BILL NUMBER: S7462B
SPONSOR: RYAN
 
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 opportunity
to have all their public service under either two separate retirement
benefits or the option of a combined retirement benefit, if the recalcu-
lation 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 fact 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 rectify such
miscalculations, equitably avail NYSTRS retirees of the same recalcu-
lation 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 finding 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 themselves 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.