6/19/2014 A6974B-2013 - NY Senate Open Legislation - Provides credit to members of public retirement systems of the state for military

service rendered during cert

http://open.nysenate.gov/legislation/bill/A6974B-2013 1/9
BillA6974B2013
Providescredittomembersofpublicretirementsystemsofthestatefor
militaryservicerenderedduringcertainperiods
Providesuptothreeyearsofservicecredittomembersofpublicretirement
systemsofthestateformilitaryservicerenderedduringtimesofpeaceremoves
requirementthatsuchmilitaryserviceoccurduringspecifiedperiodsof
hostilitiesrequiressuchmembershaveatleastfiveyearsofcreditedservice,
notincludingmilitaryservice.
Details
Sameas:S78392013
VersionsA69742013A6974A2013A6974B2013
Sponsor:Paulin
Multisponsor(s):Arroyo,Barclay,Blankenbush,Brindisi,Buchwald,Butler,
Ceretto,Cusick,Davila,DenDekker,DiPietro,Duprey,Farrell,Garbarino,
Giglio,Gottfried,Hawley,Heastie,Hennessey,Hooper,Kearns,Kellner,Lalor,
Lentol,Lifton,Lupardo,Magee,McDonald,McDonough,McLaughlin,Miller,
Millman,Montesano,Palmesano,Perry,Ra,Raia,Rivera,Rodriguez,Skartados,
Solages,Sweeney,Titone,Weisenberg,Wright
Cosponsor(s):Schimel,Colton,Schimminger,Gunther,Ramos,Weprin,Hevesi,
Roberts,Benedetto,Gantt,Steck,Russell,Rosenthal,Stec,Jaffee,Tedisco,
Simanowitz,Saladino,Magnarelli,BrookKrasny,Quart,Katz,Lupinacci,Nojay,
Barrett,Skoufis,Santabarbara,Graf,Thiele,Mayer,Zebrowski,Sepulveda,
Markey,Borelli,Ortiz,Camara,Simotas,Goldfeder,Titus,Clark,Curran,
Malliotakis,Tenney,Otis,Abinanti,Pichardo,Cahill
LawSection:RetirementandSocialSecurityLaw
Law:Amd1000,R&SSL
Actions
Jun19,2014:substitutedbys7839
Jun19,2014:rulesreportcal.531
Jun18,2014:reported
Jun16,2014:reportedreferredtorules
Jun11,2014:printnumber6974b
Jun11,2014:amend(t)andrecommittowaysandmeans
Apr29,2014:reportedreferredtowaysandmeans
Feb26,2014:printnumber6974a
Feb26,2014:amendandrecommittogovernmentalemployees
Jan8,2014:referredtogovernmentalemployees
Apr29,2013:referredtogovernmentalemployees
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Text
STATEOFNEWYORK
________________________________________________________________________
6974B
20132014RegularSessions
INASSEMBLY
April29,2013
___________
IntroducedbyM.ofA.PAULIN,SCHIMEL,COLTON,SCHIMMINGER,GUNTHER,
RAMOS,WEPRIN,HEVESI,ROBERTS,BENEDETTO,GANTT,STECK,RUSSELL,
ROSENTHAL,STEC,JAFFEE,TEDISCO,SIMANOWITZ,SALADINO,MAGNARELLI,
BROOKKRASNY,QUART,KATZ,LUPINACCI,NOJAY,BARRETT,SKOUFIS,SANTA
BARBARA,GRAF,THIELE,MAYER,ZEBROWSKI,SEPULVEDA,MARKEY,BORELLI,
ORTIZ,CAMARA,SIMOTAS,GOLDFEDER,TITUS,CLARK,CURRAN,MALLIOTAKIS,
TENNEY,OTIS,ABINANTI,PICHARDOMultiSponsoredbyM.ofA.
ARROYO,BARCLAY,BLANKENBUSH,BRINDISI,BUCHWALD,BUTLER,CERETTO,
CUSICK,DAVILA,DenDEKKER,DiPIETRO,DUPREY,FARRELL,GARBARINO,
GIGLIO,GOTTFRIED,HAWLEY,HEASTIE,HENNESSEY,HOOPER,KEARNS,KELL
NER,LALOR,LENTOL,LIFTON,LUPARDO,MAGEE,McDONALD,McDONOUGH,
McLAUGHLIN,MILLER,MILLMAN,MONTESANO,PALMESANO,PERRY,RA,RAIA,
RIVERA,RODRIGUEZ,SKARTADOS,SOLAGES,SWEENEY,WEISENBERG,WRIGHT
readonceandreferredtotheCommitteeonGovernmentalEmployees
recommittedtotheCommitteeonGovernmentalEmployeesinaccordance
withAssemblyRule3,sec.2committeedischarged,billamended,
orderedreprintedasamendedandrecommittedtosaidcommittee
reportedandreferredtotheCommitteeonWaysandMeanscommittee
discharged,billamended,orderedreprintedasamendedandrecommitted
tosaidcommittee
ANACTtoamendtheretirementandsocialsecuritylaw,inrelationto
providingcredittomembersofpublicretirementsystemsofthestate
formilitaryservice
THEPEOPLEOFTHESTATEOFNEWYORK,REPRESENTEDINSENATEANDASSEM
BLY,DOENACTASFOLLOWS:
Section1.Section1000oftheretirementandsocialsecuritylaw,as
addedbychapter548ofthelawsof2000,subdivision9asaddedby
chapter547ofthelawsof2002andsubdivision10asaddedbychapter
18ofthelawsof2012,isamendedtoreadasfollows:
S1000.Militaryservicecredit.Notwithstandinganylawtothe
contrary,amemberofapublicretirementsystemofthestate,as
EXPLANATIONMatterinITALICS(underscored)isnewmatterinbrackets
[]isoldlawtobeomitted.
ALBD01368084
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A.6974B2
definedinsubdivisiontwentythreeofsectionfivehundredoneofthis
chapter,shallbeeligibleforcreditformilitaryserviceashereinaft
erprovided:
1.Amember,uponapplicationtosuchretirementsystem,mayobtaina
totalnottoexceedthreeyearsofservicecreditforuptothreeyears
ofmilitaryduty,asdefinedinsectiontwohundredfortythreeofthe
militarylaw,ifthememberwashonorablydischargedfromthemilitary
[andallorpartofsuchmilitaryservicewasrenderedduringthe
followingperiods:(a)commencingDecemberseventh,nineteenhundred
fortyoneandterminatingDecemberthirtyfirst,nineteenhundred
fortysix(b)commencingJunetwentyseventh,nineteenhundredfifty
andterminatingJanuarythirtyfirst,nineteenhundredfiftyfiveor
(c)commencingFebruarytwentyeighth,nineteenhundredsixtyoneand
terminatingMayseventh,nineteenhundredseventyfive
2.Amember,uponapplicationtosuchretirementsystem,mayobtaina
totalnottoexceedthreeyearsofservicecreditforuptothreeyears
ofmilitaryduty,asdefinedinsectiontwohundredfortythreeofthe
militarylaw,ifhonorablydischargedtherefrom,ifallorpartofsuch
serviceswasrenderedinthemilitaryconflictsreferencedbelow,as
follows:
(a)hostilitiesparticipatedinbythemilitaryforcesoftheUnited
StatesinLebanon,fromthefirstdayofJune,nineteenhundredeighty
threetothefirstdayofDecember,nineteenhundredeightyseven,as
establishedbyreceiptofthearmedforcesexpeditionarymedal,thenavy
expeditionarymedal,orthemarinecorpsexpeditionarymedal
(b)hostilitiesparticipatedinbythemilitaryforcesoftheUnited
StatesinGrenada,fromthetwentythirddayofOctober,nineteen
hundredeightythreetothetwentyfirstdayofNovember,nineteen
hundredeightythree,asestablishedbyreceiptofthearmedforces
expeditionarymedal,thenavyexpeditionarymedal,orthemarinecorps
expeditionarymedal
(c)hostilitiesparticipatedinbythemilitaryforcesoftheUnited
StatesinPanama,fromthetwentiethdayofDecember,nineteenhundred
eightyninetothethirtyfirstdayofJanuary,nineteenhundredninety,
asestablishedbyreceiptofthearmedforcesexpeditionarymedal,the
navyexpeditionarymedal,orthemarinecorpsexpeditionarymedalor
(d)hostilitiesparticipatedinbythemilitaryforcesoftheUnited
States,fromtheseconddayofAugust,nineteenhundredninety,tothe
endofsuchhostilitiesincaseofaveteranwhoservedinthetheater
ofoperationsincludingIraq,Kuwait,SaudiArabia,Bahrain,Qatar,the
UnitedArabEmirates,Oman,theGulfofAden,theGulfofOman,the
PersianGulf,theRedSea,andtheairspaceabovetheselocations].
[3]2.Amembermusthaveatleastfiveyearsofcreditedservice(not
includingservicegrantedhereunder)tobeeligibletoreceivecredit
underthissection.
[4]3.Toobtainsuchcredit,amembershallpaysuchretirement
system,fordepositinthefundusedtoaccumulateemployercontrib
utions,asumequaltotheproductofthenumberofyearsofmilitary
servicebeingclaimedandthreepercentofsuchmember'scompensation
earnedduringthetwelvemonthsofcreditedserviceimmediatelypreced
ingthedatethatthemembermadeapplicationforcreditpursuantto
thissection.Ifpermittedbyruleorregulationoftheapplicable
retirementsystem,themembermaypaysuchmembercostsbypayroll
deductionforaperiodwhichshallnotexceedthetimeperiodofmili
taryservicetobecreditedpursuanttothissection.Intheeventthe
memberleavestheemployerpayrollpriortocompletionofpayment,heor
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A.6974B3
sheshallforwardallremainingrequiredpaymentstotheappropriate
retirementsystempriortotheeffectivedateofretirement.Ifthefull
amountofsuchmembercostsisnotpaidtotheappropriateretirement
systempriortothemember'sretirement,theamountofservicecredited
shallbeproportionaltothetotalamountofthepaymentsmadepriorto
retirement.
[5]4.Innoeventshallthecreditgrantedpursuanttothissection,
whenaddedtocreditgrantedformilitaryservicewithanyretirement
systemofthisstatepursuanttothisoranyotherprovisionoflaw,
exceedatotalofthreeyears.
[6]5.Tobeeligibletoreceivecreditformilitaryserviceunder
thissection,amembermustmakeapplicationforsuchcreditbeforethe
effectivedateofretirement.[Notwithstandingtheforegoingprovisions
ofthissubdivision,anindividualwhoretiredonorafterDecember
twentyfirst,nineteenhundredninetyeightandbeforetheeffective
dateofthissectionmaymakeapplicationforcreditpursuanttothis
sectionwithinoneyearfollowingtheeffectivedateofthissection,in
whichevent,thecosttotheretireewouldbebasedonthetwelvemonth
periodimmediatelyprecedingretirement.]
[7]6.Allcostsforservicecreditedtoamemberpursuanttothis
section,otherthanthemembercostssetforthinsubdivision[three]
TWOofthissection,shallbepaidbythestateandallemployerswhich
participateintheretirementsysteminwhichsuchmemberisgranted
credit.
[8]7.Amemberwhohaspurchasedmilitaryservicecreditpursuantto
sectiontwohundredfortyfouraofthemilitarylawshallbeentitled
toarefundofthedifferencebetweentheamountpaidbythememberfor
suchpurchaseandtheamountthatwouldbepayableifservicehadbeen
purchasedpursuanttothissection.
[9]8.Notwithstandinganyotherprovisionoflaw,intheeventof
deathpriortoretirement,amountspaidbythememberforthepurchase
ofmilitaryservicecreditpursuanttothissectionshallberefunded,
withinterest,totheextentthemilitaryservicepurchasedwithsuch
amountsdoesnotproduceagreaterdeathbenefitthanwouldhavebeen
payablehadthemembernotpurchasedsuchcredit.
Notwithstandinganyotherprovisionoflaw,intheeventofretire
ment,amountspaidbythememberforthepurchaseofmilitaryservice
creditpursuanttothissectionshallberefunded,withinterest,tothe
extentthemilitaryservicepurchasedwithsuchamountsdoesnotproduce
agreaterretirementallowancethanwouldhavebeenpayablehadthe
membernotpurchasedsuchcredit.
[10.]9.Anythingtothecontraryinsubdivision[four]THREEofthis
sectionnotwithstanding,toobtainsuchcredit,amemberwhofirstjoins
apublicretirementsystemofthestateonorafterAprilfirst,two
thousandtwelveshallpaysuchretirementsystem,fordepositinthe
fundusedtoaccumulateemployercontributions,asumequaltotheprod
uctofthenumberofyearsofmilitaryservicebeingclaimedandsix
percentofsuchmember'scompensationearnedduringthetwelvemonthsof
creditedserviceimmediatelyprecedingthedatethatthemembermade
applicationforcreditpursuanttothissection.
S2.Notwithstandinganyotherprovisionoflawtothecontrary,none
oftheprovisionsofthisactshallbesubjecttosection25ofthe
retirementandsocialsecuritylaw.
S3.Thisactshalltakeeffectimmediately.
FISCALNOTE.PursuanttoLegislativeLaw,Section50:
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Thisbillwouldallowuptothree(3)yearsofservicecreditfor
militarydutybyremovingallexistingrequirementsthatsuchmilitary
servicebeperformedduringcertainwarperiods,duringcertainhostil
itieswhileintheaterofoperationsoruponthereceiptofanexpedi
tionarymedal.However,thetotalservicecreditgrantedforactiveand
peacetimemilitaryserviceshallnotexceedthree(3)years.Tier6
memberswouldberequiredtomakeapaymentofsixpercentofcurrent
compensationperyearofadditionalservicecreditgrantedbythisbill.
MembersofallotherTierswouldberequiredtomakeapaymentofthree
percentofcurrentcompensationperyearofadditionalservicecredit
grantedbythisbill.Membersmusthaveatleastfive(5)yearsofcred
itservice(notincludingmilitaryservice).
Ifthisbillisenacted,insofarasthisproposalaffectstheNewYork
StateandLocalEmployees'RetirementSystem(ERS),itisestimatedthat
thepastservicecostwillaverageapproximately12%(9%forTier6)of
anaffectedmembers'compensationforeachyearofadditionalservice
creditthatispurchased.
InsofarasthisproposalaffectstheNewYorkStateandLocalPolice
andFireRetirementSystem(PFRS),itisestimatedthatthepastservice
costwillaverageapproximately17%(14%forTier6)ofanaffected
members'compensationforeachyearofadditionalservicethatis
purchased.
Theexactnumberofcurrentmembersaswellasfuturememberswho
couldbeaffectedbythislegislationcannotbereadilydetermined.
ERSCosts:PursuanttoSection25oftheRetirementandSocialSecuri
tyLaw,theincreasedcosttotheNewYorkStateandLocalEmployees'
RetirementSystemwouldbeborneentirelybytheStateofNewYorkand
wouldrequireanitemizedappropriationsufficienttopaythecostof
theprovision.Sinceamembercanapplyforthisservicecreditatany
timepriortoretirement,aprecisecostcan'tbedetermineduntileach
member,aswellasfuturemembers,appliesfortheservicecredit.Every
yearacostwillbedetermined(andbilledtothestate)basedonthose
benefitingfromthisprovisions.
PFRSCosts:ThesecostswouldbesharedbytheStateofNewYorkand
theparticipatingemployersinthePFRS.
Summaryofrelevantresources:
Themembershipdatausedinmeasuringtheimpactoftheproposed
changewasthesameasthatusedintheMarch31,2013actuarialvalu
ation.Distributionsandotherstatisticscanbefoundinthe2013
ReportoftheActuaryandthe2013ComprehensiveAnnualFinancial
Report.
Theactuarialassumptionsandmethodsusedaredescribedinthe2010,
2011,2012and2013AnnualReporttotheComptrolleronActuarial
Assumptions,andtheCodesRulesandRegulationsoftheStateofNew
York:AuditandControl.
TheMarketAssetsandGASBDisclosuresarefoundintheMarch31,2013
NewYorkStateandLocalRetirementSystemFinancialStatementsand
SupplementaryInformation.
IamamemberoftheAmericanAcademyofActuariesandmeettheQuali
ficationStandardstorenderthestatementofactuarialopinion
containedherein.
Thisestimate,datedOctober28,2013andintendedforuseonlyduring
the2014LegislativeSession,isFiscalNoteNo.20145,preparedbythe
ActuaryfortheNewYorkStateandLocalEmployees'RetirementSystem
andtheNewYorkStateandLocalPoliceandFireRetirementSystem.
FISCALNOTE.PursuanttoLegislativeLaw,Section50:
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WithrespecttocertainNewYorkCityRetirementSystems("NYCRS"),
thisproposedlegislationwouldamendNewYorkStateRetirementand
SocialSecurityLaw("RSSL")Section1000toprovidecertainmembersof
theNewYorkCityEmployees'RetirementSystem("NYCERS"),theNewYork
CityTeachers'RetirementSystem("NYCTRS"),theNewYorkCityBoardof
EducationRetirementSystem("BERS"),theNewYorkCityPolicePension
Fund("POLICE")andtheNewYorkFireDepartmentPensionFund("FIRE")
theopportunitytoobtainadditionalretirementservicecreditsfor
certainMilitaryService.
ThisproposedlegislationwouldpermitanyNYCERSmember,priortothe
effectivedateofretirement,tomakeapplicationfortheseadditional
servicecredits.
ToobtainsuchMilitaryServicecredits,memberswouldberequiredto
paytotheappropriateNYCRS,foreachyearofMilitaryService
purchased,asumequalto3.0%(6.0%formemberswhofirstjoinonand
afterApril1,2012)ifsuchmember'scompensationearnedduringthe
twelvemonthsofcreditedserviceimmediatelyprecedingthedatethat
themembermakesapplicationforcredit.
MEMBERSIMPACTED:Insofarasthisproposedlegislationrelatestothe
NYCRS,thenumberofmemberswhocouldpotentiallybenefitfromthis
proposedlegislationcannotbereadilydetermined.
IMPACTONBENEFITS:WithrespecttotheNYCRS,amemberwhoservedin
theU.S.militaryandreceivedanhonorabledischargewouldbepermit
ted,aftercompletingfiveyearsofcreditedservice(exclusiveofthe
servicecreditthatcouldbepurchasedunderthisproposedlegislation),
topurchaseamaximumofthreeyearsofMilitaryService(inclusiveof
anypriorpurchasesofMilitaryServicecredit).
InordertopurchasetheMilitaryServicecreditsprovidedinthis
proposedlegislation,amembermusthavebeenhonorabledischarged
followingaperiodof"militaryduty"asdefinedinNewYorkStateMili
taryLawSection243.
Ifamember'sMilitaryServicemeetstheseconditions,thenthat
memberwouldbepermittedtopurchaseamaximumofthreeyearsofMili
taryService(inclusiveofanypreviouslyreceivedMilitaryService
credit)attributabletoanyperiodofthemember'smilitarycareer.
ForpurposesoftherespectiveNYCRS,eachyearofMilitaryService
creditpurchasedwouldapplytowardprovidingthememberwithayearof
benefitaccrualundertheparticularbenefitformulacoveringthe
member.
Incertaincircumstances,thememberalsomaybeentitledtoutilize
suchMilitaryServiceasqualifyingserviceforbenefiteligibility
purposes.
ForpurposesofthisFiscalNote,ithasbeenassumedthatmemberswho
purchaseMilitaryServiceinaccordancewiththisproposedlegislation
wouldgenerallybeentitledtocountsuchserviceforbenefitaccrual
purposesandforthepurposeofqualifyingforbenefits.
FINANCIALIMPACTOVERVIEW:Withrespecttoanindividualmember,the
additionalcostofthisproposedlegislationwoulddependonthelength
ofallNewYorkCityservice,age,salaryhistoryandPlaninwhichthe
memberparticipates,aswellasthenumberofyearsofservicecredit
purchased.
WithrespecttoemployersparticipatingintheNYCRS,theultimate
employercostofthisproposedlegislationwouldbedeterminedbythe
increaseinbenefitstobepaid,theimpactofcertainbenefitscommenc
ingearlierandthereductionincertainfuturemembercontributions.
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FINANCIALIMPACTACTUARIALPRESENTVALUES:TheadditionalActuarial
PresentValue("APV")ofbenefitswoulddependonthenumber,salaries,
agesandlengthsofMilitaryServicepurchasedbymemberswhowouldbe
affectedbythisproposedlegislation.
WithrespecttotheNYCRSandbasedonthecensusdataassumptions
herein,theenactmentofthisproposedlegislationwouldincreasethe
ActuarialPresentValue("APV")ofbenefits("APVB")byapproximately
$178.5millionasofJune30,2014.
Inaddition,withrespecttotheNYCRS,theAPVoffuturemember
contributions(primarilyattributabletothepaymentsbymembersof3.0%
(6.0%formemberswhofirstjoinonandafterApril1,2012)ofsalary
peryearofMilitaryServicepurchased)wouldincreasebyapproximately
$26.5millionwhenmeasuredasofJune30,2014.
Consequently,withrespecttotheNYCRS,theAPVofnetfutureemploy
ercontributionswouldincreasebyapproximately$152.0millionasof
June30,2014.
FINANCIALIMPACTANNUALEMPLOYERCOSTS:Theultimatecostofa
pensionplanisthebenefitsitpays.WithrespecttotheNYCRS,the
financingoftheultimatecostdependsuponthecensusdatausedandthe
actuarialassumptionsandmethodsemployed.Assumingthatalleligible
membersweretopurchasetheeligibleMilitaryServiceduringFiscal
Year2014andbasedontheActuary'sactuarialassumptionsandmethods
ineffectasofJune30,2013,theenactmentofthisproposedlegis
lationwouldincreaseannualemployercostsbyapproximately$18.0
millionperyear.
FINANCIALIMPACTEMPLOYERCONTRIBUTIONS:Theimpactoftheproposed
legislationonemployercontributionswouldbeafunctionofthecensus
data(i.e.,age/service/salary,etc)reportedtotheActuaryandofthe
timingofthememberselectingtobuybacktheirMilitaryService.
WithrespecttotheNYCRS,basedontheActuary'sactuarialassump
tionsandmethodsineffectasofJune30,2013,theenactmentofthis
proposedlegislationwouldultimatelyincreaseemployercontributionsby
approximatelytheestimatedadditionalannualemployercosts.
IfapplicationsforbuyingbackMilitaryServicewerecompletedduring
FiscalYear2014andtheNYCRScensusdatawereupdatedtoreflectthis
informationbyJune30,2014,thenemployercontributionswouldfirstbe
impactedforFiscalYear2016.
IftheMilitaryServicebuybackswerecompletedafterFiscalYear
2014,thentheincreaseinemployercontributionswouldbedelayed.
FINANCIALIMPACTSUMMARY:Thefollowingtablesummarizestheesti
matedfinancialimpactofthisproposedlegislationontheNYSCRS.
EstimatedFinancialimpacttoAllowMembersoftheNYCRS
toPurchaseuptoThreeYearsofMilitaryServiceCredit
($Millions)
Estimated
AdditionalFirstYear
AdditionalAPVofFutureAdditional
RetirementAPVofEmployerEmployer
SystemBenefitsContributionsCosts
NYCERS$48.5$40.8$4.8
NYCTRS14.411.91.4
BERS2.01.70.2
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POLICE92.679.49.4
FIRE21.018.22.2
TOTAL$178.5$152.0$18.0
ADDITIONALEMPLOYERCOSTSGENERAL:Ingeneral,therealcostofthe
enactmentofthisproposedlegislationwouldbetheadditionalbenefits
paid.
OTHERCOSTS:NotmeasuredinthisFiscalNoteistheimpactofthis
proposedlegislationontheManhattanandBronxSurfaceTransitOperat
ingAuthority("MaBSTOA")oronStateorLocalemployeeswithrespectto
theirparticipationintheNewYorkStateandLocalRetirementSystem
("NYSLRS")ortheNewYorkStateTeachers'RetirementSystem("NYSTRS").
Also,thisFiscalNotedoesnotincludeanalysesoftheimpactofthis
proposedlegislationontheexpectedincreasesinadministrativecosts
orcostsforOtherPostEmploymentBenefits("OPEB").
CENSUSDATA:ThecensusdatausedforestimatesofAPVofbenefitsand
employercontributionspresentedhereinaretheactivemembersincluded
intheJune30,2013(Lag)actuarialvaluationsofNYCERS,NYCTRS,BERS,
POLICE,andFIREusedtodeterminethePreliminaryFiscalYear2015
employercontributions.
ACTUARIALASSUMPTIONSANDMETHODS:AdditionalAPVofbenefits,of
membercontributionsandofemployercontributionshavebeenestimated
asofJune30,2014usingvariousapproximatingtechniquesandassump
tionsbytheActuary,including,butnotlimitedto:
*AcertainpercentageofVeteransbeinghonorablydischarged.
*Acertainpercentageofhonorablydischargedveteransbeingdisa
bled.
*DifferentpercentagesofmembersbyNYRCShavingpriorMilitary
Service.
*Eacheligiblememberpurchasinganaverageof2.5yearsoftheMili
taryService.
Changesinemployercontributionshavebeenestimatedassumingthe
increaseintheAPVofFutureEmploymentContributionswouldbefinanced
overatimeperiodcomparabletothatusedforactuariallossesunder
theEntryAgeActuarialCostMethod.Usingthisapproach,theAdditional
APVofFutureEmployerContributionswouldbeamortizedoveraclosed
15yearperiod(14paymentsunderOneYearLagMethodology)usinglevel
dollarpayments.
ECONOMICVALUESOFBENEFITS:Theactuarialassumptionsusedtodeter
minethefinancialimpactoftheproposedlegislationdiscussedinthis
FiscalNotearethoseappropriateforbudgetarymodelsanddetermining
annualemployercontributionstotheNYCES.
However,theeconomicassumptionsthatareusedfordetermining
employercontributionsdonotdevelopriskadjustedeconomicvaluesof
benefits.Suchriskadjusted,economicvaluesofbenefitswouldlikely
differsignificantlyfromthosedevelopedbythebudgetarymodels.
STATEMENTOFACTUARIALOPINION:I,RobertC.North,Jr.,amtheChief
ActuaryfortheNewYorkCityRetirementSystems.IamaFellowofthe
SocietyofActuariesandaMemberoftheAmericanAcademyofActuaries.
ImeettheQualificationStandardsoftheAmericanAcademyofActuaries
torendertheactuarialopinioncontainedherein.
FISCALNOTEIDENTIFICATION:Thisestimateisintendedforuseonly
duringthe2014LegislativeSession.ItisFiscalNote201404,dated
January30,2014,preparedbytheChiefActuaryfortheNewYorkCity
Employees'RetirementSystem,theNewYorkCityTeachers'Retirement
System,theNewYorkCityBoardofEducationRetirementSystem,theNew
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YorkCityPolicePensionFundandtheNewYorkFireDeportmentPension
Fund.
FISCALNOTE.PursuanttoLegislativeLaw,Section50:
ThisbillwouldamendSection1000oftheRetirementandSocialSecu
rityLawtoallowactivemembersofpublicretirementsystemsofNew
YorkStatetoclaimservicecreditforuptothreeyearsofmilitary
service,regardlessofwhenitwasperformed.Currently,activemembers
canreceiveservicecreditformilitaryserviceperformed,butonly
duringspecifiedperiodsofwar.Amembermusthaveatleastfiveyears
ofcreditedservicetobeeligibleandmakeapplicationforsuchcredit
beforetheeffectivedateofretirement.Toobtainsuchcredit,amember
mustmakepaymentsasrequiredinSection1000oftheRetirementand
SocialSecurityLaw.Tier1,2,3,4and5membersarerequiredtopay
threepercentofsalaryearnedduringthetwelvemonthsofcredited
serviceimmediatelyprecedingtheyearinwhichaclaimismadeforeach
yearofmilitaryservice.Tier6membersarerequiredtopaysixpercent
ofsalaryearnedduringthetwelvemonthsofcreditedserviceimmediate
lyprecedingtheyearinwhichaclaimismadeforeachyearofmilitary
service.
Itisnotpossibletodeterminethetotalannualcosttotheemployers
ofmembersoftheNewYorkStateTeachers'RetirementSystemsincethe
totalamountofservicecreditwhichwouldbeclaimedunderthisbill
cannotbeestimated.However,thecosttotheemployersofmembersof
theNewYorkStateTeachers'RetirementSystemisestimatedtobe
$21,700peryearofservicecreditedforTier1and2members,$20,500
peryearofservicecreditedforTier3and4members,$20,400peryear
ofservicecreditedforTier5membersand$15,000peryearofservice
creditedforTier6membersifthisbillisenacted.Thesecostswould
beoffsetbymemberpaymentsrequiredunderSection1000oftheRetire
mentandSocialSecurityLaw.
ThesourceofthisestimateisFiscalNote201415datedFebruary24,
2014preparedbytheActuaryoftheNewYorkStateTeachers'Retirement
Systemandisintendedforuseonlyduringthe2014LegislativeSession.
I,RichardA.Young,amtheActuaryfortheNewYorkStateTeachers'
RetirementSystem.IamamemberoftheAmericanAcademyofActuaries
andImeettheQualificationStandardsoftheAmericanAcademyofActu
ariestorendertheactuarialopinioncontainedherein.
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