A10595 Summary:

BILL NOA10595
 
SAME ASSAME AS S08599
 
SPONSORRules (Abinanti)
 
COSPNSRPaulin, Griffin, McDonald, Steck, Walker, Dickens, D'Urso, Mosley, Tague, Burke, Santabarbara, McDonough, Colton, Ramos, Taylor, Arroyo, Darling, Thiele, Gunther, McMahon, Reyes, Lupardo, Crouch, DeStefano, Brabenec, Mikulin, Finch, Barron, Zebrowski, Englebright, Reilly, Palumbo
 
MLTSPNSR
 
 
Provides a temporary retirement incentive for certain public employees (Part A); provides an age 55/25 years temporary retirement incentive for certain public employees (Part B).
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A10595 Actions:

BILL NOA10595
 
06/05/2020referred to governmental employees
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A10595 Committee Votes:

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A10595 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A10595
 
SPONSOR: Rules (Abinanti)
  TITLE OF BILL: An act to provide a temporary retirement incentive for certain public employees (Part A); and to provide an age 55/25 years temporary retire- ment incentive for certain public employees (Part B)   PURPOSE OR GENERAL IDEA OF BILL: This bill would establish a temporary retirement incentive program for certain state employees and other public employees to assist in stream- lining the workforce while also achieving cost savings. This bill would apply to members of the New York State and Local Employees Retirement System; New York City Employees Retirement System; New York State Teach- ers Retirement System; New York City Teachers Retirement System; and New York City Board of Education Retirement-System. The members of the Police and Fire Retirement Systems are not included because of the existing 2C- and 25-year retirement options.   SUMMARY OF PROVISIONS: Section 1 of the bill sets forth the components of the act that would enable public employers to offer a temporary retirement incentive to their employees, as well as to provide an age 55/25 years temporary incentive for certain public employees. Section 2 is the legislative findings. Part A - Section 1 of Part A of the bill would define terms and establish eligibility requirements for participation in the retirement incentive program. Eligibility would be determined at employer discretion and excludes agency heads and elected officials. An employer who elects to participate in the retirement incentive program would be required to provide a 30 to 9Q-day open peri- od to allow eligible employees adequate time to consider the incentive. Eligibility is targeted to positions that can be eliminated for reasons of economy, consolidation, abolition or curtailment of governmental activities. An eligible position can also include a title into which an employee could be transferred to avoid a layoff. Section 2 of Part A of the bill would establish the criteria to be considered in determining whether positions should be eligible for participation in the retirement incentive program. This determination would consider whether the abolition of positions within a title would unacceptably reduce the level of patient care, pose health and safety risks, or result in adverse budgetary implications. Section 3 of Part A of the bill would provide that eligibility for the retirement incentive would be first determined on the basis of seniority and require eligible employees who intend to participate in the incen- tive program to provide written notice to their, employer 21 days prior to the end of the program's open period. Section 4 of Part A of the bill would require certain employers to enact a local law or resolution, as appropriate on or before August 31, 2020, to take advantage of the program. School districts would need to enact such law or resolution by July 30, 2020. This section would also provide that the retirement incentive would not be available to persons other- wise eligible to receive benefits under any other retirement incentive or severance program, unless such person agrees to waive payment under the other program. In addition, this section would authorize the Mayor of the City of New York to declare employees of the community colleges of the City University of New York ineligible for the program by filing a notice with the University Chancellor within 30 days of the effective date of this act. Section 5 of Part A of the bill would require eligible employees to be in active service on the effective date of this act and continue in active service up to the date immediately preceding commencement of the program open period. Eligible employees would need either to be current- ly eligible to retire or be at least 50 years of age with ten or more years of service. Employees who participate in a pension plan that allows for retirement after 25 years of service without regard to age would be eligible for the program as long as they meet the 25-year requirement, which could be achieved with the service credit provided by the incentive. Section 6 of Part A of the bill would establish the retirement incentive benefit as one-twelfth of a year of additional retirement service credit for each year of pension service, up to a maximum of 3 years of addi- tional retirement service credit. The benefit would be subject to reduction for early retirement based on the employee's tier, age and years. of service. Eligible employees who participate in an optional retirement program would receive a retirement incentive of one-twelfth for each year of, service multiplied by 15 percent multiplied by the employee's annual salary, up to a maximum benefit equal to 45 percent salary. Section 7 of Part A of the bill would provide that state employees who participate in the program may defer participation in the health insur- ance program as well as the calculation of the value of available sick leave credits to offset the retiree's share of health insurance premi- ums. This section would also authorize the payment of certain leave compensation in 3 installments over a 2-year period to New York City employees. Section 8 of Part A of the bin would require the elimination of any position vacated by a state employee receiving the retirement incentive, other than a position supported by Special Revenue Funds. An exception to this rule is made where another state employee could be appointed, transferred or reassigned to the vacated position to avoid a layoff. This section would also authorize the Director of State Operations to direct the Department of Civil Service to prepare a report designating the title, grade level, .salary, and classification of each position eliminated, each position into which another employee was appointed, transferred, or reassigned and the former position of such employee, and . each position eliminated as a result of an appointment, transfer, or reassignment. Section 9 of Part A of the bill would provide that local government employers and the State University of New York would not be required to eliminate positions vacated as a result of the retirement incentive if they can demonstrate savings of at least one-half of the total amount of the base salary of employees who receive the incentive for the 2-year period subsequent to the program. Section 10 of Part A of the bill would provide that the incentive cannot result in an employee's pension exceeding the limits of Internal Revenue Code (IRC) 415. However, if the IRC 415 limit is increased in subsequent years, the retirement benefit which would otherwise have been paid to any employees originally affected by the limit would be paid to the extent permitted by the new IRC 415 limit. Section 11 of Part A of the bill would require an employee receiving the retirement incentive to forfeit the benefit of such incentive if that employee reenters public service and joins or rejoins any public retire- ment system in the State. Section 12 of Part A of the bill would provide that the retirement incentive is not subject to any maximum retirement benefit limitation pursuant to Retirement and Social Security Law (R&SSL).. Section 13 of Part A of the bill would make R&SSL 430, which requires an employer to pay for any benefit or benefit improvement in the fiscal year it becomes effective, inapplicable to any benefit or benefit improvement provided by this bill. Section 14 of Part A of the bill would require employers to pay the pension costs of offering a retirement incentive program over a period not to exceed 5 years commencing in the State fiscal year ending March 31, 2022. Section 15 of Part A of the bill would prevent employees from receiving either the benefits of Part B of this incentive program or the benefits of any other incentive program authorized by the State in conjunction with the benefits provided by this part of the bill. Section 16 of Part A of the bill would provide for an immediate effec- tive date. Part 3 - Section 1 of Part B of the bill would define terms used in the bill and establish eligibility requirements for partic- ipation in the retirement incentive program. Eligibility is determined at employer discretion and excludes agency heads and elected officials. An employer who elects to participate in the retirement incentive program is required to provide a 90-day open period to allow eligible employees adequate time to consider the incentive. Employees of the executive branch or participating employers who have attained age fifty-five and have at least twenty-five years of creditable service in an eligible retirement system may participate in this part of the incen- tive. Section 2 of Part B of the bill would require State employers, partic- ipating employers not empowered to act by local law which elect to participate in Part B of the incentive, and New York City to establish a commencement date. In the event State employers fail to establish a commencement date, the default commencement date would be July 1, 2020. Section 3 of Part B of the bill would provide that State employers and participating employers may elect to provide employees the benefits of Part B on or before September 1, 2020, provided that educational employ- ers make such election by July 1, 2020. It would further provide that the Executive Branch would be deemed to have opted in upon enactment. Section 4 of Part B of the bill would provide that any eligible employee that has been continuously in active service from February 1, 2020 to the commencement date and who files an application for retirement during the open period would be entitled to the benefits provided by this part of the bill. Section 5 of Part B of the bill would provide that an eligible employee in an eligible retirement system who is entitled to the benefits provided by this part of the bill who has attained the age of fifty-five and has completed at least twenty-five years or more of service may retire during the open period without a reduction of his or her retire- ment benefit that would otherwise be imposed. This section also would provide that the Director of State Operations, the chief executive offi- cer of the City of New York, or the chief executive officer or governing board of a participating employer may deny participation in the benefits provided by this part of the bill if they determine an employee holds _a and safety. that is deemed critical to the maintenance of public health and safety. Section 6 of Part B of the bill would require employers to pay the pension costs of offering a retirement incentive program over a period not to exceed 5 years commencing in the State fiscal year ending March 31, 2022. Section 7 of Part B of the bill would provide for an immediate effective date. Section 3 of the bill would provide a severability clause. Section 4 of the bill would provide for an immediate effective date.   JUSTIFICATION: The COVID-19 pandemic has dramatically impacted the fiscal stability of state and local governments. This bill would streamline the public sector workforce and result in savings to the State and local govern- ments through the elimination of specific positions determined to be less critical to governmental operations. The savings of this bill, however, would be at least be partially offset by costs to the pension system and its members. The New York State and Local Retirement System (NYSLRS) estimates that per-member cost (at retirement) of the additional service credit benefit will average approximately 65% of a member's final average salary. The NYSLRS esti- mates that the per-member cost (at retirement) of the elimination of the early retirement reductions at 25 years of service instead of at 30 years of service will average approximately 110% of a member's final average salary. This cost will be borne by each employer electing the incentive over a period not to exceed five years commencing with a payment in the State fiscal. year ending March 31, 2022. The New York State Teachers' Retirement System estimates that the Part A cost, measured as the increase in the present value of benefit per participating member will range from 5% to approximately 250% of final average salary, depending on the member's age, years of service, and tier at retirement. The Part B cost per participating member will range from 3% to approximately 200% of final average salary, depending on the member's age, year of service, and tier at retirement. The potential number of members eligible to benefit under Part A is much greater than under Part B. Employers participating in Part A or Part B (or both) would pay the cost of the retirement incentive over a period not to exceed five years, beginning in the state fiscal year ending March 31, 2022. This program is very similar to the two-part retirement incentive offered by the State in 2010.   PRIOR LEGISLATIVE HISTORY: New Bill   FISCAL IMPACT FOR STATE AND LOCAL GOVERNMENTS: To be determined.   EFFECTIVE DATE: This act would take effect immediately; provided, however, that the applicable effective date of Parts A and B of this act shall be as specifically set forth in the last section of such Parts.
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