Relates to the right of vested members to withdraw from the New York city teachers' retirement system; allows a member who has permanently ceased teaching in New York to elect to withdraw his/her accumulated contributions to enable the member to obtain credit for the teaching service in another state provided such member has at least five years of service credit in that system, and the withdrawal must be necessary in order for the member to obtain credit in the other system.
TITLE OF BILL: An act to amend the administrative code of the city of New York, in relation to the right of vested members to withdraw from the New York city teachers' retirement system
PURPOSE OF THE BILL; This bill would allow certain Tiers 3, 4 and 5 vested members of the New York City Teachers' Retirement System who have permanently ceased teaching to withdraw from membership in the System.
SUMMARY AND JUSTIFICATION: Tier 1 and 2 members of the System have an unrestricted right to terminate their memberships with the System and withdraw their accumulated contributions, if any, from the System. No similar right, however, has been extended to members of the System provided benefits under Articles 14 and 15 of the Retirement and Social Security Law. Once Tier 3, 4 and 5 members have accumulated 10 years of credited service with the system, they are locked into System membership even where it may not be to their advantage.
It is not always to a Tier 3, 4 or 5 member's advantage to have his/her membership in the System continue after he or she has ceased teaching in New York state. Specifically, teachers who have been compelled by circumstances to leave New York state and take up residence in other states may have the opportunity to obtain credit for their New York service in the public employee retirement systems of other states provided they are not entitled to a benefit from the system for that service. Allowing Tiers 3, 4 and 5 members to withdraw from the System in that circumstance so that they can obtain credit for their New York service in another state would make their service portable.
This bill would amend the administrative code sec. 13-541. This would allow a member of the system subject to Article 14 or 15 of the Retirement and Social Security Law who has permanently ceased teaching in New York to elect to withdraw his/her accumulated contributions and thereby terminate his/her membership in the System where the purpose of the withdrawal is to enable the member to obtain credit for the teaching service in a public employee retirement system in another state. The retirement system in the other state must certify that the member seeking withdrawal is a member of that system, that the member has at least five years of service credit in that system, and that withdrawal from the System is necessary in order for the member to obtain credit for the member's New York service in the other system. Upon payment of the accumulated contributions to the member, any and all obligations of the System to the member would cease. This legislation parallels provisions of C.553 2011 which applies to members of the NYS Teacher's Retirement System
FISCAL IMPLICATIONS: There are no fiscal implications to the State.
EFFECTIVE DATE: The bill would take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 6224--A IN SENATE January 13, 2012 ___________Introduced by Sen. GOLDEN -- read twice and ordered printed, and when printed to be committed to the Committee on Cities -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the administrative code of the city of New York, in relation to the right of vested members to withdraw from the New York city teachers' retirement system THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 13-541 of the administrative code of the city of New York, as amended by chapter 854 of the laws of 1985, is amended to read as follows: S 13-541 Termination of membership; resignation, transfer or dismiss- al. 1. Withdrawals from the retirement association shall be by resigna- tion, by transfer, or by dismissal. Should a contributor resign from the position by virtue of which he or she is a contributor under the provisions of this chapter, or should he or she, upon transferring from such a position to another position in the city-service, fail to become a transferred-contributor as provided in section 13-523 of this chapter, his or her membership in such association shall cease except as provided in section 13-556 of this code and he or she shall be paid forthwith the full amount of the accumulated deductions standing to the credit of his or her individual account in the annuity savings fund. 2. NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO THE CONTRARY, ANY MEMBER OF THE RETIREMENT ASSOCIATION SUBJECT TO ARTICLE FOURTEEN OR FIFTEEN OF THE RETIREMENT AND SOCIAL SECURITY LAW WHO HAS PERMANENTLY CEASED TEACHING SHALL HAVE THE RIGHT TO ELECT THE RETURN OF HIS OR HER ACCUMULATED CONTRIBUTIONS AND THEREBY TERMINATE HIS OR HER MEMBERSHIP IN THE RETIREMENT ASSOCIATION WITHOUT REGARD TO THE AMOUNT OF SERVICE TO HIS OR HER CREDIT, PROVIDED A PUBLIC EMPLOYEE RETIREMENT SYSTEM IN ANOTHER STATE HAS CERTIFIED IN A MANNER SATISFACTORY TO THE SYSTEM THAT SUCH MEMBER IS A MEMBER OF SUCH OTHER RETIREMENT SYSTEM, HAS AT LEAST FIVE YEARS OF RETIREMENT CREDIT IN SUCH OTHER SYSTEM, AND IS ELIGIBLE, UPON THE TERMINATION OF HIS OR HER MEMBERSHIP IN THE SYSTEM, TO OBTAINEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD13999-03-2 S. 6224--A 2
RETIREMENT CREDIT IN SUCH OTHER RETIREMENT SYSTEM FOR THE SERVICE WHICH HAS BEEN CREDITED TO HIS OR HER MEMBERSHIP IN THE SYSTEM. UPON REFUND OF SUCH ACCUMULATED CONTRIBUTIONS, ANY AND ALL OBLIGATIONS OF THE RETIRE- MENT ASSOCIATION TO SUCH MEMBER SHALL BE TOTALLY DISCHARGED. THE TEACH- ERS' RETIREMENT BOARD IS AUTHORIZED TO ADOPT SUCH RULES AND REGULATIONS AS MAY BE NECESSARY TO IMPLEMENT THIS SUBDIVISION. S 2. This act shall take effect immediately. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: PROVISIONS OF PROPOSED LEGISLATION: This proposed legislation would amend Administrative Code of the City of New York ("ACNY") Section 13-541 to allow certain Tier III and Tier IV members of the New York City Teacher's Retirement System ("TRS") to withdraw their memberships from TRS under certain conditions. For purposes of this Fiscal Note, the references herein to Tier IV include those TRS members who dates of membership are on or after April 1, 2012 (a.k.a., Tier VI members). Specifically, this proposed legislation would permit a Tier III or Tier IV member of TRS who has permanently ceased teaching to elect the return of his or her accumulated member contributions and terminate his or her membership in TRS without regard to the amount of service to his or her credit. As a condition necessary to this election, a Public Employee Retire- ment System ("PERS") in another state must certify in a manner satisfac- tory to TRS that such member is a member of such other PERS, has at least five years of retirement credit in such other PERS, and is eligi- ble, upon the termination of his or her membership in TRS, to obtain retirement credit in such other PERS for the service which has been credited to his or her membership in TRS. Upon refund to the member of his or her accumulated member contrib- utions, any and all obligations of TRS to the member would be totally discharged. The TRS Retirement Board would be authorized to adopt such rules and regulations as may be necessary to implement this subdivision. Note: One of the consequences to a member withdrawing from TRS would be to eliminate the opportunity of the member to receive any Other Postemployment Benefits ("OPEB") from the City of New York or other former employer participating in TRS. FINANCIAL IMPACT - ACTUARIAL PRESENT VALUE OF BENEFITS AND EMPLOYER CONTRIBUTIONS: For most members likely to elect the provisions of this proposed legislation, enactment would result in a modest reduction in the Actuarial Present Value of Benefits ("APVB") and employer contrib- utions to TRS. OTHER COSTS: The enactment of this proposed legislation would result in some administrative expenses for TRS. The enactment of this proposed legislation would, for certain members, result in a reduction in the obligations for OPEB benefits from their former employers. 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 2012 Legislative Session. It is Fiscal Note 2012-11, dated May 24, 2012 prepared by the Chief Actuary of the New York City Teach- ers' Retirement System.