Bill Text: NY S06139 | 2017-2018 | General Assembly | Amended
Bill Title: Relates to return of member contributions of New York city correction officers after more than fifteen years of service.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2018-07-25 - PRINT NUMBER 6139A [S06139 Detail]
Download: New_York-2017-S06139-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 6139--A 2017-2018 Regular Sessions IN SENATE May 11, 2017 ___________ Introduced by Sen. GOLDEN -- read twice and ordered printed, and when printed to be committed to the Committee on Civil Service and Pensions -- recommitted to the Committee on Civil Service and Pensions in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said commit- tee AN ACT to amend the retirement and social security law, in relation to the return of member contributions The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subparagraph (ii) of paragraph 7 of subdivision d of 2 section 445-a of the retirement and social security law, as amended by 3 chapter 631 of the laws of 1993, is amended to read as follows: 4 (ii) Except as otherwise provided in subparagraph (iii) of this para- 5 graph, should a participant in the twenty-year improved benefit retire- 6 ment program[, who has rendered less than fifteen years of credited7service] cease to hold the position of New York city correction officer 8 below the rank of captain for any reason whatsoever other than service 9 retirement or resignation with a vested right to a benefit, his or her 10 accumulated additional member contributions made pursuant to this subdi- 11 vision (together with any interest thereon paid to the retirement 12 system) may be withdrawn by him or her pursuant to procedures promulgat- 13 ed in regulations of the board of trustees of the retirement system, 14 together with interest thereon equal to eight and one-quarter percent 15 per annum, compounded annually. 16 § 2. Paragraph 6 of subdivision d of section 445-c of the retirement 17 and social security law, as added by chapter 631 of the laws of 1993, is 18 amended to read as follows: 19 6. Where a person [who] became or becomes a participant in the twen- 20 ty-year improved benefit retirement program for captains and above [has21rendered less than fifteen years of credited service as of the date heEXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD11668-03-8S. 6139--A 2 1or she became or becomes a New York city correction member of the rank2of captain or above], the amount of the contribution deficiency charged 3 to such a participant pursuant to paragraph five of this subdivision, 4 consisting of retroactive additional member contributions plus interest 5 on such amounts, shall be reduced by an amount equal to the additional 6 member contributions which such participant made pursuant to paragraph 7 one of subdivision d of section four hundred forty-five-a of this arti- 8 cle as a participant in the twenty-year improved benefit retirement 9 program for correction officers below the rank of captain (together with 10 any interest thereon) which are on deposit in the contingent reserve 11 fund of the retirement system on the date such person became or becomes 12 a participant in the twenty-year improved benefit retirement program for 13 captains and above. 14 § 3. Clause (A) of subparagraph (ii) of paragraph 11 of subdivision d 15 of section 445-c of the retirement and social security law, as added by 16 chapter 631 of the laws of 1993, is amended to read as follows: 17 (A) Should a participant in the twenty-year improved benefit retire- 18 ment program for captains and above [who has rendered less than fifteen19years of credited service] cease to hold the position of New York city 20 correction officer of the rank of captain or above for any reason what- 21 soever, other than service retirement or resignation with a vested right 22 to a benefit, his or her accumulated additional member contributions 23 made pursuant to this subdivision (together with any interest thereon 24 paid to the retirement system) may be withdrawn by him or her pursuant 25 to procedures promulgated in regulations of the board of trustees of the 26 retirement system, together with interest thereon at the rate of eight 27 and one-quarter percent per annum, compounded annually. 28 § 4. Clause (A) of subparagraph (ii) of paragraph 8 of subdivision e 29 of section 504-a of the retirement and social security law, as amended 30 by chapter 622 of the laws of 2004, is amended to read as follows: 31 (A) Except as otherwise provided in subparagraph (iii) of this para- 32 graph, should a participant in the twenty-year retirement program [who33has rendered less than fifteen years of credited service] cease to hold 34 the position of New York city correction officer below the rank of 35 captain for any reason whatsoever other than service retirement or 36 resignation with a vested right to a benefit under this section, his or 37 her accumulated additional member contributions made pursuant to this 38 subdivision (together with any interest thereon paid to the retirement 39 system) may be withdrawn by him or her pursuant to procedures promulgat- 40 ed in regulations of the board of trustees of the retirement system, 41 together with interest thereon at the rate of five percent per annum, 42 compounded annually. 43 § 5. Paragraph 6 of subdivision e of section 504-b of the retirement 44 and social security law, as amended by chapter 622 of the laws of 2004, 45 is amended to read as follows: 46 6. Where a person [who] became or becomes a participant in the twen- 47 ty-year retirement program for captains and above [has rendered less48than fifteen years of credited service as of the date he or she became49or becomes a New York city correction member of the rank of captain or50above], the amount of the contribution deficiency charged to such a 51 participant pursuant to paragraph five of this subdivision, consisting 52 of retroactive additional member contributions plus interest on such 53 amounts, shall be reduced by an amount equal to the additional member 54 contributions which such participant made pursuant to paragraph one of 55 subdivision e of section five hundred four-a of this article as a 56 participant in the twenty-year retirement program for correction offi-S. 6139--A 3 1 cers below the rank of captain (together with any interest thereon) 2 which are on deposit in the contingent reserve fund of the retirement 3 system on the date such person became or becomes a participant in the 4 twenty-year retirement program for captains and above, provided, howev- 5 er, that for persons who elect to become a participant in the twenty- 6 year retirement program for captains and above pursuant to subparagraph 7 (ii) of paragraph one of subdivision b of this section or subparagraph 8 (ii) of paragraph two of subdivision b of this section, such reduction 9 pursuant to this paragraph in the amount of such contribution deficiency 10 shall be by the amount of such additional member contributions made 11 pursuant to subdivision e of section five hundred four-a of this article 12 (together with any interest thereon) which are on deposit in such 13 contingent reserve fund at the time such member files such election to 14 become such a participant, and such participant shall not thereafter be 15 permitted to withdraw any portion of such additional member contrib- 16 utions made pursuant to subdivision e of section five hundred four-a of 17 this article at any time while he or she is a participant in the twen- 18 ty-year retirement program for captains and above, and provided further 19 that the provisions of this paragraph shall apply to any person who is a 20 participant in the twenty-year retirement program for captains and above 21 on or after the revised contribution date, even where such person has 22 rendered fifteen or more years of credited service as of the date he or 23 she became a New York city correction member of the rank of captain or 24 above. 25 § 6. Clause (A) of subparagraph (ii) of paragraph 12 of subdivision e 26 of section 504-b of the retirement and social security law, as added by 27 chapter 631 of the laws of 1993, is amended to read as follows: 28 (A) Should a participant in the twenty-year retirement program for 29 captains and above [who has rendered less than fifteen years of credited30service] cease to hold the position of New York city correction officer 31 of the rank of captain or above for any reason whatsoever other than 32 service retirement or resignation with a vested right to a benefit under 33 this section, his or her accumulated additional member contributions 34 made pursuant to this subdivision (together with any interest thereon 35 paid to the retirement system) may be withdrawn by him or her pursuant 36 to procedures promulgated in regulations of the head of the retirement 37 system, together with interest thereon at the rate of five percent per 38 annum, compounded annually. 39 § 7. This act shall take effect immediately. FISCAL NOTE. -- Pursuant to Legislative Law, Section 50: SUMMARY OF BILL: This proposed legislation would amend provisions of Article 11 and 14 of the Retirement and Social Security Law to permit certain correction officer members of the New York City Employees' Retirement System (NYCERS), who are participants in the Tiers 2 and 3 Twenty-Year Improved Benefit Program for correction officers (CO-20 Plans) and such plans for ranks of correction captains and above (CC-20 Plans), and who cease to hold the title of correction officer, other than by retirement or separation with a vested benefit, on and after 15 years of credited service, to withdraw their accumulated additional member contributions (AMCs) with interest (Applicable Members). However, since there are currently no Tier 2 CO-20 or CC-20 Plan members who would be affected by this proposed legislation, the analysis contained herein is limited to Tier 3 CO-20 and CC-20 Plan members. Effective Date: Upon enactment. BACKGROUND: Currently, Applicable Members with less than 15 years of credited service who cease to hold the title of correction officer andS. 6139--A 4 withdraw from their respective CO-20 or CC-20 Plan are eligible for a refund of AMCs. Applicable Members who have rendered 15 or more years of credited service and cease to hold the title of correction officer and withdraw from their respective CO-20 or CC-20 Plan forfeit AMCs. AMCs are generally required for the first 20 years of credit service in the CO-20 or CC-20 Plans. For Tier 3 CO-20 Plan members first employed as a correction officer after June 30, 1988, AMCs are 3.61% of salary. AMCs for Tier 3 CC-20 Plan members first employed as a correction officer after October 31, 1992 are 7.46% of salary. The proposed legislation would permit Applicable Members with 15 or more years of credited service to withdraw from their respective Plan and receive a refund of AMCs, with interest, upon the cessation of hold- ing a correction officer title. Applicable Members who withdraw from their respective Plan and receive a refund of AMCs would no longer be eligible to receive a CO-20 or CC-20 Plan benefit, but may still be entitled to a benefit in an applicable underlying basic plan. FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: Based on the census data and actuarial assumptions and methods described herein, the enactment of this proposed legislation would increase the Actuarial Present Value (APV) of Benefits (APVB) and APV of future employer contributions by approximately $15.5 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 $7.6 million and an increase in the APV of future employer Normal Cost of $7.9 million. FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with the Administrative Code of the City of New York (ACCNY) Section 13-638.2(k-2), new UAL attributable to benefit changes are to be amor- tized as determined by the Actuary but generally over the remaining working lifetime of those impacted by the benefit changes. As of June 30, 2017, the remaining working lifetime of the members in CO-20 and CC-20 Plans is approximately eight years. For the purposes of this Fiscal Note, the increase in UAL was amor- tized over an eight-year period (seven payments under the One-Year Lag Methodology) using level dollar payments. This payment plus the increase in the Normal Cost results in an increase in annual employer contrib- utions of approximately $2.5 million. OTHER COSTS: Not measured in this Fiscal Note are the additional administrative costs of NYCERS and other New York City agencies to implement the proposed legislation. CONTRIBUTION TIMING: For the purposes of this Fiscal Note, it is assumed that the changes in the APV of future employer contributions and annual employer contributions would be reflected for the first time in the June 30, 2017 actuarial valuation of NYCERS. In accordance with the One-Year Lag Methodology (OYLM) used to determine employer contrib- utions, the increase in employer contributions would first be reflected in Fiscal Year 2019. CENSUS DATA: The estimates presented herein are based on census data used in the Preliminary June 30, 2017 (Lag) actuarial valuation of NYCERS to determine Preliminary Fiscal Year 2019 employer contributions. ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the APV of future employer contributions, and annual employer contributions presented herein have been calculated based on the same actuarial assumptions and methods in effect for the June 30, 2017 (Lag) actuarial valuations used to determine the Preliminary Fiscal Year 2019 employer contributions of NYCERS. Please note these assumptions and methods are subject to changeS. 6139--A 5 as this valuation is not considered final until the end of Fiscal Year 2019. STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu- ary for, and independent of, the New York City Retirement Systems and Pension Funds. I am a Fellow of the Society of Actuaries, an Enrolled Actuary under the Employee Retirement Income and Security Act of 1974 (ERISA), a Member of the American Academy of Actuaries, and a Fellow of the Conference of Consulting Actuaries. I meet the Qualification Stand- ards of the American Academy of Actuaries to render the actuarial opin- ion contained herein. To the best of my knowledge, the results contained herein have been prepared in accordance with generally accepted actuari- al principles and procedures and with the Actuarial Standards of Prac- tice issued by the Actuarial Standards Board. FISCAL NOTE IDENTIFICATION: This Fiscal Note 2018-45 dated July 10, 2018, was prepared by the Chief Actuary for the New York City Employees' Retirement System. This estimate is intended for use only during the 2018 Legislative Session.
