S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6640
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                              March 19, 2025
                                ___________
 
 Introduced by Sens. GOUNARDES, ADDABBO, CLEARE, COMRIE, FERNANDEZ, JACK-
   SON,  LIU, MARTINEZ, MATTERA, PALUMBO, PARKER, RAMOS, RHOADS, SALAZAR,
   SCARCELLA-SPANTON, SKOUFIS, STAVISKY, WEBER, WEIK --  read  twice  and
   ordered  printed, and when printed to be committed to the Committee on
   Civil Service and Pensions

 AN ACT to amend the retirement and social security law, in  relation  to
   death benefits for active New York city transit authority members
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 604-b of the retirement and social security law  is
 amended by adding a new subdivision f to read as follows:
   F. DEATH BENEFITS. NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRA-
 RY, WHERE A NEW YORK CITY TRANSIT AUTHORITY MEMBER WOULD HAVE BEEN ENTI-
 TLED  TO A SERVICE RETIREMENT BENEFIT AT THE TIME OF THEIR DEATH BUT HAD
 NOT YET FILED FOR SUCH SERVICE RETIREMENT PURSUANT TO SUBPARAGRAPH  (IV)
 OF  PARAGRAPH ONE OF SUBDIVISION C OF THIS SECTION, AND WHERE SUCH DEATH
 OCCURS ON OR AFTER THE EFFECTIVE DATE OF THIS SUBDIVISION, THE BENEFICI-
 ARY OR BENEFICIARIES OF SUCH MEMBER MAY ELECT TO RECEIVE, IN A LUMP  SUM
 OR ON AN ANNUITIZED BASIS, AN AMOUNT PAYABLE WHICH SHALL BE EQUAL TO THE
 PENSION RESERVE THAT WOULD HAVE BEEN ESTABLISHED HAD SUCH MEMBER RETIRED
 ON THE DATE OF THEIR DEATH.
   §  2. Notwithstanding any other provision of law to the contrary, none
 of the provisions of this act shall be subject  to  section  25  of  the
 retirement and social security law.
   § 3. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY:  This proposed legislation would provide an alternative death
 benefit for Transit Tier 4 and Tier 6 Special Plan members  of  the  New
 York  City Employees' Retirement System (NYCERS) who die on or after the
 effective date.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09277-02-5
 S. 6640                             2
              

 
          EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
           by Fiscal Year for the first 25 years ($ in Millions)
 
                             Year   NYCERS
                             2026   4.2
                             2027   4.2
                             2028   4.3
                             2029   4.3
                             2030   4.3
                             2031   4.3
                             2032   4.3
                             2033   4.3
                             2034   4.3
                             2035   4.3
                             2036   4.3
                             2037   4.3
                             2038   1.0
                             2039   1.0
                             2040   1.0
                             2041   1.0
                             2042   1.0
                             2043   1.1
                             2044   1.1
                             2045   1.1
                             2046   1.1
                             2047   1.1
                             2048   1.1
                             2049   1.1
                             2050   1.1
 
 Projected  contributions  include future new hires that may be impacted.
 For Fiscal Year 2051 and beyond, the expected increase in normal cost as
 a level percent of pay for impacted new entrants is approximately 0.01%.
 
   The increase in employer contributions will be allocated  to  the  New
 York City Transit Authority.
   PRESENT  VALUE  OF  BENEFITS:  The  Present  Value  of Benefits is the
 discounted expected value of benefits paid to  current  members  if  all
 assumptions are met, including future service accrual and pay increases.
 Future new hires are not included in this present value.
 
          INITIAL INCREASE (DECREASE) IN ACTUARIAL PRESENT VALUES
                    as of June 30, 2024 ($ in Millions)
 
                Present Value (PV)                 NYCERS
                (1) PV of Employer Contributions:    34.3
                (2) PV of Employee Contributions:    0.0
                Total PV of Benefits (1) + (2):      34.3
 
   UNFUNDED  ACCRUED  LIABILITY  (UAL): Actuarial Accrued Liabilities are
 the portion of the Present Value of Benefits allocated to past  service.
 Changes  in UAL were amortized over the expected remaining working life-
 time of those impacted using level dollar payments.
 
                AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
 S. 6640                             3
 
                                                   NYCERS
 
                Increase (Decrease) in UAL:        25.2 M
                Number of Payments:                    12
                Amortization Payment:               3.3 M
 
   CENSUS  DATA:  The estimates presented herein are based on preliminary
 census data collected as of June 30,  2024.  The  census  data  for  the
 impacted population is summarized below.

                                                   NYCERS
 
                Active Members
                - Number Count:                    37,476
                - Average Age:                       48.2
                - Average Service:                   11.4
                - Average Salary:                  93,100
 
   IMPACT  ON  MEMBER  BENEFITS:  Currently,  NYCERS  Transit members are
 generally entitled to a lump sum  ordinary  death  benefit  equal  to  a
 multiple  of salary plus the return of member accumulated contributions,
 if any. These death benefits are generally calculated as three times the
 final year's salary  and  may  be  subject  to  salary  caps  and  other
 reductions.
   Under the proposed legislation, the ordinary death benefit for Transit
 Tier  4  and  Tier  6 Special Plan members who are eligible to receive a
 service retirement benefit would be the greater of their  current  death
 benefit  or the value of the pension reserve that would have been estab-
 lished had they retired on the date of their death.
   The pension reserve is the actuarial  present  value  of  all  pension
 payments  expected  to  be made had the member retired for service. This
 type of lump sum pension reserve death benefit is sometimes referred  to
 as  a Death Gamble, and is afforded, in a similar form, to Tier 1 NYCERS
 members.
   ASSUMPTIONS AND METHODS: The  estimates  presented  herein  have  been
 calculated  based  on the Revised 2021 Actuarial Assumptions and Methods
 of the impacted retirement systems. 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.
   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). This Fiscal Note does not reflect any chapter
 laws that may have been enacted during the current legislative session.
   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
 S. 6640                             4
 
 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 2025-27  dated  March  6,
 2025  was prepared by the Chief Actuary for the New York City Retirement
 Systems and Pension Funds and is intended for use only during  the  2025
 Legislative Session.