S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7156
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               May 11, 2023
                                ___________
 
 Introduced  by  M.  of A. PHEFFER AMATO -- read once and referred to the
   Committee on Governmental Employees
 
 AN ACT to amend the education law, in  relation  to  providing  for  the
   automatic  enrollment of employees of the city of New York eligible to
   join the New York city board of education retirement system

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Paragraph  (b)  of  subdivision 18 of section 2575 of the
 education law, as added by chapter 536 of the laws of 1986,  is  amended
 to read as follows:
   (b) (1) Notwithstanding the provisions of paragraph (a) of subdivision
 one of this section or any provision of the rules and regulations or any
 other  provision  of  law  to  the  contrary, membership in the board of
 education retirement system shall include any  provisional  employee  in
 education service who elects to become a member in the manner prescribed
 by  the  applicable  provisions  of  subparagraph two [or], subparagraph
 three OR SUBPARAGRAPH FOUR of this paragraph.
   (2) Any such provisional employee who is not a member of the New  York
 city employees' retirement system at the time he or she elects to become
 a  member  of  the board of education retirement system may make such an
 election of membership by filing with the board of education  retirement
 system a duly executed and acknowledged application for membership.
   (3) Any such provisional employee who is a member of the New York city
 employees'  retirement  system  at the time he or she elects to become a
 member of the board of education retirement  system  may  make  such  an
 election of membership by filing simultaneously with the board of educa-
 tion  retirement system a duly executed and acknowledged application for
 membership and a duly executed and acknowledged request that his or  her
 membership and service credit in the New York city employees' retirement
 system be transferred to the board of education retirement system.
   (4)(I)  BEGINNING JULY FIRST, TWO THOUSAND TWENTY-FOUR, UPON THE ENTRY
 INTO EMPLOYMENT OF ANY EMPLOYEE ELIGIBLE  TO  ELECT  MEMBERSHIP  IN  THE
 RETIREMENT  SYSTEM  PURSUANT TO SUBPARAGRAPHS ONE, TWO AND THREE OF THIS
 PARAGRAPH OR ANY OTHER APPLICABLE PROVISION OF LAW,  AND  PROVIDED  SUCH
 
              

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07729-02-3
 A. 7156                             2
 
 EMPLOYEE  IS  NOT  A MEMBER IN THE RETIREMENT SYSTEM OR ANY OTHER PUBLIC
 RETIREMENT SYSTEM OF THE CITY OR STATE OF NEW YORK AS OF SUCH ENTRY DATE
 IN COVERED EMPLOYMENT, SUCH EMPLOYEE SHALL BE ENROLLED IN THE RETIREMENT
 SYSTEM  EFFECTIVE  NINETY-ONE DAYS AFTER THE COMMENCEMENT OF EMPLOYMENT.
 NOTWITHSTANDING THE PRECEDING, IF SUCH EMPLOYEE FILES WITH  THE  RETIRE-
 MENT  SYSTEM  AN APPLICATION TO OPT OUT OF MEMBERSHIP WITHIN NINETY DAYS
 AFTER COMMENCEMENT OF EMPLOYMENT, THE RETIREMENT  SYSTEM  SHALL  REFRAIN
 FROM ENROLLING SUCH EMPLOYEE UNLESS AND UNTIL SUCH EMPLOYEE SUBSEQUENTLY
 FILES  AN  APPLICATION  FOR MEMBERSHIP WITH THE RETIREMENT SYSTEM, OR IS
 OTHERWISE SUBSEQUENTLY MANDATED TO ENROLL BY THE RULES  AND  REGULATIONS
 OF  THE  RETIREMENT  SYSTEM  OR ANY APPLICABLE LAW. THE EMPLOYER AND THE
 APPLICABLE UNION FOR THE RETIREMENT SYSTEM SHALL JOINTLY PROVIDE WRITTEN
 NOTICE TO THE EMPLOYEE INFORMING THE EMPLOYEE THAT HE  OR  SHE  HAS  THE
 OPTION TO OPT-OUT OF THE AUTOMATIC ENROLLMENT PROGRAM. SUCH NOTICE SHALL
 BE PROVIDED TO THE EMPLOYEE ON THREE OCCASIONS: ON OR BEFORE THE THIRTI-
 ETH  DAY,  THE  SIXTIETH  DAY  AND  THE NINETIETH DAY PRIOR TO AUTOMATIC
 ENROLLMENT IN THE RETIREMENT SYSTEM.  THE AUTOMATIC ENROLLMENT OF ELIGI-
 BLE EMPLOYEES  AS  PROVIDED  FOR  IN  THIS  SUBPARAGRAPH  SHALL  NOT  BE
 CONSTRUED  TO MODIFY THE RIGHT OF ELIGIBLE EMPLOYEES TO JOIN THE RETIRE-
 MENT SYSTEM AS OF THE FIRST DATE OF  COVERED  EMPLOYMENT  BY  FILING  AN
 APPLICATION  FOR  MEMBERSHIP  WITH  THE  RETIREMENT SYSTEM. THE EMPLOYER
 SHALL INFORM THE EMPLOYEE IN WRITING OF THE RIGHT TO JOIN THE SYSTEM  AS
 WELL  AS  THE FACT THAT THE EMPLOYEE SHALL BE ENROLLED IN THE RETIREMENT
 SYSTEM ON THE NINETY-FIRST DAY AFTER COMMENCEMENT OF EMPLOYMENT,  UNLESS
 SUCH EMPLOYEE FILES WITH THE RETIREMENT SYSTEM AN APPLICATION TO OPT OUT
 OF  MEMBERSHIP  PRIOR  TO SUCH DATE. ANY ELIGIBLE EMPLOYEE WHO ELECTS TO
 OPT OUT OF MEMBERSHIP IN THE RETIREMENT SYSTEM  WITHIN  THE  NINETY  DAY
 PERIOD SHALL RETAIN THE RIGHT TO JOIN SUCH SYSTEM BY SUBSEQUENTLY FILING
 AN  APPLICATION  FOR  MEMBERSHIP  SO  LONG  AS  SUCH EMPLOYEE REMAINS IN
 COVERED EMPLOYMENT.
   (II) EVERY CURRENT EMPLOYEE WHO IS  ELIGIBLE  FOR  MEMBERSHIP  IN  THE
 RETIREMENT  SYSTEM  ON  JULY FIRST, TWO THOUSAND TWENTY-FOUR, AND WHO IS
 NOT A MEMBER IN THE RETIREMENT SYSTEM OR  ANY  OTHER  PUBLIC  RETIREMENT
 SYSTEM  OF  THE  CITY  OR  STATE  OF  NEW YORK, SHALL BE ENROLLED IN THE
 RETIREMENT SYSTEM EFFECTIVE OCTOBER  FIRST,  TWO  THOUSAND  TWENTY-FOUR,
 UNLESS  SUCH EMPLOYEE FILES WITH THE RETIREMENT SYSTEM AN APPLICATION TO
 OPT OUT OF MEMBERSHIP BEFORE OCTOBER FIRST,  TWO  THOUSAND  TWENTY-FOUR.
 SUCH  AUTOMATIC  ENROLLMENT  IN  THE  RETIREMENT  SYSTEM  SHALL  NOT  BE
 CONSTRUED TO WAIVE ANY OF  THE  ELIGIBILITY  REQUIREMENTS  FOR  PREVIOUS
 SERVICE CREDIT.
   (III)  THE  AUTOMATIC ENROLLMENT OF ELIGIBLE EMPLOYEES AS PROVIDED FOR
 IN THIS SUBPARAGRAPH SHALL NOT BE CONSTRUED TO  MODIFY  THE  RIGHTS  AND
 OBLIGATIONS OF ANY EMPLOYEE WHOSE PARTICIPATION IN THE RETIREMENT SYSTEM
 IS MANDATED BY THE RULES AND REGULATIONS OF THE RETIREMENT SYSTEM OR ANY
 APPLICABLE LAW, AND SUCH MANDATED MEMBERS MAY NOT OPT OUT OF MEMBERSHIP.
   (IV)  IF  AN  EMPLOYEE WHO IS AUTOMATICALLY ENROLLED IN THE RETIREMENT
 SYSTEM PURSUANT TO THE PROVISIONS OF THIS PARAGRAPH IS  A  MEMBER  OF  A
 UNION,  THE  RETIREMENT SYSTEM SHALL PROVIDE WRITTEN NOTICE TO THE UNION
 OF THE EMPLOYEE'S  ENROLLMENT  WITHIN  THIRTY  DAYS  OF  THE  EMPLOYEE'S
 ENROLLMENT IN THE RETIREMENT SYSTEM.
   (V)  THE  PROVISIONS  OF  THIS  SUBPARAGRAPH  SHALL APPLY TO FULL-TIME
 EMPLOYEES AND PART-TIME EMPLOYEES. THE PROVISIONS OF  THIS  SUBPARAGRAPH
 SHALL NOT APPLY TO PROVISIONAL EMPLOYEES.
   §  2. Paragraph (f) of subdivision 18 of section 2575 of the education
 law, as added by chapter 749 of the laws of 1992, is amended to read  as
 follows:
 A. 7156                             3
 
   (f) Notwithstanding the provisions of paragraph (a) of subdivision one
 of  this  section  or  any provision of the rules and regulations or any
 other provision of law to the  contrary,  membership  in  the  board  of
 education retirement system shall include any person employed by the New
 York  city  police  department in the title of school crossing guard who
 becomes a member in the manner prescribed by the provisions of  subdivi-
 sion g of section 13-638.4 of the administrative code of the city of New
 York  OR BY THE PROVISIONS OF SUBPARAGRAPH FOUR OF PARAGRAPH (B) OF THIS
 SUBDIVISION.
   § 3. This act shall take effect July 1, 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 date.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: This proposed legislation would amend Section 2575 of
 the  Education  Law  to  require  certain new and existing New York City
 Board of Education Retirement System (BERS) eligible employees, who  are
 non-provisional  and  who are not otherwise already a member in a public
 retirement system within the State, to be enrolled into BERS  membership
 unless the employees timely opt out of such membership.
   Under  current law, these employees have the option of joining BERS by
 filing an application for membership at any time during employment  with
 a BERS participating employer, but enrollment is not mandated.
   The  proposed  legislation would require BERS to enroll new non-provi-
 sional and non-permanent eligible employees (e.g.,  non-competitive  and
 exempt class titles) into BERS membership, within 90 days of employment,
 unless the employee files an application with BERS to opt out of member-
 ship  within the 90-day period. An existing non-provisional and non-per-
 manent eligible employee who is  not  already  a  BERS  member  will  be
 enrolled as a BERS member on October 1, 2024, unless such employee files
 an application with BERS to opt out of membership by September 30, 2024.
   A BERS eligible employee who timely opts out of BERS automatic enroll-
 ment  may  still  join BERS at any time during employment with a partic-
 ipating employer. The proposed  legislation  would  have  no  effect  on
 employees  who are, under existing provisions of law, required to become
 BERS members.
   Effective Date: July 1, 2024.
   FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: If enacted into law,
 the ultimate employer cost for this proposed legislation would be  based
 on  the  number,  ages,  years of service, and salary of those employees
 that would have otherwise not elected to become members of BERS.
   Based on the data and these statistics herein, the Office of the Actu-
 ary (OA) has estimated the following costs for this legislation:
   * The additional annual employer contribution will be $17.4 million if
 no prior years of service are purchased by these individuals.
   * The additional annual employer contribution will be $22.6 million if
 all years of prior service eligible for buyback are purchased  by  these
 individuals.
   Finally, for purposes of determining the portion of the annual employ-
 er  contribution  attributable  to the buyback of prior service, we have
 assumed an amortization period of 15 years (14 payments under  the  One-
 Year Lag Methodology used in the actuarial valuation).
   CENSUS  DATA:  The estimates presented herein are based on information
 provided by BERS for 23,977 individuals who are non-provisional and  not
 currently  members  of BERS, but could voluntarily elect to participate.
 This group consists of 22,255 part-time and 1,722  full-time  employees,
 A. 7156                             4
 
 is  72%  female,  and  has  an average age of 36.2 years, average annual
 salary of approximately $34,800, and average service since date of  hire
 of 3.5 years.
   The  OA was advised that employees in Payroll Codes 056, 744, 745, and
 746 work part-time and earned 0.67 years, 0.28 years,  0.78  years,  and
 0.68  years  of  service per year on average, respectively. Employees in
 Payroll Codes 740 and 742 are assumed to generally be full-time  employ-
 ees.
   The estimate above assumes all eligible employees who are not current-
 ly  BERS members join immediately, of which approximately 50% would have
 eventually joined BERS, and therefore this bill  would  only  accelerate
 membership for certain individuals.
   ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
 been  calculated  based on the actuarial assumptions and methods used to
 determine the Preliminary Fiscal Year  2024  employer  contributions  of
 BERS.
   For  the  purposes  of  this Fiscal Note, it is assumed that since the
 proposed legislation requires  BERS  to  enroll  all  existing  eligible
 employees (who are not already members and who do not opt out) into BERS
 on  October  1,  2024,  the  increase in employer contributions for BERS
 could be first reflected as early as in Fiscal Year 2026.
   RISK AND UNCERTAINTY: The costs presented in this Fiscal  Note  depend
 highly  on the realization of the actuarial assumptions used, demograph-
 ics of the impacted population, and other factors  such  as  investment,
 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 potential savings to other New York City Retirement Systems  and
 Pension Funds (NYCRS) as a result of these employees becoming members in
 BERS instead of another NYCRS.
   *  The  initial  additional  administrative  costs  to  implement  the
 proposed legislation.
   * The impact of this  proposed  legislation  on  Other  Postemployment
 Benefit costs.
   *  The  cost  of potential Tax-Deferred Annuity plan participation and
 benefits.
   STATEMENT OF ACTUARIAL OPINION: I, Marek  Tyszkiewicz,  am  the  Chief
 Actuary  for,  and  independent of, the New York City Retirement Systems
 and Pension Funds. I am an Associate of the Society of Actuaries  and  a
 Member of the American Academy of Actuaries. I am a member of NYCERS but
 do  not  believe  it impairs my objectivity and 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 2023-46 dated May 9, 2023
 was prepared by the Chief Actuary for the New York City Board of  Educa-
 tion  Retirement  System.  This estimate is intended for use only during
 the 2023 Legislative Session.