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PRESENTATION TO THE NYS ASSOCIATION OF SMALL CITY SCHOOL DISTRICTS PENSION REFORM 2012

PRESENTATION TO THE NYS ASSOCIATION OF SMALL CITY SCHOOL DISTRICTS PENSION REFORM 2012. CHAPTER 18 OF THE LAWS OF 2012 May 21, 2012. TIGHTENING IN 2009: TIER 5. For TRS members first entering on or after January 1, 2010: 3.5% career contributions 10 year vesting

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PRESENTATION TO THE NYS ASSOCIATION OF SMALL CITY SCHOOL DISTRICTS PENSION REFORM 2012

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  1. PRESENTATION TO THE NYS ASSOCIATION OF SMALL CITY SCHOOL DISTRICTSPENSION REFORM 2012 CHAPTER 18 OF THE LAWS OF 2012 May 21, 2012

  2. TIGHTENING IN 2009: TIER 5 For TRS members first entering on or after January 1, 2010: • 3.5% career contributions • 10 year vesting • 25 years of service needed to be eligible for 2% pension factor • No unreduced benefit prior to age 57 with 30 years of service • More severe pre-2000 Tier 3/4 early retirement reductions brought back in Tier 5

  3. IMPACT OF TIER 5

  4. FURTHER TIGHTING IN 2012: TIER 6 For TRS members first entering on or after April 1, 2012: • Member contribution rates (3%-6%) based upon wages • Prior service and military service costs 6% of wages • Benefit accrual rate generally reduced • No retirement with unreduced benefit prior to age 63 • 6.5% per year early retirement reductions • 5-year FAS with wages in excess of 110% of the average of the previous four years’ wages excluded from calculation • Annual wages in excess of $179,000 not pensionable • Wages from more than 2 employers excluded from FAS calculation • 10 year vesting unchanged

  5. TIER 6 MEMBER CONTRIBUTION RATES • $45,000 or less = 3% • More than $45,000 to $55,000 = 3.5% • More than $55,000 to $75,000 = 4.5% • More than $75,000 to $100,000 = 5.75% • More than $100,000 to $179,000 = 6% Contribution rates are generally determined on 2 year lag basis; in first 3 plan years of membership on employer projections Transitional 3.5% rate until April 1, 2013

  6. CHANGES IN ACCRUAL RATES

  7. CHANGES IN EARLY RETIREMENT REDUCTIONS

  8. CHANGES IN FAS CALCULATION(figures rounded to whole numbers for presentation purposes)

  9. EARLIEST UNREDUCED BENEFITS BY TIER

  10. EARLIEST UNREDUCED BENEFITS IN DOLLARS

  11. COST IMPACT OF CHANGES

  12. CHAPTER 18 DC FEATURE • SUNY ORP opened to non-unionized public employees after June 30, 2013 • To be eligible, employee must be initially hired (not promoted) to a position with an estimated salary of $75,000 or more • Employers required to contribute 8% of wages • Employees contribute on same rate schedule as in Tier 6

  13. OPTIONAL 57/30 BENEFIT ENHANCEMENT • Eligible members may retire with unreduced benefit at age 57 with 30 years of service • Eligible members must hold a position represented by NYSUT bargaining unit • NYSUT must ask the Governor to implement the enhancement • Eligible members must make sufficient additional contributions to cover the cost of the enhancement

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