Delays reductions in the ordinary death benefit payable to members of the New York State and Local Retirement and the New York State and Local Police and Fire Retirement System to ensure that no reduction before a member becomes retirement eligible for an unreduced retirement from age 61 to 62 for members in Tiers 1-5 and 63 for members in Tier 6.
STATE OF NEW YORK
________________________________________________________________________
6619--B
2021-2022 Regular Sessions
IN SENATE
May 10, 2021
___________
Introduced by Sen. GOUNARDES -- (at request of the State Comptroller) --
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
AN ACT to amend the retirement and social security law, in relation to
the ordinary death benefit
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The closing paragraph of paragraph 2 of subdivision a of
2 section 448 of the retirement and social security law, as amended by
3 chapter 376 of the laws of 2021, is amended to read as follows:
4 In the case of a member of the New York state teachers' retirement
5 system, commencing upon attainment of age [sixty-one] sixty-two if such
6 member's date of membership is prior to April first, two thousand twelve
7 or attainment of age sixty-three if such member's date of membership is
8 on or after April first, two thousand twelve, the benefit otherwise
9 provided pursuant to this paragraph shall be reduced while the member is
10 in service to ninety-six per centum of the benefit otherwise payable and
11 each year thereafter the benefit payable shall be reduced by an amount
12 equal to four per centum per year of the original benefit otherwise
13 payable, but not below sixty per centum of the original benefit other-
14 wise payable. In the case of a member of the New York city employees'
15 retirement system, the New York city board of education retirement
16 system or the New York city teachers' retirement system, commencing upon
17 attainment of age sixty-one, the benefit otherwise provided pursuant to
18 this paragraph shall be reduced while the member is in service to nine-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10525-07-2
S. 6619--B 2
1 ty-five per centum of the benefit otherwise payable and each year there-
2 after the benefit payable shall be reduced by an amount equal to five
3 per centum per year of the original benefit otherwise payable, but not
4 below fifty per centum of the original benefit otherwise payable. In the
5 case of any member of the New York state and local employees' retirement
6 system who is permitted to retire without regard to age or a member of
7 the New York state and local police and fire retirement system, commenc-
8 ing upon attainment of age [sixty-one] sixty-two if such member's date
9 of membership is prior to April first, two thousand twelve or attainment
10 of age sixty-three if such member's date of membership is on or after
11 April first, two thousand twelve, the benefit otherwise provided pursu-
12 ant to this paragraph shall be reduced while the member is in service to
13 ninety-seven per centum of the benefit otherwise payable, and each year
14 thereafter the benefit payable shall be reduced by an amount equal to
15 three per centum per year of the original benefit otherwise payable, but
16 not below seventy per centum of the original benefit otherwise payable.
17 In the case of any other member of the New York state and local employ-
18 ees' retirement system, commencing upon attainment of age [sixty-one]
19 sixty-two if such member's date of membership is prior to April first,
20 two thousand twelve or attainment of age sixty-three if such member's
21 date of membership is on or after April first, two thousand twelve, the
22 benefit otherwise provided pursuant to this paragraph shall be reduced
23 while the member is in service to ninety-six per centum of the benefit
24 otherwise payable, and each year thereafter the benefit payable shall be
25 reduced by an amount equal to four per centum per year of the original
26 benefit otherwise payable, but not below sixty per centum of the
27 original benefit otherwise payable. Upon retirement from any retirement
28 system, the benefit in force shall be reduced by fifty per centum; upon
29 completion of the first year of retirement, the benefit in force at the
30 time of retirement shall be reduced by an additional twenty-five per
31 centum, and upon commencement of the third year of retirement, the bene-
32 fit shall be ten per centum of the benefit in force at age sixty, if
33 any, or at the time of retirement if retirement preceded such age;
34 provided, however, the benefit in retirement shall not be reduced below
35 ten per centum of the benefit in force at age sixty, if any, or at the
36 time of retirement if retirement preceded such age. Notwithstanding any
37 other provision of this paragraph to the contrary, the benefit for a
38 retiree from the New York state and local employees' retirement system
39 and the New York state teachers' retirement system shall not be reduced
40 below ten per centum of the benefit in force at the time of retirement.
41 § 2. The closing paragraph of paragraph 2 of subdivision a of section
42 508 of the retirement and social security law, as amended by chapter 376
43 of the laws of 2021, is amended to read as follows:
44 Notwithstanding any other provision of this paragraph, in the case of
45 a member of the New York state teachers' retirement system, commencing
46 upon attainment of age [sixty-one] sixty-two if such member's date of
47 membership is prior to April first, two thousand twelve or attainment of
48 age sixty-three if such member's date of membership is on or after April
49 first, two thousand twelve, the benefit otherwise provided pursuant to
50 this paragraph shall be reduced while the member is in service to nine-
51 ty-six per centum of the benefit otherwise payable, and each year there-
52 after the benefit payable shall be reduced by an amount equal to four
53 per centum per year of the original benefit otherwise payable, but not
54 below sixty per centum of the original benefit otherwise payable. In the
55 case of a member of the New York city employees' retirement system, the
56 New York city board of education retirement system or the New York city
S. 6619--B 3
1 teachers' retirement system, commencing upon attainment of age sixty-
2 one, the benefit otherwise provided pursuant to this paragraph shall be
3 reduced while the member is in service to ninety-five per centum of the
4 benefit otherwise payable and each year thereafter the benefit payable
5 shall be reduced by an amount equal to five per centum per year of the
6 original benefit otherwise payable, but not below fifty per centum of
7 the original benefit otherwise payable. In the case of any member of the
8 New York state and local employees' retirement system who is permitted
9 to retire without regard to age, commencing upon attainment of age
10 [sixty-one] sixty-two if such member's date of membership is prior to
11 April first, two thousand twelve or attainment of age sixty-three if
12 such member's date of membership is on or after April first, two thou-
13 sand twelve, the benefit otherwise provided pursuant to this paragraph
14 shall be reduced while the member is in service to ninety-seven per
15 centum of the benefit otherwise payable, and each year thereafter the
16 benefit payable shall be reduced by an amount equal to three per centum
17 per year of the original benefit otherwise payable, but not below seven-
18 ty per centum of the original benefit otherwise payable. In the case of
19 any other member of the New York state and local employees' retirement
20 system, commencing upon attainment of age [sixty-one] sixty-two if such
21 member's date of membership is prior to April first, two thousand twelve
22 or attainment of age sixty-three if such member's date of membership is
23 on or after April first, two thousand twelve, the benefit otherwise
24 provided pursuant to this paragraph shall be reduced while the member is
25 in service to ninety-six per centum of the benefit otherwise payable,
26 and each year thereafter the benefit payable shall be reduced by an
27 amount equal to four per centum per year of the original benefit other-
28 wise payable, but not below sixty per centum of the original benefit
29 otherwise payable. Upon retirement from any retirement system, the bene-
30 fit in force shall be reduced by fifty per centum; upon completion of
31 the first year of retirement, the benefit in force at the time of
32 retirement shall be reduced by an additional twenty-five per centum, and
33 upon commencement of the third year of retirement, the benefit shall be
34 ten per centum of the benefit in force at age sixty, if any, or at the
35 time of retirement if retirement preceded such age; provided, however,
36 the benefit in retirement shall not be reduced below ten per centum of
37 the benefit in force at age sixty, if any, or at the time of retirement
38 if retirement preceded such age. Notwithstanding any other provision of
39 this paragraph to the contrary, the benefit for a retiree from the New
40 York state and local employees' retirement system and the New York state
41 teachers' retirement system shall not be reduced below ten per centum of
42 the benefit in force at the time of retirement.
43 § 3. The closing subparagraph of paragraph 2 of subdivision a of
44 section 606 of the retirement and social security law, as amended by
45 chapter 376 of the laws of 2021, is amended to read as follows:
46 In the case of a member of the New York state teachers' retirement
47 system, commencing upon attainment of age [sixty-one] sixty-two if such
48 member's date of membership is prior to April first, two thousand twelve
49 or attainment of age sixty-three if such member's date of membership is
50 on or after April first, two thousand twelve, the benefit otherwise
51 provided pursuant to this paragraph shall be reduced while the member is
52 in service to ninety-six per centum of the benefit otherwise payable,
53 and each year thereafter the benefit payable shall be reduced by an
54 amount equal to four per centum per year of the original benefit other-
55 wise payable, but not below sixty per centum of the original benefit
56 otherwise payable. In the case of a member of the New York city employ-
S. 6619--B 4
1 ees' retirement system, the New York city board of education retirement
2 system or the New York city teachers' retirement system, commencing upon
3 attainment of age sixty-one, the benefit otherwise provided pursuant to
4 this paragraph shall be reduced while the member is in service to nine-
5 ty-five per centum of the benefit otherwise payable and each year there-
6 after the benefit payable shall be reduced by an amount equal to five
7 per centum per year of the original benefit otherwise payable, but not
8 below fifty per centum of the original benefit otherwise payable. In the
9 case of any member of the New York state and local employees' retirement
10 system who is permitted to retire without regard to age, commencing upon
11 attainment of age [sixty-one] sixty-two if such member's date of member-
12 ship is prior to April first, two thousand twelve or attainment of age
13 sixty-three if such member's date of membership is on or after April
14 first, two thousand twelve, the benefit otherwise provided pursuant to
15 this paragraph shall be reduced while the member is in service to nine-
16 ty-seven per centum of the benefit otherwise payable, and each year
17 thereafter the benefit payable shall be reduced by an amount equal to
18 three per centum per year of the original benefit otherwise payable, but
19 not below seventy per centum of the original benefit otherwise payable.
20 In the case of any other member of the New York state and local employ-
21 ees' retirement system, commencing upon attainment of age [sixty-one]
22 sixty-two if such member's date of membership is prior to April first,
23 two thousand twelve or attainment of age sixty-three if such member's
24 date of membership is on or after April first, two thousand twelve, the
25 benefit otherwise provided pursuant to this paragraph shall be reduced
26 while the member is in service to ninety-six per centum of the benefit
27 otherwise payable, and each year thereafter the benefit payable shall be
28 reduced by an amount equal to four per centum per year of the original
29 benefit otherwise payable, but not below sixty per centum of the
30 original benefit otherwise payable. Upon retirement, from any retirement
31 system, the benefit in force shall be reduced by fifty per centum; upon
32 completion of the first year of retirement, the benefit in force at the
33 time of retirement shall be reduced by an additional twenty-five per
34 centum, and upon commencement of the third year of retirement, the bene-
35 fit shall be ten per centum of the benefit in force at age sixty, if
36 any, or at the time of retirement if retirement preceded such age;
37 provided, however, the benefit in retirement shall not be reduced below
38 ten per centum of the benefit in force at age sixty, if any, or at the
39 time of retirement if retirement preceded such age. Notwithstanding any
40 other provision of this paragraph to the contrary, the benefit for a
41 retiree from the New York state and local employees' retirement system
42 and the New York state teachers' retirement system shall not be reduced
43 below ten per centum of the benefit in force at the time of retirement.
44 § 4. Notwithstanding any other provision of law to the contrary, the
45 provisions of this act shall not be subject to section 25 of the retire-
46 ment and social security law.
47 § 5. This act shall take effect on the first of April next succeeding
48 the date on which it shall have become a law.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would delay reductions in the ordinary death benefits paya-
ble to beneficiaries of the New York State and Local Employees' Retire-
ment System (NYSLERS) and New York State and Local Police and Fire
Retirement System (NYSLPFRS), ensuring that no reduction applies before
a member becomes eligible for an unreduced retirement benefit. Current-
ly, annual reductions of 4% (NYSLERS age-based plans) or 3% (all other
plans) are applied to ordinary death benefits immediately when a member
S. 6619--B 5
attains age 61. This bill would delay the reductions until age 62 for
members in Tiers 1-5, and age 63 for members in Tier 6.
Insofar as this bill affects the NYSLERS, if this legislation is
enacted during the 2022 legislative session, there would be an increase
in the present value of future costs of approximately $33 million which
would be shared by the State of New York and all of the Local partic-
ipating employers in the NYSLERS. The estimated first year cost would be
approximately $1.5 million to the State of New York and approximately
$2.1 million to the Local participating employers in the NYSLERS.
Insofar as this bill affects NYSLPFRS, if this legislation is enacted
during the 2022 legislative session, we anticipate that the cost would
be negligible.
Summary of relevant resources:
Membership data as of March 31, 2021 was used in measuring the impact
of the proposed change, the same data used in the April 1, 2021 actuari-
al valuation. Distributions and other statistics can be found in the
2021 Report of the Actuary and the 2021 Comprehensive Annual Financial
Report.
The actuarial assumptions and methods used are described in the 2020
and 2021 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, 2021
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 December 21, 2021, and intended for use only
during the 2022 Legislative Session, is Fiscal Note No. 2022-25,
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 Section 448, Section 508 and Section 606 of the
Retirement and Social Security Law to change the age at which reductions
to the ordinary death benefit commence for active members of the New
York State Teachers' Retirement System. Currently, the ordinary death
benefit is reduced by four percent per year commencing at age 61. This
bill would change the age at which reductions commence to age 62 for
members with a date of membership prior to April 1, 2012 and to age 63
for members with a date of membership on or after April 1, 2012. The
post-retired death benefit for affected members, which is based on the
ordinary death benefit, would be increased as well.
The annual cost to the employers of members of the New York State
Teachers' Retirement System for this benefit is estimated to be $1.0
million or .01% of payroll if this bill is enacted.
Member data is from the System's most recent actuarial valuation
files, consisting of data provided by the employers to the Retirement
System. Data distributions and statistics can be found in the System's
Annual Report. System assets are as reported in the System's financial
statements and can also be found in the System's Annual Report. Actuari-
al assumptions and methods are provided in the System's Actuarial Valu-
ation Report and the Actuarial Assumptions 2021 report.
S. 6619--B 6
The source of this estimate is Fiscal Note 2022-11 dated January 21,
2022 prepared by the Actuary of the New York State Teachers' Retirement
System and is intended for use only during the 2022 Legislative Session.
I, Richard A. Young, am the Chief Actuary for the New York State Teach-
ers' Retirement System. I am a member of the American Academy of Actuar-
ies and I meet the Qualification Standards of the American Academy of
Actuaries to render the actuarial opinion contained herein.
