NYS Public Pensions

1. National Center for the Study of Collective Bargaining in Higher Education and the Professions – 36th Annual Conference April, 2009 Panel on Legislative Strategies Presentation by Richard Winsten Esq. Meyer, Suozzi, English, Klein PC

2. State Constitution Guarantees Incumbent Employee Benefits Article 5 NYS Constitution § 7. After July first, nineteen hundred forty, membership in any pension or retirement system of the state or of a civil division thereof shall be a contractual relationship, the benefits of which shall not be diminished or impaired. NYS Pension Tiers Tier 1 pre 1973 Tier 2 1973-76 Tier 3 1976 - Tier 4 Late 1980's to present Tier 5 – January, 2010 -

3. The 2007-08 Session of the LegislatureThe 2007-08 Session of the LegislatureOver 300 retirement bills introduced in the Senate and Assembly at the request of public employers, unions, and others

4. Retirement Benefits That Aren’t Pension Benefits New York City Administrative Code § 13-194 Correction officers' variable supplements fund. 1. As used inthis section, the following words and phrases shall have the followingmeanings, unless a different meaning is plainly required by the conte (b) It is hereby declared by the legislature that the correctionofficers' variable supplements fund shall not be, and shall not beconstrued to constitute, a pension or retirement system or fund, andthat it shall function as a means whereby payments, not constituting apension or retirement allowance, may be made in accordance with theprovisions of this section, to eligible beneficiaries as a supplement tobenefits received by them pursuant to this title. The legislature herebyreserves to the state and itself the right and power to amend, modify orrepeal any or all of the provisions of this section.

5. Changes in Retirement System Earnings Assumptions – Presto, Money New York City Administrative Code § 13-638.2 Supplementary provisions regarding employer contributionsto retirement systems for fiscal years beginning on or after July first,nineteen hundred eighty-nine, for amortization of consolidated unfundedaccrued liabilities and balance sheet liabilities for the nineteenhundred ninety--nineteen hundred ninety-one, nineteen hundredninety-one--nineteen hundred ninety-two and nineteen hundredninety-two--nineteen hundred ninety-three fiscal years, and foramortization of such liabilities and certain other unfunded accruedliabilities pursuant to the level percentage of payroll method incertain fiscal years thereafter; rates of interest. a. As used in thissection, unless the context clearly indicates otherwise, the followingterms shall have the following meanings: (iii) There shall be determined with respect to such retirement system, as of June thirtieth, nineteen hundred ninety, on the basis ofan interest rate of eight and one-quarter per centum per annum, the NYCERS 8% July 1, 2004 to June 30, 2009NYCTRS 8% July 1, 2004 to June 30, 2009PPF 8% July 1, 2004 to June 30, 2009FPF 8% July 1, 2004 to June 30, 2009BERS 8% July 1, 2004 to June 30, 2009

6. Statutory Prohibition on Negotiating Pension Benefits ?????? Retirement and Social Security * § 470. Temporary suspension of retirement negotiations. Until July first, two thousand eleven, changes negotiated between any public employer and public employee, as such terms are defined in section two hundred one of the civil service law, with respect to any benefit provided by or to be provided by a public retirement system, or payments to a fund or insurer to provide an income for retirees or payment to retirees or their beneficiaries, shall be prohibited. Thereafter, such changes shall be made only pursuant to negotiations between public employers and public employees conducted on a coalition basis pursuant to the provisions of this article; provided, however, any such changes not requiring approval by act of the legislature may be implemented prior to July first, two thousand eleven, if negotiated as a result of collective bargaining authorized by section six of chapter six hundred twenty-five of the laws of nineteen hundred seventy-five. * NB Effective until January 9, 2010 * § 470. Temporary suspension of retirement negotiations. Changes negotiated between any public employer and public employee, as such terms are defined in section two hundred one of the civil service law, with respect to any benefit provided by or to be provided by a public retirement system, or payments to a fund or insurer to provide an income for retirees or payment to retirees or their beneficiaries, shall be prohibited. * NB Effective January 9, 2010

7. Governors Maintain that Benefits Should Be Negotiated Tho Illegal? VETO MESSAGE - No. 265TO THE ASSEMBLY:I am returning herewith, without my approval, the following bill:Assembly Bill Number 10224, entitled: "AN ACT to amend the general municipal law, in relation to certain lung disabilities incurred by bridge and tunnel officers, sergeants and lieutenants in certain cases and providing for the repeal of such provisions upon expiration thereof" NOT APPROVED This bill would amend the General Municipal Law to provide bridge andtunnel officers, employed in cities where such officers are drawn fromcompetitive civil service lists, with the benefit of a presumption thatany disease of the lung contracted by such officer that results in totalor partial disability was incurred in the performance of duty. The MTA once again opposes this bill on the grounds that the air qual-ity in the bridge and tunnel work environment is within acceptablelimits and that the bill would: (i) circumvent the collective bargainingprocess;

8. Another Example of the “Illegal” Cited As the Law in a Governor Veto TO THE SENATE:I am returning herewith, without my approval, the following bill:Senate Bill Number 3927, entitled: "AN ACT to amend the retirement and social security law, in relation to providing county correction officers with a special optional twenty year retirement plan" NOT APPROVED Further, in a 2005 decision, Public Employment Relations Board held that an employer's participation in an optional retirement plan is a mandatory subject forbargaining. At the very least, these factors constrict any employer's decision ability to decline participation in the new pension plan.

9. Local Government Option § 89-f. Retirement of county correction officers in Suffolk county. a. Any member who is employed in Suffolk county as a correction officer shall be eligible to retire pursuant to the provisions of this section. Such eligibility shall be an alternative to the eligibility provisions available under any other plan of this article to which such member is subject. The sheriff shall certify to the comptroller, periodically and at such intervals of time as may be required of him and in such fashion as may be prescribed, the identity of the eligible correction officers in his employ. b. Such member shall be entitled to retire upon the completion of twenty-five years of total creditable service by filing an application therefor in the manner provided for in section seventy of this article. c. Upon completion of twenty-five years of such service and upon retirement, each such member shall receive a pension which, together with an annuity which shall be the actuarial equivalent of his accumulated contributions at the time of his retirement and an additional pension which is the actuarial equivalent of the reserved-for-increased-take-home-pay to which he may then be entitled shall be sufficient to provide him with a retirement allowance equal to one-half of his final average salary. d. As used in this section "creditable service" shall include any and all services performed as a correction officer of Suffolk county. e. As used in this section, "correction officer" means a correction officer, warden, deputy warden or chief of staff. f. Credit for service as a member or officer of the state police or as a paid fireman, policeman or officer of any organized fire department or police force or department of any county, city, village, town, fire district or police district, or as a criminal investigator in the office of a district attorney, provided that service as such investigator shall have been rendered prior to January first, nineteen hundred sixty and that credit therefor shall not exceed five years, shall also be deemed to be creditable service and shall be included in computing years of total service for retirement pursuant to this section, provided such service was performed by the member while contributing to the retirement system pursuant to the provisions of this article or article eight of this chapter. g. A member contributing on the basis of this section at the time of retirement, shall retire after the completion of twenty-five years of total creditable service. Application therefor may be filed in a manner similar to that provided in section seventy of this article. Upon completion of twenty-five years of such service and upon retirement, each such member shall receive a pension which, together with an annuity which shall be the actuarial equivalent of his accumulated contributions at the time of his retirement and an additional pension which is the actuarial equivalent of the reserve-for-increased-take-home-pay to which he may then be entitled shall be sufficient to provide him with a retirement allowance equal to one-half of his final average salary. h. In computing the twenty-five years of total service of a member pursuant to this section full credit shall be given and full allowance shall be made for service of such member in time of war after World War I as defined in section two of this chapter, provided such member at the time of his entrance into the armed forces was in the service of the county of Suffolk. i. Nothing herein shall be construed to prevent a member, who does not retire pursuant to the provisions of this section, from utilizing service which is creditable service pursuant to the provisions of this section for service credit pursuant to the provisions of any other plan of this article to which such member is subject. j. The provisions of this section shall be controlling notwithstanding any other provision in this article to the contrary.

10. Employees Pay for New Benefit * § 445-f. Optional twenty-five year improved benefit retirement program for special officer, parking control specialist, school safety agent, campus peace officer, and New York city taxi and limousine inspector members. a. d. Additional member contributions. 1. In addition to the member contributions required pursuant to section 13-125 or section 13-162 of the administrative code, each participant in the twenty-five year improved benefit retirement program shall contribute, subject to the applicable provisions of section 13-125.2 of the administrative code, an additional six and twenty-five one hundredths percent of his or her compensation earned from all allowable service, as a participant in the twenty-five year improved benefit retirement program, rendered on and after the starting date of the improved benefit retirement program, and all allowable service after such person ceases to be a participant, but before he or she again becomes a participant pursuant to paragraph five of subdivision b of this section. A participant in the twenty-five year improved benefit retirement program shall contribute additional member contributions until the later of the date as of which he or she is eligible to retire with thirty years of allowable service under such retirement program, or the first anniversary of the starting date of the twenty-five year improved benefit retirement program. The additional contributions required by this paragraph shall be in lieu of additional member contributions required by subdivision d of section four hundred forty-five-d of this article, as added by chapter ninety-six of the laws of nineteen hundred ninety-five, and no member paying additional

11. Fiscal Notes – NYS Legislative Law § 50. Fiscal note in retirement bills. A bill which enacts or amends any provision of law relating to a retirement system or plan of the state of New York or of any of its political subdivisions shall contain a fiscal note stating the estimated annual cost to the employer affected and the source of such estimate. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: If this bill were to be enacted in the 2006 Legislative Session, there would be no cost to the City in fiscal year 2006-07 or in any subsequent fiscal year. This estimate, dated April 26, 2006, was prepared by Jonathan Schwartz, consulting actuary. “and the source of such estimate” PROVISIONS OF PROPOSED LEGISLATION: With respect to the New York City Retirement Systems ("NYCRS"), this proposed legislation would amend Retirement and Social Security Law ("RSSL") Section 177.9(a) to permit an increase to 25% the percentage of assets that could be invested in "Basket Clause" investments. This 25% limit compares with a limit of 15% under current law. FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS: With respect to the NYCRS, the enactment of this proposed legislation would not, in and of itself, result in any change in employer contributions. The ultimate cost of a Retirement Program is the benefits it pays. The financing of that ultimate cost is provided by contributions and invest- ment income. Investment income depends upon the amount of assets of the Fund and the rate of return received on those assets. The rate of return depends primarily upon the asset allocation policy of the Fund. To the extent that the NYCRS increase their investments in the securi- ties authorized by this proposed legislation and those securities produce greater (lesser) rates of return than the rates of return that the NYCRS would otherwise have achieved, then employer contributions will be lesser (use only during the 2006 Legislation Session. It is Fiscal Note 2006-04, dated March 2, 2006, prepared by the Chief Actuary for the New York City Retirement Systems. greater). FISCAL NOTE IDENTIFICATION: This estimate is intended for .

12. Fiscal Note Controversy NY Times By DANNY HAKIM Published: May 17, 2008 Assembly Halts Bills With Analysis by Union-Paid Actuary

13. Controversy cont. Why aren’t they using the New York City pension system’s actuary for these fiscal notes?” said John J. Faso, who was the Republican nominee for governor in 2006 and a former minority leader of the Assembly. “To me, it’s a real conflict of interest to use anything but the pension system itself as the actuary.” “What people call actuarial science is at least as much as an art as a science,” said Mr. Schwartz, a former actuary for New York City. “Back in my days as city actuary, I would go to that part of the range that would make things look as expensive as possible,” he added. “As consultant for the unions, I go to the part of the range that makes things as cheap as possible, but I never knowingly go out of the range.”

14. Controversy continued Section 1. Legislative findings. The legislature finds that it is critically important to ensure that all fiscal notes required pursuant to section 50 of the legislative law reflect the most accurate estimate of the total cost of any proposed change to a retirement system or plan of the state of New York or any of its political subdivisions. In order to accomplish this public purpose, the legislature hereby finds that all fiscal notes required pursuant to section 50 of the legislative law should be prepared and submitted by the chief actuary of the affected retirement system or plan, if applicable, in as timely a manner as practicable. The legislature further finds that all fiscal notes generated pursuant to such section 50 shall represent the best faith estimate of the chief actuary of the affected retirement system or plan, if applicable, and that such estimate shall be generated in accordance with the generally-accepted actuarial standards and practices in effect at the time for such retirement system or plan. S T A T E O F N E W Y O R K ___________________________________________________________________ S. 5418--A A. 8059—A 2009-2010 Regular Sessions S E N A T E - A S S E M B L Y May 1, 2009