S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5658--A
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                               May 10, 2019
                                ___________
 
 Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
   --  recommitted  to  the  Committee  on  Civil Service and Pensions in
   accordance with Senate Rule 6, sec. 8 --  committee  discharged,  bill
   amended,  ordered reprinted as amended and recommitted to said commit-
   tee
 
 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:  This proposed legislation would amend Administrative
 Code of the City of New York (ACCNY) Section 14-114 to allow for a Lieu-
 tenant  of  the  New  York City Police Department (NYPD), 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 Lieutenant detailed
 to act as a Lieutenant Commander Detective Squad or  Lieutenant  Special
 Assignment.
   Effective Date: Upon enactment.
   IMPACT ON BENEFITS: 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 salary.
   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-

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD07972-05-0

 S. 5658--A                          2
 
 fit  under  this  proposed  legislation,  if  enacted,  would receive an
 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 $162,000 per year.
   With respect to an individual member, the impact on  benefits  due  to
 this  proposed  legislation could vary greatly depending on the member's
 age, years of service, retirement cause, and Tier.
   FINANCIAL IMPACT - PRESENT VALUES: Based on the actuarial  assumptions
 and methods described herein, the enactment of this proposed legislation
 would  increase  the Present Value of Future Benefits (PVFB) by approxi-
 mately $2.1 million.
   FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In  accordance  with
 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 who
 will retire with 15 or more years in rank cannot  be  known  in  advance
 with  credibility,  the PVFB due to this legislation has been treated as
 an actuarial loss at the affected members' retirement.
   For the purposes of this Fiscal Note, the increase in  UAL  was  amor-
 tized  over a 15-year period (14 payments under the One-Year Lag Method-
 ology) using level dollar payments. This results in an increase in annu-
 al employer contributions of approximately $248,000 each year.
   CONTRIBUTION TIMING: For the purposes  of  this  Fiscal  Note,  it  is
 assumed  that  the changes in the PVFB and annual employer contributions
 would be reflected for the first time in the  June  30,  2020  actuarial
 valuation  of  POLICE.  In  accordance with the One-Year Lag Methodology
 (OYLM) used to determine employer contributions, the increase in employ-
 er contributions would first be reflected in Fiscal  Year  2022.  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 (excluding overtime)
     o Lieutenant - $125,530
     o Lieutenant Commander of Detective  Squad  and  Lieutenant  Special
 Assignment - $138,089
   *  Lieutenants  who  retired  with 15+ years in rank - 44 retired from
 January 1, 2018 through January 1, 2020.
   ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the PVFB and  annual
 employer  contributions  presented  herein have been calculated based on
 the actuarial assumptions and methods in effect for the  June  30,  2018
 (Lag) actuarial valuations used to determine the Preliminary Fiscal Year
 2020 employer contributions of POLICE.
   RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
 highly on the realization of the actuarial assumptions used, as well  as
 certain  demographic  characteristics  of  the  Plan and other exogenous
 factors such as investment, contribution, and  other  risks.  If  actual
 experience  deviates  from actuarial assumptions, the actual costs could
 differ from those presented herein. Costs  are  also  dependent  on  the
 actuarial  methods used, and therefore different actuarial methods could

 S. 5658--A                          3
 
 produce different results. Quantifying these risks is beyond  the  scope
 of this Fiscal Note.
   Not measured in this Fiscal Note are the following:
   * The initial, additional administrative costs of POLICE and other New
 York City agencies to implement the proposed legislation.
   *  The  impact  of  this  proposed legislation on Other Postemployment
 Benefit (OPEB) costs.
   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, a
 Member of the American Academy of Actuaries, and a Fellow of the Confer-
 ence  of Consulting Actuaries. I meet the Qualification Standards of the
 American Academy of Actuaries to render the actuarial opinion  contained
 herein.  To  the best of my knowledge, the results contained herein have
 been prepared in accordance with generally accepted actuarial principles
 and procedures and with the Actuarial Standards of  Practice  issued  by
 the Actuarial Standards Board.
   FISCAL  NOTE  IDENTIFICATION:  This Fiscal Note 2020-05 dated February
 10, 2020 was prepared by the Chief Actuary for the New York City  Police
 Pension  Fund.  This  estimate  is intended for use only during the 2020
 Legislative Session.