Lower Veterans' Service Credit Cost

Section 1. Subdivision 9 of section 1000 of the retirement and social security law, as amended by chapter 41 of the laws of 2016, is amended to read as follows:

9. Anything to the contrary in subdivision three of this section notwithstanding, to obtain such credit, a member who first joins a public retirement system of the state on or after April first, two thousand twelve shall pay such retirement system, for deposit in the fund used to accumulate employer contributions, a sum equal to the product of the number of years of military service being claimed and [six] three percent of such member's compensation earned during the twelve months of credited service immediately preceding the date that the member made application for credit pursuant to this section.

§ 2. This act shall take effect immediately.

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

This bill would decrease the amount of payment required for Tier 6

members who are obtaining military service credit pursuant to Section

1000 of the Retirement and Social Security Law. Under current law, a

Tier 6 member must pay a sum equal to the product of the number of years

of military service being claimed and six percent of such member's

compensation earned during the twelve months of credited service imme-

diately preceding the date that the member made application for credit.

This legislation would require such members to pay only three percent of

compensation per year of service being claimed.

If this bill is enacted, insofar as this proposal affects the New York

State and Local Employees' Retirement System (ERS), it is estimated that

the past service cost will be 3% of an affected members' compensation

for each year of additional service credit that is purchased. For ERS,

this cost would be borne entirely by the State of New York.

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

[ ] is old law to be omitted.

LBD15570-02-0

S. 8349 2

Insofar as this proposal affects the New York State and Local Police

and Fire Retirement System (PFRS), it is estimated that the past service

cost will be 3% of an affected members' compensation for each year of

additional service that is purchased. For PFRS, this cost would be

shared by the State of New York and the participating employers of the

PFRS.

The exact number of current members as well as future members who

could be affected by this legislation cannot be readily determined.

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, 2019 actuarial valu-

ation. Distributions and other statistics can be found in the 2019

Report of the Actuary and the 2019 Comprehensive Annual Financial

Report.

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

2016, 2017, 2018, and 2019 Annual Report to the Comptroller on Actuarial

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

York: Audit and Control.

The Market Assets and GASB Disclosures are found in the March 31, 2019

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 May 8, 2020, and intended for use only during the

2020 Legislative Session, is Fiscal Note No. 2020-113, prepared by the

Actuary for the New York State and Local Retirement System.