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A40026 Summary:

BILL NOA40026
 
SAME ASSAME AS UNI. S66026
 
SPONSORRules (Silver)
 
COSPNSRAbbate, Arroyo, Clark, Destito, Englebright, Fields, Galef, Hooper, Kellner, Morelle, Paulin, Peoples-Stokes, Sweeney, Thiele, Zebrowski
 
MLTSPNSR
 
Amd R & SS L, generally; amd S6, Chap 625 of 1975; amd S209, Civ Serv L; amd S90, Gen Muni L; amd S1, Chap 729 of 1994; amd S13-582, NYC Ad Cd; amd S2575, Ed L
 
Provides retirement benefits for new entrants to certain public retirement systems; makes the coordinated-escalator retirement plan and coordinated retirement plan permanent; extends the expiration of public arbitration of disputes between public employers and employee organizations.
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A40026 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
            S. 26                                                      A. 26
 
                             Twentieth Extraordinary Session
 
                SENATE - ASSEMBLY
 
                                    December 2, 2009
                                       ___________
 
        IN  SENATE  --  Introduced  by  COMMITTEE ON RULES -- (at request of the
          Governor) -- read twice and ordered printed, and when  printed  to  be
          committed to the Committee on Rules
 
        IN  ASSEMBLY -- Introduced by COMMITTEE ON RULES -- (at request of M. of
          A. Silver, Abbate, Arroyo, Clark, Destito, Englebright, Fields, Galef,

          Hooper, Kellner, Morelle,  Paulin,  Peoples-Stokes,  Sweeney,  Thiele,
          Zebrowski)  --  (at request of the Governor) -- read once and referred
          to the Committee on Ways and Means
 
        AN ACT to amend the retirement and social security law, in  relation  to
          establishing  police  and  fire  retirement  provisions;  to amend the
          retirement and social security law and chapter  625  of  the  laws  of
          1975,  amending the retirement and social security law relating to the
          extension of temporary rights and benefits, in relation to making  the
          coordinated-escalator  retirement  plan and the coordinated retirement
          plan permanent; to amend the civil service law, in relation to extend-
          ing the expiration of public arbitration of  disputes  between  public
          employers and employee organizations (Part A); to amend the retirement

          and  social security law and the general municipal law, in relation to
          persons joining a public retirement system  on  or  after  January  1,
          2010; and to amend chapter 729 of the laws of 1994 relating to affect-
          ing the health insurance benefits and contributions of retired employ-
          ees of school districts and certain boards, in relation to eliminating
          the  expiration  of  the provisions thereof (Part B); and to amend the
          retirement and social security law, the  administrative  code  of  the
          city of New York and the education law, in relation to new entrants to
          the  New  York  city teachers' retirement system and the New York city
          board of education retirement system (Part C)
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD12149-15-9

        S. 26                               2                              A. 26
 
     1    Section 1. This act enacts into law legislation relating to retirement
     2  for  newly  hired employees. Each component is wholly contained within a
     3  Part identified as Parts A  through  C.  The  effective  date  for  each
     4  particular provision contained within such Part is set forth in the last
     5  section  of  such  Part. Any provision in any section contained within a
     6  Part, including the effective date of the Part, which makes reference to
     7  a section "of this act", when used in connection  with  that  particular

     8  component,  shall  be  deemed  to  mean  and  refer to the corresponding
     9  section of the Part in which it is found.   Section three  of  this  act
    10  sets forth the general effective date of this act.
 
    11                                   PART A
 
    12    Section 1. The retirement and social security law is amended by adding
    13  a new article 22 to read as follows:
    14                                 ARTICLE 22
    15                    POLICE AND FIRE RETIREMENT PROVISIONS
    16  Section 1200. Definitions.
    17          1201. Applicability.
    18          1202. Vesting.
    19          1203. Overtime.
    20          1204. Member contributions.
    21          1205. Recalculation of benefits.
    22          1206. Conflicting provisions.

    23    § 1200. Definitions. For purposes of this article the terms:
    24    a. "Member" shall mean a person who is employed as a police officer or
    25  firefighter  by any employer who first joins the retirement system on or
    26  after January first, two thousand ten.
    27    b. "Retirement system" shall mean the New York state and local  police
    28  and fire retirement system.
    29    §  1201.  Applicability.   Notwithstanding any provision of law to the
    30  contrary, the provisions of this article  shall  be  applicable  to  all
    31  employees  in  the  retirement system who first joined such system on or
    32  after January first, two thousand ten.
    33    § 1202. Vesting. a. In order to qualify for a service retirement bene-

    34  fit, members subject to the provisions of this article must have a mini-
    35  mum of ten years of creditable service.
    36    b. In computing the years of total creditable  service  of  a  member,
    37  full  credit  shall be given for military service as defined in subdivi-
    38  sions twenty-nine-a and thirty of section  three  hundred  two  of  this
    39  chapter.
    40    §  1203. Overtime. A member's final average salary shall be calculated
    41  in accordance with such provisions of article eight or article eleven of
    42  this chapter as govern the member's benefits, except that earnings clas-
    43  sified as overtime compensation  in  an  amount  in  excess  of  fifteen
    44  percent  of  a  member's annual wages not classified as overtime compen-

    45  sation shall be excluded from such calculation.  "Overtime compensation"
    46  shall mean, for purposes of this section, compensation  paid  under  any
    47  law  or  policy  under  which  employees are paid at a rate greater than
    48  their standard rate for additional hours worked beyond  those  required,
    49  including compensation paid under section one hundred thirty-four of the
    50  civil service law and section ninety of the general municipal law.
    51    §   1204.  Member  contributions.  Members  who  are  subject  to  the
    52  provisions of this article shall  contribute  three  percent  of  annual
    53  wages  to  the  retirement system in which they have membership. Members
    54  who are enrolled in a retirement plan that limits the amount of credita-


        S. 26                               3                              A. 26
 
     1  ble service a member can accrue shall not be required to  make  contrib-
     2  utions  pursuant  to  this  section after accruing the maximum amount of
     3  service credit  allowed  by  the  retirement  plan  in  which  they  are
     4  enrolled. The state comptroller shall promulgate such regulations as may
     5  be  necessary  and  appropriate  with  respect  to the deduction of such
     6  contribution from members' wages and for the maintenance of any  special
     7  fund  or  funds with respect to amounts so contributed.  In no way shall
     8  the member contributions made  pursuant  to  this  section  be  used  to
     9  provide for pension increases or annuities of any kind.

    10    § 1205. Recalculation of benefits. Notwithstanding any other provision
    11  of  law, any member who has joined the retirement system pursuant to the
    12  provisions of article fourteen of this chapter on or after  July  first,
    13  two  thousand  nine  may  elect  to  have his or her retirement benefits
    14  calculated pursuant to this article by filing within one hundred  twenty
    15  days  of  the  effective  date of this section a request for such calcu-
    16  lation with the retirement system in the form and manner  prescribed  by
    17  the state comptroller.
    18    §  1206.  Conflicting provisions. Except as otherwise provided in this
    19  article, or in conflict therewith, the provisions of article  eleven  of

    20  this  chapter,  including any plan that has been elected by the employer
    21  or is otherwise applicable under article eight  of  this  chapter  shall
    22  govern the retirement benefits provided under this article. In the event
    23  of  any  conflict  between  the provisions of this article and any other
    24  provision of law, this article shall govern.
    25    § 2. Subdivision c of section 440 of the retirement and social securi-
    26  ty law, as amended by chapter 63 of the laws of 2007, is amended to read
    27  as follows:
    28    c. Notwithstanding any other provision  of  law,  the  provisions  and
    29  limitations  of  this article shall apply, as may be appropriate, to all
    30  police officers and firefighters who last  joined  a  public  retirement
    31  system  of  the state or a municipality thereof, on or after July first,

    32  nineteen hundred seventy-six, but prior  to  July  first,  two  thousand
    33  nine,  and all employees subject to the provisions of article twenty-two
    34  of this chapter; provided, however, that  in  the  case  of  a  conflict
    35  between  the  provisions  of this article and article twenty-two of this
    36  chapter, the provisions of article twenty-two shall be controlling.
    37    § 3. Intentionally omitted.
    38    § 4. Section 470 of the retirement and social security law, as amended
    39  by chapter 79 of the laws of 2009, is amended to read as follows:
    40    § 470. Temporary suspension of retirement  negotiations.  [Until  July
    41  first,  two  thousand  eleven,  changes]  Changes negotiated between any
    42  public employer and public  employee,  as  such  terms  are  defined  in

    43  section  two  hundred  one of the civil service law, with respect to any
    44  benefit provided by or to be provided by a public retirement system,  or
    45  payments  to  a  fund  or  insurer  to provide an income for retirees or
    46  payment to retirees or their beneficiaries, shall be prohibited.  [Ther-
    47  eafter, such changes shall be made only pursuant to negotiations between
    48  public employers and public employees conducted  on  a  coalition  basis
    49  pursuant  to the provisions of this article; provided, however, any such
    50  changes not requiring approval by act of the legislature may  be  imple-
    51  mented  prior  to  July  first,  two thousand eleven, if negotiated as a
    52  result of collective bargaining authorized by section six of chapter six
    53  hundred twenty-five of the laws of nineteen hundred seventy-five.]

    54    § 5. Section 480 of the retirement and social security law, as amended
    55  by chapter 79 of the laws of 2009, is amended to read as follows:

        S. 26                               4                              A. 26
 
     1    § 480. Extension of temporary benefits and  supplementation  programs.
     2  a.    Every  temporary right, privilege or benefit conferred pursuant to
     3  the provisions of a general, special or local law (other  than  pursuant
     4  to  articles  fourteen  and fifteen of this chapter) for any member of a
     5  public  retirement  system or pension plan funded by the state or one of
     6  its political subdivisions, which is scheduled to expire or terminate at
     7  any time during nineteen hundred seventy-four, nineteen  hundred  seven-
     8  ty-five,  nineteen  hundred seventy-six, nineteen hundred seventy-seven,

     9  nineteen hundred seventy-eight, nineteen hundred seventy-nine,  nineteen
    10  hundred  eighty,  nineteen  hundred eighty-one, nineteen hundred eighty-
    11  two, nineteen hundred eighty-three, nineteen hundred eighty-four,  nine-
    12  teen  hundred eighty-five, nineteen hundred eighty-six, nineteen hundred
    13  eighty-seven, nineteen hundred eighty-eight,  nineteen  hundred  eighty-
    14  nine,  nineteen  hundred  ninety,  nineteen hundred ninety-one, nineteen
    15  hundred ninety-two,  nineteen  hundred  ninety-three,  nineteen  hundred
    16  ninety-four,  nineteen hundred ninety-five, nineteen hundred ninety-six,
    17  nineteen hundred ninety-seven, nineteen hundred  ninety-eight,  nineteen
    18  hundred  ninety-nine,  two thousand, two thousand one, two thousand two,
    19  two thousand three, two thousand four, two thousand five,  two  thousand
    20  six,  two  thousand  seven,  two  thousand eight, two thousand nine, two

    21  thousand ten or two thousand eleven,  is  hereby  extended  [until  July
    22  first,  two  thousand  eleven],  notwithstanding  the provisions of such
    23  general, special or local law.  Notwithstanding the  foregoing,  nothing
    24  in  this  section shall be construed to extend the provisions of article
    25  eighteen of this chapter or to affect any statutory  deadlines  provided
    26  in such article.
    27    b.  (i)  Any  program  under  which an employer in a public retirement
    28  system funded by the state or one of its political subdivisions  assumes
    29  all  or  part  of  the contribution which would otherwise be made by its
    30  employees toward retirement, which expires or terminates during nineteen
    31  hundred seventy-four, is hereby extended [until July first, two thousand
    32  eleven], notwithstanding the provisions of any other general, special or

    33  local law, except that commencing with the payroll period the first  day
    34  of which is nearest to January first, nineteen hundred seventy-six[, and
    35  until  July  first,  two thousand eleven], the rate of such contribution
    36  assumed by an employer in any of the public  retirement  systems  funded
    37  and  maintained  by  a city, shall be one-half the rate of such contrib-
    38  ution assumed by such employer for  the  immediately  preceding  payroll
    39  period except as provided in paragraph (ii) of this subdivision.
    40    (ii)  Commencing  with the first payroll period the first day of which
    41  is subsequent to October first, two thousand [and until July first,  two
    42  thousand  eleven],  the rate of such contribution assumed by an employer
    43  in the New York city police pension fund and in the New York  city  fire

    44  department pension fund shall be equal to the rate of such contributions
    45  assumed by such employer for the payroll period preceding January first,
    46  nineteen hundred seventy-six.
    47    c.  All  supplemental  retirement  allowances or supplemental pensions
    48  paid to pensioners or beneficiaries of any retirement  system  supported
    49  in  whole  or  in  part by the state or a political subdivision thereof,
    50  which are scheduled to expire at any time during nineteen hundred seven-
    51  ty-five, nineteen hundred seventy-six, nineteen  hundred  seventy-seven,
    52  nineteen  hundred seventy-eight, nineteen hundred seventy-nine, nineteen
    53  hundred eighty, nineteen hundred eighty-one,  nineteen  hundred  eighty-
    54  two,  nineteen hundred eighty-three, nineteen hundred eighty-four, nine-
    55  teen hundred eighty-five, nineteen hundred eighty-six, nineteen  hundred

    56  eighty-seven,  nineteen  hundred  eighty-eight, nineteen hundred eighty-

        S. 26                               5                              A. 26
 
     1  nine, nineteen hundred ninety,  nineteen  hundred  ninety-one,  nineteen
     2  hundred  ninety-two,  nineteen  hundred  ninety-three,  nineteen hundred
     3  ninety-four, nineteen hundred ninety-five, nineteen hundred  ninety-six,
     4  nineteen  hundred  ninety-seven, nineteen hundred ninety-eight, nineteen
     5  hundred ninety-nine, two thousand one, two thousand  two,  two  thousand
     6  three, two thousand four, two thousand five, two thousand six, two thou-
     7  sand  seven,  two thousand eight, two thousand nine, two thousand ten or
     8  two thousand  eleven,  shall  be  continued  [for  an  additional  year]
     9  notwithstanding any other provision of any general, special or local law

    10  provided,  however,  that all such supplemental retirement allowances or
    11  supplemental pensions which are scheduled to expire at any  time  during
    12  two thousand nine shall be continued [for two additional years] notwith-
    13  standing any other provisions of any general, special or local law.
    14    § 6. Section 615 of the retirement and social security law, as amended
    15  by chapter 79 of the laws of 2009, is amended to read as follows:
    16    §  615. Duration. Notwithstanding any other provisions of this chapter
    17  or of any other law, the provisions of article fourteen of this  chapter
    18  shall  [expire  on  June  thirtieth,  two thousand eleven, but shall] no
    19  longer apply to members to whom this article applies on the date article
    20  fifteen of this chapter becomes effective, provided, however, any member
    21  who has retired pursuant to the provisions of article fourteen  of  this

    22  chapter  before the effective date of this article or any beneficiary of
    23  such a member or a beneficiary of a member who dies before the effective
    24  date of this article and who is entitled to a death benefit pursuant  to
    25  article fourteen of this chapter shall receive such benefits pursuant to
    26  the  provisions  of article fourteen of this chapter, except as provided
    27  pursuant to the provisions of section  six  hundred  seventeen  of  this
    28  article.  [All  benefits  provided  by a public retirement system of the
    29  state shall continue with respect to members to which  this  article  is
    30  applicable only until June thirtieth, two thousand eleven.]
    31    §  7.  Section  6  of  chapter  625  of the laws of 1975, amending the
    32  retirement and social security law relating to the extension  of  tempo-

    33  rary  rights and benefits, as amended by chapter 79 of the laws of 2009,
    34  is amended to read as follows:
    35    § 6. Notwithstanding any inconsistent provisions of this act or of any
    36  general, special or local law, on and after July 1, 1975 [and up to  and
    37  including  June  30, 2011]: (a) a participating employer in the New York
    38  state and local employees' retirement system or the New York  state  and
    39  local police and fire retirement system and its employees shall continue
    40  to  have  the right to negotiate with respect to any benefit provided by
    41  or to be provided by such employer to such employees as members of  such
    42  system  and  not requiring approval by act of the legislature; and (b) a
    43  public authority or public benefit corporation which is  not  a  partic-
    44  ipating  employer  in the New York state and local employees' retirement

    45  system or the New York city employees' retirement system shall  continue
    46  to  have the right to negotiate with its employees with respect to bene-
    47  fits to be provided by such employer to such employees  upon  retirement
    48  and not requiring approval by act of the legislature.
    49    §  8. Notwithstanding any provision of law to the contrary, nothing in
    50  this act shall limit the eligibility of any member of an employee organ-
    51  ization to join a special retirement plan open to him or her pursuant to
    52  a collectively negotiated agreement with any state or  local  government
    53  employer,  where  such  agreement  is in effect on the effective date of
    54  this act and so long as such agreement  remains  in  effect  thereafter;
    55  provided, however, that any such eligibility shall not apply upon termi-
    56  nation  of  such  agreement  for  employees  otherwise  subject  to  the


        S. 26                               6                              A. 26
 
     1  provisions of article twenty-two of the retirement and  social  security
     2  law.
     3    §  9.  Paragraph  (d)  of  subdivision  4  of section 209 of the civil
     4  service law, as amended by chapter 28 of the laws of 2009, is amended to
     5  read as follows:
     6    (d) The provisions of  this  subdivision  shall  expire  [thirty-four]
     7  thirty-six  years  from  July first, nineteen hundred seventy-seven, and
     8  hereafter may be renewed every four years.
     9    § 9-a. Subdivision c of section 500 of the retirement and social secu-
    10  rity law, as added by chapter 890 of the laws of  1976,  is  amended  to
    11  read as follows:
    12    c.  If the comptroller certifies that the contribution rate under this
    13  article for any participating  employer  who  is  participating  on  the

    14  effective date hereof would be at least one percent higher than the rate
    15  which  would  be  applicable  to  such  employer  for an employee who is
    16  subject to article eleven of this chapter and who  was  hired  prior  to
    17  July first, nineteen hundred seventy-six, the provisions of this article
    18  shall  not  apply with respect to such participating employer, provided,
    19  however that members who first join the New York state and local  police
    20  and  fire  retirement system on or after January first, two thousand ten
    21  shall not be subject to the provisions of this article. In  such  event,
    22  the  provisions of article eleven and article twenty-two of this chapter
    23  shall continue to be applicable to such participating employer  and  its
    24  employees,  as  provided in section four hundred fifty-one of this chap-

    25  ter. If, as a result of actuarial experience, such  employer's  contrib-
    26  ution  rate  should  increase  to the extent that it is not at least one
    27  percent lower than the contribution rate under this article, then,  upon
    28  certification  of  such  fact by the comptroller, the provisions of this
    29  subdivision shall no longer apply with respect to the employees of  such
    30  employer who thereafter first join or rejoin a public retirement system.
    31    §  10.  This act shall take effect on the thirtieth day after it shall
    32  have become a law.
 
    33                                   PART B
 
    34    Section 1. Subdivision 24 of section 501 of the retirement and  social
    35  security  law, as amended by chapter 891 of the laws of 1976, is amended
    36  to read as follows:
    37    24. "Wages" shall mean regular compensation earned by and  paid  to  a

    38  member  by a public employer, except that for members who first join the
    39  state and local employees' retirement system on or after January  first,
    40  two  thousand  ten,  overtime compensation paid in any year in excess of
    41  the overtime ceiling, as defined  by  this  subdivision,  shall  not  be
    42  included  in  the  definition  of wages.   "Overtime compensation" shall
    43  mean, for purposes of this section, compensation paid under any  law  or
    44  policy under which employees are paid at a rate greater than their stan-
    45  dard  rate  for additional hours worked beyond those required, including
    46  compensation paid under section one hundred  thirty-four  of  the  civil
    47  service law and section ninety of the general municipal law.  The "over-

    48  time  ceiling"  shall mean fifteen thousand dollars per annum on January
    49  first, two thousand ten, and shall be increased by  three  percent  each
    50  year  thereafter.  For  the  purpose  of  calculation a member's primary
    51  federal social security retirement or disability benefit,  wages  shall,
    52  in  any  calendar  year, be limited to the portion of the member's wages
    53  which would be subject to tax under section three thousand  one  hundred
    54  twenty-one  of the internal revenue code of nineteen hundred fifty-four,

        S. 26                               7                              A. 26
 
     1  or any predecessor or successor  provision  relating  thereto,  if  such
     2  member was employed by a private employer.
     3    §  2. Subdivisions a and b of section 502 of the retirement and social

     4  security law, as amended by chapter 389 of the laws of 1998, are amended
     5  to read as follows:
     6    a. A member who first joins a public retirement system of  this  state
     7  on  or  after  June thirtieth, nineteen hundred seventy-six shall not be
     8  eligible for service retirement benefits hereunder until such member has
     9  rendered a minimum of five years of creditable service after July first,
    10  nineteen hundred seventy-three, except that a member who first joins the
    11  New York state and local employees' retirement system on or after  Janu-
    12  ary first, two thousand ten shall not be eligible for service retirement
    13  benefits pursuant to this article until such member has rendered a mini-
    14  mum of ten years of credited service.
    15    b.  A member who previously was a member of a public retirement system

    16  of this state shall not be  eligible  for  service  retirement  benefits
    17  hereunder  until  such  member  has  rendered a minimum of five years of
    18  service which is creditable pursuant to section five hundred thirteen of
    19  this article. A member who first joins the  New  York  state  and  local
    20  employees' retirement system on or after January first, two thousand ten
    21  shall  not  be eligible for service retirement benefits pursuant to this
    22  article until such member has rendered a minimum of ten years of credit-
    23  ed service.
    24    § 3. Subdivision c of section 504 of the retirement and social securi-
    25  ty law, as amended by chapter 174 of the laws of  1989,  is  amended  to
    26  read as follows:
    27    c.  The  early  service retirement benefit for general members, except

    28  for general members whose  early  retirement  benefit  is  specified  in
    29  subdivision  d  of this section, shall be the service retirement benefit
    30  specified in subdivision a or b of this section, as  the  case  may  be,
    31  without social security offset, reduced by one-fifteenth for each of the
    32  first two years by which early retirement precedes age sixty-two, plus a
    33  further  reduction  of:  (1)  one-thirtieth;  or  (2)  one-twentieth for
    34  members who first join the New York state and local  employees'  retire-
    35  ment  system  on or after January first, two thousand ten, for each year
    36  by which early retirement precedes age  sixty.  At  age  sixty-two,  the
    37  benefit shall be reduced by fifty percent of the primary social security
    38  retirement  benefit,  as provided in section five hundred eleven of this
    39  article.

    40    § 4. Subdivision a of section 516 of the retirement and social securi-
    41  ty law, as amended by chapter 389 of the laws of  1998,  is  amended  to
    42  read as follows:
    43    a.  A  member who has five or more years of credited service or ten or
    44  more years of credited service for members who first join the  New  York
    45  state  and local employees' retirement system on or after January first,
    46  two thousand ten upon termination of employment shall be entitled  to  a
    47  deferred vested benefit as provided herein.
    48    § 5. Subdivision l of section 601 of the retirement and social securi-
    49  ty  law, as added by chapter 414 of the laws of 1983, is amended to read
    50  as follows:
    51    l. "Wages" shall mean regular compensation earned by  and  paid  to  a
    52  member  by a public employer, except that for members who first join the

    53  New York state and local employees' retirement system or  the  New  York
    54  state  teachers'  retirement system on or after January first, two thou-
    55  sand ten, overtime compensation paid in any year in excess of the  over-
    56  time  ceiling,  as defined by this subdivision, shall not be included in

        S. 26                               8                              A. 26
 
     1  the definition of  wages.    "Overtime  compensation"  shall  mean,  for
     2  purposes  of  this  section,  compensation  paid under any law or policy
     3  under which employees are paid at a rate  greater  than  their  standard
     4  rate  for  additional  hours  worked  beyond  those  required, including
     5  compensation paid under section one hundred  thirty-four  of  the  civil

     6  service law and section ninety of the general municipal law.  The "over-
     7  time  ceiling"  shall mean fifteen thousand dollars per annum on January
     8  first, two thousand ten, and shall be increased by three per  cent  each
     9  year thereafter.
    10    §  6. Subdivisions a and b of section 602 of the retirement and social
    11  security law, as amended by chapter 389 of the laws of 1998, are amended
    12  to read as follows:
    13    a. A member who first joins a public retirement system of  this  state
    14  on or after July first, nineteen hundred seventy-six shall not be eligi-
    15  ble  for  service  retirement  benefits  hereunder until such member has
    16  rendered a minimum of five years of  credited  service,  except  that  a
    17  member  who  first joins the New York state and local employees' retire-

    18  ment system or the New York state  teachers'  retirement  system  on  or
    19  after  January first, two thousand ten shall not be eligible for service
    20  retirement benefits pursuant to  this  article  until  such  member  has
    21  rendered a minimum of ten years of credited service.
    22    b.  A member who previously was a member of a public retirement system
    23  of this state shall not be  eligible  for  service  retirement  benefits
    24  hereunder  until  such  member  has  rendered a minimum of five years of
    25  service which is credited pursuant to section six hundred nine  of  this
    26  article.   A member who first joins the New York state and local employ-
    27  ees' retirement system or the New York state teachers' retirement system
    28  on or after January first, two thousand ten shall not  be  eligible  for

    29  service  retirement  benefits pursuant to this article until such member
    30  has rendered a minimum of ten years of credited service.
    31    § 7. Subdivision a of section 603 of the retirement and social securi-
    32  ty law, as amended by section 3 of chapter 19 of the laws  of  2008,  is
    33  amended to read as follows:
    34    a.  The  service  retirement  benefit specified in section six hundred
    35  four of this article shall be payable to members who have met the  mini-
    36  mum  service  requirements  upon retirement and attainment of age sixty-
    37  two, other than members who are eligible for  early  service  retirement
    38  pursuant to subdivision c of section six hundred four-b of this article,
    39  subdivision c of section six hundred four-c of this article, subdivision
    40  d  of  section  six  hundred  four-d  of  this article, subdivision c of

    41  section six hundred four-e of this article, subdivision c of section six
    42  hundred four-f of this article, subdivision c  of  section  six  hundred
    43  four-g  of  this article, subdivision c of section six hundred four-h of
    44  this article or subdivision c of section  six  hundred  four-i  of  this
    45  article, provided, however, [a member who is a peace officer employed by
    46  the  unified  court system or] a member of a teachers' retirement system
    47  or the New York state and local employees' retirement system  who  first
    48  joins such system before January first, two thousand ten or a member who
    49  is  a  uniformed  court officer or peace officer employed by the unified
    50  court system may retire without reduction of his or her retirement bene-
    51  fit upon attainment of at least fifty-five years of age  and  completion

    52  of  thirty or more years of service, provided, however, that a uniformed
    53  court officer or peace officer employed by the unified court system  who
    54  first  becomes  a  member  of  the  New  York state and local employees'
    55  retirement system on or  after  January  first,  two  thousand  ten  and
    56  retires  without reduction of his or her retirement benefit upon attain-

        S. 26                               9                              A. 26
 
     1  ment of at least fifty-five years of age and  completion  of  thirty  or
     2  more years of service pursuant to this section shall be required to make
     3  the  member  contributions  required  by  subdivision  f  of section six
     4  hundred  thirteen of this article for all years of credited and credita-

     5  ble service.
     6    § 8. Subdivision i of section 603 of the retirement and social securi-
     7  ty law, as amended by chapter 19 of the laws of 2008, is amended to read
     8  as follows:
     9    i. 1. A member of a teachers' retirement system or the New York  state
    10  and  local  employees' retirement system who has met the minimum service
    11  requirements but who has less than thirty years of credited service or a
    12  member who first joins the New York state and local  employees'  retire-
    13  ment  system  or  the  New  York state teachers' retirement system on or
    14  after January first, two thousand ten may retire prior to normal retire-
    15  ment age, but no earlier than attainment of  age  fifty-five,  in  which
    16  event,  unless  such  person  is a member of the New York city teachers'

    17  retirement system who is otherwise eligible for early service retirement
    18  pursuant to subdivision c of section six hundred four-i of this article,
    19  the amount of his or her retirement benefit otherwise  computed  without
    20  optional  modification shall be reduced in accordance with the following
    21  schedule:
    22    (i) for each of the first  twenty-four  full  months  that  retirement
    23  predates  age sixty-two, one-half of one per centum per month; provided,
    24  however, that for members who first join the New York  state  and  local
    25  employees'  retirement system or the New York state teachers' retirement
    26  system on or after January first, two thousand ten, such  amounts  shall
    27  be equal to one-fifteenth per year; and
    28    (ii) for each full month that retirement predates age sixty, one-quar-

    29  ter of one per centum per month; provided, however, that for members who
    30  first  join the New York state and local employees' retirement system or
    31  the New York state teachers'  retirement  system  on  or  after  January
    32  first,  two  thousand  ten, such amounts shall be equal to one-twentieth
    33  per year, but in no event shall retirement be permitted prior to attain-
    34  ment of age fifty-five.
    35    2. A member of the New York city employees' retirement system  or  the
    36  board of education retirement system of the city of New York who has met
    37  the minimum service requirement, but who is not (a) a participant in the
    38  twenty-five-year  early  retirement program, as defined in paragraph ten
    39  of subdivision a of section six hundred four-c of this article (as added
    40  by chapter ninety-six of the laws of nineteen hundred  ninety-five),  or

    41  (b)  a participant in the age fifty-seven retirement program, as defined
    42  in paragraph three of subdivision b of section  six  hundred  four-d  of
    43  this  article,  or  (c)  a  New  York  city transit authority member, as
    44  defined in paragraph one of subdivision a of section six hundred  four-b
    45  of  this  article,  may  retire  prior  to normal retirement age, but no
    46  earlier than attainment of age fifty-five, in which event,  unless  such
    47  person  is  a member of the board of education retirement system of such
    48  city who is otherwise eligible for early service retirement pursuant  to
    49  subdivision  c of section six hundred four-i of this article, the amount
    50  of his or her retirement benefit computed without optional  modification
    51  shall be reduced in accordance with the following schedule:
    52    (i)  for  each  of  the  first twenty-four full months that retirement

    53  predates age sixty-two, one-half of one per centum per month; and
    54    (ii) for each full month that retirement predates age sixty, one-quar-
    55  ter of one per centum per month, but in no  event  shall  retirement  be
    56  permitted prior to attainment of age fifty-five.

        S. 26                              10                              A. 26
 
     1    §  8-a.  Section  603  of  the  retirement  and social security law is
     2  amended by adding a new subdivision t to read as follows:
     3    t.  Members who join the New York state teachers' retirement system on
     4  or after January first, two thousand ten, shall be  eligible  to  retire
     5  without reduction of his or her retirement benefit upon attainment of at
     6  least fifty-seven years of age and completion of thirty or more years of

     7  service.  Members who retire pursuant to the provisions of this subdivi-
     8  sion shall be required to make  the  member  contributions  required  by
     9  subdivision  g  of  section six hundred thirteen of this article for all
    10  years of credited and creditable service.
    11    § 8-b. Subdivisions a and b of  section  604  of  the  retirement  and
    12  social  security law, as amended by chapter 266 of the laws of 1998, are
    13  amended to read as follows:
    14    a. The service retirement benefit  at  normal  retirement  age  for  a
    15  member  with  less  than  twenty years of credited service, or less than
    16  twenty-five years credited service for a member who joins the  New  York
    17  state  teachers'  retirement system on or after January first, two thou-

    18  sand ten, shall be a retirement allowance equal to one-sixtieth of final
    19  average salary times years of credited service.
    20    b. The service retirement benefit  at  normal  retirement  age  for  a
    21  member  with  twenty  years or more of credited service, or with twenty-
    22  five or more years credited service for a member who first joins the New
    23  York state teachers' retirement system on or after  January  first,  two
    24  thousand  ten,  shall be a retirement allowance equal to one-fiftieth of
    25  final average salary times years of credited service not  in  excess  of
    26  thirty years.
    27    §  8-c.  Paragraph 2 of subdivision b of section 609 of the retirement
    28  and social security law, as added by chapter 414 of the laws of 1983, is
    29  amended to read as follows:
    30    2. Previous service credit shall not be  granted  unless  such  member

    31  applies  therefor  and repays the amount refunded by a public retirement
    32  system of the state for service  rendered  after  July  first,  nineteen
    33  hundred seventy-six together with interest through the date of repayment
    34  at  the  rate  of  five  percent per annum compounded annually and three
    35  percent of the wages earned for service prior to that date together with
    36  interest from July first, nineteen hundred seventy-six through the  date
    37  of payment at the rate of five percent per annum compounded annually and
    38  three percent of the wages earned for service which predates the date of
    39  entry  into  the retirement system together with interest at the rate of
    40  five percent per annum compounded annually from the date of such service
    41  until the date of payment. Anything in this paragraph  to  the  contrary
    42  notwithstanding, in order to obtain credit for previous service, members

    43  who  first  join  the  New  York state teachers' retirement system on or
    44  after January first, two thousand  ten  shall  pay  three  and  one-half
    45  percent  of  wages  earned  for service which predates the date of entry
    46  into the retirement system together with interest at the  rate  of  five
    47  percent  per  annum  compounded  annually  from the date of such service
    48  until the date of payment.
    49    § 9. Subdivision a of section 612 of the retirement and social securi-
    50  ty law, as amended by chapter 659 of the laws of  1999,  is  amended  to
    51  read as follows:
    52    a.  A member who has five or more years of credited service, or ten or
    53  more years of credited service for a member who  first  joined  the  New

    54  York  state and local employees' retirement system or the New York state
    55  teachers' retirement system on or after January first, two thousand ten,
    56  upon termination of employment, other than a member who is entitled to a

        S. 26                              11                              A. 26
 
     1  deferred vested benefit pursuant to any other provision of this article,
     2  shall be entitled to a deferred vested benefit at normal retirement  age
     3  computed  in  accordance with the provisions of section six hundred four
     4  of  this  article.  A member of a teachers' retirement system or the New
     5  York state and local employees' retirement system who has five  or  more
     6  years  of credited service, or ten or more years of credited service for
     7  a member who first becomes a member of the  New  York  state  and  local

     8  employees'  retirement system or the New York state teachers' retirement
     9  system on or after January first, two thousand ten, upon termination  of
    10  employment  shall  be  entitled  to  a  deferred vested benefit prior to
    11  normal retirement age, but no earlier than age fifty-five,  computed  in
    12  accordance  with  the provisions of subdivision i of section six hundred
    13  three of this article.
    14    § 9-a. Section 613 of  the  retirement  and  social  security  law  is
    15  amended by adding two new subdivisions f and g to read as follows:
    16    f.  Anything in subdivision a of this section to the contrary notwith-
    17  standing a member employed as a uniformed court officer or peace officer
    18  in the unified court system who first joins the New York state and local

    19  employees' retirement system on or after January first, two thousand ten
    20  shall  contribute four percent of annual wages to the New York state and
    21  local employees' retirement system. The head of the New York  state  and
    22  local  employees' retirement system shall promulgate such regulations as
    23  may be necessary and appropriate with respect to the deduction  of  such
    24  contribution  from members' wages and for the maintenance of any special
    25  fund or funds with respect to amounts so contributed.
    26    g.  Members who first join the New  York  state  teachers'  retirement
    27  system  on  or  after  January  first, two thousand ten shall contribute
    28  three and one-half percent of annual wages to the New York state  teach-

    29  ers' retirement system. The head of the New York state teachers' retire-
    30  ment  system  shall  promulgate such regulations as may be necessary and
    31  appropriate with respect to the  deduction  of  such  contribution  from
    32  members' wages and for the maintenance of any special fund or funds with
    33  respect to amounts so contributed.
    34    §  10.  Paragraph  1 of subdivision b of section 902 of the retirement
    35  and social security law, as amended by chapter 110 of the laws of  2000,
    36  is amended to read as follows:
    37    1.  An eligible employee (i) with a date of membership in a retirement
    38  system on or after July twenty-seventh, nineteen hundred seventy-six and
    39  before January first, two thousand ten, and (ii) who  has  ten  or  more
    40  years  of  membership  or  ten  or more years of credited service with a

    41  retirement system under the provisions of article fourteen or fifteen of
    42  this chapter shall not be required to contribute to a retirement  system
    43  pursuant  to  section  five hundred seventeen or six hundred thirteen of
    44  this chapter as of the cessation date.
    45    § 11. Intentionally omitted.
    46    § 12. Intentionally omitted.
    47    § 13. Section 90 of the general municipal law, as amended  by  chapter
    48  576 of the laws of 1964, is amended to read as follows:
    49    §  90.  Payment of overtime compensation to public officers or employ-
    50  ees.  The governing board of each municipal corporation or  other  civil
    51  division  or  political  subdivision of the state, or in the city of New
    52  York, the mayor, by ordinance, local law, resolution, order or rule, may
    53  provide for the payment of overtime compensation to any  or  all  public

    54  officers  except elective officers and those officers otherwise excluded
    55  by law and to any or all public employees under  their  jurisdiction  at
    56  the  regular  basic  pay rate of such officers or employees for all time

        S. 26                              12                              A. 26
 
     1  such officers or employees are required to work in excess of their regu-
     2  larly established hours of employment or at  such  other  rate  as  such
     3  governing  board,  or in the city of New York, the mayor, may authorize.
     4  The  amounts  received as overtime compensation under this section shall
     5  be regarded as salary or compensation for any of  the  purposes  of  any
     6  pension  or retirement system of which the officer or employee receiving
     7  the same is a member, except as set forth in sections five hundred  one,

     8  six  hundred  one, and twelve hundred three of the retirement and social
     9  security law.  Such overtime compensation shall not be regarded as sala-
    10  ry or compensation for the purpose  of  determining  the  right  to  any
    11  increase  of  salary  or  any  salary  increment on account of length of
    12  service or otherwise. No such overtime compensation shall  be  construed
    13  to constitute a promotion.
    14    § 14. Section 1 of chapter 729 of the laws of 1994 relating to affect-
    15  ing the health insurance benefits and contributions of retired employees
    16  of  school districts and certain boards, as amended by chapter 30 of the
    17  laws of 2009, is amended to read as follows:
    18    Section 1. From on and after June 30, 1994 [until  May  15,  2010,]  a
    19  school  district,  board of cooperative educational services, vocational

    20  education and extension board or a  school  district  as  enumerated  in
    21  section  1  of  chapter  566  of  the laws of 1967, as amended, shall be
    22  prohibited from diminishing the health insurance  benefits  provided  to
    23  retirees  and  their  dependents  or  the  contributions  such  board or
    24  district makes for such health insurance coverage  below  the  level  of
    25  such benefits or contributions made on behalf of such retirees and their
    26  dependents  by  such district or board unless a corresponding diminution
    27  of benefits or contributions is effected from the present  level  during
    28  this  period  by  such district or board from the corresponding group of
    29  active employees for such retirees.
    30    § 15. Legislative intent. The legislature hereby  finds  and  declares
    31  its  intent,  in addition to the retirement benefit changes provided for

    32  in this act, to enact legislation, in conjunction  with  the  executive,
    33  which would offer a three-month period during calendar year 2010, during
    34  which  members  of  the collective bargaining unit of the New York State
    35  United Teachers ("NYSUT") within the New York state teachers  retirement
    36  system and the New York state and local employees' retirement system who
    37  have  reached  fifty-five  years of age and have accumulated twenty-five
    38  years of service as a member  of  either  such  retirement  system,  may
    39  retire early without penalty.
    40    §  16.  This act shall take effect January 1, 2010; provided, however,
    41  that the amendments to subdivision a of section 603  of  the  retirement
    42  and  social  security  law  made by section seven of this act, shall not
    43  affect the expiration of such subdivision and shall be deemed to  expire
    44  therewith.
 

    45                                   PART C
 
    46    Section  1.  Subdivisions a and b of section 602 of the retirement and
    47  social security law, as amended by chapter 389 of the laws of 1998,  are
    48  amended to read as follows:
    49    a. [A] Except as provided in subdivision b-1 of this section, a member
    50  who  first  joins  a  public retirement system of this state on or after
    51  July first, nineteen hundred  seventy-six  shall  not  be  eligible  for
    52  service  retirement  benefits hereunder until such member has rendered a
    53  minimum of five years of credited service.

        S. 26                              13                              A. 26
 
     1    b. [A] Except as provided in subdivision b-1 of this section, a member
     2  who previously was a member of a public retirement system of this  state

     3  shall  not  be  eligible for service retirement benefits hereunder until
     4  such member has rendered a minimum of five years  of  service  which  is
     5  credited pursuant to section six hundred nine of this article.
     6    §  2. Section 602 of the retirement and social security law is amended
     7  by adding a new subdivision b-1 to read as follows:
     8    b-1. Notwithstanding the provisions of subdivision  a  or  b  of  this
     9  section  or  any other provision of law to the contrary, (i) a member of
    10  the New York city teachers'  retirement  system  who  holds  a  position
    11  represented  by  the  recognized  teacher  organization  for  collective
    12  bargaining purposes, and who became subject to the  provisions  of  this
    13  article  after  the effective date of this subdivision, or (ii) a member

    14  of the New York city board of education retirement system  who  holds  a
    15  position  represented by the recognized teacher organization for collec-
    16  tive bargaining purposes, and who became subject to  the  provisions  of
    17  this  article after the effective date of this subdivision, shall not be
    18  eligible for service retirement benefits hereunder until such member has
    19  rendered a minimum of ten years of credited service.
    20    § 3. Subdivision a of section 612 of the retirement and social securi-
    21  ty law, as amended by chapter 659 of the laws of  1999,  is  amended  to
    22  read follows:
    23    a. [A] Except as provided in subdivision a-1 of this section, a member
    24  who  has  five  or  more  years  of credited service upon termination of

    25  employment, other than a member who is entitled  to  a  deferred  vested
    26  benefit  pursuant to any other provision of this article, shall be enti-
    27  tled to a deferred vested benefit at normal retirement age  computed  in
    28  accordance with the provisions of section six hundred four of this arti-
    29  cle. [A] Except as provided in subdivision a-1 of this section, a member
    30  of a teachers' retirement system or the New York state and local employ-
    31  ees'  retirement  system  who has five or more years of credited service
    32  upon termination of employment shall be entitled to  a  deferred  vested
    33  benefit  prior  to normal retirement age, but no earlier than age fifty-
    34  five, computed in accordance with the provisions  of  subdivision  i  of
    35  section six hundred three of this article.
    36    §  4. Section 612 of the retirement and social security law is amended

    37  by adding a new subdivision a-1 to read as follows:
    38    a-1. Notwithstanding the provisions of subdivision a of  this  section
    39  or  any  other provision of law to the contrary, (i) a member of the New
    40  York city teachers' retirement system who holds a  position  represented
    41  by   the  recognized  teacher  organization  for  collective  bargaining
    42  purposes, who became subject to the provisions of this article after the
    43  effective date of this subdivision, and who has ten  or  more  years  of
    44  credited  service, or (ii) a member of the New York city board of educa-
    45  tion retirement system who holds a position represented  by  the  recog-
    46  nized  teacher  organization  for  collective  bargaining  purposes, who

    47  became subject to the provisions of this  article  after  the  effective
    48  date  of  this  subdivision,  and  who has ten or more years of credited
    49  service, other than such a member of either of such  retirement  systems
    50  who  is  entitled  to  a  deferred  vested benefit pursuant to any other
    51  provision of this article, shall, upon  termination  of  employment,  be
    52  entitled  to a deferred vested benefit at normal retirement age computed
    53  in accordance with the provisions of section six hundred  four  of  this
    54  article.    Notwithstanding  the  provisions  of  subdivision  a of this
    55  section or any other provision of law to the contrary, a member  of  the
    56  New  York  city teachers' retirement system who holds a position repres-


        S. 26                              14                              A. 26
 
     1  ented by the recognized teacher organization for  collective  bargaining
     2  purposes, who became subject to the provisions of this article after the
     3  effective  date  of  this  subdivision, and who has ten or more years of
     4  credited  service, shall, upon termination of employment, be entitled to
     5  a deferred vested benefit prior to normal retirement age, but no earlier
     6  than age fifty-five, computed  in  accordance  with  the  provisions  of
     7  subdivision i of section six hundred three of this article.
     8    § 5. Paragraph 1 of subdivision b of section 911 of the retirement and
     9  social  security  law, as amended by chapter 110 of the laws of 2000, is
    10  amended to read as follows:

    11    1. [An] Subject to the provisions of paragraph one-a of this  subdivi-
    12  sion,  an  eligible member (i) with a date of membership in a retirement
    13  system on or after July twenty-seventh, nineteen hundred seventy-six and
    14  (ii) who has ten or more years of membership or ten  or  more  years  of
    15  credited  service with a retirement system under the provisions of arti-
    16  cle fourteen or fifteen  of  this  chapter  shall  not  be  required  to
    17  contribute  to  a  retirement  system  pursuant  to section five hundred
    18  seventeen or six hundred thirteen of this chapter as  of  the  cessation
    19  date.
    20    § 6. Subdivision b of section 911 of the retirement and social securi-
    21  ty law is amended by adding a new paragraph 1-a to read as follows:
    22    1-a.  Notwithstanding the provisions of paragraph one of this subdivi-

    23  sion  or any other provision of law to the contrary, a member of the New
    24  York city teachers' retirement system or the  New  York  city  board  of
    25  education retirement system:
    26    (i)  who  is  a  twenty-seven  year  participant in the age fifty-five
    27  retirement program (as defined in paragraph twelve of subdivision  a  of
    28  section six hundred four-i of this chapter), and
    29    (ii)  who becomes subject to the provisions of article fifteen of this
    30  chapter after the effective date of this paragraph, shall contribute  to
    31  a  retirement  system  pursuant  to section six hundred thirteen of this
    32  chapter until he or she has completed  twenty-seven  years  of  credited
    33  service.
    34    §  7.  Paragraph 2 of subdivision e of section 604-i of the retirement

    35  and social security law, as added by chapter 19 of the laws of 2008,  is
    36  amended to read as follows:
    37    2.  A  twenty-five-year  participant  in the age fifty-five retirement
    38  program (as defined  in  paragraph  eleven  of  subdivision  a  of  this
    39  section)  shall  contribute  additional  member  contributions until the
    40  later of (i) June twenty-ninth, two thousand eight, or (ii) the date  on
    41  which  he  or she has completed twenty-five years of credited service. A
    42  twenty-seven-year participant in the age fifty-five  retirement  program
    43  shall  contribute  additional  member contributions only until he or she
    44  has completed twenty-seven years of credited service; provided, however,
    45  that a twenty-seven-year participant in the  age  fifty-five  retirement
    46  program  who becomes subject to the provisions of this article after the

    47  effective date of the chapter of the laws  of  two  thousand  nine  that
    48  amended  this paragraph shall contribute additional member contributions
    49  for all years of credited service as provided in  subparagraph  (ii)  of
    50  paragraph one of this subdivision.
    51    § 8. Subdivision d of section 13-582 of the administrative code of the
    52  city of New York is amended to read as follows:
    53    d.  [Interest]  1.  Subject to the provisions of paragraph two of this
    54  subdivision, interest shall be allowed on the participant's tax-deferred
    55  account in the annuity savings fund at the same rate and  in  accordance

        S. 26                              15                              A. 26
 
     1  with  the  same  rules  and  procedures applicable to any account in the

     2  annuity savings fund, as provided in this chapter.
     3    2.  Notwithstanding  the  provisions of paragraph one of this subdivi-
     4  sion, or any other provision of law, or any retirement board rule, regu-
     5  lation or resolution to the contrary, on or after the first business day
     6  immediately following the effective date  of  this  paragraph,  interest
     7  shall  be  allowed  at  the  rate of seven percent per annum, compounded
     8  annually, on the tax-deferred account in the  annuity  savings  fund  of
     9  participants  (i)  who  hold  a  position  represented by the recognized
    10  teacher organization for collective bargaining  purposes,  or  (ii)  who
    11  held  such  a  position at the time they retired or discontinued service

    12  with vested rights to  a  retirement  allowance  and  elected  to  defer
    13  commencement  of  distribution of their tax-deferred accounts in accord-
    14  ance with subdivision g of this section.
    15    § 9. Section 13-582 of the administrative code of the city of New York
    16  is amended by adding two new subdivisions n and o to read as follows:
    17    n. Notwithstanding any other provision of law, or any retirement board
    18  rule, regulation or resolution to the contrary, the amendment to  subdi-
    19  vision d of this section enacted by the chapter of the laws of two thou-
    20  sand  nine  which  added  this  subdivision shall not affect the rate of
    21  interest being charged  on  new  loans  from  the  tax-deferred  annuity
    22  program,  and  the rate of interest that was being charged on such loans

    23  immediately prior to the effective date of  this  subdivision  shall  be
    24  used  for  new  loans  from  the tax-deferred annuity program made on or
    25  after the effective date of  this  subdivision,  unless  the  retirement
    26  board,  in  accordance  with  its authority pursuant to paragraph two of
    27  subdivision l of this section, as added by chapter five  hundred  seven-
    28  teen of the laws of nineteen hundred ninety-three, shall amend its rules
    29  and regulations governing loans from the tax-deferred annuity program to
    30  establish a different rate of interest applicable to such loans.
    31    o. Notwithstanding any other provision of law, or any retirement board
    32  rule,  regulation  or resolution to the contrary, where a participant in

    33  the tax-deferred annuity program  has  elected  to  transfer  all  or  a
    34  portion of the amount credited to his or her tax-deferred account in the
    35  annuity  savings  fund to a tax-deferred account in the variable annuity
    36  savings fund, the retirement system shall effectuate  such  transfer  as
    37  expeditiously as is administratively feasible.
    38    § 10. Subdivision 20 of section 2575 of the education law, as added by
    39  chapter  509  of  the laws of 1993, is amended by adding a new paragraph
    40  (e) to read as follows:
    41    (e) Notwithstanding any other provision of law, or any rule  or  regu-
    42  lation,  or  the  provisions  of  any retirement board resolution to the
    43  contrary:
    44    (1) on or after the  first  business  day  immediately  following  the

    45  effective  date of this paragraph, interest shall be allowed at the rate
    46  of seven percent per annum, compounded  annually,  on  the  tax-deferred
    47  accounts  in  the  annuity  savings  fund of participants (i) who hold a
    48  position represented by the recognized teacher organization for  collec-
    49  tive  bargaining  purposes, or (ii) who held such a position at the time
    50  they retired or discontinued service with vested rights to a  retirement
    51  allowance  and  elected  to  defer commencement of distribution of their
    52  tax-deferred accounts in accordance with paragraph (c) of this  subdivi-
    53  sion; and
    54    (2)  the  provisions  of  subparagraph one of this paragraph shall not
    55  affect the rate of interest being charged on new loans from the  tax-de-

    56  ferred  annuity program, and the rate of interest that was being charged

        S. 26                              16                              A. 26
 
     1  on such loans immediately prior to the effective date of this  paragraph
     2  shall  be  used for new loans from the tax-deferred annuity program made
     3  on or after the effective date of this paragraph, unless the  rules  and
     4  regulations  governing  loans  from the tax-deferred annuity program are
     5  amended pursuant to paragraph (d) of this  subdivision  to  establish  a
     6  different rate of interest applicable to such loans; and
     7    (3)  where  a  participant  in  the  tax-deferred  annuity program has
     8  elected to transfer all or a portion of the amount credited  to  his  or

     9  her  tax-deferred  account in the annuity savings fund to a tax-deferred
    10  account in the variable annuity  savings  fund,  the  retirement  system
    11  shall  effectuate  such transfer as expeditiously as is administratively
    12  feasible.
    13    § 11. This act shall take effect immediately.
    14    § 2. Severability clause. If any clause, sentence, paragraph, subdivi-
    15  sion, section or part of this act shall be  adjudged  by  any  court  of
    16  competent  jurisdiction  to  be invalid, such judgment shall not affect,
    17  impair, or invalidate the remainder thereof, but shall  be  confined  in
    18  its  operation  to the clause, sentence, paragraph, subdivision, section
    19  or part thereof directly involved in the controversy in which such judg-
    20  ment shall have been rendered. It is hereby declared to be the intent of

    21  the legislature that this act would  have  been  enacted  even  if  such
    22  invalid provisions had not been included herein.
    23    §  3.  This  act shall take effect immediately provided, however, that
    24  the applicable effective date of Parts A through C of this act shall  be
    25  as specifically set forth in the last section of such Parts.
          FISCAL NOTE.--PROVISIONS OF PART C OF THE PROPOSED LEGISLATION - OVER-
        VIEW:  With  respect  to the New York City Retirement Systems ("NYCRS"),
        Part C of this proposed legislation would amend New York  State  Retire-
        ment  and  Social  Security  Law  ("RSSL")  Sections 602, 604-i, 612 and
        911.b, Administrative Code of the City  of  New  York  ("ACNY")  Section
        13-582  and  Education Law ("Ed Law") Section 2575 to provide changes in
        the service eligibility requirements for certain members for Vested  and

        Service  Retirement  benefits,  to revise the duration of payability for
        member contributions for certain Tier IV members hired on and after  the
        Effective  Date,  and  to provide a change to the rate of interest to be
        credited on Fixed Fund account balances of certain participants  in  the
        Tax  Deferred  Annuity  ("TDA")  Programs of the New York City Teachers'
        Retirement System ("NYCTRS") and the New York City  Board  of  Education
        Retirement System ("BERS").
          The  Effective  Date  of the proposed legislation would be the date of
        enactment.
          IMPACT ON SECTIONS OF LAW: The proposed legislation  would  amend  the
        following  provisions  of law for certain new NYCRS members hired on and
        after the Effective Date ("New Members") and also impact certain  exist-
        ing   members  on  the  Effective  Date  with  respect  to  certain  TDA
        provisions.

        Section of Law                               Provisions Being Amended
                                  Tier I-IV Provisions
        ACNY 13-582.d                                Provisions relating to
                                                     NYCTRS TDA.
        ACNY 12-582.n.o                              Provisions relating to
                                                     NYCTRS TDA loans.
                                   Tier IV Provisions
        RSSL Sec. 602.a,b                            Service Retirement ("SR")
                                                     eligibility.
        RSSL Sec. 604-i                              Additional Member

        S. 26                              17                              A. 26
 
                                                     Contributions ("AMC").

        RSSL Sec. 612.a                              Eligibility for Vested
                                                     benefits.
        RSSL Sec. 911.b                              Limitations on Basic Member
                                                     Contributions
                          TDA Provisions and TDA Loans for BERS
        Ed Law Sec. 2575                             TDA provisions and TDA
                                                     loans for BERS.
          IMPACT  ON  NYCRS RETIREMENT PLANS - NON-TDA PROVISIONS: Part C of the
        proposed legislation would cover certain Tier IV New Members  of  NYCTRS
        and BERS and impact provisions of the following Plans:
          * Basic Tier IV Plan Provisions ("Basic 62/5 Plan") and
          *  Optional Age Fifty-five Retirement Program for New York City Teach-
        ers and certain other members ("Age 55 Program").

          IMPACT ON ELIGIBILITY  PROVISIONS  -  NON-TDA  PROVISIONS:  Under  the
        proposed  legislation, certain New Members hired on and after the Effec-
        tive Date would become subject to the following revised Service  Retire-
        ment and Vesting eligibility requirements:
          Service Retirement
          Under  the  proposed  legislation,  the minimum service required for a
        Service Retirement benefit in the Basic 62/5 Plan would be increased  to
        10 years from 5 years of credited service.
          Vesting
          Under  the  proposed  legislation,  the minimum service required for a
        Vested benefit in the Basic 62/5 Plan would be  increased  to  10  years
        from 5 years of credited service.
          While such New Members would participate in the Age 55 Program, in the
        event a participant terminated employment prior to meeting the eligibil-

        ity requirements of the Age 55 Program for Service Retirement, the bene-
        fits  payable  upon  vesting,  retirement,  disability or death would be
        based on the provisions of the Basic 62/5 Plan.
          IMPACT ON MEMBER CONTRIBUTIONS - NON-TDA PROVISIONS: Currently,  Basic
        Member  Contributions  ("BMC") of 3.0% of salary for Tier IV members are
        required (per Chapter 126 of the Laws of 2000) for  only  the  first  10
        years of membership or the first 10 years of credited service, whichever
        occurs earliest.
          Under  the proposed legislation, certain New Members would be required
        to pay BMC for all years of credited service  up  to  a  maximum  of  27
        years.
          Currently,  under the existing Age 55 Program, only those participants
        subject to the 27-year provisions are  required  to  contribute  AMC  of
        1.85% of salary to a maximum of 27 years of credited service.

          Under  Part  C of the proposed legislation, New Member 27-year partic-
        ipants in the Age 55 Program after the Effective Date would be  required
        to contribute AMC for all years of credited service.
          FINANCIAL IMPACT - OVERVIEW: If enacted into law, the ultimate employ-
        er  cost  of  this  proposed  legislation would be determined by the net
        change in benefits paid, offset by  any  increases  in  member  contrib-
        utions, and by the reduced amount of interest credited to TDA Fixed Fund
        account balances.
          FINANCIAL  IMPACT  -  NON-TDA  PROVISIONS - ACTUARIAL PRESENT VALUES -
        CURRENT MEMBERS: Based on the census data and the actuarial  assumptions
        and  methods  currently in effect, the enactment of this proposed legis-
        lation would not change the APV of benefits, the APV of member  contrib-
        utions  or the APV of future salary of current members of NYCTRS or BERS

        as of June 30, 2008.

        S. 26                              18                              A. 26
 
          IMPACT ON NYCRS RETIREMENT PLANS  -  TDA  PROVISIONS:    The  proposed
        legislation  changes  to  the  TDA  provisions would cover both existing
        members and New Members of NYCTRS and BERS in Tier I, Tier II, Tier  III
        and Tier IV whose job titles are represented in collective bargaining by
        the United Federation of Teachers ("UFT") ("Covered Members").
          These  TDA  changes  would  impact  all  such  NYCTRS and BERS members
        regardless of the Plan in which they participate.
          BACKGROUND - EARNINGS ON TDA ACCOUNTS - CURRENT LAW:    Under  current
        law,  eligible  members  of  NYCTRS  who elect to participate in the TDA
        Program select from among the following  funds  to  allocate  their  TDA

        account balances (100.0% in one Fund or proportions (delineated in mini-
        mum 5.0% increments)) within the following six alternative funds:
          *  A  Fixed  Fund  that provides a guaranteed annual rate of return of
        8.25% per annum (for periods on and after July 1, 1988), or
          * Five separate Variable Funds (i.e., Diversified Equity Fund,  Stable
        Value  Fund,  International  Equity  Fund,  Inflation Protection Fund or
        Socially Responsive Equity Fund) that  provide  alternative  risk/reward
        characteristics.
          Eligible  BERS  members who participate in the TDA Program select only
        from the Fixed Fund and the Diversified Equity Fund.
          At retirement after age 59 1/2, TDA participants may receive their TDA
        account balances payable as a lump sum, as a monthly  annuity  based  on
        annuitization  factors used by the NYCTRS or BERS Qualified Pension Plan

        ("QPP") Programs, respectively, or in other amounts they  elect  subject
        to  the  Internal  Revenue  Code  ("IRC")  Minimum Required Distribution
        ("MRD") rules for those age 70 1/2 or greater.
          BACKGROUND - EARNINGS ON  TDA  ACCOUNTS  -  PROPOSED  LAW:  Under  the
        proposed  legislation,  the interest crediting rate for TDA participants
        in the Fixed Fund for Covered Members would be  decreased  (i.e.,  8.25%
        per annum would decrease to 7.0% per annum).
          FINANCIAL  IMPACT  - TDA FIXED FUND ASSETS - OVERVIEW: If enacted into
        law, the ultimate change in employer cost of this  proposed  legislation
        would  equal  the  change in benefits payable by NYCTRS and BERS arising
        from revised TDA provisions.
          Simplistically, this change in employer cost would equal  the  cumula-
        tive reduction in obligations between crediting 8.25% per annum and 7.0%

        per annum on TDA Fixed Fund account balances for Covered Members.
          However, financing this change in obligations is not simplistic.
          Under current law, TDA Fixed Fund assets of NYCTRS and BERS are co-in-
        vested with NYCTRS QPP assets.
          The  Investment  Policy  for  NYCTRS QPP assets reflects a broad asset
        allocation of 70% equity-like securities and 30% bond-like securities.
          The actuarial assumptions currently in  effect  include  an  Actuarial
        Interest  Rate  ("AIR")  assumption of 8.0% per annum that is consistent
        with an assumption that the NYCTRS QPP assets are expected  to  earn  an
        average  of 8.0% per year. To the extent that TDA Fixed Fund assets earn
        more than 8.25% per year (i.e., the crediting rate  on  TDA  Fixed  Fund
        account  balances),  actuarial gains occur. To the extent that TDA Fixed
        Fund assets earn less than 8.25% per year, actuarial losses occur.

          To the extent TDA Fixed Fund account balances are shifted to  Variable
        Funds or vice versa, there are also impacts on the potential cost of the
        TDA Programs.
          Under  the proposed legislation, access to and earnings payable on the
        Variable Funds would not change.
          Under current actuarial practice,  the  Actuary  spreads  through  the
        Actuarial  Asset  Valuation Method ("AAVM") over six years and then over

        S. 26                              19                              A. 26
 
        the expected future working lifetimes of NYCTRS QPP and BERS QPP  active
        members  the  investment gains/losses attributable to the TDA Fixed Fund
        earnings equaling more/less than the 8.25%  per  annum  TDA  Fixed  Fund
        Interest Crediting Rate.
          In  particular,  the  Actuary  includes in the NYCTRS QPP and BERS QPP

        actuarial valuations a modest load to the  Actuarial  Present  Value  of
        Benefits  ("APVB")  equal  to approximately 2.3% of their respective TDA
        Fixed Fund assets. This amount is intended to represent a portion of the
        anticipated difference between the expected earnings on TDA  Fixed  Fund
        assets and the TDA Fixed Fund Interest Crediting Rate. These obligations
        are  financed  over  the expected future working lifetimes of NYCTRS QPP
        and BERS QPP active members.
          FINANCIAL IMPACT - TDA FIXED FUND ASSETS -  RISK  ADJUSTED:  As  noted
        earlier, the expected long-term actuarial loss on TDA Fixed Fund assets,
        under  the  current  actuarial  assumptions,  is  .25% of TDA Fixed Fund
        assets, per year.
          However, on a risk-adjusted basis, the economic implications are  more
        significant.  Specifically, TDA Fixed Fund account balances are credited

        with interest at a rate of 8.25% per annum, not subject to any  risk  to
        the TDA participants.
          To  earn the AIR assumption of 8.0% per annum, (or the 8.25% per annum
        crediting rate), TDA Fixed  Fund  assets  are  subject  to  considerable
        investment risk.
          Were  NYCTRS  to set aside TDA Fixed Fund assets whose characteristics
        had a comparable level of certainty of payment, it would have to  invest
        in some form of risk-free asset class such as U.S. Treasury securities.
          Although  a  TDA participant may move, following a modest notification
        period, his or her TDA account balance between the Fixed  Fund  and  the
        Variable  Funds, the Actuary has assumed an average TDA Fixed Fund hold-
        ing period of 10 years. Comparing the expected  yield  on  10-year  U.S.
        Treasury securities would then be a reasonable, risk-adjusted benchmark.

          Over  time, intermediate-term U.S. Treasury securities may be expected
        to earn a real rate of return of approximately 2.5% per  year.  Combined
        with a long-term assumption for inflation of 2.5% per year, a total rate
        of return for intermediate-term Treasury securities would equal approxi-
        mately 5.0% per year.
          Comparing the current risk-free TDA Fixed Fund interest crediting rate
        of  8.25%  per  annum with a long-term expected, market place, risk-free
        yield of 5.0% per year on  intermediate-term  U.S.  Treasury  securities
        indicates  that TDA account balances are being credited with an expected
        3.25% per year greater rate of return on a risk-adjusted basis than  the
        expected earnings on the supporting TDA Fixed Fund assets.
          Thus, on an economically robust, risk-adjusted basis, the crediting of
        TDA  account balances with interest at either 7.0% or 8.25% per annum is

        more expensive than reported on a non-risk-adjusted basis.
          FINANCIAL IMPACT - TDA VARIABLE ANNUITY CONVERSIONS: In addition,  the
        Actuary  holds as obligations of the NYCTRS QPP and BERS QPP, amounts to
        reflect the actuarial losses anticipated upon the conversion of some TDA
        account balances into Variable Annuities.  This reflects the  fact  that
        the annuity factors used for such conversion, by law, are not actuarial-
        ly equivalent to what the Actuary assumes in the actuarial valuations.
          Under the proposed legislation, TDA participants would be permitted to
        transfer  their  TDA  Fixed  Fund account balances to one or more of the
        Variable Funds as soon as feasible  under  the  direction  of  the  Plan
        administrators of each NYCTRS and BERS.

        S. 26                              20                              A. 26
 

          However, it is not expected that enactment of the proposed legislation
        would  result  in  substantial  numbers of TDA participants transferring
        their TDA Fixed Fund account balances to TDA Variable Funds.
          FINANCIAL IMPACT - TDA FIXED FUND - SUMMARY: Annual investment returns
        on  the  TDA  Fixed Fund assets that exceed the guaranteed amounts to be
        credited to the TDA Fixed Fund accounts produce actuarial gains.
          Conversely, annual investment returns less than the guaranteed amounts
        to be credited to the TDA Fixed Fund accounts produce actuarial losses.
          Under the current AIR assumption of 8.0% per annum, an aggregate long-
        term net actuarial loss of .25% on TDA Fixed Fund  account  balances  is
        expected.  This loss ultimately increases employer costs.
          The  Actuary  anticipates  that  enactment of the proposed legislation

        with respect to the decrease to 7.0% per annum from 8.25% per  annum  of
        the Interest Crediting Rate on TDA Fixed Fund account balances in NYCTRS
        and BERS would become effective in the Fiscal Year containing the Effec-
        tive Date.
          If  enacted  before  June  30,  2010,  the Actuary would likely reduce
        Fiscal Year 2010 employer contributions to reflect that there  would  be
        fewer  TDA  Fixed Fund account balances expected to be credited at 8.25%
        per annum.
          As of June 30, 2008, TDA Fixed Fund account balances equaled  approxi-
        mately $8.970 billion for NYCTRS and $456.8 million for BERS.
          Assuming  a  portion  of  the TDA Fixed Fund account balances would be
        transferred to the  TDA  Variable  Funds  following  enactment  of  this
        proposed  legislation,  the  Actuary would likely apply the 2.3% load to
        only non-UFT TDA account balances.

          If the proposed legislation were enacted on or before June  30,  2010,
        the  impact  of  reducing expected TDA Fixed Fund actuarial losses would
        result in decreases  in  Fiscal  Year  2010  employer  contributions  of
        approximately $18.7 million for NYCTRS and $.4 million for BERS.
          It  is  anticipated  that  the annualized expected reduction in Fiscal
        Year 2010 employer contributions to NYCTRS and BERS would  continue  for
        future years.
          PROJECTED  CHANGES  IN  EMPLOYER  CONTRIBUTIONS  -  CURRENT  ACTUARIAL
        ASSUMPTIONS AND METHODS: If the proposed legislation  were  enacted  and
        effective  for certain New Members on or after the Effective Date, these
        New Members would first join the NYCRS during Fiscal Year 2010 and first
        be included in the June 30, 2010 actuarial valuations of the NYCRS  used
        to determine Fiscal Year 2012 employer contributions.

          However,  since  most  New Members of NYCTRS and BERS impacted by this
        proposed legislation would likely not be hired until September 2010  and
        would first be included in the June 30, 2011 actuarial valuations of the
        NYCRS,  the  first  significant  impact of the proposed legislation with
        respect to non-TDA provisions would likely be on the  Fiscal  Year  2013
        employer contributions.
          The  proposed  changes  to  the  TDA provisions would first impact the
        Fiscal Year 2010 employer contributions.
          The following Table 1 presents an estimate of the reduction in employ-
        er contributions that would occur based on current actuarial assumptions
        and methods:
 
                                         Table 1
 
                     Estimated Reductions in Employer Contributions
                   If Proposed Legislation is Enacted to be Effective
                               On or Before June 30, 2010*

        S. 26                              21                              A. 26
 
                     Under Current Actuarial Assumptions and Methods
 
                                      ($ Millions)
 
        Fiscal Year         NYCTRS         BERS        Total
        2010                18.7           0.4         19.1
        2011                17.6           0.4         18.0
        2012                16.6           0.3         16.9
        2013                23.2           0.5         23.7
        2014                29.5           0.7         30.2
        2015                35.9           0.8         36.7
        2016                42.5           1.0         43.5
        2017                49.0           1.2         50.2
        2018                55.6           1.4         57.0
        2019                62.6           1.5         64.1
 
          *  Based  on projection assumptions set forth in Actuarial Assumptions

        and Methods Section and as noted herein. Includes both impact of non-TDA
        provisions with first significant impact in Fiscal  Year  2013  and  TDA
        provisions with impact in Fiscal Year 2010 and later.
          The  estimated  reductions  in employer contributions shown in Table 1
        are based upon the following projection assumptions:
          * Level workforce (i.e., new employees are hired to replace those  who
        leave active status).
          *  Projected salary increase consistent with those used in projections
        presented  to  the  New  York  City  Office  of  Management  and  Budget
        ("NYCOMB") on February 20, 2009 ("February Projections").
          *  New  entrant  salaries  consistent  with those used in the February
        Projections.
          These "open group" projections include future new entrants  introduced
        into the census data models to project the future workforces.

          As of each future actuarial valuation date, the current "closed group"
        actuarial assumptions and valuation methodology are used.
          Under  this  methodology  only  Plan Participants as of each actuarial
        valuation date are  utilized  to  determine  Actuarial  Present  Values,
        employer costs and employer contributions.
          To  the  extent  Plan  designs  do not change markedly over time, such
        closed group actuarial methodology is well suited to funding  a  Retire-
        ment System.
          FINANCIAL  IMPACT  - ACTUARIAL PRESENT VALUES - POTENTIAL METHODOLOGY:
        The impact of enactment of the proposed  legislation  provided  in  this
        Fiscal Note has been based on the continued use of the current actuarial
        assumptions and methods.
          However,  the  current actuarial assumptions and methods do not repre-
        sent the only possible approach for funding the NYCRS.

          Historically, actuarial assumptions and methods have been reviewed  on
        average  every  five  years  in  connection with an actuarial experience
        study mandated by New York City Charter Section 96.
          Following this review, the Actuary generally proposes changes in actu-
        arial assumptions and methods that he believes appropriate  and  reason-
        ably related to such experience period and future expectations.
          The next such review is anticipated during Fiscal Year 2011 or 2012.
          If  enacted,  the  proposed legislation would increase the duration of
        member contributions of  New  Members  of  the  NYCTRS  and  BERS.  This
        increase  may possibly impact the timing of their election to retire for
        service and hence, their future working lifetimes.  As such, the Actuary

        S. 26                              22                              A. 26
 

        will be considering  alternative  actuarial  methodologies  that  could,
        directly  or  indirectly,  reflect  the impact of future new entrants as
        early as the Fiscal Year of enactment.
          The  Actuary  may  also consider revising the amortization periods for
        financing certain costs in order to reflect the expected change  in  the
        average  working  lifetimes of New Members hired after enactment of this
        proposed legislation.
          Note: The Actuary has not committed to any particular methodology  for
        determining employer costs and employer contributions in connection with
        the  upcoming,  experience  review of actuarial assumptions and methods.
        However, the Actuary intends to consider seriously the potential  impli-
        cations for financing the NYCRS that could arise should the benefits and
        the  expected  future working lifetimes of certain New Members after the

        Effective Date differ from those of current new entrants.
          FINANCIAL IMPACT - ENTRY AGE NORMAL COSTS: Entry Age Normal Costs  can
        provide  a  useful  basis  to  compare  the value of alternative benefit
        programs.  For each member who enters a NYCRS, there  is  a  theoretical
        net  annual  employer  cost to be paid for such member while such member
        remains actively employed (i.e., the Entry Age Normal Cost ("EANC")).
          In addition, such EANC may be expressed  as  a  percentage  of  salary
        earned  over  a working lifetime and referred to as the Entry Age Normal
        Rate ("EANR").
          Under the proposed legislation and based on the actuarial  assumptions
        noted  herein,  the  EANC and EANR of New Members would be less than the
        EANC and EANR for comparable new members entering at the  same  attained
        age and gender under the current NYCRS provisions.

          A  summary  of the change in EANC by NYCRS for entry age 25, 30 and 35
        follows:
 
                                         Table 2
              Comparison of Representative Employer Entry Age Normal Rates*
                   To Implement Proposed Legislation Impacting Certain
                             New Members of NYCTRS and BERS
 
                             EANR Under Proposed Legislation
 
        Retirement          Entry Age 25     Entry Age 30          Entry Age 35
        System
                          Male   Female     Male      Female      Male      Female
 
        NYCTRS            5.68%  5.99%      6.39%     6.79%       6.99%     7.53%
 
        BERS              3.72%  4.19%      4.21%     4.80%       4.47%     5.21%
 
                                EANR Under Current Law**
 
        NYCTRS            7.08%  7.40%      7.79%     8.21%       8.46%     9.02%
 
        BERS              5.07%  5.58%      5.55%     6.18%       5.80%     6.61%
 

                      Reduction in EANR Due to Proposed Legislation
 
        NYCTRS            1.40%  1.41%      1.40%     1.42%       1.47%     1.49%
 
        BERS              1.35%  1.39%      1.34%     1.38%       1.33%     1.40%

        S. 26                              23                              A. 26
 
          * Based on salaries paid over entire working lifetime.
          **  EANR  were  determined as of June 30, 2008 and do not vary signif-
        icantly over time, absent benefit and/or actuarial assumption changes.
          FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS FISCAL YEARS 2010, 2011  and
        2012  - CURRENT METHODOLOGY:  Based on the census data and the actuarial
        assumptions and methods currently in effect, and assuming  enactment  to
        be  effective on or before June 30, 2010, the enactment of this proposed
        legislation would, with respect to the changes in TDA provisions, result

        in changes in employer contributions to NYCTRS and BERS for Fiscal Years
        2010, 2011 and 2012.
          FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS FISCAL YEAR 2013 AND  BEYOND
        -  CURRENT METHODOLOGY: If enacted to be effective on or before June 30,
        2010, the first significant number of New Members would join NYCTRS  and
        BERS  during  September  2010 and be included in the June 30, 2011 (Lag)
        actuarial valuations of those NYCRS. Based on the actuarial  assumptions
        and  methods  currently  in  effect, those provisions under the proposed
        legislation that affect New Members  would  first  significantly  impact
        employer contributions to NYCTRS and BERS for Fiscal Year 2013.
          OTHER  COSTS:  Not  measured in this Fiscal Note is the impact of this
        proposed legislation on Other Post-Employment  Benefit  ("OPEB")  costs.
        Also  not measured are the initial and ongoing additional administrative

        costs of NYCTRS and BERS and their participating employers to  implement
        the proposed legislation.
          CENSUS  DATA:  The  starting  census  data  used  for the calculations
        presented herein are the census data used in the  June  30,  2008  (Lag)
        actuarial valuations of NYCTRS and BERS.
          The census data used for the estimates of additional APVB and employer
        contributions  presented  herein of the non-TDA portions of the proposed
        legislation are based on average salaries of new entrants  in  the  June
        30, 2008 (Lag) actuarial valuations of NYCTRS and BERS.
          The metrics for new members of NYCTRS were approximately 25% male, age
        34 and 75% female, age 34 and a combined average salary of $48,239.
          The  metrics  for new members of BERS were approximately 25% male, age
        41 and 75% female, age 44 and a combined average salary of $33,774.

          The census data used for estimates of the impact on employer  contrib-
        utions  of  the TDA portion of the proposed legislation presented herein
        are those active participants included in the June 30, 2008 (Lag)  actu-
        arial valuations of the NYCTRS and BERS.
          For  NYCTRS,  this consisted of 2,401 Tier I, 1,224 Tier II and 69,273
        Tier IV TDA participants included in the June 30, 2008  (Lag)  actuarial
        valuation of NYCTRS.
          For  BERS, this consisted of 108 Tier I, 58 Tier II and 11,799 Tier IV
        TDA participants included in the June 30, 2008 (Lag) actuarial valuation
        of BERS.
          ACTUARIAL ASSUMPTIONS AND  METHODS:  The  additional  APVB,  EANR  and
        employer  contributions  under current methodology presented herein have
        been calculated based on the actuarial assumptions and methods in effect
        for the June 30, 2008 (Lag) actuarial valuations of NYCTRS and BERS.

          Employer contributions under current methodology have  been  estimated
        assuming  the  additional  APVB  would be financed through future normal
        contributions.
          Projections of salaries, reflecting the impact of estimated contractu-
        al wage increases, include information provided  by  NYCOMB.  These  and
        other  projection assumptions (such as projected expenses) are set forth
        in the February Projections.

        S. 26                              24                              A. 26
 
          New entrants were projected to replace the NYCRS members  expected  to
        leave the active population to maintain a steady-state population.
          The  following  Table  3 presents the total number of active employees
        used in the projections, assuming a level work force, and the net number
        of New Members as of each June 30 from 2009 to 2017.

                                          Table 3
 
                     Active* and Net New Members of NYCTRS and BERS*
                           Used in the Projections for Table 1
                              NYCTRS                        BERS
        June 30                       Net New                       Net New
                       Actives        Members        Actives        Members
        2009           112,472             0         22,702             0
        2010           112,472             0         22,702             0
        2011           112,472         6,330         22,702         1,582
        2012           112,472        12,213         22,702         3,096
        2013           112,472        17,705         22,702         4,553
        2014           112,472        22,846         22,702         5,940
        2015           112,472        27,652         22,702         7,241
        2016           112,472        32,181         22,702         8,457

        2017           112,472        36,461         22,702         9,595
 
          * Active members included in the projections assume a level work force
        based on the June 30, 2008 (Lag) actuarial valuation  census  data.  For
        simplification,  all  New  Members  in TRS and 15% of the New Members in
        BERS are assumed to be UFT Members.
          The changes in employer contributions and costs  have  been  estimated
        assuming that changes in the Actuarial Present Values of Future Employer
        Costs would be financed through future normal contributions.
          Information  on  TDA Fixed Fund and TDA Variable Fund account balances
        used to estimate the impact on employer costs of the TDA portion of  the
        legislation presented herein also reflect financial information provided
        by the accountants of NYCTRS and BERS.
          STATEMENT  OF ACTUARIAL OPINION: I, Robert C. North, Jr., am the Chief

        Actuary for the New York City Retirement Systems. 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.
          FISCAL  NOTE  IDENTIFICATION:  This  estimate is intended for use only
        during the 2009 Legislative Session. It is Fiscal  Note  2009-17,  dated
        November  17,  2009,  prepared by the Chief Actuary of the New York City
        Teachers' Retirement System and the New York  City  Board  of  Education
        Retirement System.
          FISCAL  NOTE.--This bill would (1) create new benefits for new members
        who first join the  New  York  State  and  Local  Employees'  Retirement
        System,  the  New  York  State Teachers' Retirement System, the New York
        City Teachers' Retirement System, the New York City  Employees'  Retire-

        ment System or the New York City Board of Education Retirement System on
        or after January 1, 2010 (2) create a new plan in the New York State and
        Local Police and Fire Retirement System.
          Insofar as this bill would affect the New York State and Local Employ-
        ees'  Retirement  System  (ERS), the significant plan design changes for
        members who join on or after January 1, 2010 include:
          1. Employee contributions of 3% of  pay  for  all  years  of  service,
        except

        S. 26                              25                              A. 26
 
          -  State correction officer contributions would be limited to 30 years
        of service, &
          -  uniformed  court  officers/peace  officers  employed by the Unified
        Court System would contribute 4% of pay for all years of service.
          2. Ten year vesting,

          3. Larger early retirement reductions would be in  place  for  members
        retiring  prior  to  age  62,  and the waiver of reduction with 30 years
        would be eliminated except for uniformed court  officers/peace  officers
        employed by the Unified Court System,
          4.  Annual  overtime pay in excess of $15,000 would not be included in
        the definition of wages and final  average  salary.  This  overtime  pay
        limitation would increase by 3% annually.
          If  this bill is enacted, we will calculate new plan rates for all ERS
        members who first enter on or after  January  1,  2010.  The  long  term
        expected  annual employer contribution rate for new general members will
        be approximately 8.9% as compared to  the  current  expected  long  term
        annual employer contribution rate for Tier 4 general members of approxi-
        mately  11.0%  of  payroll. For fiscal year ending March 31, 2010, since

        the average Tier 4 employer contribution rate is approximately  7%,  the
        new plan rate would be approximately 5.7%.
          For  ERS  members in 20 or 25 year retirement plans that allow retire-
        ment without regard to age, the long term reductions would vary by  plan
        and  be  less  than  2% of salary, with the fiscal year ending March 31,
        2010 reductions averaging approximately 1%.
          Insofar as this bill would affect the New York State and Local  Police
        and  Fire  Retirement System (PFRS), the significant plan design changes
        for members who join on or after January 1, 2010 include:
          1. An employee contribution of 3% of pay  will  be  required  for  all
        years  of  service,  except that a member who is enrolled in a plan that
        limits the amount of creditable service which may be accrued will not be
        required to contribute after accruing the maximum amount  of  creditable

        service under such plan,
          2.  Overtime  pay  in  an amount in excess of 15% of a member's annual
        wages not classified as overtime pay shall be excluded from  a  member's
        final average salary,
          3. Ten year vesting.
          If this bill is enacted, we will calculate new plan rates for all PFRS
        members  who  first  enter  on  or  after January 1, 2010. The long term
        expected annual employer contribution rate would change as follows:
          -1.8% for municipal 20 year plans with additional 60ths (benefits  for
        members hired on or after 7/1/2009 are now computed under Article 14),
          -0.6%  for  the state 20 year plan with additional 60ths (benefits for
        members hired on or after 7/1/2009 are now computed under Article 14),
          -2.6% for 20 year plans  (benefits  for  members  hired  on  or  after
        7/1/2009 are now computed under Article 14),

          -3.0%  for  25  year  plans  with additional 60ths, 25 year plans, and
        regular plans previously non-contributory.
          This estimate, dated November 16, 2009,  and  intended  for  use  only
        during  the  2009  Legislative  Session,  is  Fiscal  Note No. 2009-297,
        prepared by the Actuary for the ERS and PFRS.
          FISCAL NOTE.--This bill would amend various sections of the  Education
        Law  and  the  Retirement  and  Social  Security  Law to implement a new
        retirement benefit structure (Tier 5)  for  members  who  first  join  a
        public  retirement  system  of  the state (or New York City) on or after
        January 1, 2010. The following provisions are with respect to members of
        the New York State Teachers' Retirement System. Members would be  eligi-

        S. 26                              26                              A. 26
 

        ble  for  a  service retirement benefit after rendering a minimum of ten
        years of credited service and attainment of age 55. The service  retire-
        ment  benefit  formula  for a member with less than twenty-five years of
        service would be equal to one-sixtieth of final average salary times the
        years  of  service.  The service retirement benefit formula for a member
        with twenty-five or more years of service would be equal to one-fiftieth
        of final average salary times the years of service  (not  in  excess  of
        thirty).  Years  of  service  in excess of thirty shall provide an addi-
        tional retirement benefit equal to three two-hundredths of final average
        salary. Members retiring prior to age 62  would  have  their  retirement
        benefit  reduced  by  one-fifteenth  per  year for each of the first two
        years retirement predates age 62 and by one-twentieth per year for  each

        year  retirement  predates age 60. However, members who are at least age
        57 with 30 or more years of  credited  service  would  be  permitted  to
        retire without reduction.  Members would be required to contribute three
        and one-half percent of annual salary for all years of service.
          The current required employer contribution rate for the New York State
        Teachers'  Retirement  System  is  6.19%  of pay, applicable to 7/1/09 -
        6/30/10 member salaries and to be collected in the fall  of  2010.  This
        rate  is  applicable to the salaries of all members, regardless of tier.
        In that this proposed benefit structure is only  applicable  to  members
        joining  on  or after January 1, 2010, it will be at least several years
        before it has a noticeable impact on the employer contribution rate. The
        cost savings impact of this change will  become  more  significant  with

        time  as  the number of post-1/1/10 members grows as a percentage of the
        total membership.
          Our "new entrant rate", a hypothetical employer contribution rate that
        would occur if we started a new Retirement System without any assets, is
        equal to 11.8% of pay under the current benefit structure. This  can  be
        thought  of as the cost of the benefit structure for new entrants, based
        on current actuarial assumptions. Under the proposed benefit  structure,
        this new entrant rate would be equal to 8.7% of pay.
          The  source of this estimate is Fiscal Note 2009-92 dated November 16,
        2009 prepared by the Actuary of the New York State Teachers'  Retirement
        System and is intended for use only during the 2009 Legislative Session.
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