BILL NUMBER: S6972
TITLE OF BILL :
An act to provide temporary retirement incentive for certain public employees
PURPOSE OF THE BILL :
This bill would enact a temporary retirement incentive program for certain public employees above age 55 and with 25 years of service.
SUMMARY OF PROVISIONS OF THE BILL :
Section 1 of the bill describes the purpose of the bill.
Sections 2 of the bill would set forth legislative findings.
Section 3 of the bill would define relevant terms. In particular, an "eligible employee" is defined as a member of the New York State Teachers Retirement System (TRS) or the New York State and Local Employees Retirement System (ERS) in a position represented by the recognized collective bargaining units affiliated with New York State United Teachers (NYSUT). A "participating employer" is defined as an educational employer, the State University of New York (SUNY) or a community college.
Section 4 of the bill would provide that an eligible employee in an eligible title who has been in continuous service from February 1, 2010 to the date prior to the commencement date of the open period provided for by this bill would be eligible for a service retirement in accordance with section 5 of the bill.
Section 5 of the bill would provide that an eligible employee who meets the terms of the section can retire during the open period if he or she is 55 years of age or older, and has at least 25 years or more of creditable service.
Section 6 of the bill would provide that it would not impact other retirement incentives provided for by collective bargaining agreements negotiated before the effective date.
Section 7 of the bill sets forth a severability clause.
Section 8 of the bill provides that it would take effect immediately.
EXISTING LAW :
Under current law, affected employees retire depends upon various factors, including age and years of service. The majority of teachers are presently governed by Article 15 of the Retirement and Social Security Law, under which they may retire without penalty upon reaching age 55 with 30 years of service or age 62 with at least 5 years of service.
STATEMENT IN SUPPORT :
Language expressing the intent to enact a 55/25 early retirement option for employees in who are members of TRS and ERS and who are in bargaining units represented by NYSUT was included as part of Chapter 504 of the laws of 2009. This bill implements that intent.
This temporary retirement option will provide budgetary flexibility to school districts, SUNY and community colleges while averting layoffs at the same time. BUDGET IMPLICATIONS :
The estimated annual cost to employers of TRS members is $13.2 million. For every 100 employees in ERS who participate in this incentive, there would be a cost of $260,000 to the State and $360,000 to participating employers. The fiscal note estimates that less than 1000 ERS members will participate.
EFFECTIVE DATE : This bill would be effective immediately upon enactment.
STATE OF NEW YORK ________________________________________________________________________ 6972 IN SENATE March 2, 2010 ___________Introduced by Sens. SAVINO, OPPENHEIMER -- (at request of the Governor) -- read twice and ordered printed, and when printed to be committed to the Committee on Civil Service and Pensions AN ACT to provide temporary retirement incentive for certain public employees THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. This act enacts into law components of legislation that would establish an age 55/25 temporary incentive for certain public employees. S 2. Legislative findings. The legislature finds and declares that the retirement benefit for certain public employees who are above age 55 and with 25 years of service provided for in this act is intended only to be temporary in nature for employees who are eligible to receive and quali- fy for the applicable benefit during the applicable time periods speci- fied in this act. Further, nothing in this act shall be construed to create an expectation of a future or continuing retirement benefit for any public employee who is not eligible to receive and qualify for the retirement benefits herein during the applicable time periods. S 3. Definitions. As used in this act, unless the context clearly requires otherwise: (a) "Retirement system" means the New York state and local employees' retirement system and the New York state teachers' retirement system. (b) "Teachers' retirement system" means the New York state teachers' retirement system. (c) "Participating employer" means an educational employer, the state- operated institutions of the state university of New York, and a commu- nity college operating under a program of the state university of New York, which participates in a retirement system as defined in this section, who employs members who hold positions represented by the recognized collective bargaining units affiliated with the New York state united teachers employee organization. (d) "Educational employer" means a participating employer which is a school district, a board of cooperative educational services, a voca-EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD12189-05-0 S. 6972 2
tional education and extension board, an institution for the instruction of the deaf and of the blind as enumerated in section 4201 of the educa- tion law, or a school district as enumerated in section 1 of chapter 566 of the laws of 1967, as amended; who employ members who hold positions represented by the recognized collective bargaining units affiliated with the New York state united teachers employee organization who participate in the New York state teachers' retirement system and the New York state and local employees' retirement system. (e) "Eligible employee" means a person who is a member of a retirement system, who is an employee of a participating employer and who holds a position represented by the recognized collective bargaining units affiliated with the New York state united teachers employee organization as certified by his or her employer, who makes an election under section five of this act. (f) "Active service" means service while being paid on the payroll, provided that (i) a leave of absence with pay shall be deemed active service; (ii) other approved leave without pay not to exceed twelve weeks from February 1, 2010 and the commencement of the designated open period; and (iii) the period of time subsequent to the June 2010 school term and on or before August 31, 2010 for a teacher (or other employee as defined in this act, employed on a school-year basis) who is other- wise in active service on the effective date of this act shall be deemed active service. (g) "Open period" means the period beginning with the commencement date as defined in subdivision (h) of this section; provided, however, for the state-operated institutions of the state university of New York and community colleges, the open period shall be as specified by the appropriate board of trustees, and shall be ninety days in length; provided however that there shall be only one such open period and any such period shall not extend beyond August 31, 2010 for educational employers and shall not extend beyond December 31, 2010 for the state- operated institutions of the state university of New York and community colleges. For the purposes of retirement pursuant to this act, a service retirement application must be filed with the appropriate retirement system not less than fourteen days prior to the effective date of the retirement. (h) "Commencement date" means the first day the retirement benefit mandated by this act shall be made available, which shall mean a date or dates on or after the effective date of this act to be determined by a participating employer; provided, however, that for an educational employer, the commencement date shall be June 1, 2010. S 4. Notwithstanding any other provision of law, any eligible employee serving in an eligible title who (a) has been continuously in the active service of a participating employer from February 1, 2010 to the date immediately prior to the commencement date of the applicable open peri- od, (b) files an application for service retirement that is effective during the open period, and (c) is otherwise eligible for a service retirement as of the effective date of the application for retirement shall be entitled to the retirement benefit provided in section five of this act. S 5. Notwithstanding any other provision of law, an eligible employee who is: (a) a member of a retirement system, and (b) entitled to a retirement benefit pursuant to section four of this act may retire during the open period without the reduction of his or her retirement benefit that would otherwise be imposed by article 11 or 15 of the retirement and social security law if he or she has attained the age ofS. 6972 3
55 and has completed at least 25 or more years of creditable service. An eligible employee who is covered by the provisions of articles 11 and 15 of the retirement and social security law shall retire under the provisions of articles 11 and 15 of the retirement and social security law. S 6. Notwithstanding any other provision of law, this act shall have no impact on retirement incentives, options or inducements offered as part of a contractual agreement between an eligible employee and eligi- ble employer which were negotiated prior to the effective date of this act. S 7. Severability clause. If any clause, sentence, paragraph, subdi- vision, section or part of this act shall be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, subdivision, section or part thereof directly involved in the controversy in which such judg- ment shall have been rendered. It is hereby declared to be the intent of the legislature that this act would have been enacted even if such invalid provisions had not been included herein. S 8. This act shall take effect immediately. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: This bill would eliminate the early retirement reductions for Tier 2, 3 and 4 members of the New York State and Local Employees' Retirement System (ERS) and the New York State Teachers' Retirement System who are employed by educational institutions, whose positions are represented by NYSUT and who retire within their employer's 90 day open election peri- od, which may not extend beyond December 31, 2010. The exact number of members who would be affected by this cannot be readily determined. If this bill is enacted, insofar as it affects the New York State and Local Employees' Retirement System (ERS), the additional cost for each member who receives these benefits will vary depending on the member's age, years of service, plans and final average salary. We estimate that the per-member cost could average approximately 110% of a member's final average salary. We anticipate that the number of participants will be less than 1000. For every 100 participants, we estimate that there would be an increase in the annual contributions of approximately $260,000 to the State of New York and $360,000 to the participating employers in the ERS. This estimate, dated January 8, 2010, and intended for use only during the 2010 Legislative Session, is Fiscal Note No. 2010-66, prepared by the Actuary for the New York State and Local Employees' Retirement System. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: This bill would provide a temporary retirement incentive during fiscal year 2010-2011. This incentive would permit eligible Tier 2, 3 and 4 members to retire without early retirement reductions upon attainment of at least age 55 with 25 years of service. Currently 30 years of service are required in order to retire without reduction. In order to receive this benefit, a member must retire during the designated 90-day open period, beginning on June 1, 2010 for educational employers. In order to be eligible, a member must be an employee of a participating employer and hold a position represented by one of the recognized collective bargaining units affiliated with the New York State United Teachers (NYSUT) as certified by his or her employer. The cost of this incentive will be socialized across all employers.S. 6972 4 The annual cost to the employers of members of the New York State Teachers' Retirement System for this benefit is estimated to be $13.2 million or .09% of payroll if this bill is enacted. The source of this estimate is Fiscal Note 2010-11 dated February 24, 2010 prepared by the Actuary of the New York State Teachers' Retirement System and is intended for use only during the 2010 Legislative Session.