Presume Lung Illness Work-Related

Section 1. The administrative code of the city of New York is amended by adding a new section 13-168.1 to read as follows:

§ 13-168.1 Transit authority members; presumption in certain diseases. Notwithstanding any provision of this chapter or of any general, special or local law to the contrary, and for the purposes of this chapter, any condition of impairment of health caused by diseases of the lung, resulting in total or partial disability or death to a member of the New York city transit authority, or a member of its subsidiary corporation, as defined in section twelve hundred three-a of the public authorities law, where such member successfully passed a physical examination on entry into such service or subsequent thereto, which examination failed to reveal any evidence of such condition, shall be presumptive evidence that it was incurred in the performance and discharge of duty.

§ 2. This act shall take effect immediately.

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

SUMMARY OF BILL: This proposed legislation would amend the Administra-

tive Code of the City of New York (ACCNY) to add a new Section 13-168.1

to provide a statutory presumption to Tier 1 and Tier 2 members of the

New York City Employees' Retirement System (NYCERS) who are Transit

Authority employees, and who become physically incapacitated for

performance of duty, or die, due to lung disease.

In determining whether qualifying lung disease was caused by employ-

ment for the Transit Authority, the diagnosis of lung disease, absent

evidence of such condition upon examination at hire, would be presump-

tive evidence that such disability or death was incurred in the perform-

ance and discharge of duty. The proposed legislation does not provide a

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

[ ] is old law to be omitted.

LBD03331-04-0

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mechanism for rebutting such presumption with competent evidence to the

contrary.

Effective Date: Upon enactment.

FINANCIAL IMPACT - OVERVIEW: There is no data available to estimate

the number of members who might develop and become disabled by or die

from lung disease, and potentially benefit from this proposed legis-

lation. Therefore, the estimated financial impact has been calculated

on a per event basis equal to the increase in the Present Value of

Future Benefits (PVFB) for an average affected member who is diagnosed

with lung disease as the result of the enactment of the proposed legis-

lation and who would benefit from the proposed legislation.

In determining the increase in the PVFB, it has been assumed that 100%

of the members who would retire with lung disease would have continued

working and eventually retired for service if the proposed legislation

were not passed. The increase in PVFB does not include any cost for

additional death benefits since the ordinary death benefit for these

members is more valuable than the accidental death benefit in most

cases.

With respect to an individual member, the additional cost of this

proposed legislation varies greatly.

FINANCIAL IMPACT - PRESENT VALUES: Based on the census data and the

actuarial assumptions and methods described herein, the enactment of

this proposed legislation would increase the PVFB by an amount ranging

from $6,700 to $131,100 if one of the 12 members who could benefit from

the proposed legislation develops a qualifying lung disease. The average

increase in PVFB for the 12 members who could benefit from the proposed

legislation is approximately $60,100.

FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: Enactment of this

proposed legislation would increase employer contributions, where such

amount would depend on the number of members affected as well as other

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

of each member.

As there is no data currently available to estimate the number of

members who might be diagnosed with disabling lung disease, the finan-

cial impact would be recognized at the time of event. Consequently,

changes in employer contributions have been estimated assuming that the

increase in the PVFB will be financed over the same time period used for

actuarial losses in accordance with Section 13-638.2(k-2) of the ACCNY.

Using this approach, the additional PVFB would be amortized over a

closed 15-year period (14 payments under the One-Year Lag Methodology)

using level dollar payments.

Based on the Actuary's actuarial assumptions and methods in effect as

of June 30, 2019, the enactment of this proposed legislation is esti-

mated to increase annual employer contributions by an amount ranging

from $800 to $15,500 if one of the 12 members who could benefit from the

proposed legislation develops a qualifying lung disease. The average

increase in annual employer contributions for the 12 members who could

benefit from the proposed legislation is approximately $7,100. With

respect to the timing, increases in employer contributions would depend

upon when members would retire due to lung disease but, generally,

increased employer contributions will first occur the second fiscal year

following approval of the accident disability retirement.

CENSUS DATA: The estimates presented herein are based on the census

data used in the Preliminary June 30, 2019 (Lag) actuarial valuation of

NYCERS to determine the Preliminary Fiscal Year 2021 employer contrib-

utions.

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There are 12 active Tier 1 and Tier 2 Transit Authority employees who

participate in NYCERS as of June 30, 2019 who could potentially benefit

from the proposed legislation. These 12 active Tier 1 and Tier 2 Transit

Authority members had an average age of approximately 71.6 years, aver-

age service of approximately 38.1 years, and an average salary of

approximately $93,600. This group consisted of eight Tier 1 members, and

four Tier 2 members.

ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the PVFB and annual

employer contributions presented herein have been calculated based on

the actuarial assumptions and methods in effect for the June 30, 2019

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

2021 employer contributions of NYCERS.

RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend

highly on the realization of the actuarial assumptions used, as well as

certain demographic characteristics of NYCERS and other exogenous

factors such as investment, contribution, and other risks. If actual

experience deviates from actuarial assumptions, the actual costs could

differ from those presented herein. Costs are also dependent on the

actuarial methods used, and therefore different actuarial methods could

produce different results. Quantifying these risks is beyond the scope

of this Fiscal Note.

Not measured in this Fiscal Note are the following:

* The initial, additional administrative costs of NYCERS and other

New York City agencies to implement the proposed legislation.

* The impact of this proposed legislation on Other Postemployment

Benefit (OPEB) costs.

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, a

Member of the American Academy of Actuaries, and a Fellow of the Confer-

ence of Consulting Actuaries. I meet the Qualification Standards of the

American Academy of Actuaries to render the actuarial opinion contained

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

been prepared in accordance with generally accepted actuarial principles

and procedures and with the Actuarial Standards of Practice issued by

the Actuarial Standards Board.

FISCAL NOTE IDENTIFICATION: This Fiscal Note 2020-32 dated April 28,

2020 was prepared by the Chief Actuary for the New York City Employees'

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

2020 Legislative Session.