Home » LAWS OF NEW YORK, 2019 – CHAPTER 589

LAWS OF NEW YORK, 2019 – CHAPTER 589

                        LAWS OF NEW YORK, 2019
                                      CHAPTER 589
              (See FISCAL NOTES at end of Chapter.)

1       AN  ACT  to amend the retirement and social security law, in relation to
2         increasing the retiree earnings cap
3
4           Became a law December 6, 2019, with the approval of the Governor.
5                Passed by a majority vote, three-fifths being present.
6
7         The People of the State of New York, represented in Senate and  Assem-
8       bly, do enact as follows:
9
10         Section  1.  Subdivision 2 of section 212 of the retirement and social
11       security law, as amended by chapter 74 of the laws of 2006,  is  amended
12       to read as follows:
13         2.  The earning limitations for retired persons in positions of public
14       service under this section shall be in  accordance  with  the  following
15       table:
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For the year
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005 and 2006
2007 [and thereafter]through 2019
2020 and thereafter
Earnings limitation
$12,500
$13,500
$14,500
$15,500
$17,000
$18,500
$20,000
$25,000
$27,500
$27,500
$30,000
$35,000

30         § 2. This act shall take effect immediately.
31       ————————————————————————
32         FISCAL NOTE.–Pursuant to Legislative Law, Section 50:
33         This  bill  would amend subdivision 2 of section 212 of the Retirement
34       and Social Security Law to increase the earnings limitation for  retired
35       members  in  positions  of public employment to $35,000 for the calendar
36       year 2020 and thereafter. The earnings limitation for the calendar  year
37       2019 is $30,000.
38         The  annual  cost  to  the  employers of members of the New York State
39       Teachers’ Retirement System is estimated to be negligible if  this  bill
40       is enacted.
41         Member  data  is  from  the  System’s  most recent actuarial valuation
42       files, consisting of data provided by the employers  to  the  Retirement
43       System.   Data distributions and statistics can be found in the System’s
44       Comprehensive Annual Financial  Report  (CAFR).  System  assets  are  as
45       reported  in the System’s financial statements, and can also be found in
46       the CAFR. Actuarial assumptions and methods are provided in the System’s
47       Actuarial Valuation Report.
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49       EXPLANATION–Matter in italics is new; matter in brackets [ ] is old law
50                                    to be omitted.
1       CHAP. 589                          2
2
3         The source of this estimate is Fiscal Note 2019-9  dated  January  15,
4       2019  prepared by the Actuary of the New York State Teachers’ Retirement
5       System and is intended for use only during the 2019 Legislative Session.
6       I, Richard A. Young, am the Actuary for the  New  York  State  Teachers’
7       Retirement  System.  I  am a member of the American Academy of Actuaries
8       and I meet the Qualification Standards of the American Academy of  Actu-
9       aries to render the actuarial opinion contained herein.
10         FISCAL NOTE.–Pursuant to Legislative Law, Section 50:
11         This bill will amend Section 212 of the Retirement and Social Security
12       Law  to  set  the  amount a retired person may earn in public employment
13       without reduction in retirement allowance during the year 2020 and ther-
14       eafter to $35,000.
15         If this bill is enacted during the 2019 legislative  session,  insofar
16       as  it  would  affect the New York State and Local Employees’ Retirement
17       System and the New York State  and  Local  Police  and  Fire  Retirement
18       System,  the resulting 16.7% increase over the current $30,000 limit, in
19       place since 2007, is less than the increase in the consumer price  index
20       over  the  same  period  and  thus would not affect retirement patterns.
21       Therefore, the annual cost is estimated to be negligible.
22         Summary of relevant resources:
23         The membership data used in  measuring  the  impact  of  the  proposed
24       change  was  the same as that used in the March 31, 2018 actuarial valu-
25       ation.  Distributions and other statistics can  be  found  in  the  2018
26       Report  of  the  Actuary  and  the  2018  Comprehensive Annual Financial
27       Report.
28         The actuarial assumptions and methods used are described in the  2015,
29       2016,  2017  and  2018  Annual  Report  to  the Comptroller on Actuarial
30       Assumptions, and the Codes, Rules and Regulations of the  State  of  New
31       York: Audit and Control.
32         The Market Assets and GASB Disclosures are found in the March 31, 2018
33       New  York  State  and  Local  Retirement System Financial Statements and
34       Supplementary Information.
35         I am a member of the American Academy of Actuaries and meet the Quali-
36       fication Standards to render the actuarial opinion contained herein.
37         This fiscal note does not constitute a legal opinion on the  viability
38       of  the  proposed change nor is it intended to serve as a substitute for
39       the professional judgment of an attorney.
40         This estimate, dated January 23,  2019,  and  intended  for  use  only
41       during  the  2019  Legislative  Session,  is  Fiscal  Note  No. 2019-34,
42       prepared by the Actuary for the New  York  State  and  Local  Retirement
43       System.
44         FISCAL NOTE.–Pursuant to Legislative Law, Section 50:
45         SUMMARY  OF BILL: This proposed legislation would amend Retirement and
46       Social Security Law (RSSL) Section 212 to increase the earnings limit of
47       certain New York City Retirement Systems and Pension Funds (NYCRS) reti-
48       rees who return to Public Service.
49         Effective Date: Upon enactment.
50         IMPACT ON BENEFITS: Retirees who return to Public Service and elect to
51       be covered under the provisions of RSSL Section  212  are  permitted  to
52       earn  an amount not exceeding a specific dollar limit in a calendar year
53       without loss, suspension, or diminution of their retirement  allowances.
54       Once  this  dollar  limit is reached, the retiree’s pension is suspended
55       for the remainder of that calendar year. Generally, there are  no  earn-
56       ings  limitations in, or following, the calendar year in which the reti-
57       ree attains age 65.
1                                          3                           CHAP. 589
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3         Currently, the dollar limitation in effect for Calendar Year 2007  and
4       thereafter is $30,000.
5         Under the proposed legislation, if enacted, the RSSL Section 212 post-
6       retirement  Public  Service  earnings  limitation  would be increased to
7       $35,000 for Calendar Year 2020 and thereafter.
8         FINANCIAL IMPACT – ANNUAL EMPLOYER CONTRIBUTIONS:  The  Actuary esti-
9       mates  that the potential impact of the proposed legislation would be to
10       increase pension payments in  Calendar  Year  2020  from  the  NYCRS  by
11       approximately  $310,000.  In  accordance with Administrative Code of the
12       City of New York (ACCNY) Section  13-638.2(k-2),  new  Unfunded  Accrued
13       Liability  (UAL)  attributable to benefit changes are to be amortized as
14       determined by the Actuary but generally over the remaining working life-
15       time of those impacted by the benefit changes. However, since changes in
16       the applicable retirement allowances paid to the NYCRS  retired  members
17       under  this  proposed legislation are not known in advance, the increase
18       in pension payments due to this legislation has been treated as an actu-
19       arial loss. These actuarial losses were amortized over a 15-year  period
20       (14  payments  under  the  One-Year  Lag Methodology (OYLM)) using level
21       dollar payments for the purpose of this Fiscal Note.
22         Overall, the Actuary believes the changes in employer contributions to
23       the NYCRS as a result of enactment of the proposed legislation would  be
24       approximately $37,000 in the first year. Future years’ costs in addition
25       to  the  aforementioned  cost  would  depend on factors such as, but not
26       limited to, the number of retirees that benefit under the legislation.
27         OTHER COSTS: Not measured in this Fiscal Note are the following:
28         * The initial, additional administrative costs of the NYCRS and  other
29       New York City agencies to implement the proposed legislation.
30         *  The  impact  of  this  proposed legislation on Other Postemployment
31       Benefit (OPEB) costs.
32         CONTRIBUTION TIMING: For the purposes  of  this  Fiscal  Note,  it  is
33       assumed  that  the  changes  in the UAL would be reflected for the first
34       time in the June 30, 2020 actuarial valuations of the NYCRS. In  accord-
35       ance  with  the  OYLM  used  to  determine  employer  contributions, the
36       increase in employer contributions would first be  reflected  in  Fiscal
37       Year 2022.
38         CENSUS  DATA:  For  purposes  of  analyzing the impact of the proposed
39       legislation, data on retirees reemployed in Public Service was furnished
40       by the NYCRS. This data averaged over the past five years was considered
41       illustrative of those who could potentially be impacted by this proposed
42       legislation. The average for calendar years 2013 to 2017 of  the  number
43       of  retirees  that  would  benefit  from  this  proposal legislation was
44       approximately 90.
45         ACTUARIAL  ASSUMPTIONS  AND  METHODS:  The  changes  in  the  employer
46       contributions presented herein have been calculated based on the actuar-
47       ial  assumptions and methods in effect for the June 30, 2018 (Lag) actu-
48       arial valuations used to determine  the  Preliminary  Fiscal  Year  2020
49       employer contributions of the NYCRS.
50         RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
51       highly on the actuarial assumptions and methods used and are subject  to
52       change  based  on  the realization of potential investment, demographic,
53       contribution, and other risks. If actual experience deviates from  actu-
54       arial  assumptions,  the  actual costs could differ from those presented
55       herein. Costs are also dependent on  the  actuarial  methods  used,  and
56       therefore  different  actuarial methods could produce different results.
57       Quantifying these risks is beyond the scope of this Fiscal Note.
1       CHAP. 589                          4
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3         STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief  Actu-
4       ary  for,  and  independent of, the New York City Retirement Systems and
5       Pension Funds. I am a Fellow of the Society of  Actuaries,  an  Enrolled
6       Actuary under the Employee Retirement Income and Security Act of 1974, a
7       Member of the American Academy of Actuaries, and a Fellow of the Confer-
8       ence  of Consulting Actuaries. I meet the Qualification Standards of the
9       American Academy of Actuaries to render the actuarial opinion  contained
10       herein.  To  the best of my knowledge, the results contained herein have
11       been prepared in accordance with generally accepted actuarial principles
12       and procedures and with the Actuarial Standards of  Practice  issued  by
13       the Actuarial Standards Board.
14         FISCAL  NOTE  IDENTIFICATION:  This  Fiscal Note 2019-20 dated May 16,
15       2019 was prepared by the Chief Actuary for the New York City  Employees’
16       Retirement  System,  the  New York City Teachers’ Retirement System, the
17       New York City Board of Education Retirement System, the  New  York  City
18       Police Pension Fund, and the New York City Fire Pension Fund. This esti-
19       mate is intended for use only during the 2019 Legislative Session.
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21       The Legislature of the STATE OF NEW YORK ss:
22         Pursuant  to  the authority vested in us by section 70-b of the Public
23       Officers Law, we hereby jointly certify that  this  slip  copy  of  this
24       session law was printed under our direction and, in accordance with such
25       section, is entitled to be read into evidence.
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27          ANDREA STEWART-COUSINS                             CARL E. HEASTIE
28       Temporary President of the Senate                Speaker of the Assembly