S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5480
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 13, 2023
                                ___________
 
 Introduced  by  M.  of A. PHEFFER AMATO -- read once and referred to the
   Committee on Governmental Employees
 
 AN ACT to amend the retirement and social security law, in  relation  to
   primary  social  security  retirement benefits for police/fire members
   who are members of the New York city fire department pension fund

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section 505 of the retirement and social security law, as
 amended by chapter 18 of the  laws  of  2012,  is  amended  to  read  as
 follows:
   § 505. Service retirement benefits; police/fire members, New York city
 uniformed  correction/sanitation  revised  plan members and investigator
 revised plan members. a.  The  normal  service  retirement  benefit  for
 police/fire  members,  New  York  city  uniformed  correction/sanitation
 revised plan members and investigator revised  plan  members  at  normal
 retirement  age shall be a pension equal to fifty percent of final aver-
 age salary, less fifty percent of the primary social security retirement
 benefit commencing at age sixty-two, as provided in section five hundred
 eleven of this article, PROVIDED, HOWEVER, THAT THE COMPUTATION  OF  THE
 NORMAL  SERVICE  RETIREMENT BENEFIT OF MEMBERS OF THE NEW YORK CITY FIRE
 DEPARTMENT PENSION FUND, SHALL NOT BE  REDUCED  BY  THE  PRIMARY  SOCIAL
 SECURITY  RETIREMENT  BENEFIT COMMENCING AT AGE SIXTY-TWO AS PROVIDED IN
 SECTION FIVE HUNDRED ELEVEN OF THIS ARTICLE.
   b. The early service retirement benefit for police/fire  members,  New
 York  city  uniformed  correction/sanitation  revised  plan  members and
 investigator revised plan members shall be a pension equal  to  two  and
 one-tenths  percent  of  final  average  salary  times years of credited
 service at the completion of twenty years of service or upon  attainment
 of age sixty-two, increased by one-third of one percent of final average
 salary  for  each month of service in excess of twenty years, but not in
 excess of fifty percent of final average salary, less fifty  percent  of
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07867-02-3
              

 A. 5480                             2
 
 the  primary social security retirement benefit commencing at age sixty-
 two as  provided  in  section  five  hundred  eleven  of  this  article,
 provided,  however, that New York city police/fire revised plan members,
 New  York  city uniformed correction/sanitation revised plan members and
 investigator revised plan members shall not be eligible  to  retire  for
 service prior to the attainment of twenty years of credited service, AND
 PROVIDED FURTHER THAT THE EARLY SERVICE RETIREMENT BENEFIT OF MEMBERS OF
 THE  NEW  YORK CITY FIRE DEPARTMENT PENSION FUND SHALL NOT BE REDUCED BY
 THE PRIMARY SOCIAL SECURITY RETIREMENT BENEFIT COMMENCING AT AGE  SIXTY-
 TWO AS PROVIDED BY SECTION FIVE HUNDRED ELEVEN OF THIS ARTICLE.
   c.    A    police/fire    member,    a   New   York   city   uniformed
 correction/sanitation revised plan member  or  an  investigator  revised
 plan  member  who  retires  with twenty-two years of credited service or
 less may become eligible for annual escalation of the service retirement
 benefit if he OR SHE elects to have the payment of his  OR  HER  benefit
 commence on the date he OR SHE would have completed twenty-two years and
 one  month  or  more  of  service. In such event, the service retirement
 benefit shall equal two percent of final average salary for each year of
 credited service, less fifty percent  of  the  primary  social  security
 retirement  benefit  commencing  at age sixty-two as provided in section
 five hundred eleven of this article, PROVIDED, HOWEVER, THAT THE SERVICE
 RETIREMENT BENEFIT OF MEMBERS OF  THE  NEW  YORK  CITY  FIRE  DEPARTMENT
 PENSION FUND SHALL NOT BE REDUCED BY THE PRIMARY SOCIAL SECURITY RETIRE-
 MENT  BENEFIT  COMMENCING  AT  AGE SIXTY-TWO AS PROVIDED BY SECTION FIVE
 HUNDRED ELEVEN OF THIS ARTICLE.
   § 2. Section 511 of the retirement and social security law is  amended
 by adding a new subdivision h to read as follows:
   H.  NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, THIS SECTION
 SHALL NOT APPLY TO MEMBERS OF THE NEW YORK CITY FIRE DEPARTMENT  PENSION
 FUND  WHO  RECEIVE A SERVICE RETIREMENT BENEFIT PURSUANT TO SECTION FIVE
 HUNDRED FIVE OF THIS ARTICLE OR A DEFERRED VESTED  BENEFIT  PURSUANT  TO
 SECTION FIVE HUNDRED SIXTEEN OF THIS ARTICLE.
   § 3. Subdivision c of section 516 of the retirement and social securi-
 ty law, as amended by chapter 18 of the laws of 2012, is amended to read
 as follows:
   c.  The  deferred vested benefit of police/fire members, New York city
 police/fire   revised   plan   members,   New   York   city    uniformed
 correction/sanitation  revised plan members or investigator revised plan
 members shall be a pension commencing at early retirement age  equal  to
 two  and one-tenths percent of final average salary times years of cred-
 ited service, less fifty percent of the primary social security  retire-
 ment  benefit  commencing  at age sixty-two, as provided in section five
 hundred eleven of this article, PROVIDED HOWEVER THAT THE DEFERRED VEST-
 ED BENEFIT OF MEMBERS OF THE NEW YORK CITY FIRE DEPARTMENT PENSION  FUND
 AND  REVISED  PLAN  MEMBERS  WHO  ARE  MEMBERS OF THE NEW YORK CITY FIRE
 DEPARTMENT PENSION FUND SHALL NOT BE REDUCED BY THE PRIMARY SOCIAL SECU-
 RITY RETIREMENT BENEFIT COMMENCING  AT  AGE  SIXTY-TWO  AS  PROVIDED  BY
 SECTION FIVE HUNDRED ELEVEN OF THIS ARTICLE. A police/fire member, a New
 York  city  police/fire  revised  plan member, a New York city uniformed
 correction/sanitation revised plan member or investigator  revised  plan
 member  may  elect  to  receive  his OR HER vested benefit commencing at
 early retirement age or age fifty-five. If the vested benefit  commences
 before  early  retirement  age, the benefit shall be reduced by one-fif-
 teenth for each year, if any, that the member's early retirement age  is
 in excess of age sixty, and by one-thirtieth for each additional year by
 which  the  vested  benefit  commences prior to early retirement age. If
 A. 5480                             3
 
 such vested benefit is deferred until after such member's normal retire-
 ment age, the benefit shall be computed and subject to annual escalation
 in the same manner as provided for an early retirement benefit  pursuant
 to subdivision c of section five hundred five of this article.
   §  4. Notwithstanding the provisions of section 13-379 of the adminis-
 trative code of the city of New York, the provisions of this  act  shall
 apply  to  chapter three of title thirteen of the administrative code of
 the city of New York.
   § 5. This act shall take effect immediately.
   FISCAL NOTE.-Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: This proposed legislation would amend  Sections  505,
 511,  and 516 of the Retirement and Social Security Law (RSSL) to elimi-
 nate the offset equal to 50% of the primary social security  benefit  in
 the  service,  early  service, and vested retirement benefits for Tier 3
 original, modified, and enhanced plan members of the New York City  Fire
 Pension Fund (FIRE).
   Effective Date: Upon enactment.
   IMPACT  ON  BENEFITS: Currently, the Tier 3 normal service retirement,
 early service retirement, and vested retirement benefits are subject  to
 an offset equal to 50% of the primary social security benefit as defined
 in  RSSL  Section  511  beginning at age 62.   Under the proposed legis-
 lation, the offset for such benefits would be eliminated resulting in an
 increase in benefits.
   FINANCIAL IMPACT: Based on the census data and the  actuarial  assump-
 tions  and  methods  described  herein,  the  enactment of this proposed
 legislation would result in an initial increase in the Present Value  of
 Future Benefits (PVFB) and the present value of future employer contrib-
 utions of approximately $94.4 million.
   The  financial  impact  will  increase  as  the  impacted  populations
 increase over time. The estimate of  the  increase  in  annual  employer
 contributions  for Fiscal Years 2024 through 2028 are shown in the table
 below.
 
                Fiscal          Increase in Employer
                Year            Contributions
                                ($ Millions)
                2024            $6.4
                2025            $7.1
                2026            $7.9
                2027            $8.6
                2028            $9.3
 
   New Unfunded Accrued Liability (UAL) attributable to  benefit  changes
 are  generally  amortized  over  the remaining working lifetime of those
 impacted by the benefit changes. The remaining working lifetime for this
 group is approximately 19 years and the increase in  UAL  was  therefore
 amortized  over  a  19-year  period  (18 payments under the One-Year Lag
 Methodology) using level dollar payments.
   CENSUS DATA: The estimates presented herein are based  on  the  census
 data  to  be  used  in  the June 30, 2022 actuarial valuation of FIRE to
 determine the Preliminary Fiscal Year 2024 employer contributions.
   The 4,469 active FIRE Tier 3 members as of June 30, 2022 had an  aver-
 age  age  of  approximately 32.9 years, average service of approximately
 5.2 years, and an average salary of approximately $106,300.
   ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
 been calculated based on the actuarial assumptions  and  methods  to  be
 A. 5480                             4
 
 used  for  the  Preliminary  Fiscal  Year 2024 employer contributions of
 FIRE.  New entrants were projected to replace the  members  expected  to
 leave  the  active population to maintain a steady-state population. New
 entrant  demographics  were developed based on data for recent new hires
 and actuarial judgement.
   For the purposes of this Fiscal Note, it is assumed that  the  changes
 would  be  reflected  for  the first time in the June 30, 2022 actuarial
 valuation of FIRE used to determine employer  contributions  for  Fiscal
 Year 2024.
   RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
 highly on the realization of the actuarial assumptions used,  demograph-
 ics  of  the  impacted  population and other factors such as investment,
 contribution, and other risks. If actual experience deviates from  actu-
 arial  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  to  implement the
 proposed legislation.
   * Pension costs for future members of FIRE hired on or after 7/1/2026.
   * Cost analyses relating  to  provisions  contained  in  RSSL  Section
 500(c).
   STATEMENT  OF  ACTUARIAL  OPINION:  I, Marek Tyszkiewicz, am the Chief
 Actuary for, and independent of, the New York  City  Retirement  Systems
 and  Pension  Funds. I am an Associate of the Society of 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. 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 2023-02 dated February
 24, 2023 was prepared by the Chief Actuary for the New  York  City  Fire
 Pension  Fund.  This  estimate  is intended for use only during the 2023
 Legislative Session.

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5480--A
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 13, 2023
                                ___________
 
 Introduced  by M. of A. PHEFFER AMATO, BURDICK, DICKENS -- read once and
   referred to the Committee on Governmental Employees -- recommitted  to
   the  Committee  on  Governmental Employees in accordance with Assembly
   Rule  3,  sec.  2  --  committee  discharged,  bill  amended,  ordered
   reprinted as amended and recommitted to said committee

 AN  ACT  to amend the retirement and social security law, in relation to
   primary social security retirement benefits  for  police/fire  members
   who are members of the New York city fire department pension fund
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 505 of the retirement and social security  law,  as
 amended  by  chapter  18  of  the  laws  of  2012, is amended to read as
 follows:
   § 505. Service retirement benefits; police/fire members, New York city
 uniformed correction/sanitation revised plan  members  and  investigator
 revised  plan  members.  a.  The  normal  service retirement benefit for
 police/fire  members,  New  York  city  uniformed  correction/sanitation
 revised  plan  members  and  investigator revised plan members at normal
 retirement age shall be a pension equal to fifty percent of final  aver-
 age salary, less fifty percent of the primary social security retirement
 benefit commencing at age sixty-two, as provided in section five hundred
 eleven  of  this article, PROVIDED, HOWEVER, THAT THE COMPUTATION OF THE
 NORMAL SERVICE RETIREMENT BENEFIT OF MEMBERS OF THE NEW YORK  CITY  FIRE
 DEPARTMENT  PENSION  FUND,  SHALL  NOT  BE REDUCED BY THE PRIMARY SOCIAL
 SECURITY RETIREMENT BENEFIT COMMENCING AT AGE SIXTY-TWO AS  PROVIDED  IN
 SECTION FIVE HUNDRED ELEVEN OF THIS ARTICLE.
   b.  The  early service retirement benefit for police/fire members, New
 York city  uniformed  correction/sanitation  revised  plan  members  and
 investigator  revised  plan  members shall be a pension equal to two and
 one-tenths percent of final  average  salary  times  years  of  credited
 service  at the completion of twenty years of service or upon attainment
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07867-05-4
              

 A. 5480--A                          2
 
 of age sixty-two, increased by one-third of one percent of final average
 salary for each month of service in excess of twenty years, but  not  in
 excess  of  fifty percent of final average salary, less fifty percent of
 the  primary social security retirement benefit commencing at age sixty-
 two as  provided  in  section  five  hundred  eleven  of  this  article,
 provided,  however, that New York city police/fire revised plan members,
 New York city uniformed correction/sanitation revised plan  members  and
 investigator  revised  plan  members shall not be eligible to retire for
 service prior to the attainment of twenty years of credited service, AND
 PROVIDED FURTHER THAT THE EARLY SERVICE RETIREMENT BENEFIT OF MEMBERS OF
 THE NEW YORK CITY FIRE DEPARTMENT PENSION FUND SHALL NOT BE  REDUCED  BY
 THE  PRIMARY SOCIAL SECURITY RETIREMENT BENEFIT COMMENCING AT AGE SIXTY-
 TWO AS PROVIDED BY SECTION FIVE HUNDRED ELEVEN OF THIS ARTICLE.
   c.   A   police/fire   member,   a    New    York    city    uniformed
 correction/sanitation  revised  plan  member  or an investigator revised
 plan member who retires with twenty-two years  of  credited  service  or
 less may become eligible for annual escalation of the service retirement
 benefit  if  he  OR SHE elects to have the payment of his OR HER benefit
 commence on the date he OR SHE would have completed twenty-two years and
 one month or more of service. In  such  event,  the  service  retirement
 benefit shall equal two percent of final average salary for each year of
 credited  service,  less  fifty  percent  of the primary social security
 retirement benefit commencing at age sixty-two as  provided  in  section
 five hundred eleven of this article, PROVIDED, HOWEVER, THAT THE SERVICE
 RETIREMENT  BENEFIT  OF  MEMBERS  OF  THE  NEW YORK CITY FIRE DEPARTMENT
 PENSION FUND SHALL NOT BE REDUCED BY THE PRIMARY SOCIAL SECURITY RETIRE-
 MENT BENEFIT COMMENCING AT AGE SIXTY-TWO AS  PROVIDED  BY  SECTION  FIVE
 HUNDRED ELEVEN OF THIS ARTICLE.
   §  2. Section 511 of the retirement and social security law is amended
 by adding a new subdivision h to read as follows:
   H. NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, THIS  SECTION
 SHALL  NOT APPLY TO MEMBERS OF THE NEW YORK CITY FIRE DEPARTMENT PENSION
 FUND WHO RECEIVE A SERVICE RETIREMENT BENEFIT PURSUANT TO  SECTION  FIVE
 HUNDRED  FIVE  OF  THIS ARTICLE OR A DEFERRED VESTED BENEFIT PURSUANT TO
 SECTION FIVE HUNDRED SIXTEEN OF THIS ARTICLE.
   § 3. Subdivision c of section 516 of the retirement and social securi-
 ty law, as amended by chapter 18 of the laws of 2012, is amended to read
 as follows:
   c. The deferred vested benefit of police/fire members, New  York  city
 police/fire    revised   plan   members,   New   York   city   uniformed
 correction/sanitation revised plan members or investigator revised  plan
 members  shall  be a pension commencing at early retirement age equal to
 two and one-tenths percent of final average salary times years of  cred-
 ited  service, less fifty percent of the primary social security retire-
 ment benefit commencing at age sixty-two, as provided  in  section  five
 hundred eleven of this article, PROVIDED HOWEVER THAT THE DEFERRED VEST-
 ED  BENEFIT OF MEMBERS OF THE NEW YORK CITY FIRE DEPARTMENT PENSION FUND
 AND REVISED PLAN MEMBERS WHO ARE MEMBERS  OF  THE  NEW  YORK  CITY  FIRE
 DEPARTMENT PENSION FUND SHALL NOT BE REDUCED BY THE PRIMARY SOCIAL SECU-
 RITY  RETIREMENT  BENEFIT  COMMENCING  AT  AGE  SIXTY-TWO AS PROVIDED BY
 SECTION FIVE HUNDRED ELEVEN OF THIS ARTICLE. A police/fire member, a New
 York city police/fire revised plan member, a  New  York  city  uniformed
 correction/sanitation  revised  plan member or investigator revised plan
 member may elect to receive his OR  HER  vested  benefit  commencing  at
 early  retirement age or age fifty-five. If the vested benefit commences
 before early retirement age, the benefit shall be  reduced  by  one-fif-
 A. 5480--A                          3
 
 teenth  for each year, if any, that the member's early retirement age is
 in excess of age sixty, and by one-thirtieth for each additional year by
 which the vested benefit commences prior to  early  retirement  age.  If
 such vested benefit is deferred until after such member's normal retire-
 ment age, the benefit shall be computed and subject to annual escalation
 in  the same manner as provided for an early retirement benefit pursuant
 to subdivision c of section five hundred five of this article.
   § 4. Notwithstanding the provisions of section 13-379 of the  adminis-
 trative  code  of the city of New York, the provisions of this act shall
 apply to chapter three of title thirteen of the administrative  code  of
 the city of New York.
   § 5. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY: This proposed legislation would amend Sections of the Retire-
 ment and Social Security Law (RSSL) to eliminate the offset equal to 50%
 of  the  primary  social security benefit in the service, early service,
 and vested retirement benefits for Tier 3 members of the New  York  City
 Fire Pension Fund (FIRE).
 
          EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
           by Fiscal Year for the first 25 years ($ in Millions)
                     Year      FIRE
                     2025       8.3
                     2026       9.0
                     2027       9.8
                     2028      10.6
                     2029      11.5
                     2030      12.4
                     2031      13.4
                     2032      14.4
                     2033      15.4
                     2034      16.5
                     2035      17.6
                     2036      18.7
                     2037      19.9
                     2038      21.1
                     2039      22.3
                     2040      23.5
                     2041      24.8
                     2042      26.0
                     2043      24.5
                     2044      25.7
                     2045      26.9
                     2046      28.1
                     2047      29.2
                     2048      30.4
                     2049      31.5
    Employer Contribution impact beyond Fiscal Year 2049 is not shown.
  Projected contributions include future new hires that may be impacted.
 
   The entire increase in employer contributions will be allocated to New
 York City.
 
           EXPECTED INCREASE (DECREASE) IN ACTUARIAL LIABILITIES
                    as of June 30, 2023 ($ in Millions)
              Present Value (PV)                 FIRE
 A. 5480--A                          4
 
              PV of Benefits:                    117.4
              PV of Employee Contributions:      0.0
              PV of Employer Contributions:      117.4
              Unfunded Accrued Liabilities:      26.5
 
                AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
                                                 FIRE
              Number of Payments:                18
              Fiscal Year of Last Payment:       2042
              Amortization Payment:              2.7 M
 
   Unfunded  Accrued Liability increases were amortized over the expected
 remaining working lifetime of those  impacted  by  the  benefit  changes
 using level dollar payments.
   CENSUS  DATA:  The estimates presented herein are based on preliminary
 census data collected as of June 30,  2023.  The  census  data  for  the
 impacted population is summarized below.
 
                                                 FIRE
              Active Members
              - Number Count:                    5,030
              - Average Age:                     33.5
              - Average Service:                 5.5
              - Average Salary:                  112,400
              Term. Vested Members
              - Number Count:                    9
              - Average Age:                     37.6
 
   IMPACT  ON  MEMBER  BENEFITS: Currently, Tier 3 normal service retire-
 ment, early service  retirement,  and  vested  retirement  benefits  are
 subject to an offset equal to 50% of the primary social security benefit
 as defined in RSSL Section 511 beginning at age 62.
   Under  the proposed legislation, the offset for such benefits would be
 eliminated for FIRE members, resulting in an increase in benefits.
   ASSUMPTIONS AND METHODS: The  estimates  presented  herein  have  been
 calculated  based  on the Revised 2021 Actuarial Assumptions and Methods
 of the impacted retirement systems. In addition:
   * New entrants were assumed to replace exiting members so  that  total
 payroll increases by 3% each year for impacted groups. New entrant demo-
 graphics were developed based on data for recent new hires and actuarial
 judgement.
   RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
 highly on the actuarial assumptions, methods,  and  models  used,  demo-
 graphics  of  the  impacted population and other factors such as invest-
 ment, contribution, and other risks. If actual experience deviates  from
 actuarial   assumptions,  the  actual  costs  could  differ  from  those
 presented herein. Quantifying these risks is beyond the  scope  of  this
 Fiscal Note.
   This  Fiscal  Note  is intended to measure pension-related impacts and
 does not include other potential costs (e.g., administrative  and  Other
 Postemployment Benefits).
   This Fiscal Note does not include cost analyses relating to provisions
 contained in RSSL Section 500(c).
   STATEMENT OF ACTUARIAL OPINION: Marek Tyszkiewicz and Gregory Zelikov-
 sky  are members of the Society of Actuaries and the American Academy of
 Actuaries. We are members of NYCERS but do not believe  it  impairs  our
 A. 5480--A                          5
 
 objectivity  and  we  meet  the  Qualification Standards of the American
 Academy of Actuaries to render the actuarial opinion  contained  herein.
 To  the  best  of  our 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 2024-03 dated January 22,
 2024  was prepared by the Chief Actuary for the New York City Retirement
 Systems and Pension Funds. This estimate is intended for use only during
 the 2024 Legislative Session.