Lower Retirement Age: TBTA Workers

Section 1. Paragraph (ii) of subdivision a of section 651 of the retirement and social security law, as amended by chapter 225 of the laws of 2006, is amended to read as follows:

(ii) For each full year of covered employment [occurring prior to January first, two thousand nine] which is subsequent to December thirty-first, nineteen hundred seventy, his or her normal retirement age shall be reduced by four months.

§ 2. Section 2 of chapter 511 of the laws of 1988, amending the retirement and social security law relating to a reduction in retirement age for certain members, as amended by chapter 225 of the laws of 2006, is amended to read as follows:

§ 2. This act shall take effect immediately[, and shall apply only to covered employment performed on or before December 31, 2008].

§ 3. This act shall take effect immediately and shall be deemed to have been in full force and effect on and after December 31, 2008.

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

PROVISIONS OF PROPOSED LEGISLATION: This proposed legislation would

amend Retirement and Social Security Law (RSSL) Section 651(a)(ii) and

Chapter 511 of the Laws of 1988 to extend special unreduced early

retirement provisions for certain Tier 1, 2, 3 and 4 Triborough Bridge

and Tunnel Authority (TBTA) employees who are members of the New York

City Employees' Retirement System (NYCERS).

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

[ ] is old law to be omitted.

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The Effective Date of the proposed legislation would be the date of

enactment and would be deemed to have been in full force and effect on

and after December 31, 2008.

MEMBERS IMPACTED BY THE PROPOSED LEGISLATION: The proposed legislation

would cover those members of NYCERS who are employed in the following

TBTA job titles (Covered Members):

* Bridge and Tunnel Officer,

* Bridge and Tunnel Sergeant,

* Bridge and Tunnel Lieutenant,

* Assistant Bridge and Tunnel Maintainer,

* Bridge and Tunnel Maintainer,

* Senior Bridge and Tunnel Maintainer, and

* Bridge and Tunnel Laborer.

IMPACT ON BENEFITS PAYABLE: The proposed legislation would permit

Covered Members, who otherwise meet applicable service retirement

requirements, to retire earlier than their applicable normal retirement

age.

Under current law, a Tier 1 member's normal retirement age is 55. A

Tier 2, 3 and 4 member's current normal retirement age is 62. Retiring

for service prior to these ages would generally result in a reduction of

the member's annual retirement benefit.

Under the proposed legislation, each year of qualifying TBTA service

would reduce such normal retirement ages by 4 months (e.g., 12 years of

qualifying TBTA service would reduce the applicable normal retirement

age by 4 years) without subjecting the member to a retirement benefit

reduction.

However, in no event shall a Tier 1 member retire, other than for

disability, prior to age 50, and in no event shall a Tier 2, 3, or 4

member retire, other than for disability, prior to age 55.

FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES (APV): With respect to the

TBTA members who would be impacted by this proposed legislation, under

the actuarial assumptions used in the Preliminary June 30, 2016 (Lag)

actuarial valuations of NYCERS, the enactment of this proposed legis-

lation would increase the APV of Benefits (APVB) by approximately $1.7

million.

FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS: In accordance with the

Administrative Code of the City of New York (ACNY) Section 13.638.2

(k-2), new Unfunded Actuarial Accrued Liability (UAAL) attributable to

benefit changes are to be amortized as determined by the Actuary but

generally over the remaining working lifetime of those impacted by the

benefit changes. As of June 30, 2016, the remaining working lifetime of

the TBTA members and beneficiaries who would be impacted by the proposed

legislation is approximately 10 years.

Based on the actuarial assumptions and methods used in the Preliminary

June 30, 2016 valuation of NYCERS, the enactment of this proposed legis-

lation would increase annual employer contributions by approximately

$300,000 per year beginning in Fiscal Year 2018.

OTHER COSTS: Not measured in this Fiscal Note are the initial, addi-

tional administrative costs of NYCERS to implement the proposed legis-

lation.

CENSUS DATA: As of June 30, 2016, there are 1,311 active TBTA members

with annual salaries of approximately $126.6 million.

The members affected by the proposed legislation consisted of 82 Tier

4 members with salaries of approximately $8.2 million whose average age

and average service as of June 30, 2016 were 48.9 years and 19.7 years,

respectively.

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ACTUARIAL ASSUMPTIONS AND METHODS: The additional APVB, APVSAL and

employer contributions presented herein have been calculated based on

the actuarial assumptions and methods in effect for the Preliminary June

30, 2016 (Lag) actuarial valuations used to determine the Preliminary

Fiscal Year 2018 employer contributions of NYCERS.

Employer contributions under current methodology have been estimated

assuming the additional APVB would be financed through future normal

contributions including an amortization of the new UAAL attributable to

this proposed legislation over a 10 year period (9 payments under the

OYLM Methodology).

To determine the impact of the proposed legislation, it was necessary

to determine who would benefit actuarially, by calculating for each

member, the net APV of future employer costs (i.e., the APVB less the

APV of future member contributions) under the current Period Without

Reduction Before Normal Retirement Age (PWRBN) provisions and the

proposed PWRBN provisions. If such net APV measured for the proposed

PWRBN provisions was greater than the net APV under the current PWRBN

provisions, the member was deemed to benefit actuarially.

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

ary for, and independent of, the New York City Pension Funds and Retire-

ment Systems. I am a Fellow of the Society of Actuaries, a Fellow of

the Conference of Consulting Actuaries and a Member of the American

Academy of Actuaries. I meet the Qualification Standards of the American

Academy of Actuaries to render the actuarial opinion contained herein.

FISCAL NOTE IDENTIFICATION: This Fiscal Note 2017-09 dated April 19,

2017, was prepared by the Chief Actuary for the New York City Employee's

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

2017 Legislative Session.