S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7174
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                               June 4, 2021
                                ___________
 
 Introduced  by  Sen.  SAVINO -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the retirement and social security law, in  relation  to
   the  eligibility  of  New  York  city  transit authority employees for
   performance of duty disability retirement

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Section 607-b of the retirement and social security law is
 amended by adding a new subdivision a-1 to read as follows:
   A-1. ANY MEMBER OF THE NEW YORK CITY EMPLOYEES' RETIREMENT SYSTEM  WHO
 IS  EMPLOYED BY THE NEW YORK CITY TRANSIT AUTHORITY AND WHO PARTICIPATED
 IN WORLD TRADE CENTER RESCUE, RECOVERY OR CLEANUP OPERATIONS, AS DEFINED
 IN SECTION TWO OF THIS CHAPTER, WHO, ON OR AFTER SEPTEMBER ELEVENTH, TWO
 THOUSAND ONE, BECOMES  PHYSICALLY  OR  MENTALLY  INCAPACITATED  FOR  THE
 PERFORMANCE  OF  DUTIES AS THE NATURAL AND PROXIMATE RESULT OF AN INJURY
 SUSTAINED IN THE PERFORMANCE OR DISCHARGE OF HIS  OR  HER  DUTIES  AS  A
 RESULT  OF  SUCH PARTICIPATION IN WORLD TRADE CENTER RESCUE, RECOVERY OR
 CLEANUP OPERATIONS SHALL  BE  PAID  A  PERFORMANCE  OF  DUTY  DISABILITY
 RETIREMENT  ALLOWANCE  EQUAL  TO THREE-QUARTERS OF FINAL AVERAGE SALARY,
 SUBJECT TO SECTION 13-176 OF THE ADMINISTRATIVE CODE OF THE CITY OF  NEW
 YORK.  ANY  MEMBER  WHO HAS MADE APPLICATION OR WHO, AFTER THE EFFECTIVE
 DATE OF THIS SUBDIVISION, MAKES APPLICATION FOR SUCH PERFORMANCE OF DUTY
 PENSION SHALL  BE  ENTITLED  TO  INVOKE  THE  MEDICAL  REVIEW  PROCEDURE
 PROVIDED  FOR IN SUBDIVISION E OF SECTION SIX HUNDRED FIVE OF THIS ARTI-
 CLE, SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN SUCH SUBDIVISION.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: This proposed legislation would amend  provisions  of
 the  Retirement  and  Social  Security Law (RSSL) to grant New York City
 Transit Authority (NYCTA) active and retired employees, who are or  were
 members  of  the  New  York  City  Employees' Retirement System (NYCERS)
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD03631-02-1

 S. 7174                             2
 
 subject to Retirement and Social  Security  Law  Article  15,  and  have
 incurred  a World Trade Center (WTC) Qualifying Condition, a performance
 of duty disability retirement equivalent to 75% of  the  member's  Final
 Average  Salary  (FAS)  prospectively  as  of  the  effective  date. The
 proposed legislation would further permit such  eligible  NYCTA  members
 and  retirees to utilize the Final Medical Review procedures pursuant to
 RSSL Section 605-e to appeal from the NYCERS Medical Board WTC disabili-
 ty benefit determinations.  Finally, the bill appears  to  inadvertently
 grant  such  eligible  NYCTA members and retirees the ability to utilize
 the presumptions for infectious diseases pursuant  to  subsection  b  of
 RSSL  Section 607-b.   Costs associated with granting these presumptions
 have not been included in this Fiscal Note.
   Effective Date: Upon enactment.
   IMPACT ON BENEFITS: Under the proposed legislation,  if  enacted,  the
 WTC  disability benefit for eligible NYCTA WTC retirees would be revised
 to equal a retirement allowance of:
     * 75% multiplied by FAS,
   Reduced by:
     * 100% of  Workers'  Compensation  benefits  (if  any)  payable  (as
 required  by  the  Administrative  Code  of the City of New York (ACCNY)
 Section 13-176).
   FINANCIAL IMPACT - OVERVIEW:  The  bill,  if  enacted,  would  provide
 increased  benefits  for  37  pensioners  who have been approved for WTC
 benefits. The bill also potentially provides for increased benefits  for
 an  unknown  number of future pensioners, who have submitted a qualified
 WTC Notice of Participation. Although there are currently  approximately
 1,200  active  and  retired NYCTA members who have submitted a qualified
 WTC Notice of Participation Form, the number of members from this  group
 who  could  potentially  benefit  from  this proposed legislation in the
 future cannot be readily determined.
   The additional estimated financial impact for the  unknown  number  of
 future  pensioners  who could benefit has been calculated on a per event
 basis equal to the increase in the  Present  Value  of  Future  Benefits
 (PVFB)  for an average member who could be approved for WTC benefits and
 who is assumed to benefit from the proposed legislation. In  determining
 the increase in the PVFB for the future members who are assumed to bene-
 fit  from  the proposed legislation, it has been assumed that 50% of the
 members who would retire with a WTC benefit were those  who  would  have
 retired  under  the current Accidental Disability Retirement benefit and
 that the remaining 50% were those who would have  continued  working  if
 the proposed legislation were not passed.
   With  respect  to  an  individual  member, the additional cost of this
 proposed legislation could vary greatly depending on the member's length
 of service, age, and salary history.
   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 for 37 pensioners  who
 have been approved for World Trade Center benefits by approximately $7.8
 million.
   In  addition,  the  enactment  of this proposed legislation would also
 increase the PVFB by approximately $266,100, on average, for each  addi-
 tional  occurrence  of  WTC benefits provided under this proposed legis-
 lation. The proposed legislation would also decrease the  Present  Value
 of  Future  Employee  Contributions by approximately $4,700, on average,
 for a total average cost of approximately $270,800 for each approved WTC
 benefit for members who would be helped by the proposed legislation.

 S. 7174                             3

   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.
   In  accordance  with  Section 13-638.2(k-2) of the ACCNY, new Unfunded
 Accrued Liability (UAL) attributable to benefit changes are to be  amor-
 tized as determined by the Actuary, but are generally amortized over the
 remaining working lifetime of those impacted by the benefit changes.
   For  the  purposes  of  this  Fiscal Note, since the 37 pensioners who
 would benefit are retired, and therefore have no remaining working life-
 time, the entire increase in UAL (or PVFB) of approximately $7.8 million
 would be recognized immediately.
   In addition, since there is insufficient data currently  available  to
 estimate  the  number of members who might be approved for WTC benefits,
 the financial impact would be recognized at the time  of  event.  Conse-
 quently,  changes  in employer contributions for those NYCTA members not
 yet approved for WTC benefits have  been  estimated  assuming  that  the
 increase in the PVFB will be financed over the same time period used for
 actuarial  losses in accordance with Section 13-638.2(k-2) of the ACCNY.
 Using this approach, the additional  PVFB  would  be  amortized  over  a
 closed  15-year  period  (14 payments under the One-Year Lag Methodology
 (OYLM)) using level dollar payments.
   Based on the Actuary's actuarial assumptions and methods in effect  as
 of  June  30,  2020, the enactment of this proposed legislation is esti-
 mated to increase annual employer contributions by approximately $32,000
 for each new WTC benefit provided under this proposed legislation.
   CONTRIBUTION TIMING: For the purposes  of  this  Fiscal  Note,  it  is
 assumed  that  the changes in the PVFB and annual employer contributions
 for those already retired and receiving WTC benefits would be  reflected
 for  the  first  time  in the Final June 30, 2020 actuarial valuation of
 NYCERS. In accordance with the OYLM used to determine employer  contrib-
 utions,  the increase in employer contributions for these retirees would
 first be reflected in Fiscal Year 2022. With respect to future retirees,
 increases in employer contributions would depend upon when members would
 retire but, generally, increased employer contributions will first occur
 the second fiscal year following approval of the WTC  benefit.  For  the
 purposes  of  this Fiscal Note, it is assumed that these future retirees
 will be included for the first time in the June 30,  2022  census  data,
 and therefore the increase in employer contributions for future retirees
 that  would  benefit  from  this  proposed  legislation  would  first be
 reflected in Fiscal Year 2024.
   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.
   This data was supplemented by data provided by NYCERS that  identified
 NYCTA  members subject to Article 15 who are currently in receipt of WTC
 disability benefits. NYCERS identified 37 pensioners with an average age
 of approximately 63.0 years and  an  average  benefit  of  approximately
 $39,300.
   The  approximate 1,200 active members who have submitted WTC Notice of
 Participation Forms are a subset of the 12,412 NYCTA employees  who  are
 active  members  in NYCERS as of June 30, 2020 whose date of appointment
 is prior to September 11, 2001 and who are not currently entitled  to  a
 WTC  benefit equal to 75% of FAS and, therefore, could potentially bene-
 fit from the proposed legislation. These 12,412 active  members  had  an

 S. 7174                             4
 
 average age of approximately 56.4 years, average service of approximate-
 ly  23.0  years,  and  an  average salary of approximately $94,700. This
 group consisted of 12,403 Tier 4 members and 9 Tier 6 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 it would produce PVFB and annual
 employer contribution results that are not materially different 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 2021-39 dated June 2,
 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.