.7 years
Average Salary $101,400 $96,400 $101,300
ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the UAL, Present
Value of future employer contributions, and annual employer contrib-
utions presented herein have been calculated based on the same 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 and BERS.
The Actuary is proposing a set of changes for use beginning with the
June 30, 2019 (Lag) actuarial valuations of NYCERS and BERS 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 the annual employer contributions would be approxi-
mately 1% less 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 BERS and other exoge-
nous factors such as investment, contribution, and other risks. If actu-
al 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, BERS, 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
S. 6981--A 4
and procedures and with the Actuarial Standards of Practice issued by
the Actuarial Standards Board.
FISCAL NOTE IDENTIFICATION: This Fiscal Note 2021-34 dated May 26,
2021 was prepared by the Chief Actuary for the New York City Employees'
Retirement System and the Board of Education Retirement System of the
City of New York. This estimate is intended for use only during the 2021
Legislative Session.
