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A07389 Summary:

BILL NOA07389
 
SAME ASSAME AS S07075
 
SPONSORPheffer Amato
 
COSPNSRCunningham, Weprin, Zaccaro, Eachus
 
MLTSPNSR
 
Amd 607-b, R & SS L
 
Relates to the eligibility of New York city transit authority employees for performance of duty disability retirement.
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A07389 Actions:

BILL NOA07389
 
05/19/2023referred to governmental employees
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A07389 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A7389
 
SPONSOR: Pheffer Amato
  TITLE OF BILL: An act to amend the retirement and social security law, in relation to the eligibility of New York city transit authority employees for performance of duty disability retirement   PURPOSE OR GENERAL IDEA OF BILL: Relates to extending the benefits of the variable supplements fund for transit police members of the New York City employees' retirement system.   SUMMARY OF PROVISIONS: Amends paragraph c of subdivision 1 of section 13-191 of the administra- tive code of the city of New York to provide for the payment of Transit Police Officers' and Transit Police Superior Officers' Variable Supple- ments Funds (VSF) benefits to former New York City Employees' Retirement System (NYCERS) members who are retired for service from the New York City Transit Police (TP) between October 1, 1968 and June 30, 1987 (Prior Retirees) with 20 or more years of service. These benefits would be paid from the following VSFs: Transit Police Officers' Variable Supplements Fund (TPOVSF), and Transit Police Superi- or Officers' Variable Supplements Fund (TPSOVSF). The amount of VSF benefits paid is currently $12,000 per Calendar Year. These VSF benefits are payable on an annual basis around December 15th to eligible former NYCERS members for their lifetimes. There are no optional forms of payment. Upon the death of the NYCERS retiree, VSF payments cease.   JUSTIFICATION: Former members of the NYC Transit Police that retired for service after June 30, 1987 presently receive a supplemental benefit from the Variable Supplements Fund ("VSF"). The VSF was enacted into law because of a fact finders award in 1970 and was granted to members of the NYC Police and Fire pension funds who retired for service after October 1, 1968. In the mid-1960s, members of the Transit Police were granted and given pay and retirement benefit parity. However, the VSF was not bestowed upon similarly situated members of the department until legislation was enacted effective after July 1, 1987. As a result, members were in pari- ty until unjustly removed on July 24, 1992, as beneficiaries. As a matter of equity and fairness, the VSF should be granted to all members of the Transit Police who retired from service subsequent to October 1, 1968.   PRIOR LEGISLATIVE HISTORY: 2022 Session - Amended and Recommit to Civil Service and Pensions 2020 Session - S8306 - referred to Civil Service and Pensions S.6823-A by Senator Lanza 2017-18 Session - referred to Civil Service and Pensions Committee required home rule from the NYC Council, which was not provided.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: IMPACT ON BENEFITS: Currently, the WTC disability benefit for eligible NYCTA WTC retirees is generally equal to a lifetime payment of the greatest of 1/3 of FAS, 1/60th of FAS for each year of service, or the service retirement benefit, if eligible. Under the proposed legislation, the WTC disability benefit for eligible NYCTA WTC retirees would be revised to equal a retirement allowance of 75% of FAS, less any applica- ble Workers' Compensation benefit. FINANCIAL IMPACT - OVERVIEW: The bill, if enacted, would provide increased benefits for 46 pensioners who have been approved for WTC benefits. The bill also potentially provides for increased benefits for an unknown number of future pensioners, who have submitted a qualified WTC Notice of Participation. Although there are currently approximately 1,300 active and retired NYCTA members who have submitted a qualified WTC Notice of Participation Form, the number of members from this group who could potentially benefit from this proposed legislation in the future cannot be readily determined. The additional estimated financial impact for the unknown number of future pensioners who could benefit has been calculated on a per event basis equal to the increase in the present value of future e mployer 05/15/23 4 08375-02-3 contributions for an average member who could be approved for WTC benefits and who is assumed to benefit from the proposed legis- lation. In determining the increase in the present value for the future members who are assumed to benefit from the proposed legislation, it has been assumed that 50% of the members would have retired under the current Accidental Disability Retirement benefit and that the remaining 50% would have continued working if the proposed legislation were not passed. With respect to an individual member, the additional cost of this proposed legislation could vary greatly depending on the member's length of service, age, and .salary history. FINANCIAL IMPACT - PRESENT VALUES: Based on the census data and the actuarial assumptions and meth- ods described herein, the enactment of this proposed legislation would increase the Present Value of Future Benefits for 46 pensioners who have been approved for WTC benefits by approximately $9.5 million. In addi- tion, the enactment of this proposed legislation would also increase the present value of future employer contributions by approximately $262,600, on average, for each additional approval of WTC benefits for members who are assumed to benefit from the proposed legislation. FINAN- CIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: Enactment of this proposed . legislation would increase employer contributions, where such amount would depend on the number of members affected as well as other charac- teristics including the age, years of service, and salary history of each member. The 46 pensioners have no remaining working lifetime, and therefore the entire increase in Unfunded Accrued Liability would be recognized 05/15/23 5 08375-02-3 immediately. The enactment of this proposed legislation would therefore result in an increase in Fiscal Year 2024 employer contributions of approximately $10.5 million. Based on the actuarial assumptions and methods described herein, the enactment of this proposed legislation is estimated to increase annual employer contributions by approximately $31,100, on average for each new WTC benefit provided under this proposed legislation. Since there is insuf- ficient data currently available to estimate the number of members who might be approved for WTC benefits, the financial impact would be recog- nized at the time of event. Consequently, changes in employer contrib- utions for those NYCTA members not yet approved for WTC benefits have been estimated assumi ng that the increase in the present value of future employer contributions would be amortized over a closed 15-year period (14 payments under the One-Year Lag Methodology) using level dollar payments. CENSUS DATA: The estimates presented herein are based on the census data used in the June 30, 2022 actuarial valuation of NYCERS to determine the Preliminary Fiscal Year 2024-employer contrib- utions. The 46 NYCERS pensioners subject to Article 15 who are current- ly in receipt of WTC disability benefits had an average age of approxi- mately 64.3 years and an average maximum retirement allowance of approximately $38,700. The approximate 1,300 active members who have submitted WTC Notice of Participation Forms are a subset of the 9,219 NYCTA employees who are active members in NYCERS as of June 30, 2022 whose date of appointment is prior to September 11, 2001, and who are not currently entitled to a WTC benefit equal to 75% of FAS and, there- fore, could potentially benefit from the proposed legislation. These 9,219 active members had an 05/15/23 6 08375-02-3 average age of approx- imately 57.0 years, average service of approximately 23.9 years, and an average salary of approximately $99,600. ACTUARIAL ASSUMPTIONS AND METH- ODS: 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 ti me in the June 30, 2022 actuarial valuation of NYCERS used to determine employer contributions for Fiscal Year 2024. RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend highly on the realization of the actuarial assumptions used, demographics of the impacted population, and other factors such as investment, contribution, and other risks. If actual 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: * the initial additional administrative costs to implement the proposed legislation. * The impact of this proposed legisl ation on Other Postemployment Benefit 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 05/15/23 7 08375-02-3 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: the Chief Actuary for the New York City Employees' Retirement System prepared this Fiscal Note 2023-47 dated May 12, 2023. This estimate is intended for use only during the 2023 Legislative Session.   EFFECTIVE DATE: This act shall take effect immediately.
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A07389 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          7389
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                      May 19, 2023
                                       ___________
 
        Introduced  by  M.  of A. PHEFFER AMATO -- read once and referred to the
          Committee on Governmental Employees
 
        AN ACT to amend the retirement and social security law, in  relation  to
          the  eligibility  of  New  York  city  transit authority employees for
          performance of duty disability retirement

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1. Section 607-b of the retirement and social security law is
     2  amended by adding a new subdivision a-1 to read as follows:
     3    a-1. Any member of the New York city employees' retirement system  who
     4  is  employed by the New York city transit authority and who participated
     5  in World Trade Center rescue, recovery or cleanup operations, as defined
     6  in section two of this chapter, who, on or after September eleventh, two
     7  thousand one, becomes  physically  or  mentally  incapacitated  for  the
     8  performance  of  duties as the natural and proximate result of an injury
     9  sustained in the performance or discharge of his  or  her  duties  as  a
    10  result  of  such participation in World Trade Center rescue, recovery or
    11  cleanup operations shall  be  paid  a  performance  of  duty  disability
    12  retirement  allowance  equal  to three-quarters of final average salary,
    13  subject to section 13-176 of the administrative code of the city of  New
    14  York.  Any  member  who has made application or who, after the effective
    15  date of this subdivision, makes application for such performance of duty
    16  pension shall  be  entitled  to  invoke  the  medical  review  procedure
    17  provided  for in subdivision e of section six hundred five of this arti-
    18  cle, subject to the terms and conditions set forth in such subdivision.
    19    § 2. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY OF BILL: This proposed legislation would amend  provisions  of
        the  Retirement  and  Social  Security Law (RSSL) to grant New York City
        Transit Authority (NYCTA) active and retired employees, who are or  were
        members  of  the  New  York  City  Employees' Retirement System (NYCERS)
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08375-03-3

        A. 7389                             2
 
        subject to RSSL Article 15, and have incurred a World Trade Center (WTC)
        Qualifying Condition, a performance of duty disability retirement equiv-
        alent to 75% of the member's Final Average Salary (FAS) prospectively as
        of the effective date.
          The  proposed  legislation  would  further  permit such eligible NYCTA
        members and retirees to utilize  the  Final  Medical  Review  procedures
        pursuant  to  RSSL Section 605-e to appeal from the NYCERS Medical Board
        WTC disability benefit determinations.
          Finally, the bill appears to grant such  eligible  NYCTA  members  and
        retirees the ability to utilize the presumptions for infectious diseases
        pursuant  to  subsection b of RSSL Section 607-b.  Costs associated with
        granting these presumptions have not been included in this Fiscal Note.
          Effective Date: Upon enactment.
          IMPACT ON BENEFITS: Currently, the WTC disability benefit for eligible
        NYCTA WTC retirees is generally equal  to  a  lifetime  payment  of  the
        greatest  of  1/3 of FAS, 1/60th of FAS for each year of service, or the
        service retirement benefit, if eligible.
          Under the proposed legislation, the WTC disability benefit for  eligi-
        ble  NYCTA WTC retirees would be revised to equal a retirement allowance
        of 75% of FAS, less any applicable Workers' Compensation benefit.
          FINANCIAL IMPACT - OVERVIEW:  The  bill,  if  enacted,  would  provide
        increased  benefits  for  46  pensioners  who have been approved for WTC
        benefits. The bill also potentially provides for increased benefits  for
        an  unknown  number of future pensioners, who have submitted a qualified
        WTC Notice of Participation. Although there are currently  approximately
        1,300  active  and  retired NYCTA members who have submitted a qualified
        WTC Notice of Participation Form, the number of members from this  group
        who  could  potentially  benefit  from  this proposed legislation in the
        future cannot be readily determined.
          The additional estimated financial impact for the  unknown  number  of
        future  pensioners  who could benefit has been calculated on a per event
        basis equal to the increase in the  present  value  of  future  employer
        contributions  for an average member who could be approved for WTC bene-
        fits and who is assumed to benefit from the proposed legislation.
          In determining the increase  in  the  present  value  for  the  future
        members who are assumed to benefit from the proposed legislation, it has
        been  assumed  that  50%  of  the  members  would have retired under the
        current Accidental Disability Retirement benefit and that the  remaining
        50%  would  have  continued working if the proposed legislation were not
        passed.
          With respect to an individual member,  the  additional  cost  of  this
        proposed legislation could vary greatly depending on the member's length
        of service, age, and salary history.
          FINANCIAL  IMPACT  -  PRESENT VALUES: Based on the census data and the
        actuarial assumptions and methods described  herein,  the  enactment  of
        this  proposed  legislation  would  increase the Present Value of Future
        Benefits for 46 pensioners who have been approved for  WTC  benefits  by
        approximately $9.5 million.
          In  addition,  the  enactment  of this proposed legislation would also
        increase the present value of future employer contributions by  approxi-
        mately  $262,600,  on average, for each additional approval of WTC bene-
        fits for members who are assumed to benefit  from  the  proposed  legis-
        lation.
          FINANCIAL  IMPACT  -  ANNUAL EMPLOYER CONTRIBUTIONS: Enactment of this
        proposed legislation would increase employer contributions,  where  such
        amount  would  depend on the number of members affected as well as other

        A. 7389                             3
 
        characteristics including the age, years of service, and salary  history
        of each member.
          The  46  pensioners  have no remaining working lifetime, and therefore
        the entire increase in Unfunded Accrued Liability  would  be  recognized
        immediately.  The enactment of this proposed legislation would therefore
        result in an increase in Fiscal  Year  2024  employer  contributions  of
        approximately $10.5 million.
          Based  on  the actuarial assumptions and methods described herein, the
        enactment of this proposed legislation is estimated to  increase  annual
        employer contributions by approximately $31,100, on average for each new
        WTC benefit provided under this proposed legislation.
          Since  there  is insufficient data currently available to estimate the
        number of members who might be approved for WTC benefits, the  financial
        impact  would  be recognized at the time of event. Consequently, changes
        in employer contributions for those NYCTA members not yet  approved  for
        WTC benefits have been estimated assuming that the increase in the pres-
        ent  value  of  future  employer contributions would be amortized over a
        closed 15-year period (14 payments under the One-Year  Lag  Methodology)
        using level dollar payments.
          CENSUS  DATA:  The  estimates presented herein are based on the census
        data used in the June 30, 2022 actuarial valuation of NYCERS  to  deter-
        mine the Preliminary Fiscal Year 2024 employer contributions.
          The  46  NYCERS  pensioners subject to Article 15 who are currently in
        receipt of WTC disability benefits had an average age  of  approximately
        64.3  years and an average maximum retirement allowance of approximately
        $38,700.
          The approximate 1,300 active members who have submitted WTC Notice  of
        Participation  Forms  are  a subset of the 9,219 NYCTA employees who are
        active members in NYCERS as of June 30, 2022 whose date  of  appointment
        is  prior to September 11, 2001, and who are not currently entitled to a
        WTC benefit equal to 75% of FAS and, therefore, could potentially  bene-
        fit  from  the  proposed  legislation. These 9,219 active members had an
        average age of approximately 57.0 years, average service of approximate-
        ly 23.9 years, and an average salary of approximately $99,600.
          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,  2022  actuarial
        valuation  of NYCERS used to determine employer contributions for Fiscal
        Year 2024.
          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-
        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 costs.

        A. 7389                             4
 
          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  2023-47  dated  May  12,
        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.
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