End Corrections Retiree Earnings Cap

Section 1. Section 507-a of the retirement and social security law is amended by adding a new subdivision f to read as follows:

f. Notwithstanding any other provision of law, there shall be no restrictions on the earnings from employment not in public service permitted to a member of the uniformed personnel of the New York city department of correction who:

1. has retired pursuant to the provisions of this section; and

2. was subject to the provisions of (i) subdivision d of section five hundred four of this article, (ii) subdivision c of section five hundred four-a of this article, or (iii) subdivision c of section five hundred four-b of this article prior to his or her retirement, subsequent to the date as of which he or she would have been eligible for service retirement.

§ 2. This act shall take effect immediately.

FISCAL NOTE.--Pursuant to Legislative Law, Section 50:

SUMMARY OF BILL: The proposed legislation would amend Retirement and

Social Security Law (RSSL) Section 507-a by adding a new subdivision f

to remove post-retirement earnings restrictions from private sector

employment for periods after the applicable service retirement eligibil-

ity date for certain retired uniformed personnel of the New York City

Department of Correction who are receiving certain disability benefits

from the New York City Employees' Retirement System (NYCERS).

Effective Date: Upon enactment.

IMPACT ON BENEFITS: NYCERS restricts the total calendar year Personal

Service Income (PSI) resulting from all public and private employment

for certain retirees, including certain Tier 3 correction officers who

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD06033-03-8

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receive disability retirement benefits under RSSL Section 507-a

(Correction Disability Retiree).

If a Correction Disability Retiree's PSI from all public and private

employment exceeds the NYCERS PSI limitation for the calendar year, then

such retiree's disability pension is suspended for 12 months. The NYCERS

PSI limitation for 2016 was $29,900 and increases each year with the

Consumer Price Index.

If the proposed legislation is enacted, Correction Disability Reti-

rees, who were Tier 3 correction members in the Early Service Retirement

Benefit Plan for General Members, the Correction Officer 20-year Plan or

the Correction Captain 20-year Plan, would no longer be subject to the

PSI limitation for private employment earnings after the date they would

have been eligible to receive a service retirement in their respective

plan.

For purposes of this fiscal note, it was assumed that Correction Disa-

bility Retirees would continue to be limited by other post-retirement

earnings restrictions such as New York City Charter (NYCC) Section 1117

and RSSL Section 212.

NYCC Section 1117 limits the PSI for any NYCERS retiree to $1,800 per

year from most public employment within New York State (including New

York City). PSI from those sources that exceeds $1,800 per year will

result in a suspension of the retiree's pension. However, NYCC Section

1117 places no limits on the amounts of PSI that may be earned from

private employment. RSSL Section 212 limits a retiree to earn up to

$30,000 per year from post-retirement public employment, notwithstanding

NYCC Section 1117, if certain conditions are met.

FINANCIAL IMPACT - EMPLOYER COSTS: The change in employer costs would

depend upon the amount and timing of pension payments that would no

longer be suspended due to this legislation.

To the extent the NYCERS earnings limitation would have applied in

Calendar Years 2018 and later, Correction Disability Retirees whose

post-retirement earnings exceeded the PSI limitation would have had

their pension suspended for 12 months in years after the date on which

they would have become eligible for service retirement.

Enactment of the legislation would eliminate the reduction in benefits

to those Correction Disability Retirees whose PSI exceeds the NYCERS

earnings limitation after the date on which they would have become

eligible for service retirement.

Because few, if any, Correction Disability Retirees' benefits are

suspended due to PSI that exceeds the NYCERS earnings limitation, the

increase in benefits would likely be de minimis.

OTHER COSTS: Not measured in this Fiscal Note are any possible

increased administrative costs attributable to enactment of the proposed

legislation.

ACTUARIAL ASSUMPTIONS AND METHODS: The additional employer costs

presented herein have been calculated based on the same actuarial

assumptions and methods in effect for the June 30, 2016 (Lag) actuarial

valuations used to determine the Preliminary Fiscal Year 2018 employer

contributions of NYCERS. Please note these assumptions and methods are

subject to change as this valuation is not considered final until the

end of the Fiscal Year 2018.

STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu-

ary for, and independent of, the New York City Retirement Systems and

Pension Funds. I am a Fellow of the Society of Actuaries, an Enrolled

Actuary under the Employee Retirement Income and Security Act of 1974

(ERISA), a Member of the American Academy of Actuaries, and a Fellow of

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the Conference of Consulting Actuaries. I meet the Qualification Stand-

ards of the American Academy of Actuaries to render the actuarial opin-

ion contained herein. To the best of my knowledge, the results contained

herein have been prepared in accordance with generally accepted actuari-

al principles and procedures and with the Actuarial Standards of Prac-

tice issued by the Actuarial Standards Board.

FISCAL NOTE IDENTIFICATION: This Fiscal Note 2018-13 dated March 29,

2018, was prepared by the Chief Actuary for New York City Employees'

Retirement System. This estimate is intended for use only during the

2018 Legislative Session.