Allows retired employees of the New York state teachers' retirement system who return to active service and suspend their pension benefit to elect to combine their service credit earned prior to retirement with the service credit earned after their restoration to active service, provided they have earned at least two years of service credit since such restoration.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10529
SPONSOR: Rules (Burke) TITLE OF BILL:
An act to amend the education law, in relation to allowing retirees of
the New York state teachers' retirement system who suspend their retire-
ment the option of a benefit recalculation after two years of service
PURPOSE OF THE BILL:
The New York State Teachers' Retirement System (NYSTRS) proposes an
amendment to Education Law Section 503(11) to mirror the provisions of
Retirement and Social Security Law Section 101, the provisions available
to members of the New York State and Local Employees' Retirement System
(NYSLRS), The purpose of this amendment is to maintain consistency in
the law for members of the state systems (NYSLRS and NYSTRS). The amend-
ments to Education Law Section 503(11) would allow retired members of
NYSTRS to suspend their retirement, return to work and have the option
of a benefit recalculation after working at least two years of addi-
tional public service,
SUMMARY AND JUSTIFICATION:
Under the current statute, Education Law Section 503(11)(b), NYSTRS
retirees are permitted to suspend their retirement and return to work to
have their benefit recalculated after five years or alternatively upon
re-retiring with at least two years of service, they become eligible to
receive two separate retirement benefits, In order to avail themselves
of the recalculation after five years of additional service, the member
is required to pay back all the pension benefits received under the
original retirement benefit, with interest, or take an actuarial equiv-
alent lifetime reduction. The intent of these provisions, Education Law
Section 503 and Retirement and Social Security Law Section 101, is to
allow members of NYSTRS and NYSLRS, as public, employees, the opportu-
nity to have all their public service under either two separate retire-
ment benefits or the option of a combined retirement benefit, if the
recalculation requirements are satisfied.
The amendments to Education Law Section 503(11) update the law to
reflect the requirements under Retirement and Social Security Law
Section 101, and would allow NYSTRS members to avail themselves of a
recalculation after two years of member service credit after restoration
to active service, provided, such members return to the retirement
system with regular interest the actuarial equivalent of the amount of
the retirement allowance received in the first retirement or repayment
of same through actuarial lifetime reduction.
In addition, the System recognizes that allowing retirees the option of
recalculating their benefit after two years of service, instead of five
years, may assist those who believe they attained a service credit mark-
er, but discover:after the het and post verification of service record
with the school district that they had not, For example, in some cases,
members retiring believe they have reached their intended service credit
milestone, twenty years, but once the service has been verified with the
employer the service credit is less than what was anticipated. At that
point, It could be very difficult for the retiree to return to the posi-
tion they retired from or even find a similar position, much less for an
additional five years. Reducing the benefit recalculation requirement to
two years, Would provide a more reasonable avenue to real* such miscal-
oulations, equitably avail NYSTRS retirees of the same recalculation
already provided in law for NYSLRS retirees, and may provide employers
with Opportunities to hire an experienced worker to fill in during a
transition and assist in Succession planning.
This legislation was captured under veto message 138 of the laws of 2022
for the reason that the funding source was not identified, The System's
fiscal note was appended to the bill and provided that due to the nature
of this legislation NYSTRS is unable to ascertain the exact number of
members who will pursue the recalculation upon restoration to member-
ship. Accordingly, it is not possible to state that there will be no
cost to the bill, An individual's life circumstances determine how and
when a member retires and then elects to return to public service. The
law does currently require, however, that for a member to afford them-
selves of the benefit recalculation addressed in this legislation the
member must remit the repayment of all pension received under the first
retirement plus interest or repayment through an actuarial reduction,
With that said, there may be a cost associated due to. the employer
contribution rate collected and applicable at the time of the service
and that is reflected in the negligible cost in the fiscal note
appended.
The amendments sought by this proposed legislation seek to update the
application of the law and provide NYSTRS members with the similar
option currently available to other state employees.
EFFECTIVE DATE OF THE BILL:
This act shall take effect on the sixtieth day after it shall have
become a law.
OTHER AGENCIES TO WHOM THE BILL MAY BE OF INTEREST:
Division of the Budget, Department of Financial Services,
BUDGETARY IMPLICATIONS OF THE BILL:
If this bill is enacted, the annual cost to the employers of members of
the New York State Teachers' Retirement System Is estimated to be negli-
gible.
NOTE: This bill was prepared under the direction of the New York State
Teachers' Retirement System Board and was Introduced at its request.
FISCAL NOTE 2024-2
October 16, 2023
This fiscal note was requested by the New York State Teachers' Retire-
ment System. Pursuant to Section 50 of the Legislative Law, the fiscal
note that must be appended in its entirety to this bill is: "This bill
would amend subdivision 11 of Section 503 of the Education Law to allow,
a retired member of the New York State Teachers' Retirement System
(NYSTRS), who returns to active service and suspends their pension bene-
fit, to elect to combine their service credit earned prior to their
retirement with the service credit earned after their restoration to
active service, provided they have earned at least two years of service
credit since restoration and they pay back their prior pension received
or have the new benefit reduced for life based upon the actuarial equiv-
alent of the prior pension received. Current law requires five years of
service credit since restoration to combine all service credit into one
pension benefit. State employees and other members of the New York State
and Local Retirement System (NYS&LRS) are eligible to combine their
service credit after earning two years of service credit after restora-
tion. This bill would make this eligibility the same for teachers as it
is for state employees, This bill would take effect on the sixtieth day
after it shall become a law.
"The annual cost to the employers of members of the New York State
Teachers' Retirement System would 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 Annual
Report. System assets are as reported in the System's financial state-
ments and can also be found in the System's Annual Report. Actuarial
assumptions and methods are provided in the System's Actuarial Valuation
Report.
"The source of this estimate is Fiscal Note 2024-2 dated October 16,
2023 prepared by the Actuary of the New York State Teachers' Retirement
System and is intended for use only during the 2024 Legislative Session.
I, Richard A. Young, am the Chief Actuary for the New York State Teach-
ers' Retirement System. I am a member of the American Academy of Actuar-
ies and I meet the Qualification Standards of the American Academy of
Actuaries to render the actuarial opinion contained herein."
STATE OF NEW YORK
________________________________________________________________________
10529
IN ASSEMBLY
June 2, 2024
___________
Introduced by COMMITTEE ON RULES -- (at request of M. of A. Burke) --
(at request of the New York State Teachers' Retirement System) -- read
once and referred to the Committee on Governmental Employees
AN ACT to amend the education law, in relation to allowing retirees of
the New York state teachers' retirement system who suspend their
retirement the option of a benefit recalculation after two years of
service
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 11 of section 503 of the education law, as
2 added by chapter 507 of the laws of 1972 and as renumbered by chapter
3 512 of the laws of 1976, is amended to read as follows:
4 11. a. If a retired member, receiving a retirement allowance for other
5 than disability, returns to active public service, except as otherwise
6 provided in sections two hundred eleven or two [hyndred] hundred twelve
7 of the retirement and social security law, and is eligible for member-
8 ship in the retirement system, [he thereupon] such employee shall become
9 a member and [his] their retirement allowance shall be suspended in the
10 same manner as provided in subdivision five of this section [five
11 hundred three of this article. In such event, he shall contribute to the
12 retirement system as if he were a new member]. Upon [his] subsequent
13 retirement [after at least two years of service he] such employee shall:
14 1. Be credited with all member service earned [by him] since [he] they
15 last became a member of the retirement system, and
16 2. Receive a retirement allowance which shall consist of[:
17 (a) An annuity as provided in subdivision five of section five hundred
18 three of this article plus an annuity which is the actuarial equivalent
19 of any contributions made by him since he last became a member, and
20 (b) The] the pension which [he] such employee was receiving immediate-
21 ly prior to [his] the last restoration to membership as provided in
22 subdivision five of this section [five hundred three of this article],
23 plus a pension based upon the [member] service credit earned [by him]
24 since [he] such employee last became a member. Such latter pension shall
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
A LBD15831-01-4
A. 10529 2
1 be computed as if [he] they were a new member when [he] they rejoined
2 the system pursuant to the provisions of this subdivision.
3 b. Where such member shall have earned at least [five] two years of
4 [member] service credit after restoration to active service, the total
5 service credit to which [he] such member was entitled at the time of
6 [his] the earlier retirement may, at [his] their option, again be cred-
7 ited to [him] them and upon [his] subsequent retirement [he] such member
8 shall be credited in addition for purposes of computation of the pension
9 portion of the retirement allowance with all [member] service credit
10 earned [by him] subsequent to [his] the last restoration to membership.
11 Such total service credit to which [he] such member was entitled at the
12 time of [his] the earlier retirement shall be so credited only in the
13 event that such member returns to the retirement system with regular
14 interest the actuarial equivalent of the amount of the pension [he]
15 received, or in the event that such amount is not so repaid the actuari-
16 al equivalent thereof shall be deducted from [his] such member's subse-
17 quent retirement allowance.
18 c. Notwithstanding the foregoing provisions of this subdivision, a
19 retired member who is receiving a retirement allowance for other than
20 physical disability, and who returns to active public service, may elect
21 not to be restored to membership in the retirement system until [he]
22 such retired member has rendered one year of service following [his]
23 their return to public service. In such event [his] the retirement
24 allowance shall be suspended during such year of service in the same
25 manner as provided in subdivision five of this section [five hundred
26 three of this article]. Upon restoration to membership following
27 completion of such year of service, [his] service in such year shall be
28 deemed to be service while a member for purposes of subdivision b of
29 section five hundred twelve of this article. [He] Such retired member
30 may purchase [member] service credit for such year, which shall be
31 deemed earned [member] service credit. If a retired member receiving a
32 retirement benefit allowance for other than physical disability, returns
33 to active public service, and is then ineligible for membership in the
34 retirement system, the retirement allowance shall be suspended in the
35 same manner as provided in this section.
36 d. Notwithstanding any other provision of this article, a retired
37 member who rejoins the system under the provisions of [paragraphs a or c
38 of] this subdivision shall only be entitled to a death benefit according
39 to the provisions of paragraph two of subdivision b of section five
40 hundred twelve of this article and of no other subdivision thereof and
41 for the purposes of [said] such paragraph two of subdivision b of
42 section five hundred twelve the credited service as a teacher shall be
43 service as a teacher credited since last joining the system.
44 § 2. This act shall take effect on the sixtieth day after it shall
45 have become a law.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would amend subdivision 11 of Section 503 of the Education
Law to allow a retired member of the New York State Teachers' Retirement
System (NYSTRS), who returns to active service and suspends their
pension benefit, to elect to combine their service credit earned prior
to their retirement with the service credit earned after their restora-
tion to active service, provided they have earned at least two years of
service credit since restoration and they pay back their prior pension
received or have the new benefit reduced for life based upon the actuar-
ial equivalent of the prior pension received. Current law requires five
years of service credit since restoration to combine all service credit
A. 10529 3
into one pension benefit. State employees and other members of the New
York State and Local Retirement System (NYS&LRS) are eligible to combine
their service credit after earning two years of service credit after
restoration. This bill would make this eligibility the same for teachers
as it is for state employees. This bill would take effect on the sixti-
eth day after it shall become a law.
The annual cost to the employers of members of the New York State
Teachers' Retirement System would 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
Annual Report. System assets are as reported in the System's financial
statements and can also be found in the System's Annual Report. Actuar-
ial assumptions and methods are provided in the System's Actuarial Valu-
ation Report.
The source of this estimate is Fiscal Note 2024-2 dated October 16,
2023 prepared by the Actuary of the New York State Teachers' Retirement
System and is intended for use only during the 2024 Legislation Session.
I, Richard A. Young, am the Chief Actuary for the New York State Teach-
er's Retirement System. I am a member of the American Academy of Actuar-
ies and I met the Qualification Standards of the American Academy of
Actuaries to render the actuarial opinion contained herein.
