S T A T E O F N E W Y O R K
________________________________________________________________________
5618--C
2023-2024 Regular Sessions
I N S E N A T E
March 9, 2023
___________
Introduced by Sens. THOMAS, ADDABBO, ASHBY, COONEY, HARCKHAM, LIU,
PALUMBO, RHOADS, ROLISON, SCARCELLA-SPANTON, TEDISCO, WALCZYK -- read
twice and ordered printed, and when printed to be committed to the
Committee on Civil Service and Pensions -- reported favorably from
said committee and committed to the Committee on Finance -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee -- recommitted to the Committee on Civil Service and
Pensions in accordance with Senate Rule 6, sec. 8 -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
AN ACT to amend the retirement and social security law, in relation to
increasing the amount of years of military service credit a member may
purchase
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivision 4 of section 1000 of the retirement and social
security law, as amended by chapter 41 of the laws of 2016, is amended
to read as follows:
4. In no event shall the credit granted pursuant to this section, when
added to credit granted for military service with any retirement system
of this state pursuant to this or any other provision of law, exceed a
total of [three] FOUR years.
§ 2. Subdivision 1 of section 1000 of the retirement and social secu-
rity law, as amended by chapter 585 of the laws of 2022, is amended to
read as follows:
1. A member, upon application to such retirement system, may obtain a
total not to exceed [three] FOUR years of service credit for up to
[three] FOUR years of military duty, as defined in section two hundred
forty-three of the military law, if the member (a) was honorably
discharged from the military, or (b) has a qualifying condition, as
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09065-10-4
S. 5618--C 2
defined in section three hundred fifty of the executive law, and has
received a discharge other than bad conduct or dishonorable from such
service, or (c) is a discharged LGBT veteran, as defined in section
three hundred fifty of the executive law, and has received a discharge
other than bad conduct or dishonorable from such service.
§ 3. Notwithstanding any provision of law to the contrary, none of the
provisions of this act shall be subject to the appropriation requirement
of section 25 of the retirement and social security law.
§ 4. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY: This proposed legislation, as it relates to members of the
New York City Retirement Systems and Pension Funds (NYCRS), would
increase the maximum number of years of military duty service credit
that a member may purchase from three years to four.
ILLUSTRATION - INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
by Fiscal Year for the first 25 years ($)
Year One Year of Service One Year of Service
Purchased Purchased Per Year
2025 2,100 2,100
2026 2,100 4,200
2027 2,100 6,300
2028 2,100 8,500
2029 2,100 10,700
2030 2,100 13,000
2031 2,100 15,300
2032 2,100 17,700
2033 2,100 20,100
2034 2,100 22,500
2035 2,100 25,000
2036 2,100 27,600
2037 2,100 30,200
2038 2,100 32,900
2039 0 33,500
2040 0 34,200
2041 0 34,900
2042 0 35,600
2043 0 36,300
2044 0 37,000
2045 0 37,800
2046 0 38,500
2047 0 39,300
2048 0 40,100
2049 0 40,900
Employer contribution impact beyond Fiscal Year 2049 is not shown.
The potential increases in employer contributions will be allocated to
New York City and other applicable obligors of NYCRS.
EXPECTED INCREASE (DECREASE) IN ACTUARIAL LIABILITIES
as of June 30, 2023 ($ in Thousands)
Present Value (PV) Per Year of
Service Purchased
PV of Benefits: 20.2
PV of Employee Contributions: (2.8)
PV of Employer Contributions: 17.4
S. 5618--C 3
Unfunded Accrued Liabilities: 17.4
AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
Recognized as Ongoing Gain/Loss Per Year of
Service Purchased
Number of Payments: 14
Amortization Payment: 2.1 K
CENSUS DATA: The number of members who will purchase an additional
fourth year of military service is unknown. The estimates presented
herein are based on preliminary census data collected as of June 30,
2023. The census data for the potentially impacted population used to
develop the average costs in this Fiscal Note is based on active members
who have already purchased three years of military service and is summa-
rized below.
NYCRS
Active Members
- Number Count: 461
- Average Age: 49.3
- Average Service: 17.1
- Average Salary: 117,900
IMPACT ON MEMBER CONTRIBUTIONS: Eligible NYCRS members are required to
contribute, for each year of military service purchased, 3% (or 6% for
members who first join on or after April 1, 2012) of such member's
compensation earned during the 12 months of credited service immediately
preceding the date the member applies for military service credit.
ASSUMPTIONS AND METHODS: The estimates presented herein have been
calculated based on the Revised 2021 Actuarial Assumptions and Methods
of the impacted retirement systems.
The number of members who will benefit in the future from this
proposed legislation is unknown. The cost of this proposed legislation
could vary greatly depending on the number of future members who benefit
and, on their plan, length of service, age, and salary history.
RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend
highly on the actuarial assumptions, methods, and models used, demo-
graphics of the impacted population and other factors such as invest-
ment, contribution, and other risks. If actual experience deviates from
actuarial assumptions, the actual costs could differ from those
presented herein. Quantifying these risks is beyond the scope of this
Fiscal Note.
This Fiscal Note is intended to measure pension-related impacts and
does not include other potential costs (e.g., administrative and Other
Postemployment Benefits).
STATEMENT OF ACTUARIAL OPINION: Marek Tyszkiewicz and Gregory Zelikov-
sky are members of the Society of Actuaries and the American Academy of
Actuaries. We are members of NYCERS but do not believe it impairs our
objectivity and we meet the Qualification Standards of the American
Academy of Actuaries to render the actuarial opinion contained herein.
To the best of our 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 2024-24 dated March 11,
2024 was prepared by the Chief Actuary for the New York City Retirement
S. 5618--C 4
Systems and Pension Funds. This estimate is intended for use only during
the 2024 Legislative Session.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would amend the current military law to allow for a member
to obtain up to a total of four years of service credit for up to four
years of military duty if the member was honorably discharged. The
current maximum is three years of service credit. Members must have at
least five years of credited service (not including military service).
Tier 1-5 members would be required to make a payment of three percent of
their most recent compensation per year of additional service credit
granted by this bill. Tier 6 members would be required to make a payment
of six percent of their most recent compensation per year of additional
service credit. Portions of the bill would become effective on November
10, 2023.
Insofar as this proposal affects the New York State and Local Employ-
ees' Retirement System (NYSLERS), all costs would be shared by the State
of New York and the local participating employers in the NYSLERS. If
enacted during the 2024 Legislative Session, it is estimated that the
past service cost will be 18% (15% for Tier 6) of an affected member's
compensation for each year of service credit that is purchased.
Insofar as this proposal affects the New York State and Local Police
and Fire Retirement System (NYSLPFRS), all costs would be shared by the
State of New York and the local participating employers in the NYSLPFRS.
If enacted during the 2024 Legislative Session, it is estimated that the
past service cost will be 23% (20% for Tier 6) of an affected member's
compensation for each year of service credit that is purchased.
Further, we anticipate some additional administrative costs to imple-
ment the provisions of this legislation.
The exact number of current and future members who could be affected
by this legislation cannot be readily determined. Through December 31,
2023, approximately 11,200 members have purchased military service cred-
it pursuant to Chapter 41 of the Laws of 2016, with a total cost of
approximately $400 million. It is estimated that, had this proposal been
law since 2016, approximately 7,700 of these members could have
purchased a fourth year of military service credit for an additional
cost of approximately $110 million.
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.
S. 5618--C 5
This estimate, dated March 1, 2024, and intended for use only during
the 2024 Legislative Session, is Fiscal Note No. 2024-64, prepared by
the Actuary for the New York State and Local Retirement System.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would amend subdivisions 1 and 4 of Section 1000 of the
Retirement and Social Security Law to increase the maximum number of
years of military service credit to four that a member may purchase.
Currently, a member can purchase up to three years of military service
credit provided such member did not receive a dishonorable discharge and
was not discharged for bad conduct. To obtain such credit, a member must
make payments as required by Section 1000 of the Retirement and Social
Security Law. Tiers 1, 2, 3, 4 and 5 members are required to pay three
percent of salary earned during the twelve months of credited service
immediately preceding the year in which a claim is made for each year of
military service. Tier 6 members are required to pay six percent of
salary earned during the twelve months of credited service immediately
preceding the year in which a claim is made for each year of military
service.
It is not possible to determine the number of eligible current and
future members, or the additional military service credit each member
may purchase under this bill. Therefore, it is not possible to estimate
the annual increase in the employers' cost for this bill. Whatever
increase in liability arises for service credited under this bill above
that paid for by the member would be included in the cost that would be
shared by employers through the employer contribution rate.
It is estimated that the cost, expressed as a percentage of a member's
salary for the additional year of service credit a member purchases
under this bill is as follows:
Cost per year of Service Purchased (as a percentage of the member's
salary)
Tier(s) 1-4 5 6
Cost 12.5% 11.3% 9.5%
Member Contribution offset 3.0% 3.0% 6.0%
Net cost to participating employers 9.5% 8.3% 3.5%
Member data is from the System's most recent actuarial valuation files
as of June 30, 2023, consisting of data provided by the employers to the
Retirement System. The most recent data distributions and statistics can
be found in the System's Annual Report for fiscal year ended June 30,
2023. System assets are as reported in the System's financial statements
and can also be found in the System's Annual Report. Actuarial assump-
tions and methods are provided in the System's Actuarial Valuation
Report as of June 30, 2023.
The source of this estimate is Fiscal Note 2024-9 dated January 31,
2024 prepared by the Office of the Actuary of the New York State Teach-
ers' Retirement System and is intended for use only during the 2024
Legislative Session. I, Richard A. Young, am the Chief Actuary for the
New York State Teachers' Retirement System. I am a member of the Ameri-
can Academy of Actuaries and I meet the Qualification Standards of the
American Academy of Actuaries to render the actuarial opinion contained
herein.
