S 7314: Permits surviving spouses of NYC police pension fund members to retain accidental death benefits upon remarriage.

  
  STATE OF NEW YORK ________________________________________________________________________ 7314 2025-2026 Regular Sessions  IN SENATE April 9, 2025 ___________ Introduced by Sen. JACKSON -- read twice and ordered printed, and when printed to be committed to the Committee on Civil Service and Pensions AN ACT to amend the retirement and social security law, in relation to permit surviving spouses of certain retirement plan members to retain certain benefits upon remarriage The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivision 7 of section 501 of the retirement and social 2 security law, as amended by chapter 457 of the laws of 2017, is amended 3 to read as follows: 4 7. "Eligible beneficiary" for the purposes of section five hundred 5 nine of this article shall mean the following persons or classes of 6 persons in the order set forth: (a) a surviving spouse who has not 7 renounced survivorship rights in a separation agreement[, until remar- 8 riage], (b) surviving children until age twenty-five, (c) dependent 9 parents, determined under regulations promulgated by the comptroller, 10 (d) any other person who qualified as a dependent on the final federal 11 income tax return of the member or the return filed in the year imme- 12 diately preceding the year of death, until such person reaches twenty- 13 one years of age, (e) with respect to members of the New York city 14 employees' retirement system (other than a New York city uniformed 15 correction/sanitation revised plan member or an investigator revised 16 plan member) and the board of education retirement system of the city of 17 New York, a person whom the member shall have nominated in the form of a 18 written designation, duly acknowledged and filed with the head of the 19 retirement system for the purpose of section five hundred eight of this 20 article. In the event that a class of eligible beneficiaries consists of 21 more than one person, benefits shall be divided equally among the 22 persons in such class. For the purposes of section five hundred eight of 23 this article the term "eligible beneficiary" shall mean such person as 24 the member shall have nominated to receive the benefits provided in this EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00108-03-5 
 S. 7314 2 1 article. To be effective, such a nomination must be in the form of a 2 written designation, duly acknowledged and filed with the head of the 3 retirement system for this specific purpose. In the event such desig- 4 nated beneficiary does not survive [him] the member, or if [he] such 5 member shall not have so designated a beneficiary, such benefits shall 6 be payable to the deceased member's estate or as provided in section one 7 thousand three hundred ten of the surrogate's court procedure act and 8 (f) notwithstanding any other provisions of law, "eligible beneficiary" 9 of a New York city uniformed sanitation revised plan member for the 10 purposes of section five hundred nine of this article shall mean the 11 following persons or classes of persons in the order set forth: (i) a 12 surviving spouse who has not renounced survivorship rights in a sepa- 13 ration agreement, (ii) surviving children until age twenty-five, (iii) 14 dependent parents, determined under regulations promulgated by the comp- 15 troller and (iv) any other person who qualified as a dependent on the 16 final federal income tax return of the member or the return filed in the 17 year immediately preceding the year of death, until such person reaches 18 twenty-one years of age. 19 § 2. This act shall take effect immediately and shall apply to surviv- 20 ing spouses in pay status as of such date and for members dying on or 21 after such date. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: SUMMARY: This proposed legislation, as it relates to the New York City Retirement Systems and Pension Funds (NYCRS), would allow eligible Tier 3 surviving spouses to continue to receive certain accidental death benefits after remarriage. ILLUSTRATION - INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS by Fiscal Year for the first 25 years ($ in Thousands) One Remarriage Year SADB Not SADB Eligible Eligible 2026 0 33 2027 0 33 2028 0 33 2029 0 33 2030 0 33 2031 0 33 2032 0 33 2033 0 33 2034 0 33 2035 0 33 2036 0 33 2037 0 33 2038 0 33 2039 0 33 2040 0 0 2041 0 0 2042 0 0 2043 0 0 2044 0 0 2045 0 0 2046 0 0 2047 0 0 2048 0 0 2049 0 0 
 S. 7314 3 2050 0 0 Based on a hypothetical example of a surviving spouse aged 45 currently receiving an accidental death benefit of $40,000 per year who remarries. As shown, no costs are expected for those receiving Special Accidental Death Benefits (SADB); however, the allocation among beneficiaries may change. The potential increases in employer contributions will be allocated to New York City. PRESENT VALUE OF BENEFITS: The Present Value of Benefits is the discounted expected value of benefits paid to current members if all assumptions are met, including future service accrual and pay increases. Future new hires are not included in this present value. INITIAL INCREASE (DECREASE) IN ACTUARIAL PRESENT VALUES as of June 30, 2024 ($ in Thousands) Present Value (PV) SADB Not SADB Eligible Eligible (1) PV of Employer Contributions: 0 275 (2) PV of Employee Contributions: 0 0 Total PV of Benefits (1) + (2): 0 275 UNFUNDED ACCRUED LIABILITY (UAL): Actuarial Accrued Liabilities are the portion of the Present Value of Benefits allocated to past service. Changes in UAL per incident would be recognized as ongoing gain/loss. AMORTIZATION OF UNFUNDED ACCRUED LIABILITY Recognized as Gain/Loss SADB Not SADB Eligible Eligible Increase (Decrease) in UAL: 0 275 K Number of Payments: N/A 14 Amortization Payment: 0 33 K CENSUS DATA: The illustration presented herein uses a hypothetical example of a non-Special Accidental Death Benefits (SADB) accidental death benefit of $40,000 per year for a member who is survived by a spouse, currently aged 45, and a youngest child, currently aged 15, with no other contingent beneficiaries. The following table contains the preliminary census data for active Tier 3 members as of June 30, 2024 across NYCERS, POLICE and FIRE, split between those eligible and not eligible for SADB. SADB Not SADB Eligible Eligible Active Members - Number Count: 33,078 81 - Average Age: 35.1 34.5 - Average Service: 7.5 4.9 - Average Salary: 119,700 83,900 IMPACT ON SURVIVOR BENEFITS: The accidental death benefits payable to beneficiaries of Tier 3 NYCRS members are made up of accidental death benefits (RSSL 509) and, if eligible, SADB under General Municipal Law 208-f, totaling approximately 100% of salary. The SADB is paid to the deceased member's surviving spouse, if alive, regardless of their mari- tal status. 
 S. 7314 4 Currently, surviving spouses receiving accidental death benefits who subsequently remarry, stop receiving the non-SADB portion of the acci- dental death benefit. Instead, the non-SADB death benefit would poten- tially be paid to the deceased member's dependent children, parents, or other eligible beneficiaries, if any. If there are no other eligible beneficiaries, then the SADB would allow the spouse to receive 100% of the accidental death benefit. Under the proposed legislation, surviving spouses who are in pay status on or after the effective date, and subsequently remarry, would continue to receive both the non-SADB and SADB portion of the accidental death benefit. Any beneficiaries lower in the hierarchy of eligible recipients (such as qualifying dependent children or parents) would forfeit eligibility to such non-SADB accidental death benefits to the extent the surviving spouse who remarries is still alive. ASSUMPTIONS AND METHODS: The estimates presented herein have been calculated based on the Revised 2021 Actuarial Assumptions and Methods of the impacted retirement systems. To illustrate the potential impact of this proposed legislation, a hypothetical example was used as disclosed in the Census Data section. The actual cost of this proposed legislation could vary greatly depend- ing on the number of future surviving spouses who remarry, their age and benefit amount, and the demographics of other eligible beneficiaries. RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend highly on the actuarial assumptions, methods, and models used, demo- graphics of the impacted population, and other factors such as invest- ment, contribution, and other risks. If actual experience deviates from actuarial assumptions, the actual costs could differ from those presented herein. Quantifying these risks is beyond the scope of this Fiscal Note. This Fiscal Note is intended to measure pension-related impacts and does not include other potential costs (e.g., administrative and Other Postemployment Benefits). This Fiscal Note does not reflect any chapter laws that may have been enacted during the current legislative session. STATEMENT OF ACTUARIAL OPINION: Marek Tyszkiewicz and Gregory Zelikov- sky are members of the Society of Actuaries and the American Academy of Actuaries. We are members of NYCERS, but do not believe it impairs our objectivity, and we meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained herein. To the best of our knowledge, the results contained herein have been prepared in accordance with generally accepted actuarial principles and procedures and with the Actuarial Standards of Practice issued by the Actuarial Standards Board. FISCAL NOTE IDENTIFICATION: This Fiscal Note 2025-41 dated April 8, 2025 was prepared by the Chief Actuary for the New York City Retirement Systems and Pension Funds and is intended for use only during the 2025 Legislative Session.