Boost 9/11 Responder Disability Pensions

Section 1. Paragraph 4 of subdivision d of section 605 of the retirement and social security law is renumbered paragraph 5 and a new paragraph 4 is added to read as follows:

4. Notwithstanding any other law, rule or regulation to the contrary, any member who had an active membership when such member participated in World Trade Center rescue, recovery, or cleanup operations, as such participation is defined in section two of this chapter, who incurred a qualifying World Trade Center condition, as defined in section two of this chapter, that is determined to have been incurred in the performance and discharge of duty and is the natural and proximate result of an accident not caused by such member's own willful negligence, shall be paid a performance of duty disability retirement allowance equal to three-quarters of final average salary. The payment of such pension shall be subject to the provisions of section sixty-four of this chapter.

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

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

[ ] is old law to be omitted.

LBD00930-17-8

A. 8433--C 2

h-1. Notwithstanding any other law, rule or regulation to the contrary, any member who had an active membership when such member participated in World Trade Center rescue, recovery, or cleanup operations, as such participation is defined in section two of this chapter, who incurred a qualifying World Trade Center condition, as defined in section two of this chapter, that is determined to have been incurred in the performance and discharge of duty and is the natural and proximate result of an accident not caused by such member's own willful negligence, shall be paid a performance of duty disability retirement allowance equal to three-quarters of final average salary. The payment of such pension shall be subject to the provisions of section sixty-four of this chapter.

§ 3. This act shall take effect immediately and apply to all active members who are determined to have incurred a qualifying World Trade Center condition in the performance and discharge of duty that is the natural and proximate result of an accident not caused by such member's own willful negligence prior to the effective date of this act.

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

This bill would amend the benefits of certain members of public

retirement systems who are subject to the provisions of Article 14 or

Article 15 of the Retirement and Social Security Law who contract any

form of disease or disability related to exposure to any elements in

connection with the World Trade Center rescue, recovery or cleanup oper-

ations. The annual accidental disability benefit would be 75% of a

member's final average salary less workers compensation, regardless of a

member's plan coverage. Currently, eligible members receive the acci-

dental disability benefit specified in the plan under which they are

covered, which for most Article 14 and 15 member is 1/3 of a member's

final average salary. This improved benefit would be payable only to

current members or their beneficiaries, who must file for this benefit

prior to September 11, 2019. Current retirees and their beneficiaries

would not be affected by this bill.

If this bill is enacted, the cost of the revised benefit will depend

upon the applicant's age, service, salary, plan, and benefit type other-

wise payable, but is expected to cost up to 4 times final average salary

per individual.

Insofar as this bill would affect the New York State and Local Employ-

ees' Retirement System, there are currently 657 active members, with a

salary of $6.7 million, who have filed an Application for World Trade

Center Notice who could potentially receive benefits under this bill.

A precise cost for future years can't be determined at this time.

Pursuant to Section 25 of the Retirement and Social Security Law, the

increased cost would be borne entirely by the State of New York and

would require an itemized appropriation sufficient to pay the cost of

the provision. Every year a cost will be determined (and billed to the

state) based on those benefitting from this provision.

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, 2017 actuarial valu-

ation. Distributions and other statistics can be found in the 2017

Report of the Actuary and the 2017 Comprehensive Annual Financial

Report.

The actuarial assumptions and methods used are described in the 2015,

2016, and 2017 Annual Report to the Comptroller on Actuarial Assump-

tions, and the Codes Rules and Regulations of the State of New York:

Audit and Control.

A. 8433--C 3

The Market Assets and GASB Disclosures are found in the March 31, 2017

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 estimate, dated June 5, 2018, and intended for use only during

the 2018 Legislative Session, is Fiscal Note No. 2018-97, prepared by

the Actuary for the New York State and Local Retirement System.

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

SUMMARY OF BILL: With respect to the New York City Pension Funds

Retirement Systems (NYCRS), the proposed legislation would amend

provisions of the Retirement and Social Security Law (RSSL) to grant to

active NYCRS members, who are subject to RSSL Articles 14 or 15 and

incur a World Trade Center (WTC) Qualifying Condition, a performance of

duty disability retirement equivalent to 75% of the member's Final Aver-

age Salary (FAS). The proposed legislation would also require that

applicable members or beneficiaries of the proposed benefit file a WTC

Notice of Participation with the applicable NYCRS by September 11, 2018

to be eligible to receive the proposed benefit.

Effective Date: Upon enactment, and retroactive for qualifying members

who retired with a non-75% FAS WTC disability retirement.

IMPACT ON BENEFITS PAYABLE: Under the proposed legislation, the bene-

fits for WTC retirees would be revised to equal a retirement allowance

of:

* 75% multiplied by FAS,

Reduced by:

* 100% of Workers' Compensation benefits (if any) payable (as required

by RSSL Section 64).

Please note that, generally, uniformed WTC retirees are currently

entitled to a 75% of FAS benefit (i.e. members of the New York City

Police Pension Fund (POLICE), the New York City Fire Pension Fund

(FIRE), and Sanitation, Correction, EMT, and Deputy Sherriff members of

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

application of the proposed legislation would likely be limited to

active Tier 3 and 4 civilian members of NYCERS, the Teachers' Retirement

System of the City of New York (NYCTRS), and the New York City Board of

Education Retirement System (BERS).

Although certain NYCRS members are ineligible for Workers' Compen-

sation benefits and therefore would not have their benefit subject to an

offset, for purposes of this Fiscal Note, it is assumed that the Work-

ers' Compensation offset provisions cited in Sections 1 and 2 of the

proposed legislation would not apply to NYCRS members because such

members are not paid retirement benefits under RSSL Article 2, which is

a requirement for the application of the offset provision contained in

RSSL Section 64.

FINANCIAL IMPACT - ACTUARIAL PRESENT VALUE OF BENEFITS (APVB):

Although there are currently approximately 4,700 submitted qualified WTC

Notice of Participation Forms for applicable NYCERS, TRS, and BERS

members, the number of members from this group, and any additional

eligible members who timely file such Form by the extended September 11,

2018 date contained in this proposed legislation, who could potentially

benefit from this proposed legislation in the future cannot be readily

determined. Therefore, the ultimate impact of this proposed legislation

would depend on the number of members affected in the future as well as

other characteristics including the age, years of service, and salary

history of the member.

A. 8433--C 4

However, for purposes of this fiscal note, only those members who have

retired from active membership with a qualifying WTC-related condition

and receive a non-75% FAS WTC disability benefit have been considered.

Those members who have been reclassified as having a WTC-related disa-

bility after retirement from service, based on the proposed legis-

lation's limited application to active members, and the unknown number

of active members who may eventually retire in the future with a current

non-75% FAS WTC disability benefit, were not included in the below

calculation.

With respect to applicable NYCRS retirees currently in receipt of

non-75% FAS WTC disability benefits, under the actuarial assumptions

used in the Preliminary June 30, 2017 (Lag) actuarial valuations of

NYCRS, the enactment of this proposed legislation would increase the

APVB by approximately $23,003,000 as of June 30, 2017. This amount is

the sum of the amounts shown in the table below.

ESTIMATED FINANCIAL IMPACT ON NYCERS, TRS, AND BERS

IF CERTAIN CIVILIAN NYCRS WTC MEMBERS

RECEIVE A 75% PERFORMANCE OF DUTY DISABILITY BENEFIT

($ 000s)

APVB NYCERS TRS BERS Total

Retroactive* $ 8,438 $18 $0 $ 8,456

Prospective 14,503 44 0 14,547

Total $22,941 $62 $0 $23,003

* It has been assumed that no interest will be credited on these retro-

active payments.

FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS: In accordance with Adminis-

trative Code of the City of New York (ACCNY) Section 13-638.2(k-2), new

Unfunded Accrued Liability (UAL) attributable to benefit changes are to

be amortized as determined by the Actuary but generally over the remain-

ing working lifetime of those impacted by the benefit changes. For this

proposed legislation, since those that would benefit are retired, the

entire increase in UAL of $23,003,000 would be recognized in the first

year that the increased pension was paid.

OTHER COSTS: Not measured in this Fiscal Note are the following:

* Any additional costs related to future civilian NYCRS members who

retire due to a WTC qualifying condition and who would benefit from this

proposed legislation, if enacted.

* The initial, additional administrative costs of the NYCRS to imple-

ment the proposed legislation.

* The impact of this proposed legislation on Other Postemployment

Benefit (OPEB) costs.

CONTRIBUTION TIMING: For the purposes of this Fiscal Note, it is

assumed that the changes in the employer contributions would be

reflected for the first time in the June 30, 2018 actuarial valuation of

NYCERS, TRS, and BERS. In accordance with the One-Year Lag Methodology

(OYLM) used to determine employer contributions, the increase in employ-

er contributions would first be reflected in Fiscal Year 2020.

CENSUS DATA: The starting census data used for the calculations

presented herein is the census data used in the Preliminary June 30,

A. 8433--C 5

2017 (Lag) actuarial valuation of the NYCRS to determine the Preliminary

Fiscal Year 2019 employer contributions.

This data was supplemented by data provided by NYCERS, TRS, and BERS

that identified retirees currently in receipt of non-75% FAS WTC disa-

bility benefits. NYCERS identified 51 members with an average benefit of

$29,007, TRS identified one member with a benefit of $36,512, and BERS

did not identify any members currently receiving non-75% FAS WTC disa-

bility benefits.

ACTUARIAL ASSUMPTIONS AND METHODS: The additional employer contrib-

utions presented herein have been calculated based on the actuarial

assumptions and methods in effect for the Preliminary June 30, 2017

(Lag) actuarial valuations used to determine the Preliminary Fiscal Year

2019 employer contributions of NYCRS. Please note these assumptions and

methods are subject to change as this valuation is not considered final

until the end of Fiscal Year 2019.

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

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: The Fiscal Note 2018-37 dated June 13,

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

Retirement System, the New York City Teachers' Retirement System, and

the New York City Board of Education Retirement System. This estimate is

intended for use only during the 2018 Legislative Session.

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

This bill would amend Sections 2, 507, and 605 of the Retirement and

Social Security Law to allow any member of the New York State Teachers'

Retirement System who had an active membership when such member partic-

ipated in the World Trade Center rescue, recovery, or cleanup operations

and who incurred a qualifying World Trade Center condition determined to

have been incurred in the performance and discharge of duty to receive a

performance of duty disability retirement benefit equal to 75% of final

average salary. Currently an active member would receive an accidental

disability retirement benefit which is generally one-third of final

average salary. Members who become disabled or die as a result of a

qualifying World Trade Center condition are assumed to have become disa-

bled or died as a result of an accidental or on-the-job disability or