Relates to refunding certain member contributions and eligible participants in the twenty-five-year and age fifty-five retirement program

BILL NUMBER:S7694

Title of bill

An act to amend the retirement and social security law, in relation to twenty-five-year and age fifty-five retirement program for New York city transit authority members

Purpose: To rectify an injustice between transit workers who made overpayments on their employee contributions to their pension plan during the 1990's. In 2005 full refunds of such overpayments were authorized, but only for workers who made the payments during the 1990's and who were still on the payroll. Workers who had retired in the intervening years were excluded. This bill will correct that discrepancy

Summary of Provisions: Section 1 of the bill amends subdivision e to Sec 604-b of the Retirement and Social Security Law to authorize a refund of additional member contributions as set forth in paragraph ten (10) of the subdivision.

Section 2 of the bill amends paragraph 10 to subdivision e to Sec. 604-b of the Retirement and Social Security Law to permit retired transit workers who made additional member contributions, who were not an active member when refunds for such overpayment were authorized by law in 2005, to apply for such a refund amounting to the overpayments with interest at 5% compounded annually between the date of such overpayments and their retirement date.

Justification: The Legislature in 2005 empowered the NYC Employee Retirement System (NYCERS) to issue refunds to transit workers who had made overpayments into the pension system in the form of employee contributions provided such workers were actively employed on December 16, 2005 amounting to the sum of such overpayments and 5% interest compounded annually from the time of the overpayments until such date. Both the making of the overpayments and an active employment status on that date were required to trigger the refund. Unfortunately, transit workers who made identical overpayments but who retired prior to that date were deemed ineligible.

The NYC Actuary in a fiscal note attached to the bill estimates there are 264 retired transit workers still alive who would receive a refund authorized by this bill This bill will make them eligible to receive the same refund their former colleagues received nearly nine (9) years ago

Legislative History: New Bill

Fiscal Implications: The enactment of this legislation would increase the annual employer costs by approximately $843,000 per year for four years.

Effective Date: This act shall take effect immediately