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A07971 Summary:

BILL NOA07971A
 
SAME ASSAME AS S06981-B
 
SPONSORAbbate
 
COSPNSR
 
MLTSPNSR
 
Amd §604-d, R & SS L
 
Relates to additional member contributions for certain members under the age fifty-seven retirement program; provides that members holding certain titles who due to their age at the time of enrollment in the age fifty-seven retirement program will not obtain twenty-five years of service credit and therefore will not be eligible for a refund of their additional member contributions shall not be required to make additional member contributions.
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A07971 Actions:

BILL NOA07971A
 
06/04/2021referred to governmental employees
01/05/2022referred to governmental employees
04/21/2022amend and recommit to governmental employees
04/21/2022print number 7971a
05/25/2022reported referred to ways and means
05/25/2022reported referred to rules
05/31/2022reported
05/31/2022rules report cal.457
05/31/2022substituted by s6981b
 S06981 AMEND=B GOUNARDES
 05/20/2021REFERRED TO CIVIL SERVICE AND PENSIONS
 05/27/2021AMEND AND RECOMMIT TO CIVIL SERVICE AND PENSIONS
 05/27/2021PRINT NUMBER 6981A
 01/05/2022REFERRED TO CIVIL SERVICE AND PENSIONS
 04/20/2022AMEND AND RECOMMIT TO CIVIL SERVICE AND PENSIONS
 04/20/2022PRINT NUMBER 6981B
 05/24/2022COMMITTEE DISCHARGED AND COMMITTED TO RULES
 05/24/2022ORDERED TO THIRD READING CAL.1507
 05/24/2022HOME RULE REQUEST
 05/24/2022PASSED SENATE
 05/24/2022DELIVERED TO ASSEMBLY
 05/24/2022referred to governmental employees
 05/31/2022substituted for a7971a
 05/31/2022ordered to third reading rules cal.457
 05/31/2022home rule request
 05/31/2022passed assembly
 05/31/2022returned to senate
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A07971 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A7971A
 
SPONSOR: Abbate
  TITLE OF BILL: An act to amend the retirement and social security law, in relation to additional member contributions for certain members under the age fifty-seven retirement program   PURPOSE OR GENERAL IDEA OF BILL: This bill corrects inequities in the 57/5 plan that requires members to make the physically taxing Additional Member Contributions (AMCs) even if those members due to their enrollment date would not be able to receive the benefits of those AMCs.   SUMMARY OF PROVISIONS: This bill amends section 604-d of the retirement and social security law to exempt certain members from making the physically taxing AMC.   JUSTIFICATION: This bill would allow certain members of the 57/5 to be exempt from the physically taxing provisions. Due to their enrollment date, certain members will not achieve the 25 years of service necessary to avail themselves of the physically taxing provisions. These members, however, are still required to make the additional member contributions. This bill would allow those members who will not be able to receive the bene- fits to be exempt from making the physically taxing additional member contributions. Furthermore, it requires a refund of the members' portion of the AMC for those members currently in the system but who will not reach the required service time.   PRIOR LEGISLATIVE HISTORY: 2021:A7971 -Referred to Governmental Employees 2020:A8179A- Referred to Governmental Employees 2019:A8179 -Referred to Governmental Employees 2018:A11066- Referred to Governmental Employees   FISCAL IMPLICATIONS: See bill.   EFFECTIVE DATE: Immediately.
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A07971 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         7971--A
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                      June 4, 2021
                                       ___________
 
        Introduced by M. of A. ABBATE -- read once and referred to the Committee
          on  Governmental  Employees -- recommitted to the Committee on Govern-
          mental Employees in accordance with Assembly Rule 3, sec. 2 -- commit-
          tee discharged, bill amended, ordered reprinted as amended and  recom-
          mitted to said committee

        AN  ACT  to amend the retirement and social security law, in relation to
          additional member contributions for  certain  members  under  the  age
          fifty-seven retirement program
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Paragraph 1 of  subdivision  f  of  section  604-d  of  the
     2  retirement  and  social security law is amended by adding a new subpara-
     3  graph (iv) to read as follows:
     4    (iv) notwithstanding the provisions of subparagraph (ii) of this para-
     5  graph, a participant holding the title of carpenter, supervisor  carpen-
     6  ter,  ship  carpenter,  supervisor  ship carpenter, rigger, dockbuilder,
     7  supervisor dockbuilder and  general  supervisor  dockbuilder  who  is  a
     8  participant  in the age fifty-seven retirement program and whose age and
     9  allowable service are such that he or she could not possibly be able  to
    10  accumulate  at  least twenty-five years of service by the time he or she
    11  reaches age fifty-seven, shall not be required to  make  the  additional
    12  member  contribution  pursuant  to  subparagraph (ii) of this paragraph.
    13  Any participant in the titles listed in this subparagraph who  has  made
    14  additional  member  contributions  pursuant to subparagraph (ii) of this
    15  paragraph prior to the effective date of the chapter of the laws of  two
    16  thousand  twenty-two that added this subparagraph shall receive a refund
    17  of the employee portion of such  contributions  plus  interest  provided
    18  that  their  age and allowable service are such that he or she could not
    19  possibly be able to accumulate at least twenty-five years of service  by
    20  the time he or she reaches age fifty-seven.
    21    § 2. This act shall take effect immediately.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06522-06-2

        A. 7971--A                          2
 
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY  OF  BILL:  This  proposed  legislation  would  amend New York
        Retirement and Social Security Law (RSSL) Section 604-d to  exempt  from
        the  physically  taxing  provisions certain Tier 4 carpenter titles, who
        are participants in the  New  York  City  Employees'  Retirement  System
        (NYCERS)  or the Board of Education Retirement System of the City of New
        York (BERS) Age 57 Retirement Program (57/5 Plan),  and  who  would  not
        benefit  from the early retirement provisions for such physically taxing
        titles.
          The proposed legislation would affect 57/5 Plan  participants  in  the
        physically  taxing  titles  of  carpenter,  supervisor  carpenter,  ship
        carpenter, supervisor ship carpenter,  rigger,  dockbuilder,  supervisor
        dockbuilder,  and  general  supervisor  dockbuilder  (Eligible Carpenter
        Title) who would be unable to reach the requisite 25 years  of  credited
        service  in  a physically taxing title by age 57, and would therefore be
        ineligible to take advantage of the early retirement provisions  of  the
        physically  taxing  title,  which  permits retirement at age 50 (with 25
        years of credited service).
          Under the proposed legislation, Eligible Carpenter Titles who  started
        in  the  57/5  Plan but will not reach 25 years of credited service in a
        physically taxing title by age 57 would no longer pay physically  taxing
        Additional  Member  Contributions  (AMCs) and would receive an immediate
        refund of the employee portion (i.e., 50%) of  their  physically  taxing
        AMCs  plus interest. Such Titles would remain responsible for applicable
        basic member contributions and applicable non-physically taxing AMCs for
        continued 57/5 Plan participation.
          Effective Date: Upon enactment.
          FINANCIAL IMPACT - PRESENT VALUES: Based on the census data and  actu-
        arial  assumptions  and  methods described herein, the enactment of this
        proposed legislation would result in an increase in the present value of
        future employer contributions for NYCERS and BERS of approximately  $5.2
        million.
          Under  the Entry Age Normal cost method used to determine the employer
        contributions to NYCERS and BERS, there would  be  an  increase  in  the
        Unfunded  Accrued  Liability  (UAL) of approximately $2.3 million and an
        increase in the present value of future employer  Normal  Cost  of  $2.9
        million. These results are summarized in the table below:
 
        Change in ($ Thousands):     NYCERS    BERS      Total
        Actuarial Value of Assets   $(5,308)  $ (79)    $(5,387)
        (AVA)
        Accrued Liability (AL)      $(3,053)  $ (65)    $(3,118)
        Unfunded Accrued            $ 2,255   $ 14      $ 2,269
        Liability (AL-AVA)
        Present Value of Future     $ 2,815   $ 55      $ 2,870
        Employer Normal Cost
 
        FINANCIAL  IMPACT  -  ANNUAL  EMPLOYER CONTRIBUTIONS: In accordance with
        Section 13-638.2(k-2) of the Administrative Code of the City of New York
        (ACCNY), new UAL attributable to benefit changes are to be amortized  as
        determined by the Actuary but are generally amortized over the remaining
        working  lifetime  of  those impacted by the benefit changes. As of June
        30, 2021, the remaining working lifetime  of  the  members  in  Eligible
        Carpenter  Titles is approximately seven years for NYCERS and nine years
        for BERS.

        A. 7971--A                          3
 
          For the purposes of this Fiscal Note, the increase in  UAL  was  amor-
        tized  over  a  seven-year  period  (six payments) for NYCERS and over a
        nine-year period (eight payments) for BERS under the One-Year Lag  Meth-
        odology  (OYLM) using level dollar payments. When added to the change in
        Employer Normal Cost, the estimated increase in annual employer contrib-
        utions  is  approximately  $917,000 for NYCERS and $14,000 for BERS. The
        increase in the employer contributions is estimated to be  $389,000  for
        New York City and $542,000 for the other obligors of NYCRS.
          CONTRIBUTION  TIMING:  For  the  purposes  of  this Fiscal Note, it is
        assumed that the  changes  in  the  Present  Value  of  future  employer
        contributions  and  annual employer contributions would be reflected for
        the first time in the Final June 30, 2021 actuarial valuation of  NYCERS
        and  BERS.  In  accordance  with  the  OYLM  used  to determine employer
        contributions, the increase in employer  contributions  would  first  be
        reflected in Fiscal Year 2023.
          CENSUS  DATA:  The  estimates presented herein are based on the census
        data used in the Preliminary June 30, 2021 (Lag) actuarial valuation  of
        NYCERS  and  BERS to determine the Preliminary Fiscal Year 2023 employer
        contributions.
 
                                 NYCERS           BERS        NYCERS & BERS
        Count                    225              5           230
        Average Age              57.2 years       57.4 years  57.2 years
        Average Service          15.2 years       14.0 years  15.2 years
        Average Salary           $106,000         $98,700     $105,800
 
        ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the UAL, Present Value
        of future employer  contributions,  and  annual  employer  contributions
        presented  herein  have  been  calculated  based  on  the same actuarial
        assumptions and methods in effect for the June 30, 2021 (Lag)  actuarial
        valuations  used  to determine the Preliminary Fiscal Year 2023 employer
        contributions of NYCERS and BERS.
          RISK AND UNCERTAINTY: The costs presented in this Fiscal  Note  depend
        highly  on the realization of the actuarial assumptions used, as well as
        certain demographic characteristics of NYCERS and BERS and other  exoge-
        nous factors such as investment, contribution, and other risks. If actu-
        al  experience  deviates  from  actuarial  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:
          o  The  initial,  additional administrative costs of NYCERS, BERS, and
        other New York City agencies to implement the proposed legislation.
          o The impact of this  proposed  legislation  on  Other  Postemployment
        Benefit (OPEB) costs.
          STATEMENT  OF  ACTUARIAL  OPINION: I, Michael J. Samet, am the Interim
        Chief Actuary for, and independent of,  the  New  York  City  Retirement
        Systems and Pension Funds. I am a Fellow of the Society of Actuaries and
        a  Member of the American Academy of Actuaries. 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.

        A. 7971--A                          4
 
          FISCAL NOTE IDENTIFICATION: This Fiscal Note 2022-27 dated  April  19,
        2022  was  prepared  by  the Interim Chief Actuary for the New York City
        Employees' Retirement System  and  the  Board  of  Education  Retirement
        System  of  the City of New York. This estimate is intended for use only
        during the 2022 Legislative Session.
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