Bill Text: NY S07224 | 2023-2024 | General Assembly | Amended
Bill Title: Provides an option for beneficiaries of NYC transit authority members to receive a lump sum equal to the pension reserve where a member who is eligible for a service retirement dies prior to filing for retirement.
Spectrum: Moderate Partisan Bill (Democrat 17-5)
Status: (Introduced) 2024-06-05 - SUBSTITUTED BY A7563B [S07224 Detail]
Download: New_York-2023-S07224-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 7224--B 2023-2024 Regular Sessions IN SENATE May 18, 2023 ___________ Introduced by Sens. GOUNARDES, ADDABBO, CHU, CLEARE, COMRIE, FERNANDEZ, JACKSON, KENNEDY, LIU, MANNION, MARTINEZ, MATTERA, PALUMBO, PARKER, RAMOS, RHOADS, SALAZAR, SKOUFIS, STAVISKY, WEBER, WEIK -- read twice and ordered printed, and when printed to be committed to the Committee on Civil Service and Pensions -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- recommitted to the Committee on Civil Service and Pensions in accord- ance with Senate Rule 6, sec. 8 -- 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 death benefits for active New York city transit authority members The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 604-b of the retirement and social security law is 2 amended by adding a new subdivision f to read as follows: 3 f. Death benefits. Notwithstanding any provision of law to the contra- 4 ry, where a New York city transit authority member would have been enti- 5 tled to a service retirement benefit at the time of their death but had 6 not yet filed for such service retirement pursuant to subparagraph (iv) 7 of paragraph one of subdivision c of this section, and where such death 8 occurs on or after the effective date of this subdivision, the benefici- 9 ary or beneficiaries of such member may elect to receive, in a lump sum 10 or on an annuitized basis, an amount payable which shall be equal to the 11 pension reserve that would have been established had such member retired 12 on the date of their death. 13 § 2. Notwithstanding any other provision of law to the contrary, none 14 of the provisions of this act shall be subject to section 25 of the 15 retirement and social security law. 16 § 3. This act shall take effect immediately. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD10259-05-4S. 7224--B 2 SUMMARY: This proposed legislation would provide an alternative death benefit for Transit Tier 4 and Tier 6 Special Plan members of NYCERS. EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS by Fiscal Year for the first 25 years ($ in Millions) Year NYCERS 2025 4.1 2026 4.1 2027 4.1 2028 4.1 2029 4.1 2030 4.1 2031 4.1 2032 4.1 2033 4.1 2034 4.1 2035 4.1 2036 4.1 2037 0.9 2038 0.9 2039 0.9 2040 0.9 2041 0.9 2042 0.9 2043 0.9 2044 0.9 2045 0.9 2046 0.9 2047 1.0 2048 1.0 2049 1.0 Employer Contribution impact beyond Fiscal Year 2049 is not shown. Projected contributions include future new hires that may be impacted. The increase in employer contributions will be allocated to the New York City Transit Authority. INITIAL INCREASE (DECREASE) IN ACTUARIAL LIABILITIES as of June 30, 2023 ($ in Millions) Present Value (PV) NYCERS PV of Benefits: 32.6 PV of Employee Contributions: 0.0 PV of Employer Contributions: 32.6 Unfunded Accrued Liabilities: 24.4 AMORTIZATION OF UNFUNDED ACCRUED LIABILITY NYCERS Number of Payments: 12 Fiscal Year of Last Payment: 2036 Amortization Payment: 3.2 M Unfunded Accrued Liability increases were amortized over the expected remaining working lifetime of those impacted by the benefit changes using level dollar payments.S. 7224--B 3 CENSUS DATA: The estimates presented herein are based on preliminary census data collected as of June 30, 2023. The census data for the impacted population is summarized below. NYCERS Active Members - Number Count: 36,819 - Average Age: 48.3 - Average Service: 11.6 - Average Salary: 90,200 IMPACT ON MEMBER BENEFITS: Currently, NYCERS Transit members are generally entitled to a lump sum ordinary death benefit equal to a multiple of salary plus the return of member accumulated contributions, if any. These death benefits are generally calculated as three times the final year's salary and may be subject to salary caps and other reductions. Under the proposed legislation, the ordinary death benefit for members who are eligible to receive a service retirement benefit and die prior to retirement would be the greater of their current death benefit or the value of the pension reserve that would have been established had they retired on the date of their death. The pension reserve is the actuarial present value of all pension payments expected to be made had the member retired for service. This type of lump sum pension reserve death bene- fit is sometimes referred to as a Death Gamble, and is afforded, in a similar form, to Tier 1 NYCERS members. ASSUMPTIONS AND METHODS: The estimates presented herein have been calculated based on the Revised 2021 Actuarial Assumptions and Methods of the impacted retirement systems. In addition: * New entrants were assumed to replace exiting members so that total payroll increases by 3% each year for NYC Transit members. New entrant demographics were developed based on data for recent new hires and actu- arial judgement. RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend highly on the actuarial assumptions, methods, and models used, demo- graphics of the impacted population and other factors such as invest- ment, contribution, and other risks. If actual experience deviates from actuarial assumptions, the actual costs could differ from those presented herein. Quantifying these risks is beyond the scope of this Fiscal Note. This Fiscal Note is intended to measure pension-related impacts and does not include other potential costs (e.g., administrative and Other Postemployment Benefits). STATEMENT OF ACTUARIAL OPINION: Marek Tyszkiewicz and Gregory Zelikov- sky are members of the Society of Actuaries and the American Academy of Actuaries. We are members of NYCERS but do not believe it impairs our objectivity and we meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained herein. To the best of our 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 2024-45 dated April 19, 2024 was prepared by the Chief Actuary for the New York City Retirement Systems and Pension Funds. This estimate is intended for use only during the 2024 Legislative Session.
