Authorizes beneficiaries to choose pension benefits or a death benefit in certain circumstances; provides for the benefit if multiple beneficiaries cannot agree.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10570
SPONSOR: Rules (Zebrowski) TITLE OF BILL:
An act to amend the retirement and social security law, in relation to
authorizing beneficiaries to choose pension benefits or a death benefit
in certain circumstances
PURPOSE:
To allow certain beneficiaries of members who died during the period
between filing an application for retirement and the date in which their
retirement application becomes effective to choose pension benefits.
SUMMARY OF PROVISIONS:
Section 1 amends section 70 of the retirement and social security law to
allow beneficiaries of the New York State and Local Retirement System
members who died within 90 days of filing the retirement application to
choose pension benefits.
Section 2 amends section 370 of the Retirement and Social Security Law
to make conforming changes to allow beneficiaries of Police and Fire
Retirement System members who died within 90 days of filing the retire-
ment application to choose pension benefits.
Section 3 provides that section 25 of the Retirement and Social Security
does not apply to the provisions of this legislation.
Section 4 sets forth the effective date.
JUSTIFICATION:
There are members of public retirement systems who dedicate their
careers to public service but who are unable to take advantage of the
hard-earned pension benefit that they worked for because they die, unex-
pectedly, prior to their date of retirement. This legislation protects
the beneficiaries of those members of the New York State and Local
Employees' Retirement System (ERS) and the New York State and Local
Police and Fire Retirement (PFRS) who are eligible for retirement but
who die within the period after filing their application for service
retirement and before their effective date of retirement.
Currently, ERS and PFRS members who are eligible to retire must file
their application for service retirement no more than 90 days but no
less than 15 days prior to their effective date of retirement. The
beneficiaries of ERS and PFRS members who die after their effective date
of retirement are eligible for a lifetime monthly benefit based on the
option elected by the member at retirement. However, the beneficiaries
of ERS members who die after the filing of their service retirement
application but prior to their effective date of retirement are not
eligible for a lifetime benefit. Instead, these beneficiaries are only
eligible for a one-time lump sum death benefit.
In 1999, RSSL Section 370 was amended by Chapter 570 of Laws of 1999 to
allow the beneficiaries of PFRS members who were eligible to retire the
opportunity to choose to receive a lifetime monthly benefit if the
member died within 30 days of filing their application for service
retirement but before their effective date of retirement.
This legislation amends RSSL Section 70 to provide the beneficiaries of
ERS members who die before their effective date of retirement with
comparable benefits to the benefits provided to the beneficiaries of
PFRS members under Chapter 570 of the Laws of 1999. Furthermore, this
legislation amends both Section 70 and 370 of the RSSL to provide the
beneficiaries of ERS and PFRS members with a choice to receive a life-
time monthly benefit if the member dies within 90 days of filing an
application for service retirement instead of the 30 days provided under
Chapter 570 of the Laws of 1999 to also protect the beneficiaries of
those members who file their retirement application within the 90-day
filing period prescribed by law but who die more than 30 days after
filing their retirement application. This legislation also clarifies
the rights of the beneficiaries, in event that the member designates
more than one beneficiary of the option or death benefit.
LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
EFFECTIVE DATE:
Immediately.
STATE OF NEW YORK
________________________________________________________________________
10570
IN ASSEMBLY
June 4, 2024
___________
Introduced by COMMITTEE ON RULES -- (at request of M. of A. Zebrowski,
Pheffer Amato) -- (at request of the State Comptroller) -- read once
and referred to the Committee on Governmental Employees
AN ACT to amend the retirement and social security law, in relation to
authorizing beneficiaries to choose pension benefits or a death bene-
fit in certain circumstances
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision a of section 70 of the retirement and social
2 security law, as amended by chapter 375 of the laws of 2011, is amended
3 to read as follows:
4 a. Any member may retire if [he or she] such member shall have
5 attained at least the minimum retirement age while in service as a
6 member, or while in federal service, or in the service of the United
7 Nations or other international organizations of which the United States
8 is a member, as a member continued pursuant to paragraph one of subdivi-
9 sion f of section forty of this article, or while entitled to make
10 application for a vested retirement allowance pursuant to section seven-
11 ty-six of this title. Any such member desiring to retire shall execute
12 and file with the comptroller an application for retirement, which shall
13 specify the effective date of [his or her] such member's retirement,
14 which shall be not less than fifteen nor more than ninety days subse-
15 quent to such date of filing. An application for service retirement,
16 filed hereunder in accordance with the provisions of subdivision c of
17 section sixty-two or subdivision f of section sixty-three of this arti-
18 cle, shall be processed in the regular manner, provided that if the
19 application filed simultaneously therewith under either of such subdivi-
20 sions is granted, then and in that event the retirement allowance grant-
21 ed in accordance with the provisions of this section shall be appropri-
22 ately adjusted. Notwithstanding any other provision of law, for any
23 member who is eligible to retire, who has died while in active service,
24 and who has filed an application for service retirement less than ninety
25 days prior to death, such member's designated option election benefici-
26 ary or beneficiaries, if an option election has been filed prior to
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD15350-04-4
A. 10570 2
1 death, or the beneficiary or beneficiaries designated for the death
2 benefit, if no option election was filed prior to death, shall have the
3 option to choose the benefit provided by service retirement rather than
4 the death benefit, provided, however that if the designated beneficiary
5 elects the service retirement benefit such person shall be required to
6 choose an option as provided by law. If the member's beneficiary or
7 beneficiaries elect the service retirement benefit, the member shall be
8 deemed to have retired on the day before the member's date of death. If
9 there are multiple option beneficiaries and such beneficiaries cannot
10 agree on the choice between the death benefit or the service retirement
11 under an agreed upon option, the service retirement benefit shall be
12 payable under the option election form filed by the member prior to such
13 member's death. If there are multiple death beneficiaries and such bene-
14 ficiaries cannot agree on the choice between the death benefit or the
15 service retirement under an agreed upon option, the death benefit shall
16 be payable.
17 § 2. Subdivision a of section 370 of the retirement and social securi-
18 ty law, as amended by chapter 375 of the laws of 2011, is amended to
19 read as follows:
20 a. Any member may retire if [he or she] such member shall have
21 attained at least the minimum retirement age while in service as a
22 member, or while in federal service, or in the service of the United
23 Nations or other international organizations of which the United States
24 is a member, as a member continued pursuant to paragraph one of subdivi-
25 sion f of section three hundred forty of this article or while entitled
26 to make application for a vested retirement allowance pursuant to
27 section three hundred seventy-six of this title. Any such member desir-
28 ing to retire shall execute and file with the comptroller an application
29 for retirement, which shall specify the effective date of [his or her]
30 such member's retirement, which shall be not less than fifteen nor more
31 than ninety days subsequent to such date of filing. An application for
32 service retirement, filed hereunder in accordance with the provisions of
33 subdivision c of section sixty-two or subdivision f of section sixty-
34 three of this chapter, shall be processed in the regular manner,
35 provided that if the application filed simultaneously therewith under
36 either of such subdivisions is granted, then and in that event the
37 retirement allowance granted in accordance with the provisions of this
38 section shall be appropriately adjusted. Notwithstanding any other
39 provision of law, for any member who is eligible to retire [and], who
40 has died while in active service, and who has filed an application for
41 service retirement less than [thirty] ninety days prior to death, [shall
42 be deemed to have retired and] the member's designated option election
43 beneficiary or beneficiaries, if an option election has been filed prior
44 to death, or the beneficiary or beneficiaries designated for the death
45 benefit, if no option election was filed prior to death, shall have the
46 option to choose the benefit provided by service retirement rather than
47 the death benefit, provided, however that if the designated beneficiary
48 elects the service retirement benefit such person shall be required to
49 choose an option [under section three hundred ninety of this article] as
50 provided by law. If the member's beneficiary or beneficiaries elect the
51 service retirement benefit, the member shall be deemed to have retired
52 on the day before the member's date of death. If there are multiple
53 option beneficiaries and such beneficiaries cannot agree on the choice
54 between the death benefit or the service retirement under an agreed upon
55 option, the service retirement benefit shall be payable under the option
56 election form filed by the member prior to such member's death. If there
A. 10570 3
1 are multiple death beneficiaries and such beneficiaries cannot agree on
2 the choice between the death benefit or the service retirement under an
3 agreed upon option, the death benefit shall be payable.
4 § 3. Notwithstanding any other provision of law to the contrary, the
5 provisions of this act shall not be subject to section 25 of the retire-
6 ment and social security law.
7 § 4. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would allow a deceased member's beneficiary the ability to
select between the active member death benefit or a survivor's benefit
payable under any optional form of payment elected by said beneficiary,
provided that the member
1) was eligible to retire as of the day immediately prior to their
death,
2) has died in active service, and
3) has filed an application for service retirement less than ninety
days prior to their death.
If an option election form was filed by the member prior to death, the
beneficiary listed on such option election form shall be permitted to
select between the active death benefit or a survivor's benefit. If no
option election form was filed by the member prior to death, the active
death beneficiary shall be permitted to select between the active death
benefit or a survivor's benefit.
When the survivor's benefit is selected, the beneficiary will be
permitted to file their own option election form determining the survi-
vor's benefit payable and the member will be deemed to have retired the
day prior to their death.
Insofar as this bill affects the New York State and Local Employees'
Retirement System (NYSLERS), if this bill is enacted during the 2024
Legislative Session, the cost will depend upon the deceased member's
age, service, salary, plan, and the optional form elected by the benefi-
ciary. For standard options, there will be an estimated additional cost
of five (5) times the salary of the deceased member, including the cost
of the post-retirement death benefit. All costs arising would be shared
and spread by the State of New York and all participating employers in
the NYSLERS.
Insofar as this bill affects the New York State and Local Police and
Fire Retirement System (NYSLPFRS), if this bill is enacted during the
2024 Legislative Session, the cost will depend upon the deceased
member's age, service, salary, plan, and the optional form elected by
the beneficiary. For standard options, no additional cost is expected to
arise in NYSLPFRS. Any costs arising would be shared and spread by the
State of New York and all participating employers in the NYSLPFRS.
The number of beneficiaries who could be affected by this legislation
cannot be readily determined. However, it is estimated that more than
600 beneficiaries could benefit from this provision each year.
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.
A. 10570 4
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.
This estimate, dated May 16, 2024, and intended for use only during
the 2024 Legislative Session, is Fiscal Note No. 2024-188, prepared by
the Actuary for the New York State and Local Retirement System.
