S T A T E   O F   N E W   Y O R K
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                                  8335

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                              June 14, 2011
                               ___________

Introduced by M. of A. ABBATE -- read once and referred to the Committee
  on Governmental Employees

AN  ACT  to amend the retirement and social security law, in relation to
  permitting Triborough bridge and tunnel members of the twenty-year/age
  fifty retirement program who have incurred  contribution  deficiencies
  to defer full repayment until 2015

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

  Section 1. Paragraph 7-a of subdivision e  of  section  604-c  of  the
retirement  and  social  security  law, as amended by chapter 693 of the
laws of 2003, is amended to read as follows:
  7-a. Notwithstanding paragraph six or seven of this subdivision, where
a deficiency chargeable to a participant pursuant to paragraph three  of
this  subdivision  has  not been paid in full while the participant is a
Triborough bridge and tunnel member and such participant  retires  prior
to July first, two thousand [eleven] FIFTEEN, such participant may elect
to  be  covered by this paragraph. Such participant shall be entitled to
the benefits provided in subdivision c of  this  section  provided  that
participant  authorizes  the retirement system to deduct from such bene-
fits an amount which will result  in  the  deficiency,  plus  associated
interest to date of final payment, being paid in full no later than July
first,  two  thousand [eleven] FIFTEEN or such earlier date as agreed to
by the participant. Such amount will be deducted in  equal  installments
on  a monthly basis. Nothing in this paragraph shall prevent the partic-
ipant from making a partial payment of the amount of the  deficiency  at
the time of retirement so as to reduce the monthly payment nor to make a
lump  sum payment equal to the amount of the total unpaid balance at any
time during the period of repayment.
  S 2. This act shall take effect immediately.
  FISCAL NOTE.--PROVISIONS OF PROPOSED LEGISLATION: This proposed legis-
lation would amend Retirement and Social Security Law  ("RSSL")  Section

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10859-02-1
              

A. 8335                             2

604-c.e.7(a) to extend from June 30, 2011 to June 30, 2015 the right for
the Triborough Bridge and Tunnel Authority ("TBTA") employee participat-
ing  in  the TBTA Age 50 20 Years of Service Plan ("TBTA 50/20 Plan") to
retire with an Additional Member Contribution ("AMC") deficiency.
  The  Effective  Date  of the proposed legislation would be the date of
enactment.
  MEMBERS IMPACTED BY THE PROPOSED LEGISLATION: The proposed legislation
would cover active members of NYCERS ("Covered Members") who are partic-
ipating in the TBTA 50/20 Plan and who elect to retire between  July  1,
2011 and June 30, 2015.
  IMPACT  ON  BENEFITS  PAYABLE:  Under current law, Covered Members who
retire prior to July 1, 2011 are permitted to retire with an  AMC  defi-
ciency and repay that deficiency during retirement no later than July 1,
2011.
  The  proposed  legislation  would extend the July 1, 2011 date of this
provision to July 1, 2015.
  FINANCIAL IMPACT - OVERVIEW: The ultimate cost of this proposed legis-
lation depends on how many active TBTA 50/20 Plan participants choose to
retire between July 1, 2011 and June 30, 2015 and, if so,  whether  they
have, and choose not to pay off, any AMC deficiencies.
  FINANCIAL  IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: Under current prac-
tice actuarial gains or losses attributable to TBTA 50/20  Plan  partic-
ipants  who retire with an AMC deficiency are not determined until after
retirement.
  Following retirement, if a TBTA 50/20 Plan participant retires with an
AMC deficiency, the actuarial gain or loss is represented by the differ-
ence between the amount earned by the lesser amount of Plan assets  (due
to  paying the full benefit amounts without accounting for the AMC defi-
ciency) versus the interest amounts paid on the AMC deficiency.
  Overall, this impact is expected to be modest and the impact on annual
employer contributions is expected to be minor.
  If enacted on or before June 30, 2011, this proposed legislation would
be expected to change employer contributions to NYCERS beginning  Fiscal
Year 2014 after Covered Members retire during Fiscal Year 2012.
  If enacted during the 2011 Legislative Session after June 30, 2011 but
on  or  before  December  31, 2011, this proposed legislation would also
first impact employer contributions  to  NYCERS  beginning  Fiscal  Year
2014.
  FINANCIAL  IMPACT  -  POTENTIAL  CHANGES  IN ACTUARIAL ASSUMPTIONS AND
METHODS: The impact of enactment of the proposed legislation provided in
this Fiscal Note has been based on the continued use of certain  current
actuarial assumptions and methods.
  However,  this  set of actuarial assumptions and methods do not repre-
sent the only possible approach for funding NYCERS.
  Historically, actuarial assumptions and methods have been reviewed  on
average  every  five  years  in  connection with an actuarial experience
study mandated by New York City Charter Section 96.
  Following this review, the Actuary generally proposes changes in actu-
arial assumptions and methods  that  he  believes  are  appropriate  and
reasonably related to such experience period and future expectations.
  The  next  such review is anticipated during Fiscal Year 2012 at which
time the Actuary is likely to propose new packages of actuarial  assump-
tions  and  methods  to  be  effective  for  use in determining employer
contributions beginning Fiscal Year 2012.
  It is anticipated that whatever new actuarial assumptions  are  recom-
mend  by the Actuary are likely to result in increased APVB and employer

A. 8335                             3

costs as the current  actuarial  assumptions  no  longer  represent  the
Actuary's best estimates.
  Note:  The  Actuary  has not yet committed to any particular actuarial
assumptions or methodology for determining employer costs  and  employer
contributions  in  connection  with  the  upcoming, experience review of
actuarial assumptions and methods.
  OTHER COSTS: The enactment of this proposed legislation would also  be
expected  to  result  in  minor  increases in administrative expenses of
NYCERS, the employer and certain New York City agencies.
  CENSUS DATA: As of June 30, 2010, census data consisted  of  891  TBTA
50/20  Plan participants of NYCERS with annual salaries of approximately
$62.3 million.
  The subset of Covered Members who  are  potentially  affected  by  the
proposed  legislation  (i.e.,  eligible  to retire on or before June 30,
2015) consisted of 121 Tier IV members with  salaries  of  approximately
$10.4  million whose average age and average service as of June 30, 2010
were 50.8 years and 22.5 years, respectively.
  ACTUARIAL ASSUMPTIONS AND METHODS: Additional APVB, employer costs and
employer contributions  have  been  estimated  based  on  the  actuarial
assumptions  and methods in effect for the June 30, 2010 (Lag) actuarial
valuation of NYCERS for use in determining the Fiscal Year 2012 employer
contributions.
  Additional annual employer costs and employer contributions have  been
estimated  assuming any additional APVB would be financed through future
normal contributions.
  As stated earlier, the Actuary is likely to propose  new  packages  of
actuarial assumptions and methods to be effective for use in determining
employer  contributions  beginning  Fiscal  Year  2012. As such, not all
assumptions employed in determining the results contained in this Fiscal
Note for Fiscal Years 2012 and later  represent  the  Actuary's  current
best estimate of future experience. However, most of the assumptions and
methods  used  to  determine  the results contained herein are generally
those adopted by the NYCERS Board of Trustees and enacted by  the  State
Legislature  and  Governor,  and  provide  consistency with the employer
contributions currently being presented.
  Finally, the actuarial assumptions currently employed for  determining
employer  contributions  do not represent risk-adjusted, economic evalu-
ations. As risk-adjusted, economic evaluations could, for certain compo-
nents of the proposed legislation, produce results that  differ  signif-
icantly from the results shown herein.
  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 2011 Legislative Session. It is Fiscal  Note  2011-21,  dated
June  13,  2011,  prepared  by  the  Chief Actuary for the New York City
Employees' Retirement System.