S T A T E   O F   N E W   Y O R K
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                                   7529
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                               June 2, 2023
                                ___________
 
 Introduced  by Sen. SCARCELLA-SPANTON -- read twice and ordered printed,
   and when printed to be committed to the Committee on Rules
 
 AN ACT to amend the retirement and social security  law,  the  education
   law  and  the administrative code of the city of New York, in relation
   to supplemental military retirement allowances for members  of  public
   retirement systems of the state
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 1000 of the retirement and social security  law  is
 amended by adding a new subdivision 8-a to read as follows:
   8-A.  A  PERSON  WHO  RETIRED  PRIOR TO MAY THIRTY-FIRST, TWO THOUSAND
 SIXTEEN AND WHO WOULD HAVE BEEN  ENTITLED  TO  THE  PROVISIONS  OF  THIS
 SECTION,  MAY  MAKE  APPLICATION TO SUCH RETIREMENT SYSTEM NO LATER THAN
 DECEMBER THIRTY-FIRST, TWO THOUSAND TWENTY-FOUR FOR A SUPPLEMENTAL MILI-
 TARY RETIREMENT ALLOWANCE PURSUANT TO THIS  SUBDIVISION.    THE  SUPPLE-
 MENTAL  RETIREMENT  ALLOWANCE  PROVIDED  BY THIS SUBDIVISION SHALL BE IN
 LIEU OF ANY BENEFIT OTHERWISE PROVIDED PURSUANT TO THIS SECTION AND  ANY
 CREDIT  GRANTED  FOR MILITARY SERVICE WITH ANY RETIREMENT SYSTEM OF THIS
 STATE PURSUANT TO ANY OTHER SECTION OF LAW.  UPON RECEIPT OF AN APPLICA-
 TION, THE RETIREMENT SYSTEM SHALL DETERMINE THE AMOUNT OF SERVICE CREDIT
 SUCH PERSON WOULD HAVE BEEN ENTITLED TO RECEIVE PURSUANT TO SUBDIVISIONS
 ONE AND TWO OF THIS SECTION, SUBJECT TO  THE  LIMITATIONS  CONTAINED  IN
 THIS SECTION. THE SUPPLEMENTAL MILITARY RETIREMENT ALLOWANCE SHALL EQUAL
 THE  RETIREMENT  ALLOWANCE  OF  SUCH  PERSON,  COMPUTED WITHOUT OPTIONAL
 MODIFICATION AND NOT TO EXCEED FIFTEEN THOUSAND DOLLARS,  MULTIPLIED  BY
 TWENTY-FIVE ONE-HUNDREDTHS OF ONE PERCENT PER MONTH OF THE SERVICE CRED-
 IT  AS  DETERMINED  PURSUANT  TO  THIS SUBDIVISION.   ONE-TWELFTH OF THE
 SUPPLEMENTAL MILITARY RETIREMENT ALLOWANCE SHALL BE ADDED TO THE RETIRE-
 MENT ALLOWANCE OF SUCH PERSON EACH MONTH. THE BENEFIT  PAYABLE  PURSUANT
 TO  THIS SECTION SHALL COMMENCE ON THE NEXT RETIREMENT ALLOWANCE PAYABLE
 AT LEAST THIRTY DAYS AFTER THE  RECEIPT  OF  AN  APPLICATION  FROM  SUCH
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01409-02-3
              

 S. 7529                             2
 
 PERSON. FOR THE PURPOSES OF THIS SUBDIVISION, RETIREMENT ALLOWANCE SHALL
 EXCLUDE  ANY  ANNUITY  DERIVED  FROM VOLUNTARY CONTRIBUTIONS MADE BY THE
 INDIVIDUAL, EXCEPT THOSE MADE PURSUANT TO  ELECTIONS  UNDER  SUBDIVISION
 ONE OF SECTION FIVE HUNDRED ELEVEN-A OR PARAGRAPH C OF SUBDIVISION THREE
 OF  SECTION FIVE HUNDRED SIXTEEN OF THE EDUCATION LAW, BUT SHALL INCLUDE
 ANY COST OF LIVING ADJUSTMENT DERIVED FROM SECTIONS SEVENTY-EIGHT-A  AND
 THREE  HUNDRED  SEVENTY-EIGHT-A  OF THIS CHAPTER OR SECTION FIVE HUNDRED
 THIRTY-TWO-A OF THE EDUCATION LAW, AS APPLICABLE.   THE BENEFIT  PAYABLE
 PURSUANT  TO  THIS  SUBDIVISION  SHALL  BE  PAYABLE  FOR THE LIFE OF THE
 RETIRED MEMBER ONLY, EXCEPT THAT THE  SURVIVING  SPOUSE  OF  A  DECEASED
 MEMBER  WHO  RETIRED UNDER AN OPTION PROVIDING A BENEFIT TO BE CONTINUED
 FOR LIFE TO THE SURVIVING SPOUSE AFTER THE DEATH OF THE MEMBER SHALL  BE
 ENTITLED  TO  RECEIVE  FIFTY  PERCENT  OF  THE  MONTHLY BENEFIT THAT THE
 RETIRED MEMBER WOULD BE  RECEIVING  PURSUANT  TO  THIS  SUBDIVISION,  IF
 LIVING,  COMMENCING  WITH THE NEXT RETIREMENT ALLOWANCE PAYABLE AT LEAST
 THIRTY DAYS AFTER RECEIPT OF AN APPLICATION FROM THE RETIRED MEMBER  FOR
 THE BENEFIT OR PAYABLE AFTER THE DEATH OF THE RETIRED MEMBER.
   §  2. Subdivision b of section 78-a of the retirement and social secu-
 rity law, as added by chapter 125 of the laws of  2000,  is  amended  to
 read as follows:
   b.  Said cost-of-living adjustment shall be a percentage of the annual
 retirement  allowance  otherwise  payable,  computed  without   optional
 modification,  but  including  any benefit derived from subdivision f of
 this section [and], any prior year's cost-of-living  adjustment  derived
 from this section AND THE AMOUNT OF ANY SUPPLEMENTAL MILITARY RETIREMENT
 ALLOWANCE  DERIVED  FROM  SUBDIVISION EIGHT-A OF SECTION ONE THOUSAND OF
 THIS CHAPTER. Said percentage is set forth  in  subdivision  d  of  this
 section.
   § 3. Subdivision b of section 378-a of the retirement and social secu-
 rity  law,  as  added  by chapter 125 of the laws of 2000, is amended to
 read as follows:
   b. Said cost-of-living adjustment shall be a percentage of the  annual
 retirement   allowance  otherwise  payable,  computed  without  optional
 modification, but including any benefit derived from  subdivision  f  of
 this  section  [and], any prior year's cost-of-living adjustment derived
 from this section AND THE AMOUNT OF ANY SUPPLEMENTAL MILITARY RETIREMENT
 ALLOWANCE DERIVED FROM SUBDIVISION EIGHT-A OF SECTION  ONE  THOUSAND  OF
 THIS  CHAPTER.    Said  percentage is set forth in subdivision d of this
 section.
   § 4. Subdivision b of section 532-a of the education law, as added  by
 chapter 125 of the laws of 2000, is amended to read as follows:
   b.  Said cost-of-living adjustment shall be a percentage of the annual
 retirement  allowance  otherwise  payable,  computed  without   optional
 modification, excluding any annuity derived from voluntary contributions
 made  by members, except those made pursuant to elections under subdivi-
 sion one of section five hundred eleven-a or paragraph c of  subdivision
 three of section five hundred sixteen of this article, but including any
 benefit  derived  from  subdivision  f  of this section [and], any prior
 year's cost-of-living adjustment  derived  from  this  section  AND  THE
 AMOUNT  OF  ANY  SUPPLEMENTAL MILITARY RETIREMENT ALLOWANCE DERIVED FROM
 SUBDIVISION EIGHT-A OF SECTION ONE THOUSAND OF THE RETIREMENT AND SOCIAL
 SECURITY LAW. Said percentage is set forth  in  subdivision  d  of  this
 section.
   § 5. Subdivision b of section 13-696 of the administrative code of the
 city  of  New  York,  as  added  by  chapter 125 of the laws of 2000, is
 amended to read as follows:
 S. 7529                             3
 
   b. Said cost-of-living adjustment shall be a percentage of the  annual
 fixed  retirement allowance otherwise payable, computed without optional
 modification, but including any benefit derived from  subdivision  f  of
 this  section  [and], any prior year's cost-of-living adjustment derived
 from  this section AND THE AMOUNT OF ANY SUPPLEMENTAL MILITARY ALLOWANCE
 DERIVED FROM SUBDIVISION EIGHT-A OF SECTION ONE THOUSAND OF THE  RETIRE-
 MENT  AND SOCIAL SECURITY LAW.  Said percentage is set forth in subdivi-
 sion d of this section.
   § 6. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: The proposed legislation would, among  other  things,
 amend Retirement and Social Security Law (RSSL) Section 1000 by adding a
 new subdivision 8-a to allow eligible retirees who retired from a public
 retirement  system within the State prior to May 31, 2016, and who would
 have had qualifying military service had they been  active  members,  to
 apply  for  a  prospective  supplemental  military  retirement allowance
 (Supplemental Retirement Allowance).
   For purposes of this Fiscal Note, the New York City Employees' Retire-
 ment System (NYCERS), the New  York  City  Teachers'  Retirement  System
 (TRS),  the  New  York City Board of Education Retirement System (BERS),
 the New York City Police Pension Fund (POLICE), and the  New  York  City
 Fire Pension Fund (FIRE) are collectively referenced as the NYCRS.
   With  respect  to  the  NYCRS, the proposed legislation further amends
 Administrative Code of the City of New York (ACCNY)  Section  13-696  to
 include  Cost-of-Living  Adjustment  (COLA) increases in the calculation
 and payment of such Supplemental Retirement Allowance.
   Effective Date: Upon enactment.
   BACKGROUND: A NYCRS retiree would be eligible to receive  the  Supple-
 mental Retirement Allowance (Eligible Recipient) if he or she:
   * Retired prior to May 31, 2016,
   * Was, due to a May 31, 2016 effective date, ineligible for Chapter 41
 of the Laws of 2016,
   *  Would  have  otherwise met the current eligibility criteria of RSSL
 Section 1000, and
   * Files an application for such benefit by December 31, 2024.
   The Supplemental Retirement Allowance would be in lieu  of  any  other
 retirement benefit provided for military service.
   For  purposes of this Fiscal Note, it is assumed that the Supplemental
 Retirement Allowance is provided without cost to Eligible Recipients.
   IMPACT ON BENEFITS PAYABLE: With respect to NYCRS Eligible Recipients,
 the Supplemental Retirement Allowance would be payable as  of  the  next
 retirement  allowance  payment following 30 days from filing an applica-
 tion for such benefit.
   The Supplemental Retirement Allowance would be payable for the  Eligi-
 ble Recipient's lifetime and payable, at 50% of the Eligible Recipient's
 Supplemental  Retirement Allowance rate, for the lifetime of an Eligible
 Recipient's surviving spouse who  is  eligible  to  receive  a  lifetime
 retirement allowance benefit under an existing option election.
   The  annual  Supplemental  Retirement  Allowance would be equal to the
 retirement  allowance  of  the  Eligible  Recipient  (computed   without
 optional  modification, without certain annuities derived from voluntary
 contributions and not to exceed $15,000) multiplied by  0.25%  for  each
 month  of qualifying military service (not to exceed 36 months).  There-
 fore, the initial maximum Supplemental Retirement  Allowance  would  not
 exceed  $1,350  per year (i.e., $15,000 x 0.25% x 36 months = $1,350 per
 year), and would thereafter be subject to the COLA  provisions,  to  the
 S. 7529                             4
 
 extent  the total retirement allowance including Supplemental Retirement
 Allowance is less than $18,000  per  year,  provided  by  ACCNY  Section
 13-696.
   FINANCIAL IMPACT - SUMMARY: The number of members who could potential-
 ly  benefit  from  this  proposed  legislation cannot be determined. For
 illustrative purposes only,  the  table  below  presents  the  estimated
 financial  impact  assuming  that,  (1)  the percentage of retirees that
 would benefit is the same percentage  for  each  of  the  NYCRS  as  the
 percentage  of active members that have purchased military service under
 Chapter 41 of the Laws of 2016 as of June 30, 2021, (2) that each member
 purchased 2.5 years of military service, (3) that each retiree's pension
 is equal to or greater than $18,000 per year, and (4) that the  percent-
 age  of  those retirees who are receiving their pension in the form of a
 Joint and Survivor benefit is the same percentage  as  current  retirees
 for each of the NYCRS.
                                    One-Time Increase
                     NYCRS     in Employer Contributions*
                                    ($ Millions)
                NYCERS                $ 6.8
                TRS                     0.6
                BERS                    0.2
                POLICE                 22.5
                FIRE                    3.3
                  Total               $33.4
   *  Any  costs  may be subject to State appropriation and reimbursement
 pursuant to RSSL Section 25.
   New Unfunded Accrued Liability (UAL) attributable to  benefit  changes
 are  generally  amortized  over  the remaining working lifetime of those
 impacted by the benefit changes. For this  proposed  legislation,  since
 those who would benefit are retired, the entire increase in UAL would be
 recognized in the first year that the increased pension was paid.
   ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
 been  calculated based on the actuarial assumptions and methods used for
 the Preliminary Fiscal Year 2024 employer contributions of NYCRS.
   RISK AND UNCERTAINTY: The costs presented in this Fiscal  Note  depend
 highly  on the realization of the actuarial assumptions used, demograph-
 ics of the impacted population, and other factors  such  as  investment,
 contribution,  and other risks. If actual experience deviates from actu-
 arial assumptions, the actual costs could differ  from  those  presented
 herein.
   Costs  are also dependent on the actuarial methods used, and therefore
 different actuarial methods could produce different results. Quantifying
 these risks is beyond the scope of this Fiscal Note.
   Not measured in this Fiscal Note are the following:
   *  The  initial  additional  administrative  costs  to  implement  the
 proposed legislation.
   STATEMENT  OF  ACTUARIAL  OPINION:  I, Marek Tyszkiewicz, am the Chief
 Actuary for, and independent of, the New York  City  Retirement  Systems
 and  Pension  Funds. I am an Associate of the Society of Actuaries and a
 Member of the American Academy of Actuaries. I am a member of NYCERS but
 do not believe it impairs my objectivity and I  meet  the  Qualification
 Standards  of  the American Academy of Actuaries to render the actuarial
 opinion contained herein. To the  best  of  my  knowledge,  the  results
 contained  herein  have  been  prepared  in  accordance  with  generally
 accepted actuarial principles and  procedures  and  with  the  Actuarial
 Standards of Practice issued by the Actuarial Standards Board.
 S. 7529                             5
 
   FISCAL  NOTE  IDENTIFICATION:  This  Fiscal Note 2023-69 dated June 2,
 2023, was prepared by the Chief Actuary for the New York City Retirement
 Systems and Pension Funds. This estimate is intended for use only during
 the 2023 Legislative Session.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This  bill would amend Section 1000 of the Retirement and Social Secu-
 rity Law by adding a new  subdivision  8-a  to  allow  eligible  retired
 members  of  public  retirement  systems  of New York State to receive a
 supplemental military retirement allowance  based  upon  the  retirement
 allowance of such member and up to three years of military service cred-
 it.  This supplemental benefit would be in lieu of any benefit otherwise
 provided by military service credit. The  annual  supplemental  military
 retirement  allowance shall be equal to the retirement allowance of such
 person, computed without optional modification and not to exceed fifteen
 thousand  dollars,  multiplied  by  twenty-five  one-hundredths  of  one
 percent per month of military service claimed. The surviving spouse of a
 deceased  member who retired under an option which provides a continuing
 lifetime benefit would be entitled  to  receive  fifty  percent  of  the
 supplemental military retirement allowance that the retired member would
 have received. A member must have retired prior to May 31, 2016 and make
 application no later than December 31, 2024. This benefit is prospective
 only  and  shall  commence  on  the next retirement allowance payable at
 least 30 days after the receipt of said application. There is no  member
 cost for this benefit.
   It is not possible to determine the total annual cost to the employers
 of  members  of the New York State Teachers' Retirement System since the
 number of retired members who would be  eligible  for  the  supplemental
 military  retirement  allowance  under  this  bill cannot be effectively
 estimated. However, the cost is estimated to be,  on  average,  approxi-
 mately  $11,900  for  each  retired member eligible for the supplemental
 military retirement allowance provided under this bill if enacted.
   Member data is from  the  System's  most  recent  actuarial  valuation
 files,  consisting  of  data provided by the employers to the Retirement
 System.  Data distributions and statistics can be found in the  System's
 Annual  Report.  System assets are as reported in the System's financial
 statements and can also be found in the System's Annual Report. Actuari-
 al assumptions and methods are provided in the System's Actuarial  Valu-
 ation Report.
   The  source of this estimate is Fiscal Note 2023-32 dated June 2, 2023
 prepared by the Office of the Actuary of the New  York  State  Teachers'
 Retirement  System and is intended for use only during the 2023 Legisla-
 tive Session. I, Richard A. Young, am the Chief Actuary for the New York
 State Teachers' Retirement System. I am a member of the American Academy
 of Actuaries and I meet the  Qualification  Standards  of  the  American
 Academy of Actuaries to render the actuarial opinion contained herein.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This  bill would amend Section 1000 of the Retirement and Social Secu-
 rity Law to allow retirees of the New York State  and  Local  Retirement
 Systems  to  apply  for  a supplemental pension benefit based upon prior
 military service that was not creditable to the member prior to  retire-
 ment.  The member must have retired prior to May 31, 2016. The amount of
 the supplemental benefit is equal to the single life allowance plus  any
 cost-of-living  adjustment,  not to exceed $15,000, multiplied by 3% for
 each year of military service credit granted, not to exceed three years.
 The surviving spouse and lifetime  beneficiary  of  a  deceased  retiree
 shall  receive  half of what the deceased member would have received. An
 S. 7529                             6
 
 eligible retiree must file an application for the  supplemental  pension
 no  later  than  December 31, 2024, but will not be required to make any
 payment to obtain the benefit. The payment of the  supplemental  benefit
 will  begin  with  the  first monthly pension payment issued at least 30
 days after receipt of the application.
   The exact number of retirees that could be  affected  by  this  legis-
 lation cannot be readily determined.
   Insofar  as  this bill affects the New York State and Local Employees'
 Retirement System, pursuant to Section 25 of the Retirement  and  Social
 Security  Law,  the increased costs would be borne entirely by the State
 of New York and would require an itemized  appropriation  sufficient  to
 pay the cost of the provision. Once a retiree applies for this benefit a
 cost will be generated, which will be billed to the State of New York.
   Insofar  as  this bill affects the New York State and Local Police and
 Fire Retirement System (NYSLPFRS), the increased costs would  be  shared
 by  the  State  of New York and the local participating employers in the
 NYSLPFRS.
   Summary of relevant resources:
   Membership data as of March 31, 2022 was used in measuring the  impact
 of the proposed change, the same data used in the April 1, 2022 actuari-
 al  valuation.  Distributions  and  other statistics can be found in the
 2022 Report of the Actuary and the 2022 Annual  Comprehensive  Financial
 Report.
   The  actuarial assumptions and methods used are described in the 2020,
 2021, and 2022 Annual Report to the  Comptroller  on  Actuarial  Assump-
 tions,  and  the  Codes, Rules and Regulations of the State of New York:
 Audit and Control.
   The Market Assets and GASB Disclosures are found in the March 31, 2022
 New York State and Local  Retirement  System  Financial  Statements  and
 Supplementary Information.
   I am a member of the American Academy of Actuaries and meet the Quali-
 fication Standards to render the actuarial opinion contained herein.
   This  fiscal note does not constitute a legal opinion on the viability
 of the proposed change nor is it intended to serve as a  substitute  for
 the professional judgment of an attorney.
   This  estimate,  dated  May 16, 2023, and intended for use only during
 the 2023 Legislative Session, is Fiscal Note No. 2023-153,  prepared  by
 the Actuary for the New York State and Local Retirement System.