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A05062 Summary:

BILL NOA05062
 
SAME ASSAME AS S02094
 
SPONSORAbbate
 
COSPNSR
 
MLTSPNSR
 
Amd 43 & 343, R & SS L
 
Relates to the calculation of past service credit for members in the title of deputy sheriff transferring between the New York state and local employees' retirement system to the New York state and local police and fire retirement system.
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A05062 Actions:

BILL NOA05062
 
02/07/2019referred to governmental employees
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A05062 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A5062
 
SPONSOR: Abbate
  TITLE OF BILL: An act to amend the retirement and social security law, in relation to the calculation of past service credit for members in the title of depu- ty sheriff transferring between the New York state and local employees' retirement system to the New York state and local police and fire retirement system   SUMMARY OF PROVISIONS: Section 1 amends Section 43 of the retirement and social security law to permit Deputy Sheriffs that transfer from the State and Local Retirement System to the Police and Fire Retirement System, to keep the eligible service credit accrued while they were a Deputy Sheriff and permits former Deputy Sheriffs that subsequently transfer back in the opposite direction to keep the eligible service credit accrued while they were State and local police officers. Section 2 Section 343 of the retirement and social security law to permit Deputy Sheriffs that transfer from the State and Local Retirement System to the Police and Fire Retirement System, to keep the eligible service credit accrued while they were a Deputy Sheriff and permits former Deputy Sheriffs that subsequently transfer back in the opposite direction to keep the eligible service credit accrued while they were State and local police officers.   JUSTIFICATION: Under current law, in the largest Police and Fire Retirement System (PFRS) plan which was established by Section 384-e of the Retirement and Social Security Law (RSSL) - you can accrue creditable service as a firefighter or police officer under the 384-e plan, as a member or offi- cer of the New York State Police, or in the military. Service as a depu- ty sheriff would not be creditable in Section 384-e of the RSSL. Police officers and deputy sheriffs should receive retirement benefits for all previously earned pension service credit, regardless of whether the prior service was rendered as a police officer or deputy sheriff.   PRIOR LEGISLATIVE HISTORY: None   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None   EFFECTIVE DATE: Sixty days following an IRS ruling that passage of this bill doesn't alter the tax status of the current retirement system.
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A05062 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          5062
 
                               2019-2020 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 7, 2019
                                       ___________
 
        Introduced by M. of A. ABBATE -- read once and referred to the Committee
          on Governmental Employees
 
        AN  ACT  to amend the retirement and social security law, in relation to
          the calculation of past service credit for members  in  the  title  of
          deputy  sheriff  transferring  between  the  New  York state and local
          employees' retirement system to the New York state  and  local  police
          and fire retirement system
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Section 43 of the retirement and  social  security  law  is
     2  amended by adding a new subdivision m to read as follows:
     3    m. 1. Notwithstanding any other law, rule or regulation to the contra-
     4  ry,  any member in the title of deputy sheriff transferring from the New
     5  York state and local employees' retirement system to the New York  state
     6  and  local police and fire retirement system after the effective date of
     7  this subdivision and any member previously in the title of deputy  sher-
     8  iff  having  made  such transfer shall be entitled to a determination of
     9  the amount of service credit that is eligible on a twenty year or  twen-
    10  ty-five year retirement plan if, within one year of the date on which he
    11  or  she first became a member of the New York state and local police and
    12  fire retirement system or within one year of the effective date of  this
    13  subdivision,  such  member  elects  to do so. If the member subsequently
    14  transfers back to the New York state  and  local  employees'  retirement
    15  system,  the  full amount of service credit earned while in the title of
    16  deputy sheriff shall be transferred back to the New York state and local
    17  employees' retirement system.
    18    2. The calculation of the amount of such service credit for  a  member
    19  will  be  determined by multiplying the eligible service credited in the
    20  New York state and local employees' retirement system plan by  a  salary
    21  multiplier,  reflecting  the  rate  of  salary in the New York state and
    22  local employees' retirement system plan relative to the rate  of  salary
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD05171-02-9

        A. 5062                             2
 
     1  in  the New York state and local police and fire retirement system plan,
     2  and a billing rate multiplier, reflecting the actuarial long-term  aver-
     3  age  billing  rate in the New York state and local employees' retirement
     4  system  plan relative to the actuarial long-term average billing rate in
     5  the New York state and local police and fire retirement system plan. The
     6  determination of the salary multiplier and billing rate multiplier  will
     7  be  determined by the actuary of the New York state and local employees'
     8  retirement system and the New York  state  and  local  police  and  fire
     9  retirement  system. The amount of such service credited to the member in
    10  the New York state and local police  and  fire  retirement  system  plan
    11  shall not exceed the amount of service credited to the member in the New
    12  York state and local employees' retirement system plan.
    13    §  2. Section 343 of the retirement and social security law is amended
    14  by adding a new subdivision i to read as follows:
    15    i. 1. Notwithstanding any other law, rule or regulation to the contra-
    16  ry, any member in the title of deputy sheriff transferring from the  New
    17  York  state and local employees' retirement system to the New York state
    18  and local police and fire retirement system after the effective date  of
    19  this  subdivision and any member previously in the title of deputy sher-
    20  iff having made such transfer shall be entitled to  a  determination  of
    21  the  amount of service credit that is eligible on a twenty year or twen-
    22  ty-five year retirement plan if, within one year of the date on which he
    23  or she first became a member of the New York state and local police  and
    24  fire  retirement system or within one year of the effective date of this
    25  subdivision, such member elects to do so.  If  the  member  subsequently
    26  transfers  back  to  the  New York state and local employees' retirement
    27  system, the full amount of service credit earned while in the  title  of
    28  deputy  sheriff  shall  be  transferred back to New York state and local
    29  employees' retirement system.
    30    2. The calculation of the amount of such service credit for  a  member
    31  will  be  determined by multiplying the eligible service credited in the
    32  New York state and local employees' retirement system plan by  a  salary
    33  multiplier,  reflecting  the  rate  of  salary in the New York state and
    34  local employees' retirement system plan relative to the rate  of  salary
    35  in  the New York state and local police and fire retirement system plan,
    36  and a billing rate multiplier, reflecting the actuarial long-term  aver-
    37  age  billing  rate in the New York state and local employees' retirement
    38  system plan relative to the actuarial long-term average billing rate  in
    39  the New York state and local police and fire retirement system plan. The
    40  determination  of the salary multiplier and billing rate multiplier will
    41  be determined by the actuary of the New York state and local  employees'
    42  retirement  system  and  the  New  York  state and local police and fire
    43  retirement system. The amount of such service credited to the member  in
    44  the  New  York  state  and  local police and fire retirement system plan
    45  shall not exceed the amount of service credited to the member in the New
    46  York state and local employees' retirement system plan.
    47    3. If the member subsequently retires on an age based retirement  plan
    48  in  the  New  York  state  and  local  police and fire retirement system
    49  instead of a twenty year or twenty-five year plan, the  full  amount  of
    50  service  credit  earned  while  in  the title of deputy sheriff shall be
    51  granted.
    52    4. No member who receives service credit pursuant to this  subdivision
    53  shall  be  eligible  to  receive  additional  service credit pursuant to
    54  subdivision b of section three hundred eighty four-e of this article  if
    55  his or her employer has elected to provide such service credit.

        A. 5062                             3
 
     1    §  3. This act shall take effect on the sixtieth day after an internal
     2  revenue service ruling stating that the transfer and crediting of deputy
     3  sheriff service credit from the New  York  state  and  local  employees'
     4  retirement  system  into  the  New  York state and local police and fire
     5  retirement  system  special retirement plan by this act is allowable and
     6  does not jeopardize such retirement system's tax-qualified  status,  and
     7  shall  remain  in full force and effect only as long as such transfer is
     8  authorized pursuant to the provisions  of  the  internal  revenue  code;
     9  provided,  that  the state comptroller shall notify the legislative bill
    10  drafting commission upon the occurrence of  such  ruling  and  upon  any
    11  change  in  the  provisions  of  the internal revenue code affecting the
    12  provisions of this act in order that  the  commission  may  maintain  an
    13  accurate and timely effective data base of the official text of the laws
    14  of  the  state of New York in furtherance of effecting the provisions of
    15  section 44 of the legislative law and section 70-b of the  public  offi-
    16  cers law.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          This  bill  will  expand  the  definition  of creditable service under
        20-year and 25-year plans (special plans) in  the  New  York  State  and
        Local Police and Fire Retirement System (PFRS) to include service credit
        earned  in  the  New  York  State and Local Employees' Retirement System
        (ERS) for those individuals previously employed in the title  of  Deputy
        Sheriff.  To be eligible for the service credit, an individual must be a
        member of PFRS and elect to transfer the ERS service credit to the  PFRS
        plan  within 12 months of first joining PFRS, or within 12 months of the
        effective date of the bill, whichever is later. The  amount  of  service
        credit  granted in the PFRS special plan will be calculated by The Actu-
        ary of the New York State and Local Retirement Systems (NYLSRS), not  to
        exceed the service credited under the ERS plan.
          Internal  Revenue  Service  (IRS)  plan qualification issues: granting
        service credit towards retirement in a 20-year  plan  in  the  New  York
        State  and Local Police and Fire Retirement System (PFRS) for employment
        that was not rendered  in  the  PFRS  could  jeopardize  the  Retirement
        System's  governmental  plan  status  and  its  exemption from Employees
        Retirement Income Security Act (ERISA).  This development  could  result
        in  the loss of qualified status, which would mean the loss of tax bene-
        fits. This result would substantially impair the System's value  to  our
        more than one million participants.
          This  legislation  will  not  become  effective until NYLSRS obtains a
        favorable ruling from the IRS stating that these  provisions  would  not
        harm  the qualification status of the System. Further, the provisions of
        this legislation will only continue in full force and  effect  while  so
        authorized  by  the  IRS.  It  is  estimated that the costs to obtain an
        initial ruling would be $28,000 for the services of the  IRS,  and  $800
        per hour for legal consultants.
          In addition to the costs to obtain a ruling from the IRS stated above,
        if  this bill is enacted, there will be an administrative cost to imple-
        ment the provisions of this legislation.
          All costs will be shared and spread by the participating employers  in
        PFRS.
          Summary of relevant resources:
          The  membership  data  used  in  measuring  the impact of the proposed
        change was the same as that used in the March 31, 2018  actuarial  valu-
        ation.    Distributions  and  other  statistics can be found in the 2018
        Report of the  Actuary  and  the  2018  Comprehensive  Annual  Financial
        Report.

        A. 5062                             4
 
          The  actuarial assumptions and methods used are described in the 2015,
        2016, 2017 and 2018  Annual  Report  to  the  Comptroller  on  Actuarial
        Assumptions,  and  the  Codes, Rules and Regulations of the State of New
        York: Audit and Control.
          The Market Assets and GASB Disclosures are found in the March 31, 2018
        New  York  State  and  Local  Retirement System Financial Statements and
        Supplementary Information.
          I am a member of the American Academy of Actuaries and meet the Quali-
        fication Standards to render the actuarial opinion contained herein.
          This fiscal note does not constitute a legal opinion on the  viability
        of  the  proposed change nor is it intended to serve as a substitute for
        the professional judgment of an attorney.
          This estimate, dated January 10,  2019,  and  intended  for  use  only
        during  the  2019  Legislative  Session,  is  Fiscal  Note  No. 2019-23,
        prepared by the Actuary for the New  York  State  and  Local  Retirement
        System.
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