S T A T E O F N E W Y O R K
________________________________________________________________________
6550
2017-2018 Regular Sessions
I N S E N A T E
June 2, 2017
___________
Introduced by Sen. GOLDEN -- read twice and ordered printed, and when
printed to be committed to the Committee on Rules
AN ACT to amend the general municipal law, in relation to provisions
affecting accidental disability benefits for police/fire members, New
York city uniformed correction/sanitation revised plan members and
investigator revised plan members
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The general municipal law is amended by adding a new
section 209-ff to read as follows:
§ 209-FF. PROVISIONS RELATING TO CERTAIN ACCIDENTAL DISABILITY BENE-
FITS. 1. NOTWITHSTANDING THE PROVISIONS OF SUBDIVISIONS A AND B OF
SECTION FIVE HUNDRED SEVEN OF THE RETIREMENT AND SOCIAL SECURITY LAW, A
POLICE/FIRE MEMBER IN ACTIVE SERVICE, A NEW YORK CITY UNIFORMED
CORRECTION/SANITATION REVISED PLAN MEMBER IN ACTIVE SERVICE OR AN INVES-
TIGATOR REVISED PLAN MEMBER IN ACTIVE SERVICE SHALL BE ELIGIBLE FOR THE
ACCIDENTAL DISABILITY BENEFIT PROVIDED IN SUCH SECTION FIVE HUNDRED
SEVEN, REGARDLESS OF WHETHER HE OR SHE IS ELIGIBLE FOR A NORMAL SERVICE
RETIREMENT BENEFIT. FOR THE PURPOSES OF THIS SECTION, THE TERMS
"POLICE/FIRE MEMBER" AND "ACTIVE SERVICE" SHALL HAVE THE SAME MEANINGS
AS DEFINED IN SECTION FIVE HUNDRED ONE OF THE RETIREMENT AND SOCIAL
SECURITY LAW.
2. NOTWITHSTANDING THE PROVISION OF ANY GENERAL, SPECIAL OR LOCAL LAW,
CHARTER OR ADMINISTRATIVE CODE TO THE CONTRARY, SUBDIVISION D OF SECTION
FIVE HUNDRED SEVEN OF THE RETIREMENT AND SOCIAL SECURITY LAW SHALL NOT
APPLY TO RETIRED POLICE/FIRE MEMBERS, RETIRED NEW YORK CITY UNIFORMED
CORRECTION/SANITATION REVISED PLAN MEMBERS AND RETIRED INVESTIGATOR
REVISED PLAN MEMBERS WHO RECEIVE ACCIDENTAL DISABILITY RETIREMENT ALLOW-
ANCES. SUCH RETIREES SHALL BE SUBJECT TO POST RETIREMENT MEDICAL EXAM-
INATIONS, AND WHERE APPLICABLE, MODIFICATION OF RETIREMENT ALLOWANCE,
FOLLOWING SUCH EXAMINATIONS, IN THE SAME MANNER AND UNDER THE SAME
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11535-05-7
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CONDITIONS PRESCRIBED BY LAW IMMEDIATELY PRIOR TO THE FIRST OF APRIL,
TWO THOUSAND TWELVE FOR RETIRED NEW YORK CITY UNIFORMED
CORRECTION/SANITATION REVISED PLAN MEMBERS, AND PRIOR TO THE FIRST OF
JULY, TWO THOUSAND NINE FOR RETIRED POLICE/FIRE MEMBERS AND RETIRED
INVESTIGATOR REVISED PLAN MEMBERS.
§ 2. Section 81 of chapter 18 of the laws of 2012 shall not apply to
this act.
§ 3. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill will allow certain uniformed members of public retirement
systems who are subject to the provisions of Article 14 of the Retire-
ment and Social Security Law to be eligible to file for an accidental
disability benefit regardless of whether he or she is eligible for a
normal service retirement benefit. The bill would also allow retirees
who are receiving an accidental disability pension to continue to do so
despite being disapproved from receiving a federal social security disa-
bility pension.
If this bill is enacted, insofar as it affects the New York State and
Local Police and Fire Retirement System (PFRS), there are fewer than 100
Tier 3 members that are subject to the provisions of Article 14 who
could possibly be affected.
It is estimated that there will be few, if any, accidental disability
retirees affected, thus we anticipate that the cost to state of New York
and the participating in the PFRS would be negligible.
Summary of relevant resources:
The membership data used in measuring the impact of the proposed
change was the same as that used in the March 31, 2016 actuarial valu-
ation. Distributions and other statistics can be found in the 2016
Report of the Actuary and the 2016 Comprehensive Annual Financial
Report.
The actuarial assumptions and methods used are described in the 2015
and 2016 Annual Report to the Comptroller on Actuarial Assumptions, and
the Codes Rules and Regulations of the State of New York: Audit and
Control.
The Market Assets and GASB Disclosures are found in the March 31, 2016
New York State and Local Retirement System Financial Statements and
Supplementary Information.
I am a member of the American Academy of Actuaries and meet the Quali-
fication Standards to render the actuarial opinion contained herein.
This estimate, dated May 26, 2017, and intended for use only during
the 2017 Legislative Session, is Fiscal Note No. 2017-98, prepared by
the Actuary for the New York State and Local Retirement System.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
PROVISIONS OF PROPOSED LEGISLATION: With respect to the New York City
Police Pension Fund (POLICE), the New York City Employees' Retirement
System (NYCERS), the proposed legislation would add Section 209-ff to
the General Municipal Law (GML) to permit POLICE, FIRE and NYCERS
Members who are subject to Retirement and Social Security Law (RSSL)
Article 14 (Eligible Members) and who would be ineligible for disability
retirement benefits solely on account of being eligible for a normal
service retirement benefit to be eligible for disability benefits.
The proposed legislation would also relax the safeguards provisions
regarding restrictions on post-retirement employment for Eligible
Members who are awarded Accident Disability Retirement (ADR), and would
also make the process for reducing or eliminating an ADR benefit based
on post-retirement earnings more onerous.
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Currently, Eligible Members receiving ADR benefits are subject to the
safeguards provision contained in RSSL section 507(d). RSSL section
507(d) restricts ADR recipients who have not reached age 65 from engag-
ing in employment or business activity that would render them ineligible
for social security disability benefits. It is the understanding of the
Actuary that ceasing to be disabled or earning above a threshold amount
determined by the Social Security Administration, set at $13,560 per
year in 2016 for non-blind individuals, would result in an automatic
cessation of ADR benefits.
Where applicable, Eligible Members who would have been deemed ineligi-
ble for social security disability may be permitted to receive ADR bene-
fits while being placed on a preferred eligible list for purposes of
reemployment at a salary grade not to exceed that from which the indi-
vidual retired. Once an offer of employment is made, ADR benefits would
cease.
Under the proposed legislation, RSSL section 507(d) safeguards would
become inapplicable to Eligible Members, and a medical examination,
followed by the conditions prescribed by safeguards provisions in effect
for the relevant POLICE, FIRE and NYCERS titles who became members prior
to the application or RSSL Article 14 would be required before an ADR
benefit reduction or suspension could occur.
Although subject to varying applicable safeguards provisions, relevant
POLICE, FIRE and NYCERS titles that joined prior to the application of
RSSL Article 14 are generally subject to two alternative safeguards
processes. Where an ADR recipient has not yet reached the minimum age of
service retirement and the sum of ADR retirement benefits and post-re-
tirement earnings exceed the salary of the title next higher than that
held at the time of retirement, the ADR pension is automatically reduced
by the amount exceeding such salary rate. The second alternative
involves a medical examination to determine disability level, the Board
of Trustee review and approval, to reduce the ADR amount based on an
ability of the retiree to perform gainful employment, or based on an
offer of employment after being placed on a preferred eligible list. It
is the understanding of the Actuary, that the second alternative is
rarely utilized.
The proposed legislation would therefore eliminate the automatic bene-
fit reduction and termination alternative under safeguards, reduce the
amount of time safeguards may be applied to a retiree, increase the
amount of post-retirement earnings an ADR recipient may earn before a
reduction or elimination of an ADR benefit can be applied, and modify
the safeguards provision in effect for Eligible Member titles who became
members prior to application of Article 14 to require a medical examina-
tion and Board of Trustee review and approval to reduce or terminate and
ADR benefit even in situations where the retiree is gainfully employed
and earning above the applicable post-retirement earnings threshold.
The Effective Date of the proposed legislation would be the date of
enactment.
IMPACT ON ADR BENEFITS PAYABLE: Under the proposed legislation the
eligibility requirements for disability benefits would be revised to
allow for benefits after a member is eligible for normal service retire-
ment benefits and the safeguards provisions would be relaxed as
explained above.
FINANCIAL IMPACT - CHANGES IN PROJECTED ACTUARIAL PRESENT VALUE OF
BENEFITS AND PROJECTED EMPLOYER CONTRIBUTIONS: For purposes of this
Fiscal Note, it is assumed that the changes in the Actuarial Present
Value (APV) of benefits (APVB), APV of member contributions, the
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Unfunded Actuarial Accrued Liability (UAAL) and APV of future employer
contributions would be reflected for the first time in the June 30, 2016
actuarial valuation of POLICE, FIRE and NYCERS. Under the One-Year Lag
Methodology (OYLM), the first year in which changes in benefits for
Eligible Members would impact employer contributions to POLICE, FIRE and
NYCERS would be Fiscal Year 2018.
The additional member contributions expressed as percentages of annual
wages provided in section 18 of Chapter 298 of the Laws of 2016 and
section 4, Part SSS of Chapter 59 of the Laws of 2017 for purposes of
maintaining no additional employer contributions for implementation of
the Enhanced Plan for applicable members included the cost for changes
to eligibility requirements for disability retirement contained in the
proposed legislation, corresponding to the APVB in Table 1 below.
Table 1 presents an estimate of the increases in the APV of benefits
and in employer contributions to POLICE, FIRE and NYCERS for Fiscal
Years 2018 through 2022 due to the changes in disability eligibility
based on the applicable actuarial assumptions and methods noted herein:
Table 1
Estimated Financial Impact if Certain Revisions are Made to
Eligibility for Disability Benefits for Eligible Members
($ Millions)
Increase in APV of Increase in Employer
Fiscal Year Benefits Contributions*
2018
* POLICE $76.5 8.9
* FIRE 45.4 0
* Sanitation 6.9 0
* Correction 4.6 0
* Total $133.4 $8.9
2019
* POLICE $95.8 9.9
* FIRE 61.6 0
* Sanitation 9.0 0
* Correction 6.2 0
* Total $172.6 $9.9
2020
* POLICE $116.2 11.0
* FIRE 77.1 0
* Sanitation 11.5 0
* Correction 9.7 0
* Total $212.9 $11.0
2021
* POLICE $136.9 11.7
* FIRE 93.1 0
* Sanitation 13.9 0
* Correction 9.7 0
* Total $253.6 $11.7
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2022
* POLICE $158.8 12.5
* FIRE 111.4 0
* Sanitation 17.1 0
* Correction 11.5 0
* Total $298.8 $12.5
* The cost for this change has already been accounted for in the
Preliminary June 30, 2016 actuarial valuation of FIRE and NYCERS.
The estimated increases in APVB in Table 1 are based upon the follow-
ing projection assumptions:
* Level workforce (i.e., new employees are hired to replace those who
leave active status).
* Salary increases consistent with those used in projections presented
to the New York City Office of Management and Budget in April 2017
(Preliminary Projections).
* New entrant salaries consistent with those used in the Preliminary
Projections.
OTHER COSTS: Not measured in this Fiscal Note are the following:
* The initial, additional administrative costs of POLICE, FIRE and
NYCERS to implement the proposed legislation.
* The impact of this proposed legislation on Other Postemployment
Benefit (OPEB) costs.
CENSUS DATA: The starting census data used for the calculations
presented herein and shown in Table 2 below are the census data used in
the Preliminary June 30, 2016 (Lag) actuarial valuation of POLICE, FIRE,
and NYCERS to determine the Preliminary Fiscal Year 2018 employer
contributions.
Table 2
Census Data as of June 30, 2016
Average Average Average
Group Count Age Service Salary
Police
Tier 3 3,211 31.3 5.2 $87,300
Revised
Tier 3 7,998 28.5 1.8 $58,400
Fire
Tier 3 336 29.9 3.0 $60,500
Revised
Tier 3 1,638 29.0 1.3 $53,000
Sanitation 1,563 36.5 2.4 $55,800
Correction 2,302 33.1 1.9 $52,200
ACTUARIAL ASSUMPTIONS AND METHODS: The change in the APVB presented
herein has been calculated based on the actuarial assumptions and meth-
ods in effect for the Preliminary June 30, 2016 (Lag) actuarial valu-
ations used to determine the Preliminary Fiscal Year 2018 employer
contributions of POLICE, FIRE and NYCERS.
It has been further assumed that all Tier 3 POLICE, FIRE and NYCERS
members who became members prior to the effective date of the proposed
legislation will choose new disability provisions.
New entrants were projected to replace the members expected to leave
the active population to maintain a steady-state population.
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STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu-
ary for, and independent of, the New York City Pension Funds and Retire-
ment Systems. I am a Fellow of the Society of Actuaries, a Fellow of the
Conference of Consulting Actuaries and a Member of the American Academy
of Actuaries. I meet the Qualification Standards of the American Academy
of Actuaries to render the actuarial opinion contained herein.
FISCAL NOTE IDENTIFICATION: This Fiscal Note 2017-23 dated May 30,
2017 was prepared by the Chief Actuary for the New York City Employees'
Retirement System, the New York City Police Pension Fund, and the New
York Fire Department Pension Fund. This estimate is intended for use
only during the 2017 Legislative Session.
