S T A T E O F N E W Y O R K
________________________________________________________________________
8855
I N S E N A T E
March 21, 2024
___________
Introduced by Sen. JACKSON -- read twice and ordered printed, and when
printed to be committed to the Committee on Civil Service and Pensions
AN ACT to amend the administrative code of the city of New York and the
education law, in relation to the transfer of board of education
employees to the teachers' retirement system of the city of New York
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivision 7 of section 13-501 of the administrative code
of the city of New York is amended by adding a new paragraph (c) to read
as follows:
(C) "TEACHER" SHALL ALSO MEAN ALL THOSE SERVING AS BOARD OF EDUCATION
EMPLOYEES IN A TITLE REPRESENTED BY THE UNITED FEDERATION OF TEACHERS
WHO FILE AN APPLICATION FOR MEMBERSHIP IN THE RETIREMENT ASSOCIATION ON
A FORM SUPPLIED BY THE RETIREMENT BOARD.
§ 2. The education law is amended by adding a new section 2575-f to
read as follows:
§ 2575-F. TRANSFER OF EMPLOYEES REPRESENTED BY THE UNITED FEDERATION
OF TEACHERS TO THE NEW YORK CITY TEACHERS' RETIREMENT SYSTEM. ANY
EMPLOYEE REPRESENTED BY THE UNITED FEDERATION OF TEACHERS WHO IS A
MEMBER OF THE NEW YORK CITY BOARD OF EDUCATION RETIREMENT SYSTEM SHALL
HAVE THE RIGHT TO TRANSFER THEIR MEMBERSHIP TO THE TEACHERS' RETIREMENT
SYSTEM OF THE CITY OF NEW YORK. TO AFFECT SUCH A TRANSFER, A MEMBER MUST
GIVE NOTICE TO THE NEW YORK CITY BOARD OF EDUCATION RETIREMENT SYSTEM,
WITHIN ONE YEAR OF SUCH MEMBER BECOMING ELIGIBLE FOR MEMBERSHIP IN THE
SAID TEACHERS' RETIREMENT SYSTEM, OF SUCH MEMBER'S INTENTION TO TRANSFER
TO THE SAID TEACHERS' RETIREMENT SYSTEM. MEMBERSHIP IN THE UNITED FEDER-
ATION OF TEACHERS IS NOT REQUIRED TO BE COVERED UNDER THIS SECTION. UPON
RECEIPT OF SUCH NOTICE, THE NEW YORK CITY BOARD OF EDUCATION SYSTEM
SHALL TRANSFER TO SUCH TEACHERS' RETIREMENT SYSTEM THE RESERVE ON SUCH
MEMBERS' BENEFITS IN THE MANNER PROVIDED BY SUBDIVISIONS C AND D OF
SECTION FORTY-THREE OF THE RETIREMENT AND SOCIAL SECURITY LAW AND
NOTWITHSTANDING SUBDIVISION L OF SUCH SECTION. THE FORMER SYSTEM SHALL
ALSO TRANSFER TO THE LATTER SYSTEM THE MEMBER'S CONTRIBUTIONS, WHICH
SHALL BECOME SUCH MEMBER'S CONTRIBUTIONS IN THE LATTER SYSTEM. A PERSON
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14964-02-4
S. 8855 2
SO TRANSFERRING SHALL BE DEEMED TO HAVE BEEN A MEMBER OF THE SYSTEM TO
WHICH SUCH MEMBER HAS TRANSFERRED DURING THE ENTIRE PERIOD OF MEMBERSHIP
SERVICE CREDITED TO SUCH MEMBER IN THE SYSTEM FROM WHICH SUCH MEMBER HAS
TRANSFERRED. SUCH TRANSFEREE SHALL BE ENTITLED TO ALL THE RIGHTS, PRIV-
ILEGES AND BENEFITS OF THE SYSTEM TO WHICH THEY HAVE TRANSFERRED.
§ 3. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY: This proposed legislation would allow current and future full
time or part time New York City Department of Education employees serv-
ing in New York City Board of Education Retirement System (BERS) eligi-
ble titles represented by the United Federation of Teachers (UFT) to
join or transfer into the New York City Teachers' Retirement System
(TRS) by filing a notice with BERS within one year of becoming eligible
for such TRS membership.
EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
by Fiscal Year for the first 25 years ($ in Millions)
Year NYC
2025 2.3
2026 2.3
2027 2.3
2028 2.4
2029 2.4
2030 2.4
2031 2.4
2032 2.4
2033 2.4
2034 2.4
2035 2.3
2036 2.3
2037 2.3
2038 1.1
2039 1.1
2040 1.0
2041 1.0
2042 1.0
2043 0.9
2044 0.9
2045 0.9
2046 0.8
2047 0.8
2048 0.8
2049 0.8
The Employer Contribution impact shown above reflects the cost of
expected benefit increases using TRS assumptions only. Not shown is any
impact due to valuing impacted BERS members using TRS assumptions. The
potential impact of assumption changes is discussed further below. The
Employer Contribution impact beyond Fiscal Year 2049 is not shown.
Projected contributions include future new hires that may be impacted.
INITIAL INCREASE (DECREASE) IN ACTUARIAL LIABILITIES
as of June 30, 2023 ($ in Millions)
S. 8855 3
Present Value (PV) Impacted
Group
PV of Benefits: 18.3
PV of Employee Contributions: (2.4)
PV of Employer Contributions: 20.8
Unfunded Accrued Liabilities: 9.0
AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
Impacted
Group
Number of Payments: 13
Fiscal Year of Last Payment: 2037
Amortization Payment: 1.1 M
Unfunded Accrued Liability increases were amortized over the expected
remaining working lifetime of those impacted by the benefit changes
using level dollar payments.
IMPACT ON CONTRIBUTIONS AND FUNDING: Employer contributions are actu-
arially determined to fund expected benefit payments over the future
working lifetime of the members, with any gain or loss resulting from
actual experience differing from expectations recognized separately.
Applying TRS assumptions to members currently in BERS would change the
funding pattern for these members, immediately increasing the employer
contributions, and over time, gains and losses would ultimately offset
any changes in the required contributions. Reevaluating actuarial
assumptions (e.g., salary scale, mortality, etc.) may be warranted if
there is a significant change in the demographics of the underlying
population. The first-year impact of valuing these BERS members using
current TRS assumptions, assuming no change in benefits, is an addi-
tional net increase in the employer contributions of $19.6 million.
In addition, the transfer of reserves based on the accrued liability
for members who switch between systems is dependent on the actuarial
assumptions utilized. The calculation of reserves based on BERS assump-
tions would be less than the reserves calculated based on TRS assump-
tions. The net impact will ultimately be reconciled through actuarial
gains and losses but may vary by system. The accrued liability and
expected reserve transfer from BERS to TRS due to the proposed legis-
lation is approximately $730 million.
CENSUS DATA: The estimates presented herein are based on preliminary
census data collected as of June 30, 2023. The census data for the
impacted population is summarized below.
BERS
Active Members
- Number Count: 5,533
- Average Age: 47
- Average Service: 8.6
- Average Salary: 80,300
IMPACT ON MEMBER BENEFITS: Employees in the impacted titles would
generally, except as provided below, be eligible for the same respective
plans in TRS in which they are eligible to participate in BERS.
S. 8855 4
Under the proposed legislation, if a member elects to join or transfer
to TRS, members may be entitled to additional benefits. Among those, the
following differences were valued for purposes of this Fiscal Note:
* Unreduced Retirement with 30 years of service for Tier 4 members
* Provisions for additional member contributions
* Greater Accidental Disability Retirement benefits
* Loans Factors applied to outstanding balances at retirement
* Early Deferred Vested Retirement commencement
Additional differences may apply but were not valued for the purposes
of this Fiscal Note.
ASSUMPTIONS AND METHODS: The estimates presented herein have been
calculated based on the Revised 2021 Actuarial Assumptions and Methods
of TRS. In addition:
* New entrants were assumed to replace exiting members so that total
payroll increases by 3% each year for impacted groups. New entrant demo-
graphics were developed based on data for recent new hires and actuarial
judgement.
To determine the impact of the elective nature of the proposed legis-
lation, a subgroup of members in UFT represented titles was developed
based on who is assumed to benefit actuarially by comparing the net
present value of future employer costs of each member's benefit under
their current plan and under the comparable TRS plan.
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).
In addition, this Fiscal Note does not measure the impact of the
significant transfer of member contributions and reserves from BERS to
TRS.
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 2024-32 dated March 20,
2024 was prepared by the Chief Actuary for the New York City Retirement
Systems and Pension Funds. This estimate is intended for use only during
the 2024 Legislative Session.
