Relates to military service credits

Summary of specific provisions

Section 1 of the bill amends the language of the opening paragraph and adds two new paragraphs (e) and (f) to subdivision 2 of section 1000 of the retirement and social security law. Language is added to the opening paragraph which will allow a member of the service to obtain a credit which is the greater of up to three years of service credit for up to three years of military duty or not to exceed seven years of service credit for fifty percent of such member's total years in active military duty. The bill also adds two new paragraphs (e) and (f) which add to the military conflicts in which members may have served in order to be eligible for such service credits including the Global War on Terrorism from September 11, 2001 through the end of such hostilities in paragraph (e) and United States participation in UN related combat theaters in Somalia, Bosnia and Kosovo in paragraph (f).

Section 2 of the bill sets forth an immediate effective date.

Justification

State law currently provides military service credit up to a maximum of three years of service credit for up to three years of active military duty. This arbitrary cap does not allow a veteran who has dedicated their life to service in the military for longer than 3 years to be acknowledged for that sacrifice. This is especially the case for those veterans who may have stayed in the military for up to 14 years and then returned to civilian employment but were ineligible to stay long enough in the military to retire after 20 years and thus receive federal retirement benefits.

It is appropriate that veterans be allowed to obtain up seven years of service credit for 50% of their total years in active military duty as recognition of their valor and dedication to the security of this country.

The bill also amends the law to bring current the list of "hostilities" which qualifies veterans for military service credits. This includes the hostilities in the Global War on Terrorism (including Iraq, Kuwait, Saudi Arabia, Bahrain, Qatar, the United Arab Emirate, Oman, the Gulf of Aden, the Gulf of Oman, the Persian Gulf, the Red Sea, and the airspace above these location, and the UN related combat theaters in Somalia, Bosnia and Kosovo.

Prior legislative history

New Bill.

Fiscal implications

This bill would amend the benefits of Chapter 548, Laws of 200 to permit members of public retirement systems in New

York State who are eligible to purchase military service credit, to purchase the larger of up to 3 years of service credit, or up to 50% of such member's total years in active military duty up to 7 years of service credit (current law allows up to 3 years). In addition, this bill would include the following conflicts as allowable military service for credit in the case of a veteran who served in the theater of operations:

-from 9/11/01 to the end of hostilities in Afghanistan, Iraq, Pakistan, Yemen, Oman, Saudi Arabia, Turkey, Libya, Egypt, India, Lebanon, Syria, the Gulf of Aden, the Gulf of Oman, the Persian Gulf, the Red Sea and the airspace above these locations

-in UN related combat theaters in Somalia from 8/1992 - 3/1994

-in NATO related combat theaters in Bosnia 12/1995 - 11/2004

-in NATO related combat theaters in Kosovo 4/1999 - 6/1999

Members must have at least five years of credited service (not including military service). Tier 1-5 members would be required to make a payment of three percent of their most recent compensation per year of additional service credit granted by their bill. Tier 6 members would be required to make a payment of six percent of their most recent compensation per year of additional service credit.

If the bill is enacted, insofar as this proposal affects the New York State and Local Employees' Retirement System (ERS), it is estimated that the past service cost will average approximately 12% (9% for Tier 6) of an affected members' compensation for each year of additional service credit that is purchased.

Insofar as this proposal affects the New York State and Local Police and Fire Retirement System (PFRS), it is estimated that the past service cost will average approximately 15% (14% for Tier 6) of an affected members' compensation for each year of additional service that is purchased.

The exact number of current members as well as future members who could be affected by this legislation cannot be readily determined.

ERS Costs: Pursuant to Section 25 of the Retirement and Social Security Law, the increased cost to other New York State and Local Employees' Retirement System would be borne entirely by the State of New York and would require an itemized appropriation sufficient to pay the cost of the provision. Since a member can apply for this service credit at any time prior to retirement, a precise cost can't be determined until each member, as well as future members, applies for the service credit. Every year a cost will be determined (and billed to the state) based on those benefiting from this provision.

PFRS Costs: These costs would be shared by the State of New York and the participating employers in the PFRS.

Summary of relevant resources:

The membership data used in measuring the impact of the proposed change was the same as that used in the March 31, 2013 actuarial valuation. Distributions and other statistics can be found in the 2013 Report of the Actuary and the 2013 Comprehensive Annual Financial Report.

The actuarial assumptions and methods used are described in the 2010, 2011, 2012 and 2013 Annual Report to the Comptroller on Actuarial Assumptions, 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, 2013 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 Qualification Standards to render the actuarial opinion contained herein.

This estimate, dated December 6, 2013 and intended for use only during the 2014 Legislative Session, is Fiscal Note No. 2014-38, prepared by the Actuary for the New York State and Local Police and Fire Retirement System.

Effective date

This act shall take effect immediately.