S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5798
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 23, 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
   service  retirement  benefits for certain members of the New York city
   employees' retirement system

   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, EXCEPT THAT FOR POLICE/FIRE MEMBERS OF  THE  NEW
 YORK  CITY  FIRE  DEPARTMENT  PENSION  FUND  OR THE NEW YORK CITY POLICE
 PENSION FUND, THE NEW YORK CITY UNIFORMED CORRECTION/SANITATION  REVISED
 PLAN  MEMBERS  OR INVESTIGATOR REVISED PLAN MEMBERS OF THE NEW YORK CITY
 EMPLOYEES' RETIREMENT SYSTEM,  THE  NORMAL  SERVICE  RETIREMENT  BENEFIT
 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.
                                                            LBD06954-02-3
              

 A. 5798                             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 FOR POLICE/FIRE MEMBERS OF THE NEW YORK CITY  FIRE
 DEPARTMENT     PENSION     FUND  OR  THE   NEW   YORK   CITY   UNIFORMED
 CORRECTION/SANITATION  REVISED PLAN MEMBERS OR INVESTIGATOR REVISED PLAN
 MEMBERS OF THE NEW YORK CITY EMPLOYEES'  RETIREMENT  SYSTEM,  THE  EARLY
 SERVICE  RETIREMENT  BENEFIT  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.
   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 elects to have the payment of his benefit commence on  the
 date  he  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 commenc-
 ing at age sixty-two as provided in section five hundred eleven of  this
 article, EXCEPT THAT FOR POLICE/FIRE MEMBERS OF THE NEW YORK  CITY  FIRE
 DEPARTMENT   PENSION FUND  OR THE NEW YORK CITY POLICE PENSION FUND, NEW
 YORK CITY UNIFORMED CORRECTION/SANITATION REVISED PLAN MEMBERS OR INVES-
 TIGATOR REVISED PLAN MEMBERS OF THE NEW YORK CITY EMPLOYEES'  RETIREMENT
 SYSTEM,  THE  SERVICE  RETIREMENT  BENEFIT  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.
   §  2. Section 511 of the retirement and social security law is amended
 by adding a new subdivision h to read as follows:
   H. THIS SECTION SHALL NOT APPLY TO POLICE/FIRE MEMBERS OF THE NEW YORK
 CITY FIRE DEPARTMENT PENSION FUND OR THE NEW YORK  CITY  POLICE  PENSION
 FUND, TO NEW YORK  CITY  UNIFORMED  CORRECTION/SANITATION  REVISED  PLAN
 MEMBERS  OR  INVESTIGATOR  REVISED  PLAN  MEMBERS  OF  THE NEW YORK CITY
 EMPLOYEES' RETIREMENT SYSTEM 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, EXCEPT THAT FOR POLICE/FIRE MEMBERS OF
 THE NEW YORK CITY FIRE DEPARTMENT PENSION FUND OR  THE  NEW  YORK   CITY
 POLICE    PENSION    FUND, NEW YORK CITY UNIFORMED CORRECTION/SANITATION
 REVISED PLAN MEMBERS OR INVESTIGATOR REVISED PLAN  MEMBERS  OF  THE  NEW
 A. 5798                             3
 
 YORK  CITY  EMPLOYEES' RETIREMENT SYSTEM, THE SERVICE RETIREMENT BENEFIT
 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.  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 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-fifteenth 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 retirement  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. This act shall take effect on the sixtieth  day  after  it  shall
 have become a law.
   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 normal service, early service, and vested  retirement  benefits  for
 Tier  3  uniformed  members  in  the  original,  revised,  modified, and
 enhanced plans (i.e., the 22-Year Plans) of the New York City Employees'
 Retirement System (NYCERS),  the  New  York  City  Police  Pension  Fund
 (POLICE), and the New York City Fire Pension Fund (FIRE) who are subject
 to Article 14 of the RSSL.
   Effective Date: Sixty days after enactment.
   IMPACT  ON  BENEFITS:  Currently,  the  RSSL Article 14 normal service
 retirement, early service retirement, and vested retirement benefits for
 members in 22-Year Plans 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 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  $316.0 million for NYCERS, $675.0 million for
 POLICE, and $94.4 million for FIRE, resulting in  a  total  increase  of
 approximately $1.1 billion for NYCRS.
   The   financial  impact  will  increase  as  the  impacted  population
 increases over time. The estimate of the  increase  in  annual  employer
 contributions  for Fiscal Years 2024 through 2028 are shown in the table
 below.
 
                    Increase in Employer Contributions
                           ($ Millions)
       Fiscal
        Year    NYCERS    POLICE    FIRE     TOTAL
 
        2024    $ 27.3    $ 50.8    $ 6.4    $ 84.5
        2025    $ 29.3    $ 54.8    $ 7.1    $ 91.2
        2026    $ 30.9    $ 59.1    $ 7.9    $ 97.9
 A. 5798                             4
 
        2027    $ 33.1    $ 63.9    $ 8.6    $ 105.6
        2028    $ 35.6    $ 69.4    $ 9.3    $ 114.3
 
   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
 impacted Tier 3 members is approximately 17 years for those  in  NYCERS,
 18 years for those in POLICE, and 19 years for those in FIRE.
   The  increase in UAL for NYCERS was therefore amortized over a 17-year
 period (16 payments under the  One-Year  Lag  Methodology)  using  level
 dollar  payments. Under the same methodology the increase in the UAL for
 POLICE and FIRE was amortized over 17 and 18 payments, respectively.
   CENSUS DATA: The estimates presented herein are based  on  the  census
 data  used  in  the June 30, 2022 actuarial valuation of NYCERS, POLICE,
 and FIRE to determine the Preliminary Fiscal Year 2024 employer contrib-
 utions.
   The table below contains a summary of the census data for active  Tier
 3 members in Article 14 22-Year Plans in NYCERS, POLICE, and FIRE.

                NYCRS     Active   Average   Average   Average
                          Count      Age     Service   Salary
 
                NYCERS    7,085    38.5      6.3       $96,700
                POLICE    19,375   32.2      5.7       $101,600
                FIRE      4,469    32.9      5.2       $106,300
 
   ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
 been  calculated based on the actuarial assumptions and methods used for
 the Preliminary Fiscal  Year  2024  employer  contributions  of  NYCERS,
 POLICE, and 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 actu-
 arial 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  NYCERS,  POLICE,  and  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 NYCERS, POLICE, and  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
 A. 5798                             5
 
 and Pension Funds. I am an Associate of the Society of Actuaries  and  a
 Member of the American Academy of Actuaries. I am a member of NYCERS but
 do  not  believe  it impairs my objectivity and 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 2023-06 dated March 1,
 2023 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 City Fire Pension Fund. This estimate  is  intended  for  use  only
 during the 2023 Legislative Session.