Bill Text: NY A06862 | 2023-2024 | General Assembly | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Increases benefits payable by the correction officers' variable supplements fund to beneficiaries.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2024-03-21 - print number 6862a [A06862 Detail]
Download: New_York-2023-A06862-Introduced.html
Bill Title: Increases benefits payable by the correction officers' variable supplements fund to beneficiaries.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2024-03-21 - print number 6862a [A06862 Detail]
Download: New_York-2023-A06862-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 6862 2023-2024 Regular Sessions IN ASSEMBLY May 8, 2023 ___________ Introduced by M. of A. PHEFFER AMATO -- read once and referred to the Committee on Governmental Employees AN ACT to amend the administrative code of the city of New York, in relation to increasing benefits payable by the correction officers' variable supplements fund to beneficiaries The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 13-194 of the administrative code of the city of 2 New York is amended by adding a new subdivision 12 to read as follows: 3 12. In addition to the payments set forth in paragraphs (c) and (d) of 4 subdivision four of this section, there shall be paid to each benefici- 5 ary on or about the December fifteenth next succeeding his or her date 6 of retirement, an amount equal to the variable supplements payments, 7 subject to the provisions of items (i) and (ii) of subparagraph one of 8 paragraph (e) of subdivision four of this section, that he or she would 9 have received, had he or she retired on the date of his or her earliest 10 eligibility for service retirement, in the period measured from (1) the 11 later of (i) such earliest eligibility date and (ii) January first, two 12 thousand twenty-four and (2) his or her date of retirement. 13 § 2. This act shall take effect immediately. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: SUMMARY OF BILL: This bill provides certain New York City Employees' Retirement System (NYCERS) Correction officers a lump sum benefit upon retirement, commonly referred to as a Deferred Retirement Option Plan (DROP), equal to the amount of Correction Officer Variable Supplements Fund (COVSF) payments such officer would have received if he or she had retired at the later of their respective earliest service retirement eligibility date or January 1, 2024. Effective Date: Upon enactment. BACKGROUND: Correction officers who participate in NYCERS and who retire with immediate payability of a service retirement at their earli- EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD08663-02-3A. 6862 2 est service retirement eligibility date (e.g., after 20 or 25 years of credited service) are entitled to receive supplemental non-pension COVSF benefits in the amount of $12,000 per calendar year. Correction officers who continue to work beyond their earliest service retirement eligibil- ity date are ineligible to receive COVSF payments until retirement, even though they would be eligible to retire from service and receive COVSF benefits. IMPACT ON BENEFITS: This bill would provide to NYCERS correction offi- cers who continue to work beyond their earliest service retirement eligibility date a lump sum DROP payment consisting of the annual COVSF payment each year beyond the later of their earliest service retirement date or January 1, 2024 (i.e., the COVSF payments the retiree would have received if he or she had retired at his or her earliest service retire- ment eligibility date or January 1, 2024, whichever is later) without any adjustment for interest. The DROP does not apply to deaths or to disability retirement, even if those events occur after the earliest service retirement eligibility date. FINANCIAL IMPACT - PRESENT VALUES: Based on the actuarial assumptions and methods described herein, the enactment of this proposed legislation would increase the Present Value of Future Benefits (PVFB) by approxi- mately $76.7 million. Under the Entry Age Normal cost method used to determine the employer contributions to NYCERS, there would be an increase in the Unfunded Accrued Liability (UAL) of approximately $42.8 million and an increase in the Present Value of future employer Normal Cost of $33.9 million. FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: The enactment of this proposed legislation would result in an initial increase in annual employer contributions for New York City of approximately $9.8 million which is the result of an increase in the Normal Cost in addition to the UAL payment. New UAL attributable to benefit changes are generally amortized over the remaining working lifetime of those impacted by the benefit changes. The remaining working lifetime for this group is approximately 11 years and the increase in UAL was therefore amortized over a 11-year period (10 payments under the One-Year Lag Methodology) using level dollar payments. CENSUS DATA: The estimates presented herein are based on the census data used in the Preliminary June 30, 2022 actuarial valuation of NYCERS to determine the Preliminary Fiscal Year 2024 employer contributions. The 6,711 NYCERS Correction officers as of June 30, 2022 had an aver- age age of approximately 42.2 years, and average service of approximate- ly 11.6 years. ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have been calculated based on the actuarial assumptions and methods in effect for the Preliminary Fiscal Year 2024 employer contributions of NYCERS. For the purposes of this Fiscal Note, it is assumed that the changes would be reflected for the first time in the June 30, 2022 actuarial valuation of NYCERS used to determine employer contributions for Fiscal Year 2024. RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend highly on the realization of the actuarial assumptions used, demograph- ics of the impacted population and other factors such as investment, contribution, and other risks. If actual experience deviates from actu- arial assumptions, the actual costs could differ from those presented herein.A. 6862 3 Costs are also dependent on the actuarial methods used, and therefore different actuarial methods could produce different results. Quantifying these risks is beyond the scope of this Fiscal Note. Not measured in this Fiscal Note are the following: * The initial additional administrative costs of NYCERS and other New York City agencies to implement the proposed legislation. * The impact of this proposed legislation on Other Postemployment Benefit (OPEB) costs. STATEMENT OF ACTUARIAL OPINION: I, Marek Tyszkiewicz, am the Chief Actuary for, and independent of, the New York City Retirement Systems and Pension Funds. I am an Associate of the Society of Actuaries and a Member of the American Academy of Actuaries. I am a member of NYCERS but do not believe it impairs my objectivity and I meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained herein. To the best of my knowledge, the results contained herein have been prepared in accordance with generally accepted actuarial principles and procedures and with the Actuarial Standards of Practice issued by the Actuarial Standards Board. FISCAL NOTE IDENTIFICATION: This Fiscal Note 2023-38 dated April 25, 2023 was prepared by the Chief Actuary for the New York City Employees' Retirement System. This estimate is intended for use only during the 2023 Legislative Session.
