Relates to certain members who re-enter public service; extends tier reinstatement provisions to a retiree of a public retirement system who was an active member of a public retirement system on or after January 1, 1989.

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S7135A-2011 Actions

• Jun 1, 2012: PRINT NUMBER 7135A
• Jun 1, 2012: AMEND AND RECOMMIT TO CIVIL SERVICE AND PENSIONS
• Apr 30, 2012: REFERRED TO CIVIL SERVICE AND PENSIONS

S7135A-2011 Memo

BILL NUMBER:S7135A

TITLE OF BILL:
An act to amend the retirement and social security law, in relation to
certain members who re-enter public service

PURPOSE:
This bill seeks to reinstate the remaining public employees who lost
their tier membership due to family care giving responsibilities. By
moving the effective date of Chapter 640 to January I, 1989, this bill
will reinstate the remainder of the retirement system members who were
deprived of their membership in superior pension plans due to the break
in the service rules.

SUMMARY OF PROVISIONS:
This bill amends subdivisions 2 and 4 of section 645 of the retirement
and social security law.

JUSTIFICATION:
This bill gives New York State the opportunity to correct a long-stand-
ing inequity at a moderate cost. In 1998, the Governor signed a law
reinstating New York State and City active teachers to their original
pension system tier membership. In 1999, pursuant to 55944, the Governor
signed a law expanding the reinstatement to all active public employees.
In the Governor's press release, he affirmed the importance of righting
the inequity done to thousands of public employees who were forced opt
of their jobs and pension plan due to pregnancy and family care giving
responsibilities. Each member who was reinstated forfeited any claim to
a return of the contributions they had made to the retirement systems
while they were members of lesser tiers.  However, reinstated members
were. refunded the amounts that they had paid to the retirements systems
for prior service credit purchases.  This bill pertains to a very limit-
ed and definable number of retirement system members. Public employees
before 1973 were assured by pension system representatives that they
could leave and return to work without effect on their benefits. For
example, a New York State teacher who left teaching, generally for
reasons related to the female work pattern i.e. childbirth and attending
to small children, stayed out beyond the "break in service" period, and
returned to find themselves in a lesser pension plan. Had they been
properly informed, they could have taught as little as twenty days in
anyone year within the five year period and remained in Tier I when they
returned to full time teaching. The average teacher lost between $9,000
and $1,000 per year in pension benefits and the right to retire at age
55 instead of 52 without penalty. It is unlikely that any members of the
police and fire pension systems will be eligible because so few women
were members in the 1960s and early 70s. As to the New York City Teach-
ers pension plan, the vast majority of teachers that left for care
giving responsibilities were protected by the generous New York City
maternity rules.

LEGISLATIVE HISTORY:

2009/10 A.7219 Died Gov't Employees, S.3634 Died Civil Service
2007/08 A.9524 Died Gov't Employees, S.4447 Passed Senate
2005/06 A.5131 Died Gov't Employees, S.3518 Passed Senate
2003/04 A.5392 Died Gov't Employees, S.3039 Died Rules
2001/02 A.2903 Died Gov't Employees, S.2172 Died Civil
        Service & Pensions
1999/00 A.10911 Died Gov't Employees, S.6127 Died Civil
        Service & Pensions

FISCAL IMPLICATIONS:

FISCAL NOTE #2012-143 - PURSUANT TO LEGISLATIVE LAW,
SECTION 50:
This bill would allow certain living retirees of New York public
retirement systems who retired prior to December 16, 1999 and who
previously were members of a New York Public retirement system to be
deemed to have become members of the systems from which they retired
as of the original date of such previous ceased membership. Tier 3
and 4 retirees of the New York State and Local Employees' Retirement
System or the New York State Teachers' Retirement System who become
Tier I or 2 retirees and who have already purchased their previous
service would receive a refund of these contributions. No benefits
will be deemed to have accrued prior to the effective date of this act.

If this bill is enacted, insofar as this bill affects the New York
State and Local Employees' Retirement System (NYS&LERS),
approximately 1,484 retirees of the NYS&LERS will be affected. The
estimated additional annual increase in contributions would be
approximately $15.9 million. This cost will be shared by the State of
New York and all participating employers in the NYS&LERS.

Insofar as this bill would affect employers in the New York State and
Local Police and Fire Retirement System (NYS&LPERS), the estimated
additional costs would be negligible.

In addition there will be cost for retirees who had a previous ceased
membership with a public employee retirement system other than the
NYS&LERS or the NYS&LPFRS. These costs would depend upon the number
of retirees affected and upon each retiree's age, salary, credited
service, plan coverage and tier. The number of retirees with such
previous ceased membership with another public retirement system
cannot be readily determined. These additional costs would be shared
by the State of New York and all participating employers in their
respective systems.

This estimate, dated May 24, 2012 and intended for use only during
the, 2012 Legislative Session is Fiscal Note No. 2012-143, prepared
by the Actuary for the NYS&LERS and the NYS&LPFRS.

FISCAL NOTE - PURSUANT TO LEGISLATIVE LAW, SECTION 50:
This bill would amend subdivisions 2 and 4 of section 645 of the
Retirement and Social.

Security Law to extend the tier reinstatement provisions to any
retiree of a public retirement system. The retiree must be alive as
of the effective date of the bill in order to be eligible; This bill
only applies to payments made on or after the effective date of this
act.

The annual cost to the employers of members of the New York State
Teachers' Retirement System for this benefit is estimated to be $7.0
million or .0515 of payroll if this bill is enacted.

The source of this estimate is Fiscal Note 2011-42 dated May 4, 2011
prepared by the Actuary of the New York State Teachers' Retirement
System and is intended for use only during the 2011 legislative
session.

EFFECTIVE DATE:
This act shall take effect immediately but shall only apply to persons
alive as of the effective date of this act and shall Apply to
payments made on or after the effective date of this act; and provided
further, that any retirees qualifying under this act shall have their
retirement allowance recalculated from July 1, 2012 or the date of
reinstatement, whichever is later.

S7135A-2011 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                   7135--A

                              I N  SENATE

                               April 30, 2012
                                 ___________

  Introduced  by  Sens.  SEWARD,  LARKIN,  LIBOUS, YOUNG -- read twice and
    ordered printed, and when printed to be committed to the Committee  on
    Civil  Service  and  Pensions  --  committee discharged, bill amended,
    ordered reprinted as amended and recommitted to said committee

  AN ACT to amend the retirement and social security law, in  relation  to
    certain members who re-enter public service

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


    Section 1. Subdivisions 2 and 4 of section 645 of the  retirement  and
  social security law, subdivision 2 as amended by chapter 322 of the laws
  of  2002  and  subdivision 4 as added by chapter 640 of the laws of 1998
  and as renumbered by chapter 646 of the laws of  1999,  are  amended  to
  read as follows:

    2.  Notwithstanding any other provision of law, any person [other than
  a retiree of a public retirement system,] who previously was a member of
  a public retirement system and whose membership in such  public  retire-
  ment  system  ceased  by reason of (i) insufficient service credit, (ii)
  withdrawal of accumulated contributions, or (iii) withdrawal of  member-
  ship,  upon  rejoining  such  public retirement system or another public
  retirement system, shall be deemed to have been a member of his  or  her
  current  retirement  system  during the entire period of time commencing
  with and subsequent to the original date of such previous ceased member-
  ship, provided that such person (a) makes application  therefor  to  the
  administrative  head of his or her current public retirement system, and
  (b) repays the amount refunded,  if  any,  at  the  time  such  previous
  membership  ceased,  together  with interest at the rate of five percent
  per annum compounded annually from the date of such refund  through  the
  date  of  repayment. Upon such reinstatement of date of membership, such
  member shall be entitled to all the rights, benefits and  privileges  to
  which  he or she would have been entitled had his or her current member-
  ship begun on such original date of membership except that,  solely  for
  the  purposes  of  granting  retirement  credit  to  members of a public
  retirement system other than the  New  York  city  teachers'  retirement
  system for service credited during such previous ceased membership where

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD02318-05-2

 S. 7135--A                          2

  such  was  in a public retirement system other than the member's current
  retirement system, such previously credited service shall be  deemed  to
  be  prior service, not subsequent service.  Furthermore, any such member
  whose  original  date  of  membership  was prior to July first, nineteen
  hundred seventy-three shall be entitled to all the rights, benefits  and
  privileges  to  which  he  or she would have been entitled had he or she
  been in active service on  June  thirtieth,  nineteen  hundred  seventy-
  three. Any contribution made to the public retirement system pursuant to
  article fourteen or fifteen of this chapter by a member who rejoined his
  or  her current system on or after July twenty-seventh, nineteen hundred
  seventy-six shall not be refunded.
    4. The provisions of this article shall be applicable to a person  who
  [is,  on  the  date  this  article becomes effective] WAS A MEMBER ON OR
  BEFORE JANUARY FIRST, NINETEEN HUNDRED EIGHTY-NINE, or who subsequent to
  such date becomes, a member of a public retirement system.
    S 2. This act shall take effect immediately and shall  only  apply  to
  all persons who are alive as of the effective date of this act and shall
  apply  to  payments made on or after the effective date of this act; and
  provided further, that any retirees qualifying under this act shall have
  their retirement allowance recalculated from July 1, 2012 or the date of
  reinstatement, whichever is later.
    FISCAL NOTE.-- Pursuant to Legislative Law, Section 50:

    This bill would allow certain  living  retirees  of  New  York  public
  retirement systems who retired prior to December 16, 1999 and who previ-
  ously  were  members of a New York public retirement system to be deemed
  to have become members of the systems from which they retired as of  the
  original  date of such previous ceased membership. Tier 3 and 4 retirees
  of the New York State and Local Employees' Retirement System or the  New
  York  State  Teachers' Retirement System who become Tier 1 or 2 retirees
  and who have already purchased their previous service  would  receive  a
  refund  of  these  contributions.    No  benefits will be deemed to have
  accrued prior to the effective date of this act.
    In addition, this bill would also affect retirees who had  a  previous
  ceased  membership  with  a public employee retirement system other than
  the NYS & LERS or the NYS & LPFRS.
    If this bill is enacted, insofar as this bill  affects  the  New  York
  State  and Local Employees' Retirement System (ERS), approximately 1,484
  retirees of the ERS will be affected. The estimated  past  service  cost
  would be approximately $15.9 million.
    Pursuant to section 25 of the Retirement and Social Security Law, this
  ERS  past service cost would be borne by the State of New York and would
  require an itemized appropriation by the State of New York sufficient to
  pay the cost of the provision. The State may amortize this past  service
  cost  over  a period of 5 years. The first year cost, including interest
  would be approximately $3.7 million.
    Insofar as this bill would affect employers in the New York State  and
  Local Police and Fire Retirement System (PFRS), the estimated additional
  costs  would  be negligible. These costs would be shared by the State of
  New York and the participating employers in the PFRS.
    Summary of relevant resources:

    Data: March 31, 2011 Actuarial Year End  File  with  distributions  of
  membership  and  other  statistics  displayed  in the 2011 Report of the
  Actuary and 2011 Comprehensive Annual Financial Report.
    Assumptions and Methods: 2010 and 2011  Annual  Report  to  the  Comp-
  troller  on  Actuarial  Assumptions,  Codes Rules and Regulations of the
  State of New York: Audit and Control.

 S. 7135--A                          3

    Market Assets and GASB Disclosures: March 31, 2011 New York State  and
  Local  Retirement System Financial Statements and Supplementary Informa-
  tion.
    Valuations  of Benefit Liabilities and Actuarial Assets: summarized in
  the 2011 Actuarial Valuations report.
    I am a member of the American Academy of Actuaries and meet the Quali-
  fication Standards to render the actuarial opinion contained herein.
    This estimate, dated May 24, 2012 and intended for use only during the
  2012 Legislative Session, is Fiscal Note No. 2012-143, prepared  by  the
  Actuary  for  the  New York State and Local Employees' Retirement System
  and the New York State and Local Police and Fire Retirement System.