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

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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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-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                          6571
                               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
        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. 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
        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.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11770-02-7
        S. 6571                             2
          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, 2016  actuarial  valu-
        ation.    Distributions  and  other  statistics can be found in the 2016
        Report of the  Actuary  and  the  2016  Comprehensive  Annual  Financial
        Report.
          The  actuarial  assumptions and methods used are described in the 2015
        and 2016 Annual Report to the Comptroller on Actuarial Assumptions,  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, 2016
        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  May 24, 2017, and intended for use only during
        the 2017 Legislative Session, is Fiscal Note No. 2017-101,  prepared  by
        the Actuary for the New York State and Local Retirement System.