Credit Teachers’ Federal Service

Section 1. Subdivision 2 of section 509 of the education law is amended by adding a new paragraph d to read as follows:

d. Notwithstanding any other provision of law, a member shall be entitled to obtain credit for up to ten years of service other than military service rendered in the employ of the federal government, including service in the Peace Corps, VISTA, or Head Start, which would constitute service as a teacher, had it been performed within New York state for an employer subject to the provisions of this article. The crediting of service pursuant to this paragraph shall be in accordance with rules and regulations as shall be adopted by the retirement board, provided that such rules and regulations shall be substantially equivalent to the rules and regulations otherwise applicable for the crediting of service pursuant to this section. Provided, however, no such credit shall be allowed for any service for which the person is receiving a benefit or will be entitled to receive a benefit at any future time from some other public or private retirement system or plan in this state, in any other state or from the federal government.

§ 2. Section 446 of the retirement and social security law is amended by adding a new subdivision k to read as follows:

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

[ ] is old law to be omitted.

LBD06634-06-9

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k. Notwithstanding any other provision of law, a member of a teachers' retirement system subject to the provisions of this article shall be entitled to obtain credit for up to ten years of service other than military service rendered in the employ of the federal government, including service in the Peace Corps, VISTA, or Head Start, which would constitute service as a teacher, had it been performed within New York state for an employer subject to the provisions of this article. The crediting of service pursuant to this subdivision shall be in accordance with rules and regulations as shall be adopted by the retirement board of such retirement system, provided that such rules and regulations shall be substantially equivalent to the rules and regulations otherwise applicable for the crediting of service pursuant to this section. Provided, however, no such credit shall be allowed for any service for which the person is receiving a benefit or will be entitled to receive a benefit at any future time from some other public or private retirement system or plan in this state, in any other state or from the federal government.

§ 3. Section 513 of the retirement and social security law is amended by adding a new subdivision i to read as follows:

i. Notwithstanding any other provision of law, a member of a teachers' retirement system subject to the provisions of this article shall be entitled to obtain credit for up to ten years of service other than military service rendered in the employ of the federal government, including service in the Peace Corps, VISTA, or Head Start, which would constitute service as a teacher, had it been performed within New York state for an employer subject to the provisions of this article, provided such member makes the payments required pursuant to the provisions of section five hundred seventeen of this article. The crediting of service pursuant to this subdivision shall be in accordance with rules and regulations as shall be adopted by the retirement board of such retirement system, provided that such rules and regulations shall be substantially equivalent to the rules and regulations otherwise applicable for the crediting of service pursuant to this section. Provided, however, no such credit shall be allowed for any service for which the person is receiving a benefit or will be entitled to receive a benefit at any future time from some other public or private retirement system or plan in this state, in any other state or from the federal government.

§ 4. Section 609 of the retirement and social security law is amended by adding a new subdivision i to read as follows:

i. Notwithstanding any other provision of law, a member of a teachers' retirement system subject to the provisions of this article shall be entitled to obtain credit for up to ten years of service other than military service rendered in the employ of the federal government, including service in the Peace Corps, VISTA, or Head Start, which would constitute service as a teacher, had it been performed within New York state for an employer subject to the provisions of this article, provided such member makes the payments required pursuant to the provisions of section six hundred thirteen of this article and paragraph two of subdivision b of this section. The crediting of service pursuant to this subdivision shall be in accordance with rules and regulations as shall be adopted by the retirement board of such retirement system, provided that such rules and regulations shall be substantially equivalent to the rules and regulations otherwise applicable for the crediting of service pursuant to this section. Provided, however, no such credit shall be allowed for any service for which the person is receiv-

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ing a benefit or will be entitled to receive a benefit at any future time from some other public or private retirement system or plan in this state, in any other state or from the federal government.

§ 5. Subparagraph (d) of paragraph 3 of subdivision a of section 13-505 of the administrative code of the city of New York is amended to read as follows:

(d) Credit for such prior service up to a maximum of fifteen years shall be given only if application and payment therefor is made by the contributor within the first four years subsequent to membership in the New York city teachers' retirement system or before December thirtyfirst, [nineteen hundred sixty-nine] two thousand nineteen, whichever is later.

§ 6. Subdivision a of section 13-505 of the administrative code of the city of New York is amended by adding a new paragraph 10 to read as follows:

10. Notwithstanding any other provision of law, a member shall be entitled to obtain credit for up to ten years of service other than military service rendered in the employ of the federal government, including service in the Peace Corps, VISTA, or Head Start, which would constitute service as a teacher, had it been performed within New York state for an employer subject to the provisions of this chapter. The crediting of service pursuant to this paragraph shall be in accordance with rules and regulations as shall be adopted by the retirement board, provided that such rules and regulations shall be substantially equivalent to the rules and regulations otherwise applicable for the crediting of service pursuant to this section. Provided, however, no such credit shall be allowed for any service for which the person is receiving a benefit or will be entitled to receive a benefit at any future time from some other public or private retirement system or plan in this state, in any other state or from the federal government.

§ 7. This act shall take effect June 30, 2019.

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

This bill would amend section 509 of the Education Law and sections

446, 513, and 609 of the Retirement and Social Security Law to permit

members of the New York State Teachers' Retirement System (NYSTRS) to

claim service credit for up to ten years of federal teaching service

(including Vista, Head Start, and the Peace Corps). Payments for such

credit must be made by those members subject to Article 14 of the

Retirement and Social Security Law in accordance with section 517 of

such law and by those members subject to Article 15 of the Retirement

and Social Security Law in accordance with section 613 and paragraph 2

of subdivision b of section 609 of such law.

It is not possible to determine the number of eligible current and

future members, or the number of years of teaching service credit each

such member may purchase under this bill. Therefore, it is not possible

to estimate the annual increase in the employers' cost for this bill.

Whatever increase in liabilities that arises for service credited under

this bill would be included in the cost that would be shared and spread

through the employer contribution rate.

It is estimated that the increase in liabilities for each member who

purchases service credit under this bill is as follows:

Increase in liabilities

(as a percentage of the member's salary per year of service credited)

Tier 1-4 5 6

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Increase in liabilities 13.6% 11.1% 10.7%

Member Contribution offset 3.0%* 3.5% 6.0%

Net cost to participating employers

(to be shared and spread) 10.6% 7.6% 4.7%

*Members of Tier 1 and 2 do not pay member contributions

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. Future actuarial measurements may differ

significantly from the current measurements presented in this report due

to such factors as: future plan experience that differs significantly

from that predicted by the actuarial assumptions, changes in the actuar-

ial assumptions or methods, and changes in plan provisions or applicable

law.

The source of this estimate is Fiscal Note 2019-27 dated May 24, 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:

SUMMARY OF BILL: This proposed legislation would amend Retirement and

Social Security Law (RSSL) Sections 446, 513 and 609 and Administrative

Code of the City of New York (ACCNY) Section 13-505 to allow active

members of the New York City Teachers' Retirement System (NYCTRS) to

claim service credit for up to ten years of non-military federal service

(including service in the Peace Corps, VISTA, and Head Start) which

would otherwise constitute service as a teacher had it been performed in

New York State. No service credit will be permitted for any federal

service for which the member is receiving, or will be entitled to

receive, a benefit from any other public or private retirement system.

Rules and regulations regarding the purchase of such service, includ-

ing the method to assess the amount required of the member for such

purchase, will be determined by the TRS Board of Trustees. For purposes

of this Fiscal Note, it has been assumed that members would be eligible

to purchase federal teaching service immediately upon joining the plan,

without any age or service requirements.

The proposed legislation also extends the deadline to purchase Tier I

Outside Teaching Service as specified in ACCNY Section 13-505 from the

later of December 31, 1969 and the member's 4th anniversary to the later

of December 31, 2019 and the member's 4th anniversary.

Effective Date: June 30, 2019.

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

the number of years of federal teaching service that members would claim

under the proposed legislation. Therefore, the estimated financial

impact has been calculated on a per individual basis equal to the

increase in the Present Value of Future Benefits (PVFB) for an average

member who would purchase a single year of credited service.

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

proposed legislation could vary greatly depending on the number of years

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of federal teaching service purchased and the member's length of

service, age, salary history, and the Plan in which the member partic-

ipates.

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

arial assumptions and methods described herein, the enactment of this

proposed legislation would increase the PVFB by approximately $16,300,

on average for each year of service credited. This increase would be

offset by the amount required to be paid by the member to purchase such

service.

FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: Enactment of this

proposed legislation would increase employer contributions, where such

amount would depend on the number of years of eligible federal teaching

service credited as well as other characteristics including the age,

years of service, and salary history of the member purchasing the

service.

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

members who might purchase federal teaching service, the financial

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

in employer contributions have been estimated assuming that increase in

the PVFB will be financed over a time period comparable to that used for

actuarial losses under the Entry Age Normal cost method. 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, 2018, the enactment of this proposed legislation is esti-

mated to increase annual employer contributions by approximately $1,900

for each year of service credited. This increase would be offset by the

amount required to be paid by the member to purchase such service. With

respect to the timing, increases in employer contributions would depend

upon when members elect to purchase the service. Generally, increased