S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7416
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               May 19, 2023
                                ___________
 
 Introduced  by  M.  of A. PHEFFER AMATO -- read once and referred to the
   Committee on Governmental Employees
 
 AN ACT to amend the retirement and social security law, in  relation  to
   eligibility  of uniformed personnel of the New York city department of
   correction for ordinary disability benefits

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Section 507-a of the retirement and social security law is
 amended by adding a new subdivision f to read as follows:
   F. NOTWITHSTANDING ANY OTHER PROVISION  OF  LAW,  THERE  SHALL  BE  NO
 RESTRICTIONS  ON  THE  EARNINGS  FROM  EMPLOYMENT  NOT IN PUBLIC SERVICE
 PERMITTED TO A MEMBER OF THE UNIFORMED PERSONNEL OF THE  NEW  YORK  CITY
 DEPARTMENT OF CORRECTION WHO:
   1. HAS RETIRED PURSUANT TO THE PROVISIONS OF THIS SECTION; AND
   2.  WAS SUBJECT TO THE PROVISIONS OF (I) SUBDIVISION D OF SECTION FIVE
 HUNDRED FOUR OF THIS ARTICLE, (II) SUBDIVISION C OF SECTION FIVE HUNDRED
 FOUR-A OF THIS ARTICLE, OR (III) SUBDIVISION C OF SECTION  FIVE  HUNDRED
 FOUR-B OF THIS ARTICLE PRIOR TO HIS OR HER RETIREMENT, SUBSEQUENT TO THE
 DATE  AS OF WHICH HE OR SHE WOULD HAVE BEEN ELIGIBLE FOR SERVICE RETIRE-
 MENT.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: This proposed legislation would amend  Section  507-a
 of  the Retirement and Social Security Law (RSSL) by adding a new subdi-
 vision f to remove post-retirement earnings  restrictions  from  private
 sector  employment  for  periods after the applicable service retirement
 eligibility date for certain retired uniformed personnel of the New York
 City Department of Correction who are receiving certain disability bene-
 fits from the New York City Employees' Retirement System (NYCERS).
   Effective Date: Upon enactment.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08666-02-3
 A. 7416                             2
              

 
   BACKGROUND:  Currently,  NYCERS  restricts  the  total  calendar  year
 Personal  Service  Income  (PSI)  resulting  from all public and private
 employment for certain retirees, including  certain  Tier  3  correction
 officers  who  receive disability retirement benefits under RSSL Section
 507-a (Correction Disability Retiree).
   If  a  Correction Disability Retiree's PSI from all public and private
 employment exceeds the NYCERS PSI limitation for the calendar year, then
 such retiree's disability pension is suspended for 12 months. The NYCERS
 PSI limitation for 2022 was $34,200 and increases  each  year  with  the
 Consumer  Price Index. As of the date this Fiscal Note was released, the
 2023 limit had not been published.
   IMPACT ON  BENEFITS:  Under  the  proposed  legislation,  if  enacted,
 Correction  Disability  Retirees,  who were Tier 3 correction members in
 the Early Service Retirement  Benefit  Plan  for  General  Members,  the
 Correction Officer 20-Year Plan, or the Correction Captain 20-Year Plan,
 would  no longer be subject to the PSI limitation for private employment
 earnings after the date they would  have  been  eligible  to  receive  a
 service retirement in their respective plan.
   For  the  purposes of this Fiscal Note, it was assumed that Correction
 Disability Retirees would continue to be limited by  other  post-retire-
 ment  earnings restrictions such as New York City Charter (NYCC) Section
 1117 and RSSL Section 212.
   NYCC Section 1117 limits the PSI for any NYCERS retiree to $1,800  per
 year  from  most  public employment within New York State (including New
 York City). PSI from those sources that exceeds  $1,800  per  year  will
 result  in  a suspension of the retiree's pension. However, NYCC Section
 1117 places no limits on the amounts of PSI  that  may  be  earned  from
 private  employment.  RSSL  Section  212 permits a retiree to earn up to
 $35,000 per year from post-retirement public employment, notwithstanding
 NYCC Section 1117, if certain conditions are met.
   FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: Based on the actuar-
 ial assumptions and methods  described  below,  the  enactment  of  this
 proposed  legislation  is estimated to increase annual employer contrib-
 utions by approximately $15,100.
   The change in employer costs would depend upon the amount  and  timing
 of pension payments that would no longer be suspended due to this legis-
 lation.
   To  the  extent  the  NYCERS earnings limitation would have applied in
 Calendar Years 2023 and  later,  Correction  Disability  Retirees  whose
 post-retirement  earnings  exceeded  the  PSI  limitation would have had
 their pension suspended for 12 months in years after the date  on  which
 they would have become eligible for service retirement.
   Enactment  of  the legislation would eliminate the suspension of bene-
 fits for those Correction Disability  Retirees  whose  PSI  exceeds  the
 NYCERS  earnings  limitation  after  the  date  on which they would have
 become eligible for service retirement.
   Suspended pensions due to earnings that exceed the NYCERS PSI  limita-
 tion,  are  currently  treated  as  an actuarial gain, and the financial
 impact is recognized at the time of the event.  Consequently, changes in
 employer contributions have been estimated assuming that the increase in
 the pension payment of approximately $128,000 will be  financed  over  a
 closed  15-year  period (14 payments under the One-Year Lag Methodology)
 using level dollar payments.
   CENSUS DATA: Data for the eight Correction Disability  Retirees  whose
 post-retirement  earnings exceeded the PSI limitation for suspensions in
 A. 7416                             3
 
 effect during fiscal year 2022 was provided by NYCERS. These members had
 an average suspended pension amount of approximately $16,000 per year.
   ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
 been  calculated based on the actuarial assumptions and methods used for
 the Preliminary Fiscal Year 2024 employer contributions of NYCERS.
   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 possible increased administrative costs attributable  to  enact-
 ment of the proposed legislation.
   *  The  impact  of  this  proposed legislation on Other Postemployment
 Benefit costs.
   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  2023-49  dated  May  16,
 2023  was prepared by the Chief Actuary for the New York City Employees'
 Retirement System.  This estimate is intended for use  only  during  the
 2023 Legislative Session.