S T A T E   O F   N E W   Y O R K
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                                  6059--A
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                               May 10, 2017
                                ___________
 
 Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
   printed to be committed to the Committee on Cities --  recommitted  to
   the  Committee  on  Cities in accordance with Senate Rule 6, sec. 8 --
   committee discharged, bill amended, ordered reprinted as  amended  and
   recommitted to said committee

 AN  ACT  to  amend  the  administrative code of the city of New York, in
   relation to promotions of lieutenants
 
   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. WHEN A LIEUTENANT SHALL HAVE SERVED IN THE RANK OF LIEUTENANT FOR A
 PERIOD OF FIFTEEN YEARS, HE OR SHE SHALL HAVE THE SAME RIGHTS IN RESPECT
 TO THE POLICE PENSION FUND AS A LIEUTENANT DETAILED TO ACT AS LIEUTENANT
 COMMANDER DETECTIVE SQUAD OR LIEUTENANT SPECIAL ASSIGNMENT.
   § 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 Lieutenant of the New York City Police Department, who
 has been a Lieutenant for at least 15 years, to have the same rights  in
 respect  to the New York City Police Pension Fund (POLICE) as a Lieuten-
 ant detailed to act as a lieutenant commander detective squad  or  lieu-
 tenant special assignment.
   IMPACT  ON  BENEFITS  PAYABLE:  The  proposed legislation would permit
 Lieutenants, who have served in the rank of Lieutenant for at  least  15
 years,  to have their pension calculations based on a higher-grade sala-
 ry.
   A Lieutenant, assuming a service retirement benefit with 20  years  of
 service  (15 of which was in the title of a Lieutenant), who would bene-
 fit under this  proposed  legislation,  if  enacted,  would  receive  an
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD06507-02-8

 S. 6059--A                          2
 
 increase  in  their  annual  pension  benefit, due to the assumed higher
 salary grade and overtime, of approximately $7,000 per year.
   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 $115,000 per year.
   Effective Date for this proposed legislation: Upon enactment.
   FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES (APV): With respect to the
 Lieutenants who would be impacted  by  this  proposed  legislation,  the
 enactment  of  this proposed legislation would increase the APV of Bene-
 fits (APVB) by approximately $1.5 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 Lieutenants that
 will retire with 15 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 full group of retirees impacted
 by  this  legislation  would occur during Fiscal Year 2019 and the esti-
 mated increase in APVB  of  $1.5  million,  the  estimated  increase  in
 employer  contributions  would  be  approximately  $175,000 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
 legislation amongst other factors.
   CENSUS DATA: These estimates are based on data provided  by  the  NYPD
 Lieutenants Benevolent Association which was not audited but was checked
 for reasonableness. Below is a summary of the data provided:
   Salary
   Lieutenant Commander of Detective Squad and Lieutenant Special Assign-
 ment - $134,067
   Lieutenant - $121,874
   Lieutenants who retired with 15+ years in rank - 33 retired from Janu-
 ary 1, 2016 through January 3, 2018.
   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
 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 Lieutenants, who retire after
 serving in the rank of Lieutenant for at least 15 years.
   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

 S. 6059--A                          3
 
 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 2018-03 dated January 31,
 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.