S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6984
 
                        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
 
 AN  ACT  to amend the retirement and social security law, in relation to
   disability retirement of certain New York city correction members

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Paragraph  1  of  subdivision  b  of section 507-a of the
 retirement and social security law, as added by chapter 452 of the  laws
 of 1983, is amended to read as follows:
   1.  Have  at  least  ten  years of total service credit, EXCEPT THAT A
 MEMBER IN THE UNIFORMED PERSONNEL OF THE NEW  YORK  CITY  DEPARTMENT  OF
 CORRECTION  MAY FILE AN APPLICATION WITHOUT REGARD TO LENGTH OF SERVICE,
 and
   § 2. This act shall take effect immediately.
 
 
 
 
 
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06299-01-1



              

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6984--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
   disability retirement of certain New York city correction members
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph 1 of  subdivision  b  of  section  507-a  of  the
 retirement  and social security law, as added by chapter 452 of the laws
 of 1983, is amended to read as follows:
   1. Have at least ten years of total  service  credit,  EXCEPT  THAT  A
 MEMBER  IN  THE  UNIFORMED  PERSONNEL OF THE NEW YORK CITY DEPARTMENT OF
 CORRECTION MAY FILE AN APPLICATION WITHOUT REGARD TO LENGTH OF  SERVICE,
 and
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY  OF BILL: This proposed legislation would modify the eligibil-
 ity requirements of Retirement and Social Security  Law  (RSSL)  Section
 507-a  for  certain  New York City Department of Correction (Correction)
 members of the New York City Employees' Retirement System (NYCERS).
   For the purposes of this Fiscal Note, Covered Participants  refers  to
 NYCERS  Correction  members  who  are  subject  to  RSSL Article 14, but
 excludes non-Enhanced Revised Plan Correction Members.
   Under the proposed legislation, Covered Participant with less than  10
 years of credited service would be entitled to 507-a disability benefits
 without having to show the disability resulted from a work-related acci-
 dent.
   Effective Date: Upon enactment.
   IMPACT ON BENEFITS: Currently, Covered Participants who are determined
 to  be  disabled  by  the NYCERS' Medical Board, and have accumulated at

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD06299-02-1

 S. 6984--A                          2
 
 least 10 years of service credit, are eligible for an immediate ordinary
 disability retirement (ODR) allowance pursuant  to  RSSL  Section  507-a
 equal to the greater of:
   1) 1/3 of Final Average Salary (FAS), or
   2) 1/60 of FAS multiplied by credited service.
   If  such member is also eligible for Service Retirement, the ODR bene-
 fit cannot be less than the retirement allowance for Service Retirement.
   Under the proposed legislation, if enacted, the ODR benefit under RSSL
 Section 507-a would become available to disabled  Covered  Participants,
 subject  to approval under the applicable statutes and procedures estab-
 lished by NYCERS, irrespective of service credit accumulation.
   The proposed legislation would  also  eliminate  the  minimum  service
 eligibility  requirements  for Covered Participants to qualify for bene-
 fits available under RSSL Section 507-a.
   For the purposes of this Fiscal Note, the Actuary has assumed that the
 proposed Section 507-a benefit  would  only  be  available  to  eligible
 Covered Participants prospectively on and after the Effective Date.
   FINANCIAL  IMPACT - PRESENT VALUES: The ultimate cost of this proposed
 legislation would be any additional benefits paid to NYCERS participants
 compared with current law. The timing of the  financial  impact  of  the
 proposed  legislation  would  depend  on  the number, salaries, age, and
 lengths of service of Covered Participants who become eligible for 507-a
 benefits and the actuarial assumptions and methods employed by the Actu-
 ary for such purposes.
   Based on  the  anticipated  Covered  Participants  and  the  actuarial
 assumptions and methods described herein, the enactment of this proposed
 legislation  would  increase the Present Value of Future Benefits (PVFB)
 by approximately $2.7 million.
   Under the Entry Age Normal cost method used to determine the  employer
 contributions  to  NYCERS,  there  would  be  a decrease in the Unfunded
 Accrued Liability (UAL) of approximately $22.8  million,  offset  by  an
 increase  in  the  Present Value of future employer Normal Cost of $25.5
 million.
   FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In  accordance  with
 Administrative   Code   of   the   City  of  New  York  (ACCNY)  Section
 13-638.2(k-2), new UAL attributable to benefit changes are to  be  amor-
 tized  as  determined  by  the  Actuary but generally over the remaining
 working lifetime of those impacted by the benefit changes.  As  of  June
 30,  2020, the remaining working lifetime of the Covered Participants is
 approximately 16 years.
   For the purposes of this Fiscal Note, the increase in  UAL  was  amor-
 tized  over a 16-year period (15 payments under the One-Year Lag Method-
 ology (OYLM))  using  level  dollar  payments.  This  payment  plus  the
 increase  in  the  Normal Cost results in an increase in annual employer
 contributions of approximately $789,000 per year.
   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. In
 accordance with the OYLM used to determine employer  contributions,  the
 increase  in  employer  contributions would first be reflected in Fiscal
 Year 2022.
   CENSUS DATA: The estimates presented herein are based  on  the  census
 data  used  in  the June 30, 2020 (Lag) actuarial valuation of NYCERS to
 determine the Preliminary Fiscal Year 2022 employer contributions.

 S. 6984--A                          3
 
   There were 4,897 Covered Participants with less than 10 years of cred-
 ited service as of June 30, 2020 and they had an average age of approxi-
 mately 35.4 years, average service of approximately 4.7  years,  and  an
 average salary of approximately $81,100.
   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, 2019 (Lag)  actuarial  valuations
 used  to  determine  the  Preliminary Fiscal Year 2021 employer contrib-
 utions 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 it would produce Present Value of
 future employer contributions results not materially  different  and  an
 increase  in  the annual employer contributions that is approximately 1%
 larger than the results shown above.
   RISK AND UNCERTAINTY: The costs presented in this Fiscal  Note  depend
 highly  on the actuarial assumptions and methods used and are subject to
 change based on the realization of  potential  investment,  demographic,
 contribution,  and other risks. If actual experience deviates from actu-
 arial 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 2021-51 dated June 14,
 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.