S T A T E   O F   N E W   Y O R K
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                                  7735--A
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               May 11, 2017
                                ___________
 
 Introduced by M. of A. ABBATE -- read once and referred to the Committee
   on  Governmental  Employees -- recommitted to the Committee on Govern-
   mental Employees in accordance with Assembly Rule 3, sec. 2 -- commit-
   tee discharged, bill amended, ordered reprinted as amended and  recom-
   mitted to said committee

 AN  ACT  to  amend  the  administrative code of the city of New York, in
   relation to promotions of detectives
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section  14-114 of the administrative code of the city of
 New York is amended by adding a new subdivision d to read as follows:
   D. (1) WHEN A DETECTIVE OF THE THIRD GRADE SHALL HAVE  SERVED  IN  THE
 RANK  OF  DETECTIVE OF THE THIRD GRADE FOR A PERIOD OF FIFTEEN YEARS, HE
 OR SHE SHALL HAVE THE SAME RIGHTS IN RESPECT TO THE POLICE PENSION  FUND
 AS  A  DETECTIVE  OF THE THIRD GRADE DETAILED TO ACT AS DETECTIVE OF THE
 SECOND GRADE.
   (2) WHEN A DETECTIVE OF THE SECOND GRADE SHALL HAVE SERVED IN THE RANK
 OF DETECTIVE OF THE SECOND GRADE FOR A PERIOD OF TEN YEARS,  HE  OR  SHE
 SHALL  HAVE  THE  SAME RIGHTS IN RESPECT TO THE POLICE PENSION FUND AS A
 DETECTIVE OF THE SECOND GRADE DETAILED TO ACT AS DETECTIVE OF THE  FIRST
 GRADE.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY  OF  BILL:  The  enactment  of this proposed legislation would
 amend Administrative Code of the City of New York (ACCNY) Section 14-114
 to allow for a Detective 3rd grade of the New York City  Police  Depart-
 ment  (NYPD),  who has been a Detective 3rd grade for at least 15 years,
 to have the same rights in respect to the New York City  Police  Pension
 Fund  (POLICE)  as  a Detective 3rd grade detailed to act as a Detective
 2nd grade and to allow for a Detective 2nd grade of the  New  York  City
 Police  Department,  who  has been a Detective 2nd grade for at least 10
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD09842-07-8

 A. 7735--A                          2
 
 years, to have the same rights in respect to POLICE as a  Detective  2nd
 grade detailed to act as a Detective 1st grade.
   IMPACT  ON  BENEFITS  PAYABLE:  The  proposed legislation would permit
 Detectives of 3rd and 2nd grade, who have met certain  service  require-
 ments,  to have their pension calculations based on a higher-grade sala-
 ry.
   A Detective 3rd grade who would benefit  under  this  proposed  legis-
 lation,  if  enacted,  would receive an increase in their annual pension
 benefit of approximately $6,500 per year and a Detective 2nd  grade  who
 would benefit under this proposed legislations, if enacted would receive
 an  increase in their annual pension benefit of approximately $8,500 per
 year, due to the assumed higher salary grade and overtime.
   Based on this increase and an estimate of the number of POLICE members
 that are expected to be impacted by this change, it is estimated that if
 this proposed legislation is enacted,  the  annual  increase  in  POLICE
 pension benefits paid will be approximately $900,000 per year.
   Effective date for this proposed legislation: Upon enactment.
   FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES (APV): With respect to the
 Detectives  who  would  be  impacted  by  this proposed legislation, the
 enactment of this proposed legislation would increase the APV  of  Bene-
 fits (APVB) by approximately $11.4 million.
   FINANCIAL  IMPACT  -  EMPLOYER  CONTRIBUTIONS:  In accordance with the
 ACCNY  Section  13.638.2(k-2),  new  Unfunded  Accrued  Liability  (UAL)
 attributable to benefit changes are to be amortized as determined by the
 Actuary  but  generally  over  the  remaining  working lifetime of those
 impacted by the benefit changes. Since  the  number  of  Detectives  3rd
 grade  that  will retire with 15 or more years in rank or Detectives 2nd
 grade that will retire with 10 or more years in rank cannot be known  in
 advance  with  credibility,  the  APVB  due to this legislation has been
 treated as an actuarial loss at the affected members' retirement.  These
 actuarial losses were amortized over a 15-year period (14 payments under
 the  One-Year  Lag  Methodology)  using  level  dollar  payments for the
 purpose of this Fiscal Note.
   Based on the assumption that the first group of retirees  impacted  by
 this  legislation  would occur during Fiscal Year 2019 and the estimated
 increase in APVB of $11.4 million, the estimated  increase  in  employer
 contributions  would  be  approximately $1.4 million beginning in Fiscal
 Year 2021. Future years' costs in addition to  the  aforementioned  cost
 would  depend  on  the  number of retirees that benefit under the legis-
 lation amongst other factors.
   CENSUS DATA: These estimates are based on data provided  by  the  NYPD
 Detectives'  Endowment Association which was not audited but was checked
 for reasonableness. Below is a summary of the data provided:
   * Salary
      * Detective 3rd grade - $111,650
      * Detective 2nd grade - $124,305
      * Detective 1st grade - $141,308
   * Detectives 3rd grade who retired  with  15+  years  in  rank  -  336
 retired over the past 15 years.
   *  Detectives  2nd  grade  who  retired with 10+ years in rank - 1,399
 retired over the past 16 years.
   ACTUARIAL ASSUMPTIONS AND METHODS: The  additional  employer  contrib-
 utions presented herein have been calculated based on the same actuarial
 assumptions  and methods in effect for the June 30, 2016 (Lag) actuarial
 valuations used to determine the Preliminary Fiscal Year  2018  employer
 contributions  of  POLICE. Please note these assumptions and methods are

 A. 7735--A                          3
 
 subject to change as this valuation is not considered  final  until  the
 end of the Fiscal Year 2018.
   For  purposes  of analyzing the impact of the proposed legislation, it
 was assumed that the benefit impacted by the increase in salary would be
 a service benefit based on 20 years of service.  The  ultimate  employer
 cost  for  this proposed legislation would be based on the number, ages,
 years of service, and salary of those Detectives  3rd  grade  that  will
 retire  with  15 or more years in rank or Detectives 2nd grade that will
 retire with 10 or more years in rank.
   STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief  Actu-
 ary  for,  and  independent of, the New York City Retirement Systems and
 Pension Funds. I am a Fellow of the Society of  Actuaries,  an  Enrolled
 Actuary  under  the  Employee Retirement Income and Security Act of 1974
 (ERISA), a Member of the American Academy of Actuaries, and a Fellow  of
 the  Conference of Consulting Actuaries. I meet the Qualification Stand-
 ards of the American Academy of Actuaries to render the actuarial  opin-
 ion contained herein. To the best of my knowledge, the results contained
 herein have been prepared in accordance with generally accepted actuari-
 al  principles and procedures, and with the Actuarial Standards of Prac-
 tice issued by the Actuarial Standards Board.
   FISCAL NOTE IDENTIFICATION: This Fiscal Note 2018-04,  dated  February
 14,  2018 was prepared by the Chief Actuary for the New York City Police
 Pension Fund. This estimate is intended for use  only  during  the  2018
 Legislative Session.