Raise Retiree Earnings Limit

Section 1. Subdivision 2 of section 212 of the retirement and social security law, as amended by chapter 74 of the laws of 2006, is amended to read as follows:

2. The earning limitations for retired persons in positions of public service under this section shall be in accordance with the following table:

For the year Earnings limitation

1996 $12,500

1997 $13,500

1998 $14,500

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

[ ] is old law to be omitted.

LBD00537-06-9

A. 2858--B 2

1999 $15,500

2000 $17,000

2001 $18,500

2002 $20,000

2003 $25,000

2004 $27,500

2005 and 2006 $27,500

2007 [and thereafter] through 2019 $30,000

2020 and thereafter $35,000

§ 2. This act shall take effect immediately.

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

This bill would amend subdivision 2 of section 212 of the Retirement

and Social Security Law to increase the earnings limitation for retired

members in positions of public employment to $35,000 for the calendar

year 2020 and thereafter. The earnings limitation for the calendar year

2019 is $30,000.

The annual cost to the employers of members of the New York State

Teachers' Retirement System is estimated to be negligible if this bill

is enacted.

Member data is from the System's most recent actuarial valuation

files, consisting of data provided by the employers to the Retirement

System. Data distributions and statistics can be found in the System's

Comprehensive Annual Financial Report (CAFR). System assets are as

reported in the System's financial statements, and can also be found in

the CAFR. Actuarial assumptions and methods are provided in the System's

Actuarial Valuation Report.

The source of this estimate is Fiscal Note 2019-9 dated January 15,

2019 prepared by the Actuary of the New York State Teachers' Retirement

System and is intended for use only during the 2019 Legislative Session.

I, Richard A. Young, am the Actuary for the New York State Teachers'

Retirement System. I am a member of the American Academy of Actuaries

and I meet the Qualification Standards of the American Academy of Actu-

aries to render the actuarial opinion contained herein.

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

This bill will amend Section 212 of the Retirement and Social Security

Law to set the amount a retired person may earn in public employment

without reduction in retirement allowance during the year 2020 and ther-

eafter to $35,000.

If this bill is enacted during the 2019 legislative session, insofar

as it would affect the New York State and Local Employees' Retirement

System and the New York State and Local Police and Fire Retirement

System, the resulting 16.7% increase over the current $30,000 limit, in

place since 2007, is less than the increase in the consumer price index

over the same period and thus would not affect retirement patterns.

Therefore, the annual cost is estimated to be negligible.

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, 2018 actuarial valu-

ation. Distributions and other statistics can be found in the 2018

Report of the Actuary and the 2018 Comprehensive Annual Financial

Report.

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

2016, 2017 and 2018 Annual Report to the Comptroller on Actuarial

Assumptions, and the Codes, Rules and Regulations of the State of New

York: Audit and Control.

A. 2858--B 3

The Market Assets and GASB Disclosures are found in the March 31, 2018

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 fiscal note does not constitute a legal opinion on the viability

of the proposed change nor is it intended to serve as a substitute for

the professional judgment of an attorney.

This estimate, dated January 23, 2019, and intended for use only

during the 2019 Legislative Session, is Fiscal Note No. 2019-34,

prepared by the Actuary for the New York State and Local Retirement

System.

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

SUMMARY OF BILL: This proposed legislation would amend Retirement and

Social Security Law (RSSL) Section 212 to increase the earnings limit of

certain New York City Retirement Systems and Pension Funds (NYCRS) reti-

rees who return to Public Service.

Effective Date: Upon enactment.

IMPACT ON BENEFITS: Retirees who return to Public Service and elect to

be covered under the provisions of RSSL Section 212 are permitted to

earn an amount not exceeding a specific dollar limit in a calendar year

without loss, suspension, or diminution of their retirement allowances.

Once this dollar limit is reached, the retiree's pension is suspended

for the remainder of that calendar year. Generally, there are no earn-

ings limitations in, or following, the calendar year in which the reti-

ree attains age 65.

Currently, the dollar limitation in effect for Calendar Year 2007 and

thereafter is $30,000.

Under the proposed legislation, if enacted, the RSSL Section 212 post-

retirement Public Service earnings limitation would be increased to

$35,000 for Calendar Year 2020 and thereafter.

FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: The Actuary esti-

mates that the potential impact of the proposed legislation would be to

increase pension payments in Calendar Year 2020 from the NYCRS by

approximately $310,000. In accordance with Administrative 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 remaining working life-

time of those impacted by the benefit changes. However, since changes in

the applicable retirement allowances paid to the NYCRS retired members

under this proposed legislation are not known in advance, the increase

in pension payments due to this legislation has been treated as an actu-

arial loss. These actuarial losses were amortized over a 15-year period

(14 payments under the One-Year Lag Methodology (OYLM)) using level

dollar payments for the purpose of this Fiscal Note.

Overall, the Actuary believes the changes in employer contributions to

the NYCRS as a result of enactment of the proposed legislation would be

approximately $37,000 in the first year. Future years' costs in addition

to the aforementioned cost would depend on factors such as, but not

limited to, the number of retirees that benefit under the legislation.

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

* The initial, additional administrative costs of the NYCRS and other

New York City agencies to implement the proposed legislation.

* The impact of this proposed legislation on Other Postemployment

Benefit (OPEB) costs.

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

assumed that the changes in the UAL would be reflected for the first

time in the June 30, 2020 actuarial valuations of the NYCRS. In accord-

ance with the OYLM used to determine employer contributions, the

increase in employer contributions would first be reflected in Fiscal

Year 2022.

CENSUS DATA: For purposes of analyzing the impact of the proposed

legislation, data on retirees reemployed in Public Service was furnished

by the NYCRS. This data averaged over the past five years was considered

illustrative of those who could potentially be impacted by this proposed

legislation. The average for calendar years 2013 to 2017 of the number

of retirees that would benefit from this proposal legislation was

approximately 90.

ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the employer

contributions presented herein have been calculated based on the actuar-

ial assumptions and methods in effect for the June 30, 2018 (Lag) actu-

arial valuations used to determine the Preliminary Fiscal Year 2020

employer contributions of the NYCRS.

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

highly on the actuarial assumptions and methods used and are subject to

change based on the realization of potential investment, demographic,

contribution, and other risks. If actual experience deviates from actu-

arial 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.

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 2019-20 dated May 16,

2019 was prepared by the Chief Actuary for the New York City Employees'

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

New York City Board of Education Retirement System, the New York City

Police Pension Fund, and the New York City Fire Pension Fund. This esti-

mate is intended for use only during the 2019 Legislative Session.