STATE OF NEW YORK ________________________________________________________________________ 9812--A IN SENATE May 31, 2024 ___________ Introduced by Sen. SKOUFIS -- (at request of the State Comptroller) -- read twice and ordered printed, and when printed to be committed to the Committee on Civil Service and Pensions -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the retirement and social security law, in relation to authorizing beneficiaries to choose pension benefits or a death bene- fit in certain circumstances The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivision a of section 70 of the retirement and social 2 security law, as amended by chapter 375 of the laws of 2011, is amended 3 to read as follows: 4 a. Any member may retire if [he or she] such member shall have 5 attained at least the minimum retirement age while in service as a 6 member, or while in federal service, or in the service of the United 7 Nations or other international organizations of which the United States 8 is a member, as a member continued pursuant to paragraph one of subdivi- 9 sion f of section forty of this article, or while entitled to make 10 application for a vested retirement allowance pursuant to section seven- 11 ty-six of this title. Any such member desiring to retire shall execute 12 and file with the comptroller an application for retirement, which shall 13 specify the effective date of [his or her] such member's retirement, 14 which shall be not less than fifteen nor more than ninety days subse- 15 quent to such date of filing. An application for service retirement, 16 filed hereunder in accordance with the provisions of subdivision c of 17 section sixty-two or subdivision f of section sixty-three of this arti- 18 cle, shall be processed in the regular manner, provided that if the 19 application filed simultaneously therewith under either of such subdivi- 20 sions is granted, then and in that event the retirement allowance grant- 21 ed in accordance with the provisions of this section shall be appropri- 22 ately adjusted. Notwithstanding any other provision of law, for any 23 member who is eligible to retire, who has died while in active service, 24 and who has filed an application for service retirement less than ninety EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD15350-03-4
S. 9812--A 2 1 days prior to death, such member's designated option election benefici- 2 ary or beneficiaries, if an option election has been filed prior to 3 death, or the beneficiary or beneficiaries designated for the death 4 benefit, if no option election was filed prior to death, shall have the 5 option to choose the benefit provided by service retirement rather than 6 the death benefit, provided, however that if the designated beneficiary 7 elects the service retirement benefit such person shall be required to 8 choose an option as provided by law. If the member's beneficiary or 9 beneficiaries elect the service retirement benefit, the member shall be 10 deemed to have retired on the day before the member's date of death. If 11 there are multiple option beneficiaries and such beneficiaries cannot 12 agree on the choice between the death benefit or the service retirement 13 under an agreed upon option, the service retirement benefit shall be 14 payable under the option election form filed by the member prior to such 15 member's death. If there are multiple death beneficiaries and such bene- 16 ficiaries cannot agree on the choice between the death benefit or the 17 service retirement under an agreed upon option, the death benefit shall 18 be payable. 19 § 2. Subdivision a of section 370 of the retirement and social securi- 20 ty law, as amended by chapter 375 of the laws of 2011, is amended to 21 read as follows: 22 a. Any member may retire if [he or she] such member shall have 23 attained at least the minimum retirement age while in service as a 24 member, or while in federal service, or in the service of the United 25 Nations or other international organizations of which the United States 26 is a member, as a member continued pursuant to paragraph one of subdivi- 27 sion f of section three hundred forty of this article or while entitled 28 to make application for a vested retirement allowance pursuant to 29 section three hundred seventy-six of this title. Any such member desir- 30 ing to retire shall execute and file with the comptroller an application 31 for retirement, which shall specify the effective date of [his or her] 32 such member's retirement, which shall be not less than fifteen nor more 33 than ninety days subsequent to such date of filing. An application for 34 service retirement, filed hereunder in accordance with the provisions of 35 subdivision c of section sixty-two or subdivision f of section sixty- 36 three of this chapter, shall be processed in the regular manner, 37 provided that if the application filed simultaneously therewith under 38 either of such subdivisions is granted, then and in that event the 39 retirement allowance granted in accordance with the provisions of this 40 section shall be appropriately adjusted. Notwithstanding any other 41 provision of law, for any member who is eligible to retire [and], who 42 has died while in active service, and who has filed an application for 43 service retirement less than [thirty] ninety days prior to death, [shall 44 be deemed to have retired and] the member's designated option election 45 beneficiary or beneficiaries, if an option election has been filed prior 46 to death, or the beneficiary or beneficiaries designated for the death 47 benefit, if no option election was filed prior to death, shall have the 48 option to choose the benefit provided by service retirement rather than 49 the death benefit, provided, however that if the designated beneficiary 50 elects the service retirement benefit such person shall be required to 51 choose an option [under section three hundred ninety of this article] as 52 provided by law. If the member's beneficiary or beneficiaries elect the 53 service retirement benefit, the member shall be deemed to have retired 54 on the day before the member's date of death. If there are multiple 55 option beneficiaries and such beneficiaries cannot agree on the choice 56 between the death benefit or the service retirement under an agreed upon
S. 9812--A 3 1 option, the service retirement benefit shall be payable under the option 2 election form filed by the member prior to such member's death. If there 3 are multiple death beneficiaries and such beneficiaries cannot agree on 4 the choice between the death benefit or the service retirement under an 5 agreed upon option, the death benefit shall be payable. 6 § 3. Notwithstanding any other provision of law to the contrary, the 7 provisions of this act shall not be subject to section 25 of the retire- 8 ment and social security law. 9 § 4. This act shall take effect immediately. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: This bill would allow a deceased member's beneficiary the ability to select between the active member death benefit or a survivor's benefit payable under any optional form of payment elected by said beneficiary, provided that the member 1) was eligible to retire as of the day immediately prior to their death, 2) has died in active service, and 3) has filed an application for service retirement less than ninety days prior to their death. If an option election form was filed by the member prior to death, the beneficiary listed on such option election form shall be permitted to select between the active death benefit or a survivor's benefit. If no option election form was filed by the member prior to death, the active death beneficiary shall be permitted to select between the active death benefit or a survivor's benefit. When the survivor's benefit is selected, the beneficiary will be permitted to file their own option election form determining the survi- vor's benefit payable and the member will be deemed to have retired the day prior to their death. Insofar as this bill affects the New York State and Local Employees' Retirement System (NYSLERS), if this bill is enacted during the 2024 Legislative Session, the cost will depend upon the deceased member's age, service, salary, plan, and the optional form elected by the benefi- ciary. For standard options, there will be an estimated additional cost of five (5) times the salary of the deceased member, including the cost of the post-retirement death benefit. All costs arising would be shared and spread by the State of New York and all participating employers in the NYSLERS. Insofar as this bill affects the New York State and Local Police and Fire Retirement System (NYSLPFRS), if this bill is enacted during the 2024 Legislative Session, the cost will depend upon the deceased member's age, service, salary, plan, and the optional form elected by the beneficiary. For standard options, no additional cost is expected to arise in NYSLPFRS. Any costs arising would be shared and spread by the State of New York and all participating employers in the NYSLPFRS. The number of beneficiaries who could be affected by this legislation cannot be readily determined. However, it is estimated that more than 600 beneficiaries could benefit from this provision each year. Summary of relevant resources: Membership data as of March 31, 2023 was used in measuring the impact of the proposed change, the same data used in the April 1, 2023 actuari- al valuation. Distributions and other statistics can be found in the 2023 Report of the Actuary and the 2023 Annual Comprehensive Financial Report. The actuarial assumptions and methods used are described in the 2023 Annual Report to the Comptroller on Actuarial Assumptions, and the
S. 9812--A 4 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, 2023 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 16, 2024, and intended for use only during the 2024 Legislative Session, is Fiscal Note No. 2024-188, prepared by the Actuary for the New York State and Local Retirement System.