S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10127
 
                           I N  A S S E M B L Y
 
                                May 6, 2024
                                ___________
 
 Introduced by M. of A. GANDOLFO -- read once and referred to the Commit-
   tee on Governmental Employees
 
 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
 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD05522-04-4
 A. 10127                            2
 
 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, 2024. 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 the New York State and Local Employ-
 ees'  Retirement  System  (NYSLERS)  currently  employed  by  a   school
 district,  a  board  of  cooperative  educational services, a vocational
 education and extension board, or an institution for the deaf and  blind
 or  as  an  institutional teacher to receive up to five years of service
 credit in the NYSLERS for employment as a teacher in private schools  in
 New  York State. No credit shall be provided for any service for which a
 member is receiving, or will be entitled to receive at any future  time,
 a  benefit from any other public or private retirement system or plan in
 New York 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  to
 receive  such  additional  service  credit.  Each  such  member  will be
 required to make a payment of 3% (6% for  Tier  6  members)  of  current
 compensation  per  year of additional service credit granted pursuant to
 this bill.
   Insofar as this bill affects the NYSLERS, pursuant to  Section  25  of
 the  Retirement  and  Social  Security Law, the increased costs would be
 borne entirely by the State of New York and would  require  an  itemized
 appropriation  sufficient to pay the cost of the provision. If this bill
 were enacted during the 2024 Legislative Session, it is  estimated  that
 the  past  service  cost  will average approximately 18% (15% for Tier 6
 members) of an affected member's current compensation per year of  addi-
 tional service credit granted.
   Further,  we  anticipate  some  administrative  costs to implement the
 provisions of this legislation.
   The exact number of current members as  well  as  future  members  who
 could be affected by this legislation cannot be readily determined.
   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 could
 jeopardize the governmental plan status of the Retirement  System  ("the
 System") and its exemption from the Employees Retirement Income Security
 Act.  This  development  could  result  in the loss of qualified status,
 which would mean the loss of tax benefits. This  result  would  substan-
 tially  impair  the  System's value to our more than one million partic-
 ipants.
 A. 10127                            3
 
   Prior to the enactment of this legislation, we recommend that a favor-
 able 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 $38,000 for the services of
 the IRS, and $1,000 per hour for legal consultants.
   Summary of relevant resources:
   Membership  data as of March 31, 2023 was used in measuring the impact
 of the proposed change, the same data used in the April 1, 2023 actuari-
 al valuation. Distributions and other statistics can  be  found  in  the
 2023  Report  of the Actuary and the 2023 Annual Comprehensive Financial
 Report.
   The actuarial assumptions and methods used are described in  the  2023
 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, 2023
 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 March 4, 2024, and intended for use  only  during
 the  2024  Legislative Session, is Fiscal Note No. 2024-135, prepared by
 the Actuary for the New York State and Local Retirement System.