Bill Text: NY S06571 | 2017-2018 | General Assembly | Amended

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Bill Title: Relates to increasing lump sum payments; inceases lump sum payments for eligible members of the New York state and local police and fire retirement system, and sheriffs, undersheriffs, deputy sheriffs and correction officers, who are employed in certain counties from twenty-five to thirty-five percent of the actuarial equivalent of his or her retirement allowance at the time of retirement if he or she retires five years after being eligible to retire.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2018-02-01 - PRINT NUMBER 6571B [S06571 Detail]

Download: New_York-2017-S06571-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                         6571--B
                               2017-2018 Regular Sessions
                    IN SENATE
                                      June 5, 2017
                                       ___________
        Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
          printed to be committed to the Committee on Rules  --  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 committee -- committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to said committee
        AN ACT to amend the retirement and social security law, in  relation  to
          increasing lump sum payments
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. Paragraph e of subdivision 2 of section 1100 of the retire-
     2  ment and social security law, as added by chapter 523  of  the  laws  of
     3  2013, is amended to read as follows:
     4    e.  Any member who files for retirement after being eligible to retire
     5  for five years may elect to receive a [twenty-five] thirty-five  percent
     6  lump  sum  payment  of the actuarial equivalent of his or her retirement
     7  allowance at the time of retirement.
     8    § 2. Notwithstanding any other provision of law to the contrary,  none
     9  of  the  provisions  of  this  act shall be subject to section 25 of the
    10  retirement and social security law.
    11    § 3. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, section 50:
          This bill would allow larger lump sum payments to be  made  under  the
        Partial Lump Sum (PLS) program for certain members of the New York State
        and  Local  Police and Fire Retirement System and the New York State and
        Local Employees' Retirement System.  Currently, members who are eligible
        for the PLS program and who file  for  service  retirement  after  being
        eligible  to  retire  for 5 or more years may elect to receive a partial
        lump sum payment of up to 25% of the present value of their  actuarially
        determined  retirement  allowance (their "reserve") at retirement, and a
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11770-08-8
        S. 6571--B                          2
        smaller annual retirement allowance thereafter.    This  proposal  would
        allow  a member who files for service retirement after being eligible to
        retire for 5 or more years to be eligible to receive a partial lump  sum
        of up to 35% of their reserve in exchange for a reduction in their annu-
        al  retirement  allowance  of  up  to 35% thereafter. For example, a new
        retiree with an initial annual pension of $100,000 could have a  reserve
        of  approximately  $1.2  million,  and  could  receive  a PLS payment of
        $420,000 and a reduced annual pension of $65,000.
          If this bill is enacted, there would be administrative  costs  associ-
        ated with redesigned estimate and option forms. There would not be costs
        associated  with  the  lump  sum payment options since payments would be
        determined on an actuarially equivalent basis.
          However, the ratcheting upward of the  maximum  lump  sum  benefit  is
        eroding  the original intent of the pension plan, first presented in the
        March 30, 1920 Report of the Commission on  Pensions,  namely,  that  "a
        satisfactory  pension  plan  must provide as a minimum, a superannuation
        benefit", which is defined as a lifetime monthly payment made to someone
        who is retired from work.
          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, 2017 actuarial valu-
        ation.  Distributions and other statistics can  be  found  in  the  2017
        Report  of  the  Actuary  and  the  2017  Comprehensive Annual Financial
        Report.
          The actuarial assumptions and methods used are described in the  2015,
        2016,  and  2017  Annual  Report to the Comptroller on Actuarial Assump-
        tions, 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, 2017
        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 estimate, dated January 4, 2018, and intended for use only during
        the 2018 Legislative Session, is Fiscal Note No.  2018-27,  prepared  by
        the Actuary for the New York State and Local Retirement System.