S T A T E   O F   N E W   Y O R K
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                                 4819--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                             April 25, 2013
                               ___________

Introduced  by  Sen.  LANZA  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Veterans, Homeland Securi-
  ty and Military Affairs -- recommitted to the Committee  on  Veterans,
  Homeland  Security and Military Affairs in accordance with Senate Rule
  6, sec. 8 -- committee discharged, bill amended, ordered reprinted  as
  amended and recommitted to said committee

AN  ACT  to  amend  the  military  law,  in relation to non-contributory
  retirement service credit for members of the New York city  retirement
  systems  called  to  military duty on or after September eleventh, two
  thousand one

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. Section 243-d of the military law, as added by chapter 326
of the laws of 2005, is amended to read as follows:
  S 243-d. Non-contributory retirement service credit for members of the
New York state and local retirement systems, THE NEW YORK  CITY  RETIRE-
MENT SYSTEMS or the New York state teachers' retirement system called to
active  military  duty on or after September eleventh, two thousand one.
Notwithstanding any other provision of law, any member of the  New  York
state  and local employees' retirement system, THE NEW YORK CITY RETIRE-
MENT SYSTEMS, the New York state and local police  and  fire  retirement
system,  or the New York state teachers' retirement system who is called
to active military duty on or after September eleventh, two thousand one
and prior to January first, two thousand six, who is not  receiving  his
or her full salary from a participating employer and is otherwise eligi-
ble  to receive retirement service credit in such system for such active
military duty pursuant to section two hundred forty-two or  two  hundred
forty-three  of  this  article,  shall  not  be  required to make member
contributions to receive such credit.
  S 2. This act shall take effect immediately and  shall  be  deemed  to
have been in full force and effect on and after September 11, 2001.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05024-03-4
              

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  FISCAL NOTE.-- PROVISIONS OF PROPOSED LEGISLATION: The proposed legis-
lation would amend Military Law Section 243-d to provide non-contributo-
ry retirement service credit for any member of the New York City Retire-
ment  Systems  ("NYCRS")  who  was  called to active military duty on or
after  September  11,  2001  and  prior  to January 1, 2006, who did not
receive his or her full salary from a  participating  employer  and  who
otherwise  would be eligible to receive retirement service credit in the
NYCRS for such  active  military  service.  Such  member  would  not  be
required to make member contributions to receive such credit.
  It  is the understanding of the Actuary that the time period for which
such member was not receiving his or her full salary from a  participat-
ing  employer  would be the time period of such military service and not
the time period after the return of such member to his or her employment
with a participating employer of the NYCRS.
  The Effective Date of the proposed legislation would be  the  date  of
enactment  and  would be deemed to have been in full force and effect on
and after September 11, 2001.
  FINANCIAL IMPACT - SUMMARY: Enactment  of  this  proposed  legislation
would  increase the Unfunded Actuarial Accrued Liability ("UAAL"), where
such amount depends on the number  of  members  affected  and  upon  the
amount  of  military  service being credited as well as other character-
istics including the age and salary history of the affected members.
  Assuming that these affected  members  would  purchase  this  military
service  if  this  legislation  were  not enacted, the enactment of this
proposed legislation for each  member  affected  would  be  expected  to
result  in  an increase in the UAAL reflecting the impact of making such
purchases non-contributory.
  Under Military Law Section 243, captioned  "Provisions  applicable  to
public  employees who are absent on military duty," members who purchase
such service would contribute such  amount  as  he  or  she  would  have
contributed had his or her employment been continuous.
  Under  Military  Law  Section  244-a,  captioned "Credit to members of
public retirement systems for military service  performed  during  war,"
members  who  purchase  such  service would pay in full the cost of such
service (i.e., both the member cost and the employer cost).
  Under the Retirement and Social Security Law  ("RSSL")  Section  1000,
captioned  "Military  service credit," members who purchase such service
would contribute 3.0% of his or her compensation earned in the 12 months
of credited service immediately  preceding  the  date  that  the  member
purchases  this  service  times  the  number  of  years of service being
purchased.
  However, RSSL Section  1000  also  provides  that  a  member  who  has
purchased  military service pursuant to Military Law Section 244-a would
be entitled to a refund of the difference between the amount paid by the
member for such purchase and the amount that would be payable if service
had been purchased under RSSL Section 1000.
  Thus, for purposes of this Fiscal Note, it has been assumed  that  the
member would have purchased this service under RSSL Section 1000.
  Accordingly, the increase in the UAAL would be comparable to the value
of member contributions of 3.0% of his or her compensation earned in the
12  months  of  credited service immediately preceding the date that the
member purchases this service times the number of years of service being
purchased.
  For purposes of amortization of the increase in  UAAL,  in  accordance
with  Administrative  Code  of  the  City  of  New York ("ACNY") Section
13.638.2(k-2), the Actuary has roughly estimated the  remaining  working

S. 4819--A                          3

lifetimes  of  those  likely  to  utilize the provisions of the proposed
legislation to be 10 years. Under the One-Year Lag Methodology  ("OYLM")
used  to  finance  the  NYCRS,  an amortization period of 10 years would
include  nine  annual  payments  beginning  one year after the actuarial
valuation date.
  The following Table summarizes the estimated financial impact of  this
proposed legislation on the NYCRS:
                                 Table 1

     Estimated Financial Impact to Provide Non-Contributory Service
      Credit for Certain Members Called to Active Military Duty on
        and after September 11, 2001 and prior to January 1,2006

                              ($ Thousands)

                       Estimated Increase in
                       Unfunded Actuarial      Estimated Additional
Retirement System{1}   Accrued Liability       Annual Employer Costs{2}
NYCERS                         $459.2                   $72.9
TRS                             0.0{3}                  0.0{3}
BERS                            0.0{3}                  0.0{3}
POLICE                        3,774.9                   599.4
FIRE                            490.9                    77.9
 Total                       $4,725.0                  $750.2

{1} New York City Employees' Retirement System ("NYCERS")
    New York City Teachers' Retirement System ("TRS")
    New York City Board of Education Retirement System ("BERS")
    New York City Police Pension Fund ("POLICE")
    New York City Fire Department Pension Fund ("FIRE")
{2} Based on an amortization period of 10 years (9 payments under OYLM).
{3} De minimis.
  Increases  in  employer  contributions  would  be  comparable  to  the
increases in employer costs.
  If enacted during the 2014 Legislative Session and if  these  affected
members  and their amounts of military service being credited were iden-
tified on or before June 30, 2014, this proposed  legislation  would  be
expected  to  increase  employer  contributions  to  the NYCRS beginning
Fiscal Year 2016.
  OTHER COSTS: The enactment of this proposed legislation  would  result
in some administrative expenses for the NYCRS.
  CENSUS  DATA:  The  calculation of estimated changes in UAAL, employer
costs and employer contributions presented herein  is  based  upon  data
provided  by  NYCERS,  POLICE and FIRE. NYCERS reported that 179 members
were called to military duty between September 11, 2001 and December 31,
2005. POLICE provided data on 1,121 members who were called to  military
service between September 11, 2001 and December 31, 2005 along with each
member's  length  of  military service during that period and their rank
when called to duty. FIRE provided data on 185 members who were on mili-
tary service as of the end of each calendar year from 2001 through  2005
along  with their salary at the time they were called to duty. Estimates
were made for similar information for TRS and BERS  based  on  the  data
received from the other systems.
  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.

S. 4819--A                          4

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  2014-10,  dated
April 2, 2014 prepared by the Chief Actuary of the New York City Retire-
ment Systems.