A. 7668 2
wise payable, but not below [fifty] SEVENTY per centum of the original
benefit otherwise payable. In the case of any member of the New York
state and local employees' retirement system who is permitted to retire
without regard to age or a member of the New York state and local police
and fire retirement system, commencing upon attainment of age sixty-two
if such member's date of membership is prior to April first, two thou-
sand twelve or attainment of age sixty-three if such member's date of
membership is on or after April first, two thousand twelve, the benefit
otherwise provided pursuant to this paragraph shall be reduced while the
member is in service to ninety-seven per centum of the benefit otherwise
payable, and each year thereafter the benefit payable shall be reduced
by an amount equal to three per centum per year of the original benefit
otherwise payable, but not below seventy per centum of the original
benefit otherwise payable. In the case of any other member of the New
York state and local employees' retirement system, commencing upon
attainment of age sixty-two if such member's date of membership is prior
to April first, two thousand twelve or attainment of age sixty-three if
such member's date of membership is on or after April first, two thou-
sand twelve, the benefit otherwise provided pursuant to this paragraph
shall be reduced while the member is in service to ninety-six per centum
of the benefit otherwise payable, and each year thereafter the benefit
payable shall be reduced by an amount equal to four per centum per year
of the original benefit otherwise payable, but not below sixty per
centum of the original benefit otherwise payable. Upon retirement from
any retirement system, the benefit in force shall be reduced by fifty
per centum; upon completion of the first year of retirement, the benefit
in force at the time of retirement shall be reduced by an additional
twenty-five per centum, and upon commencement of the third year of
retirement, the benefit shall be ten per centum of the benefit in force
at age sixty, if any, or at the time of retirement if retirement
preceded such age; provided, however, the benefit in retirement shall
not be reduced below ten per centum of the benefit in force at age
sixty, if any, or at the time of retirement if retirement preceded such
age. Notwithstanding any other provision of this paragraph to the
contrary, the benefit for a retiree from the New York state and local
employees' retirement system [and], the New York state teachers' retire-
ment system, THE NEW YORK CITY EMPLOYEES' RETIREMENT SYSTEM, THE NEW
YORK CITY BOARD OF EDUCATION RETIREMENT SYSTEM OR THE NEW YORK CITY
TEACHERS' RETIREMENT SYSTEM shall not be reduced below ten per centum of
the benefit in force at the time of retirement.
§ 2. The closing paragraph of paragraph 2 of subdivision a of section
508 of the retirement and social security law, as amended by chapter 720
of the laws of 2022, is amended to read as follows:
Notwithstanding any other provision of this paragraph, in the case of
a member of the New York state teachers' retirement system, commencing
upon attainment of age sixty-two if such member's date of membership is
prior to April first, two thousand twelve or attainment of age sixty-
three if such member's date of membership is on or after April first,
two thousand twelve, the benefit otherwise provided pursuant to this
paragraph shall be reduced while the member is in service to ninety-six
per centum of the benefit otherwise payable, and each year thereafter
the benefit payable shall be reduced by an amount equal to four per
centum per year of the original benefit otherwise payable, but not below
sixty per centum of the original benefit otherwise payable. In the case
of a member of the New York city employees' retirement system, the New
York city board of education retirement system or the New York city
A. 7668 3
teachers' retirement system, commencing upon attainment of age sixty-
one, the benefit otherwise provided pursuant to this paragraph shall be
reduced while the member is in service to [ninety-five] NINETY-SEVEN per
centum of the benefit otherwise payable and each year thereafter the
benefit payable shall be reduced by an amount equal to [five] THREE per
centum per year of the original benefit otherwise payable, but not below
[fifty] SEVENTY per centum of the original benefit otherwise payable. In
the case of any member of the New York state and local employees'
retirement system who is permitted to retire without regard to age,
commencing upon attainment of age sixty-two if such member's date of
membership is prior to April first, two thousand twelve or attainment of
age sixty-three if such member's date of membership is on or after April
first, two thousand twelve, the benefit otherwise provided pursuant to
this paragraph shall be reduced while the member is in service to nine-
ty-seven per centum of the benefit otherwise payable, and each year
thereafter the benefit payable shall be reduced by an amount equal to
three per centum per year of the original benefit otherwise payable, but
not below seventy per centum of the original benefit otherwise payable.
In the case of any other member of the New York state and local employ-
ees' retirement system, commencing upon attainment of age sixty-two if
such member's date of membership is prior to April first, two thousand
twelve or attainment of age sixty-three if such member's date of member-
ship is on or after April first, two thousand twelve, the benefit other-
wise provided pursuant to this paragraph shall be reduced while the
member is in service to ninety-six per centum of the benefit otherwise
payable, and each year thereafter the benefit payable shall be reduced
by an amount equal to four per centum per year of the original benefit
otherwise payable, but not below sixty per centum of the original bene-
fit otherwise payable. Upon retirement from any retirement system, the
benefit in force shall be reduced by fifty per centum; upon completion
of the first year of retirement, the benefit in force at the time of
retirement shall be reduced by an additional twenty-five per centum, and
upon commencement of the third year of retirement, the benefit shall be
ten per centum of the benefit in force at age sixty, if any, or at the
time of retirement if retirement preceded such age; provided, however,
the benefit in retirement shall not be reduced below ten per centum of
the benefit in force at age sixty, if any, or at the time of retirement
if retirement preceded such age. Notwithstanding any other provision of
this paragraph to the contrary, the benefit for a retiree from the New
York state and local employees' retirement system [and], the New York
state teachers' retirement system, THE NEW YORK CITY EMPLOYEES' RETIRE-
MENT SYSTEM, THE NEW YORK CITY BOARD OF EDUCATION RETIREMENT SYSTEM OR
THE NEW YORK CITY TEACHERS' RETIREMENT SYSTEM shall not be reduced below
ten per centum of the benefit in force at the time of retirement.
§ 3. The closing paragraph of paragraph 2 of subdivision a of section
606 of the retirement and social security law, as amended by chapter 720
of the laws of 2022, is amended to read as follows:
In the case of a member of the New York state teachers' retirement
system, commencing upon attainment of age sixty-two if such member's
date of membership is prior to April first, two thousand twelve or
attainment of age sixty-three if such member's date of membership is on
or after April first, two thousand twelve, the benefit otherwise
provided pursuant to this paragraph shall be reduced while the member is
in service to ninety-six per centum of the benefit otherwise payable,
and each year thereafter the benefit payable shall be reduced by an
amount equal to four per centum per year of the original benefit other-
A. 7668 4
wise payable, but not below sixty per centum of the original benefit
otherwise payable. In the case of a member of the New York city employ-
ees' retirement system, the New York city board of education retirement
system or the New York city teachers' retirement system, commencing upon
attainment of age sixty-one, the benefit otherwise provided pursuant to
this paragraph shall be reduced while the member is in service to [nine-
ty-five] NINETY-SEVEN per centum of the benefit otherwise payable and
each year thereafter the benefit payable shall be reduced by an amount
equal to [five] THREE per centum per year of the original benefit other-
wise payable, but not below [fifty] SEVENTY per centum of the original
benefit otherwise payable. In the case of any member of the New York
state and local employees' retirement system who is permitted to retire
without regard to age, commencing upon attainment of age sixty-two if
such member's date of membership is prior to April first, two thousand
twelve or attainment of age sixty-three if such member's date of member-
ship is on or after April first, two thousand twelve, the benefit other-
wise provided pursuant to this paragraph shall be reduced while the
member is in service to ninety-seven per centum of the benefit otherwise
payable, and each year thereafter the benefit payable shall be reduced
by an amount equal to three per centum per year of the original benefit
otherwise payable, but not below seventy per centum of the original
benefit otherwise payable. In the case of any other member of the New
York state and local employees' retirement system, commencing upon
attainment of age sixty-two if such member's date of membership is prior
to April first, two thousand twelve or attainment of age sixty-three if
such member's date of membership is on or after April first, two thou-
sand twelve, the benefit otherwise provided pursuant to this paragraph
shall be reduced while the member is in service to ninety-six per centum
of the benefit otherwise payable, and each year thereafter the benefit
payable shall be reduced by an amount equal to four per centum per year
of the original benefit otherwise payable, but not below sixty per
centum of the original benefit otherwise payable. Upon retirement, from
any retirement system, the benefit in force shall be reduced by fifty
per centum; upon completion of the first year of retirement, the benefit
in force at the time of retirement shall be reduced by an additional
twenty-five per centum, and upon commencement of the third year of
retirement, the benefit shall be ten per centum of the benefit in force
at age sixty, if any, or at the time of retirement if retirement
preceded such age; provided, however, the benefit in retirement shall
not be reduced below ten per centum of the benefit in force at age
sixty, if any, or at the time of retirement if retirement preceded such
age. Notwithstanding any other provision of this paragraph to the
contrary, the benefit for a retiree from the New York state and local
employees' retirement system [and], the New York state teachers' retire-
ment system, THE NEW YORK CITY EMPLOYEES' RETIREMENT SYSTEM, THE NEW
YORK CITY BOARD OF EDUCATION RETIREMENT SYSTEM OR THE NEW YORK CITY
TEACHERS' RETIREMENT SYSTEM shall not be reduced below ten per centum of
the benefit in force at the time of retirement.
§ 4. This act shall take effect immediately and shall be deemed to
have been in full force and effect on and after July 1, 2021, provided
that this act shall not apply to the payment of any death benefit based
upon a member's death which occurred prior to July 1, 2021.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: This proposed legislation (see Appendix) would amend
certain death benefit provisions to ensure continued compliance with the
requirements of the Federal Older Workers' Benefit Protection Act,
A. 7668 5
Public Law 101-433 (OWBPA). In general, with respect to the New York
City Employees' Retirement System (NYCERS), the New York City Teachers'
Retirement System (NYCTRS), and the New York City Board of Education
Retirement System (BERS), the bill would amend the Tier 2, 3, and 4/6
ordinary death benefit provisions set forth in Retirement and Social
Security Law (RSSL) Articles 11, 14, and 15, respectively, to ensure
that, on an actuarial basis, the costs of providing such benefits to
older members are no less than the costs of providing such benefits to
younger members.
Effective Date: This bill would be effective immediately and be deemed
to have been in force since July 1, 2021.
IMPACT ON BENEFITS: Under the proposed legislation, if enacted, the
Pre-retirement Ordinary Death Benefit for Active and Deferred Vested
Members, and the Post-retirement Death Benefit for Tier 2, 3, and 4/6
NYCERS, NYCTRS, and BERS members, would be updated.
PRE-RETIREMENT ORDINARY DEATH BENEFIT
The Tier 2, 3 and 4/6 Ordinary Death Benefit (for all members except
police officers, firefighters, correction officers, or sanitation work-
ers) is a lump sum payment equal to current pay multiplied by completed
years of service (up to three years) and further reduced by a percentage
based on age at date of death.
Currently, the reduction is 0% for ages 60 and younger, and increases
by 5% for every age over 60, up to the ultimate rate of 50% for ages 70
and older.
Under the proposed legislation the reduction would remain 0% for ages
60 and younger, and increase by 3% for every age over age 60 up to the
ultimate reduction of 30% for ages 70 and older.
POST-RETIREMENT DEATH BENEFIT
The changes to the reductions described above would also apply to the
calculation of the post-retirement death benefit. In addition, the post-
retirement death benefit in the third year of retirement and thereafter
would be changed as follows:
Current provision: 10% of the Pre-retirement death benefit that would
have been payable had the member died on the earlier of (1) the day
before they retired and (2) age 60.
Proposed provision: Greater of the benefit payable under the current
provision and 10% of the death benefit payable had the member died the
day before they retired.
FINANCIAL IMPACT: The increase in annual employer contributions asso-
ciated with this proposed legislation has already been accounted for
beginning with the June 30, 2020 actuarial valuations used to determine
the Final Fiscal Year 2022 employer contributions of NYCERS, NYCTRS, and
BERS.
The estimated financial impact of updating ordinary death benefits to
maintain compliance with OWBPA as described above is an increase in
Present Value of Future Benefits of approximately $223.7 million, and an
initial increase in the FY 2022 annual employer contributions of approx-
imately $40.0 million ($26.8 million for New York City and $13.2 million
for the other obligors). A breakdown of the FY 2022 annual contribution
impact by System is shown in the table below.
Impact on FY 2022
System Annual Employer Contributions
______
($ Millions)
_____________________________
NYCERS $ 22.9
A. 7668 6
NYCTRS 12.5
BERS 4.6
Total $ 40.0
Long-term annual costs (after the initial increase in unfunded accrued
liability is fully amortized in seven to eight years) are estimated to
be less than $10 million for all three Systems combined.
New Unfunded Accrued Liability (UAL) attributable to benefit changes
are generally amortized over the remaining working lifetime of those
impacted by the benefit changes. For purposes of this Fiscal Note, it
had been assumed that increases in UAL would be amortized over periods
ranging from seven to eight years depending on the System (six to seven
payments under the One-Year Lag Methodology) using level dollar
payments.
CENSUS DATA: The estimates presented herein are based on the census
data used in the June 30, 2020 actuarial valuations of NYCERS, NYCTRS,
and BERS to determine the Fiscal Year 2022 employer contributions.
ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
been calculated based on the actuarial assumptions and methods used for
the Fiscal Year 2022 employer contributions of NYCERS, NYCTRS, and BERS.
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 initial additional administrative costs to implement the
proposed legislation.
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 2023-55 dated May 22,
2023 was prepared by the Chief Actuary for the New York City Employees'
Retirement System, the New York City Teachers' Retirement System, and
the New York City Board of Education Retirement System. This estimate is
intended for use only during the 2023 Legislative Session.