Bill Text: NY S07769 | 2013-2014 | General Assembly | Introduced
Bill Title: Authorizes Thomas Steier to be reclassified as a Tier II member of the New York city employees' retirement system.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-06-06 - REFERRED TO CIVIL SERVICE AND PENSIONS [S07769 Detail]
Download: New_York-2013-S07769-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
7769
I N S E N A T E
June 6, 2014
___________
Introduced by Sen. STAVISKY -- read twice and ordered printed, and when
printed to be committed to the Committee on Civil Service and Pensions
AN ACT to allow Thomas Steier to be reclassified as a Tier II member of
the New York City Employees' Retirement System
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Notwithstanding any inconsistent provision of law, Thomas
2 Steier, a member of the New York City Employees' Retirement System
3 (NYCERS) with Tier III status, who was employed with the New York City
4 Employees' Retirement System (NYCERS) on July 6, 1976 until August 1978
5 and was employed with the New York city transit authority from August
6 1978 to February 2, 2013 when upon such date he retired, and who for
7 reasons not ascribable to his own negligence was not offered membership
8 in the New York City Employees' Retirement System on July 6, 1976 as a
9 Tier II member, shall, upon application filed with the Board of Trustees
10 of NYCERS on or before the thirty-first day of December next succeeding
11 the date on which this act shall have become a law, be reclassified as a
12 Tier II member with July 6, 1976 as his date of membership and shall be
13 entitled to every right, benefit and privilege which would have been
14 available to him in accordance with Tier II status, and the city of New
15 York, as Thomas Steier's employer from July 6, 1976 until August 1978,
16 is responsible for such error and shall be responsible for all costs to
17 provide the Tier II benefit to Thomas Steier, provided, however Thomas
18 Steier shall be responsible for contributing the required member
19 contributions for Tier II membership.
20 S 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
PROVISIONS OF PROPOSED LEGISLATION: The proposed legislation would
authorize the New York City Employees' Retirement System ("NYCERS") to
accept an application from Thomas Steier, a Tier IV NYCERS member with
Tier III rights, to be reclassified as a Tier II member.
BACKGROUND: Mr. Steier was originally employed by NYCERS on July 6,
1976 and would have been a Tier II member of NYCERS had he joined the
system prior to the establishment of Tier III on July 27, 1976. However,
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14367-03-4
S. 7769 2
since he joined NYCERS on July 29, 1976 he is a Tier IV member with Tier
III rights.
Mr. Steier retired on February 2, 2013 under the Tier IV basic 62/5
retirement plan and began his pension at that time under the 100% Joint
and Survivor payment option with his wife as beneficiary.
The proposed legislation, if enacted, would authorize NYCERS to accept
an application from Mr. Steier on or before December 31 next succeeding
the date on which this proposed legislation is enacted that would allow
him to be reclassified from his current status as a retired Tier IV
member to a retired Tier II member.
This reclassification would provide Mr. Steier with the pension bene-
fits that would have been available to him had he always been a Tier II
member of NYCERS.
The Effective Date of the proposed legislation would be the Date of
Enactment but would allow for his retirement allowance to be recomputed
as if he had always had Tier II membership status.
FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES: The estimated financial
impact has been calculated based on the difference between (1) the bene-
fits Mr. Steier would receive as a Tier II member in the Modified
Fifty-Five-Year Increased Service Fractional Plan ("ISF Plan") if this
proposed legislation were enacted and (2) the benefits Mr. Steier is
currently entitled to receive as a Tier IV member in the NYCERS 62/5
plan.
The difference in estimated costs (retroactive from his retirement
date to June 30, 2014 and prospective on and after July 1, 2014) is
intended to provide a sense of the ultimate financial impact.
If the legislation is enacted, Mr. Steier would be entitled to a
pension of approximately $56,534 per year beginning on his retirement
date of February 2, 2013 under the 100% Joint and Survivor Option with
his wife as his beneficiary. If the legislation is not enacted, Mr.
Steier would continue to be entitled to an annual pension of $38, 955
under the 100% Joint and Survivor Option that he elected.
Based on the actuarial assumptions and methods described herein, the
enactment of this proposed legislation would increase the Actuarial
Present Value ("APV") of Benefits ("APVB") and the Unfunded Actuarial
Accrued Liability ("UAAL") of NYCERS by approximately $230,000 as of
June 30, 2014. This amount was calculated as shown in Table 1 below:
Table 1
Estimated Financial Impact of Reclassification for Thomas Steier
Retroactive from February 2, 2013 to June 30, 2014
And Prospective On and After July 1, 2014
Retroactive Prospective
APV of Pension if Payments Payments Total
Legislation is Enacted $80,000 $674,000 $754,000
Legislation is Not
Enacted (55,000) (469,000) (524,000)
Increase in APV $25,000 $205,000 $230,000
FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS AND ANNUAL EMPLOYER
COSTS: In accordance with Section 13.638.2(k-2) of the Administrative
Code of the City of New York ("ACNY"), new UAAL attributable to benefit
S. 7769 3
changes are to be amortized as determined by the Actuary but generally
over the remaining working lifetime of those impacted by the benefit
changes.
For this proposed legislation, Mr. Steier is inactive and therefore
the entire increase in UAAL based on the Actuary's actuarial assumptions
and methods in effect on June 30, 2013 rolled forward to June 30, 2014
of $230,000 should be recognized immediately for contribution purposes.
The increase in employer costs would be comparable to the increase in
employer contributions.
CONTRIBUTION TIMING: If enacted during the 2014 Legislative Session
and if his application for reclassification to Tier II were received by
NYCERS on or before June 30, 2014, his status as a Tier II retiree would
likely first be reflected in the June 30, 2014 census data. In accord-
ance with the One-Year Lag methodology used to determine employer
contributions, increased employer contributions would be consistent with
the increased employer costs and would be determined for Fiscal Year
2016.
If enacted during the 2014 Legislative Session, and if his application
for reclassification to Tier II were received by NYCERS after June 30,
2014 but on or before June 30, 2015, his status as a Tier II retiree
would likely first be reflected in the June 30, 2015 census data and
increased employer contributions would be determined for Fiscal Year
2017.
ACTUARIAL ASSUMPTIONS AND METHODS: The additional APVB and UAAL
presented herein have been calculated based on the actuarial assumptions
and methods in effect for the June 30, 2013 (Lag) actuarial valuations
used to determine Fiscal Year 2015 employer contributions of NYCERS.
ECONOMIC VALUES OF BENEFITS: The actuarial assumptions used to deter-
mine the financial impact of the proposed legislation discussed in this
Fiscal Note are those appropriate for budgetary models and determining
annual employer contributions to NYCERS.
However, the economic assumptions that are used for determining
employer contributions do not develop risk-adjusted, economic values of
benefits. Such risk-adjusted, economic values of benefits would likely
differ significantly from those developed by the budgetary models.
STATEMENT OF ACTUARIAL OPINION: I, Robert C. North, Jr., am the 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 Actuaries.
I meet the Qualification Standards of the American Academy of Actuaries
to render the actuarial opinion contained herein.
FISCAL NOTE IDENTIFICATION: This estimate, is intended for use only
during the 2014 Legislative Session. It is Fiscal Note 2014-26, dated
June 4, 2014 prepared by the Chief Actuary for the New York City Employ-
ees' Retirement System.
