Bill Text: NY A07008 | 2015-2016 | General Assembly | Introduced
Bill Title: Allows a change in retirement options for certain retired members of the New York state teachers' retirement system or the New York city teachers' retirement system with the consent of the nominated survivor beneficiary.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2016-01-06 - referred to governmental employees [A07008 Detail]
Download: New_York-2015-A07008-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
7008
2015-2016 Regular Sessions
I N A S S E M B L Y
April 17, 2015
___________
Introduced by M. of A. ABBATE -- Multi-Sponsored by -- M. of A. GOLDFED-
ER -- read once and referred to the Committee on Governmental Employ-
ees
AN ACT to amend the retirement and social security law, in relation to
permitting certain retired members of the New York City Teachers'
Retirement System to change their retirement options with the consent
of the nominated survivor beneficiary (Part A); and to amend the
education law, in relation to permitting certain retired members of
the New York State Teachers' Retirement System to change their retire-
ment options with the consent of the nominated survivor beneficiary
(Part B)
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. This act enacts into law components of legislation relating
2 to certain options of the teachers' retirement system and the New York
3 City teachers' retirement system. Each component is wholly contained
4 within a Part identified as Parts A and B. The effective date for each
5 particular provision contained within such Part is set forth in the last
6 section of such Part. Any provision in any section contained within a
7 Part, including the effective date of the Part, which makes reference to
8 a section "of this act", when used in connection with that particular
9 component, shall be deemed to mean and refer to the corresponding
10 section of the Part in which it is found. Section three of this act sets
11 forth the general effective date of this act.
12 PART A
13 Section 1. Section 514 of the retirement and social security law is
14 amended by adding a new subdivision e to read as follows:
15 E. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, WHERE A RETIRED MEMBER
16 OF THE NEW YORK CITY TEACHERS' RETIREMENT SYSTEM HAS NOMINATED HIS OR
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10513-01-5
A. 7008 2
1 HER SPOUSE AS THE SURVIVOR BENEFICIARY UNDER OPTION ONE, TWO OR FIVE
2 PROVIDED FOR IN SUBDIVISION A OF THIS SECTION, AND SUCH PERSON SO NOMI-
3 NATED CEASES BY CAUSES OTHER THAN DEATH TO BE HIS OR HER SPOUSE OR IS
4 SEPARATED FROM HIM OR HER, OR IF SUCH OPTION WAS SELECTED IN CONTEM-
5 PLATION OF MARRIAGE WHICH HAS NOT TAKEN PLACE, THEN THE BOARD OF TRUS-
6 TEES OF SUCH RETIREMENT SYSTEM SHALL HAVE THE AUTHORITY TO PERMIT THE
7 CHANGE OF SUCH OPTION TO THE MAXIMUM BENEFIT THAT IS THE ACTUARIAL
8 EQUIVALENT BY AND WITH THE CONSENT OF ALL PARTIES.
9 S 2. Section 610 of the retirement and social security law is amended
10 by adding a new subdivision g to read as follows:
11 G. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, WHERE A RETIRED MEMBER
12 OF THE NEW YORK CITY TEACHERS' RETIREMENT SYSTEM HAS NOMINATED HIS OR
13 HER SPOUSE AS THE SURVIVOR BENEFICIARY UNDER OPTION ONE, TWO OR FIVE
14 PROVIDED FOR IN SUBDIVISION A OF THIS SECTION, AND SUCH PERSON SO NOMI-
15 NATED CEASES BY CAUSES OTHER THAN DEATH TO BE HIS OR HER SPOUSE OR IS
16 SEPARATED FROM HIM OR HER, OR IF SUCH OPTION WAS SELECTED IN CONTEM-
17 PLATION OF MARRIAGE WHICH HAS NOT TAKEN PLACE, THEN THE BOARD OF TRUS-
18 TEES OF SUCH RETIREMENT SYSTEM SHALL HAVE THE AUTHORITY TO PERMIT THE
19 CHANGE OF SUCH OPTION TO THE MAXIMUM BENEFIT THAT IS THE ACTUARIAL
20 EQUIVALENT BY AND WITH THE CONSENT OF ALL PARTIES.
21 S 3. This act shall take effect June 30, 2016.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
PROVISIONS OF PROPOSED LEGISLATION: With respect to the New York City
Retirement Systems ("NYCRS"), this proposed legislation would amend
Retirement and Social Security Law ("RSSL") Sections 514 and 610 to
allow certain Tier III, Tier IV and Tier VI retirees of the New York
City Teachers' Retirement System ("TRS") the opportunity to change
certain optional forms of benefit after retirement similar to the
provisions set forth in Administrative Code of the City of New York
("ACNY") Section 565(c).
ACNY Section 565(c) covers only Tier I and Tier II members of TRS.
Specifically, Part A of this proposed legislation would permit a Tier
III, Tier IV or Tier VI retiree of TRS who has nominated his or her
spouse as the survivor beneficiary to change, under certain optional
forms of benefit and with the consent of his or her spouse and the TRS
Retirement Board, from the optional form of benefit originally chosen to
the maximum benefit that is the actuarial equivalent, if such person:
(1) ceases by causes other than death to be his or her spouse, or
(2) is separated from him or her, or
(3) if such option was selected in contemplation of marriage which has
not taken place.
The Effective Date of the proposed legislation would be the date of
enactment and shall be deemed to have been in full force and effect on
or after June 30, 2015.
FINANCIAL IMPACT - ACTUARIAL PRESENT VALUE OF BENEFITS, EMPLOYER
NORMAL COST, ACTUARIAL ACCRUED LIABILITY AND EMPLOYER CONTRIBUTIONS: To
the extent that the probabilities of survival of the retiree and the
beneficiary designated under the optional form of benefit have not
changed significantly since such optional form of benefit was insti-
tuted, then the enactment of this proposed legislation is expected to
result in little or no change in the Actuarial Present Value of Bene-
fits, Employer Normal Cost, Actuarial Accrued Liability or employer
contributions to TRS.
OTHER COSTS: With respect to the NYCRS, the enactment of this proposed
legislation would result in some administrative expenses for TRS.
A. 7008 3
STATEMENT OF ACTUARIAL OPINION: I, Robert C. North, Jr., am the Acting
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 Actuar-
ies. I meet the Qualification Standards of the American Academy of Actu-
aries to render the actuarial opinion contained herein.
FISCAL NOTE IDENTIFICATION: This estimate is intended for use only
during the 2015 Legislative Session. It is Fiscal Note 2015-08, dated
February 27, 2015, prepared by the Acting Chief Actuary of the New York
City Teachers' Retirement System.
1 PART B
2 Section 1. Section 539 of the education law is amended by adding a new
3 subdivision 8 to read as follows:
4 8. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, A RETIREE SUBJECT TO
5 THIS ARTICLE OR ARTICLE FOURTEEN OR FIFTEEN OF THE RETIREMENT AND SOCIAL
6 SECURITY LAW WHO AT RETIREMENT HAD DULY SELECTED AN OPTION FORM OF
7 RETIREMENT PROVIDING FOR THE PAYMENT OF A LESSER RETIREMENT ALLOWANCE
8 OVER THE LIFE OF THE RETIREE WITH THE PROVISION THAT UPON THE RETIREE'S
9 DEATH ALL OR A PORTION OF SUCH ALLOWANCE SHALL BE CONTINUED FOR THE LIFE
10 OF AND PAID TO A BENEFICIARY DULY NOMINATED BY THE RETIREE AT RETIRE-
11 MENT, SHALL BE PERMITTED TO RESCIND SUCH SELECTION WITHIN ONE YEAR AFTER
12 SUCH BENEFICIARY HAS CEASED TO BE THE RETIREE'S SPOUSE BY REASON OF A
13 FINAL JUDGMENT OR DECREE OF DIVORCE ISSUED BY A COURT OF COMPETENT
14 JURISDICTION. IN ORDER TO RESCIND SUCH SELECTION, THE RETIREE AND BENE-
15 FICIARY MUST EACH FILE A WRITTEN CONSENT TO SUCH CHANGE WITH THE SYSTEM
16 ON A FORM PRESCRIBED BY THE SYSTEM. UPON SATISFACTORILY RECEIVING SUCH
17 JUDGMENT OR DECREE OF DIVORCE AND SUCH CONSENTS, ANY AND ALL OBLIGATIONS
18 OF THE SYSTEM TO THE BENEFICIARY UNDER THE RETIREE'S OPTION SELECTION
19 SHALL BE TOTALLY DISCHARGED AND THE RETIREE SHALL THEREAFTER BE PAID FOR
20 THE REMAINDER OF SUCH RETIREE'S LIFE THE MAXIMUM SINGLE LIFE BENEFIT
21 WHICH WOULD HAVE BEEN PAYABLE, HAD THE RETIREE MADE NO OPTION SELECTION
22 AT THE TIME OF RETIREMENT. THE RETIREMENT BOARD IS AUTHORIZED TO ADOPT
23 SUCH RULES AND REGULATIONS AS MAY BE NECESSARY TO IMPLEMENT THIS SUBDI-
24 VISION.
25 S 2. This act shall take effect June 30, 2016.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would amend Section 539 of the Education Law to allow a
retired member of the New York State Teachers' Retirement System
(NYSTRS) who has selected an optional form of retirement benefit that
provides that upon the retired member's death, all, or a percentage of,
such retirement benefit shall be continued for the life of a benefici-
ary, to rescind the selection of such option within one year after such
beneficiary ceases to be the retired member's spouse by reason of a
final judgment or decree of divorce. In order to rescind such optional
form of retirement benefit, the retired member and beneficiary must each
file a written consent with respect to such change with NYSTRS. Upon
NYSTRS' receipt of the judgment or decree of divorce and the written
consents, the retired member would receive the maximum single-life
retirement benefit for the remainder of his or her lifetime, as if no
option had been selected at retirement. Any and all obligations of
NYSTRS to the beneficiary under the option selection shall be considered
fully discharged. This bill shall apply to retirement benefits payable
on or after June 30, 2015.
The annual cost to the employers of members of the New York State
Teachers' Retirement System for this benefit is estimated to be very
A. 7008 4
low, likely less than $200,000 per year. Allowing retired members to
change the terms of their option after retirement creates the potential
for anti-selection however.
Employee data is from the System's most recent actuarial valuation
files, consisting of data provided by the employers to the Retirement
System. Data distributions and statistics can be found in the System's
Comprehensive Annual Financial Report (CAFR). System assets are as
reported in the System's financial statements, and can also be found in
the CAFR. Actuarial assumptions and methods are provided in the System's
Actuarial Valuation Report.
The source of this estimate is Fiscal Note 2015-21 dated March 25,
2015 prepared by the Actuary of the New York State Teachers' Retirement
System and is intended for use only during the 2015 Legislative Session.
I, Richard A. Young, am the Actuary for the New York State Teachers'
Retirement System. I am a member of he American Academy of Actuaries and
I meet the Qualification Standards of the American Academy of Actuaries
to render the actuarial opinion contained herein.
1 S 2. Severability clause. If any clause, sentence, paragraph, subdivi-
2 sion, section or part of this act shall be adjudged by any court of
3 competent jurisdiction to be invalid, such judgment shall not affect,
4 impair, or invalidate the remainder thereof, but shall be confined in
5 its operation to the clause, sentence, paragraph, subdivision, section
6 or part thereof directly involved in the controversy in which such judg-
7 ment shall have been rendered. It is hereby declared to be the intent of
8 the legislature that this act would have been enacted even if such
9 invalid provisions had not been included herein.
10 S 3. This act shall take effect immediately provided, however, that
11 the applicable effective date of Parts A and B of this act shall be as
12 specifically set forth in the last section of such Parts.
