S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5659--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 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 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: 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 Department  (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 a least 10  years,  to  have  the
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD07971-05-0

 S. 5659--A                          2
 
 same  rights  in  respect to POLICE as a Detective 2nd grade detailed to
 act as a Detective 1st grade.
   Effective Date: Upon enactment.
   IMPACT  ON  BENEFITS: The proposed legislation would permit Detectives
 of the 3rd and 2nd grade, who have met certain service requirements,  to
 have their pension calculations based on a higher-grade salary.
   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 $7,800 per year and a Detective 2nd grade who
 would benefit under this proposed legislation, if enacted, would receive
 an increase in their annual pension benefit of approximately $10,500 per
 year, due to the assumed higher salary grade and overtime, and  assuming
 a service retirement benefit with 20 years of service.
   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 $1.1 million 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 $14.0 million every year.
   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 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 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 $1.7 million each year.
   The  costs  above  represent  the estimated impact for retirees in the
 first year the bill is enacted. Future years' costs in addition  to  the
 aforementioned  cost would depend on the number of retirees that benefit
 under the legislation amongst other factors.
   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.
   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 (excluding overtime and outstanding wage contract increases)
     * Detective 3rd grade - $114,999
     * Detective 2nd grade - $128,034
     * Detective 1st grade - $145,548
   * Detectives 3rd grade who retired  with  15+  years  in  rank  -  386
 retired over the past 16 years.

 S. 5659--A                          3
 
   *  Detectives  2nd  grade  who  retired with 10+ years in rank - 1,451
 retired over the past 17 years.
   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.
   Due to the outstanding wage contract for Detectives  as  of  the  date
 this  Fiscal  Note was released, the salaries provided for this analysis
 have been adjusted to reflect the assumption of pattern bargaining based
 on the 1st year of the recently settled Captains  Endowment  Association
 contract of 2.25%.
   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  POLICE  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
 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 2020-06 dated February
 24, 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.