NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7281
SPONSOR: Eachus TITLE OF BILL:
An act in relation to granting retroactive tier IV membership in the New
York city employees' retirement system to Ryan D. O'Connor
PURPOSE:
Grants retroactive tier IV membership in the New York city employees'
retirement system to Ryan D. O'Connor.
SUMMARY OF PROVISIONS:
Section 1: Grants Ryan D. O'Connor Tier IV status in the New York City
employee's retirement system.
Section 2: States that no contributions made by Ryan D. O'Connor shall
be returned or refunded to him pursuant to this act.
Section 3: States that all past service costs of implementing the
provisions of this act shall be borne by the city of New York.
Section 4: Sets effective date.
JUSTIFICATION:
Ryan D. O'Connor was hired on January 19, 2012 right after law school,
but was labeled as an "independent contractor" by the New York City
Transit Authority despite being designated a W-2 worker. He did not
officially become an employee in the New York city employee's retirement
system until September 10, 2012 when he moved from the Torts Division to
the Office of Labor Relations- Due to NYCERS implementing Tier VI on
April 2012, he was placed as a Tier VI employee rather than Tier IV.
This legislation will address this issue and grant Mr. O'Connor Tier IV
status, which he would have been granted had he originally been placed
in the New York city employees' retirement system when he was hired on
January 19, 2012.
LEGISLATIVE HISTORY:
Senate:
2022: REFERRED TO CIVIL SERVICE AND PENSIONS
FISCAL IMPLICATIONS:
To be determined.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
7281
2023-2024 Regular Sessions
IN ASSEMBLY
May 17, 2023
___________
Introduced by M. of A. EACHUS -- read once and referred to the Committee
on Governmental Employees
AN ACT in relation to granting retroactive tier IV membership in the New
York city employees' retirement system to Ryan D. O'Connor
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Notwithstanding any other provision of law to the contrary,
2 Ryan D. O'Connor, an employee of the New York city transit authority and
3 a member of the New York city employees' retirement system, who was
4 employed with the New York city transit authority on January 19, 2012,
5 who for reasons not ascribable to his own negligence, failed to become a
6 member of such retirement system during such employment with the New
7 York city transit authority until September 10, 2012, shall be deemed to
8 have joined the New York city employees' retirement system on January
9 19, 2012 and shall be granted Tier IV status in such retirement system,
10 if, within one year of the effective date of this act, he shall file a
11 written request with the New York city employees' retirement system.
12 § 2. No contributions made to the New York city employees' retirement
13 system by Ryan D. O'Connor shall be returned or refunded to him pursuant
14 to this act.
15 § 3. All past service costs of implementing the provisions of this act
16 shall be borne by the city of New York.
17 § 4. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: This proposed legislation would permit Ryan D.
O'Connor, an active Tier 6 member of the New York City Employees'
Retirement System (NYCERS), to elect, by filing an application with
NYCERS within one year of the effective date, membership in the Tier 4
NYCERS 57/5 Plan.
Effective Date: Upon enactment.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07071-02-3
A. 7281 2
BACKGROUND: Mr. O'Connor commenced employment with the New York City
Transit Authority (NYCTA) on January 19, 2012 and subsequently joined
NYCERS in September 2012. In the nine-month period between the commence-
ment of his employment and the date on which he joined NYCERS, Chapter
18 of the Laws of 2012, or Tier 6, was enacted. Therefore, Mr. O'Connor
joined NYCERS as a Tier 6 member.
The proposed legislation would allow Mr. O'Connor to apply for a
retroactive NYCERS membership date of January 19, 2012, which would
entitle him to Tier 4 membership, without a refund of past Tier 6
contributions, in the NYCERS 57/5 Plan. A change from Tier 6 to Tier 4
would result in an earlier date of retirement eligibility, lower overall
prospective employee contribution rates, a larger benefit, and a three-
year (as opposed to a five-year) final average salary.
While the past service costs for this member would normally be borne
by the NYCTA, the proposed legislation assigns such costs to the City of
New York.
FINANCIAL IMPACT - PRESENT VALUES: Based on the actuarial assumptions
and methods described herein, the enactment of this proposed legislation
would result in an increase in the present value of future employer
contributions of approximately $106,900.
This net increase is a result of an increase in the Present Value of
Future Benefits (PVFB) of approximately $41,500 and a decrease in the
present value of member contributions of approximately $65,400.
Under the Entry Age Normal cost method used to determine the employer
contributions to NYCERS, there would be an increase in the Unfunded
Accrued Liability (UAL) of approximately $51,100 and an increase in the
present value of future employer Normal Cost of approximately $55,800.
The estimated financial impact of this proposed legislation has been
calculated based on the difference between (1) the present value of
benefits Mr. O'Connor would receive if the Tier 4 57/5 Plan were elected
and (2) the present value of the benefits Mr. O'Connor would receive
under the Tier 6 63/5 Plan.
FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: The enactment of
this proposed legislation would result in an initial increase in annual
employer contributions of approximately $8,900 which is the result of an
increase in the Normal Cost in addition to the UAL payment.
New UAL attributable to benefit changes are generally amortized over
the remaining working lifetime of those impacted by the benefit changes.
The remaining working lifetime for Mr. O'Connor is approximately 21
years and the increase in UAL was therefore amortized over a 21-year
period (20 payments under the One-Year Lag Methodology) using level
dollar payments.
CENSUS DATA: As of June 30, 2022, Mr. O'Connor was approximately age
36, had approximately 10 years of service, and a salary of approximately
$97,700.
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.
For the purposes of this Fiscal Note, it is assumed that the changes
would be reflected for the first time in the June 30, 2023 actuarial
valuation of NYCERS used to determine employer contributions for Fiscal
Year 2025.
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-
A. 7281 3
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.
* The impact of this proposed legislation on Other Postemployment
Benefit (OPEB) 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 2023-42 dated May 4, 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.
