NY State Assembly Bill 2023-A6403A

Assembly Bill A6403A

2023-2024 Legislative Session

Relates to the determination of salary base for members of the New York city police pension fund

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Current Bill Status - In Assembly Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Mar 19, 2024	print number 6403a
Mar 19, 2024	amend and recommit to governmental employees
Jan 03, 2024	referred to governmental employees
Apr 06, 2023	referred to governmental employees

Bill Amendments

Original

A (Active)

2023-A6403 - Details

See Senate Version of this Bill:: S6290
Current Committee:: Assembly Governmental Employees
Law Section:: Retirement and Social Security Law
Laws Affected:: Amd §443, R & SS L

2023-A6403 - Summary

Relates to the determination of salary base for members of the New York city police pension fund; provides that the salary base for members of the New York city police pension fund whose employment with the police department of the city of New York commenced on or after July 1, 2000 shall be determined in the same manner as members whose employment commenced prior to such date.

2023-A6403 - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6403
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               April 6, 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
   determination  of  salary base for members of the New York city police
   pension fund
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section  443 of the retirement and social security law is
 amended by adding a new subdivision i to read as follows:
   I. NOTWITHSTANDING ANY GENERAL, SPECIAL OR LOCAL LAW, CHARTER,  ADMIN-
 ISTRATIVE  CODE,  AGREEMENT,  RESOLUTION  OR  RULE  OR REGULATION TO THE
 CONTRARY, THE SALARY BASE FOR  MEMBERS  OF  THE  NEW  YORK  CITY  POLICE
 PENSION  FUND WHOSE EMPLOYMENT WITH THE POLICE DEPARTMENT OF THE CITY OF
 NEW YORK COMMENCED ON OR AFTER THE FIRST OF JULY, TWO THOUSAND  TO  WHOM
 THIS ARTICLE OTHERWISE APPLIES SHALL BE DETERMINED IN THE SAME MANNER AS
 THE  SALARY  BASE  FOR  MEMBERS OF THE NEW YORK CITY POLICE PENSION FUND
 WHOSE EMPLOYMENT WITH THE POLICE DEPARTMENT OF  THE  CITY  OF  NEW  YORK
 COMMENCED BEFORE THE FIRST OF JULY, TWO THOUSAND.
   § 2. This act shall take effect immediately and shall apply to members
 of  the  New  York  city police pension fund who retire on or after such
 effective date.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: This proposed legislation would amend Section 443  of
 the  Retirement and Social Security Law (RSSL) to change the salary base
 for Tier 2 members of the New York City Police Pension Fund (POLICE) who
 are hired on or after July 1, 2000.
   Effective Date: Upon enactment.
   IMPACT ON BENEFITS: Pension benefits are primarily derived from  as  a
 percentage of salary base. For Tier 2 POLICE members hired prior to July
 1,  2000  (original  Tier  2  members),  the salary base is equal to the
 greater of

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10166-02-3

 A. 6403                             2
 
   (1) the pensionable earnings in the final 12 months of service, or
   (2)  the  average pensionable earnings earned in any consecutive three
 years of service.
   For Tier 2 POLICE members hired on or after July 1, 2000,  the  salary
 base  is equal to the pensionable earnings earned in the final 12 months
 of service only.
   Under the proposed legislation, the salary base  shall  be  determined
 the  same for Tier 2 POLICE members hired on or after July 1, 2000 as it
 is for Tier 2 members hired prior to July 1, 2000.
   Note, pensionable earnings in the final 12 months or the highest three
 consecutive years, are subject to certain limits.
   FINANCIAL IMPACT - PRESENT VALUES: Based on the census  data  and  the
 actuarial  assumptions  and  methods  described herein, the enactment of
 this proposed legislation would result in an  increase  in  the  Present
 Value of Future Benefits (PVFB) and the present value of future employer
 contributions of approximately $5.6 million.
   Under  the Entry Age Normal cost method used to determine the employer
 contributions to POLICE, there would be  an  increase  in  the  Unfunded
 Accrued Liability (UAL) of approximately $3.6 million and an increase in
 the  present  value of future employer Normal Cost of approximately $2.0
 million.
   FINANCIAL IMPACT - ANNUAL EMPLOYER  CONTRIBUTIONS:  The  enactment  of
 this  proposed legislation would result in an initial increase in annual
 employer contributions of approximately $1.2 million which is the result
 of an increase in the Normal Cost in addition to the UAL payment.
   New 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 seven
 years and the increase in UAL was therefore amortized over a  seven-year
 period  (six  payments  under  the One-Year Lag Methodology) using level
 dollar payments.
   CENSUS DATA: The estimates presented herein are based  on  the  census
 data  used  in the June 30, 2022 actuarial valuation of POLICE to deter-
 mine the Preliminary Fiscal Year 2024 employer contributions.
   There are 12,849 active Tier 2 Police members hired on or  after  July
 1, 2000 as of June 30, 2022 and they have an average age of approximate-
 ly 42.6 years, average service of approximately 16.8 years, and an aver-
 age salary of approximately $150,500.
   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 POLICE.
   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 POLICE 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:
 A. 6403                             3
 
   *  The  initial  additional  administrative  costs  to  implement  the
 proposed legislation.
   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 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 2023-18 dated March 30,
 2023 was prepared by the Chief Actuary for  the  New  York  City  Police
 Pension  Fund.  This  estimate  is intended for use only during the 2023
 Legislative Session.

2023-A6403A (ACTIVE) - Details

See Senate Version of this Bill:: S6290
Current Committee:: Assembly Governmental Employees
Law Section:: Retirement and Social Security Law
Laws Affected:: Amd §443, R & SS L

2023-A6403A (ACTIVE) - Summary

2023-A6403A (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6403--A
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               April 6, 2023
                                ___________
 
 Introduced  by  M.  of A. PHEFFER AMATO -- 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
   determination  of  salary base for members of the New York city police
   pension fund
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section  443 of the retirement and social security law is
 amended by adding a new subdivision i to read as follows:
   I. NOTWITHSTANDING ANY GENERAL, SPECIAL OR LOCAL LAW, CHARTER,  ADMIN-
 ISTRATIVE  CODE,  AGREEMENT,  RESOLUTION  OR  RULE  OR REGULATION TO THE
 CONTRARY, THE SALARY BASE FOR  MEMBERS  OF  THE  NEW  YORK  CITY  POLICE
 PENSION  FUND WHOSE EMPLOYMENT WITH THE POLICE DEPARTMENT OF THE CITY OF
 NEW YORK COMMENCED ON OR AFTER THE FIRST OF JULY, TWO THOUSAND  TO  WHOM
 THIS ARTICLE OTHERWISE APPLIES SHALL BE DETERMINED IN THE SAME MANNER AS
 THE  SALARY  BASE  FOR  MEMBERS OF THE NEW YORK CITY POLICE PENSION FUND
 WHOSE EMPLOYMENT WITH THE POLICE DEPARTMENT OF  THE  CITY  OF  NEW  YORK
 COMMENCED BEFORE THE FIRST OF JULY, TWO THOUSAND.
   § 2. This act shall take effect immediately and shall apply to members
 of  the  New  York  city police pension fund who retire on or after such
 effective date.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY: This proposed legislation would change the  salary  base  for
 Tier 2 members of the New York City Police Pension Fund (POLICE) who are
 hired  on  or  after July 1, 2000 to be the greater of final salary or a
 three-year average.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10166-03-4
 A. 6403--A                          2

          EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
           by Fiscal Year for the first 25 years ($ in Millions)
 
                               Year      POLICE
                               2025         3.9
                               2026         3.8
                               2027         3.8
                               2028         3.7
                               2029         3.6
                               2030         0.4
                               2031         0.3
                               2032         0.3
                               2033         0.2
                               2034         0.2
                               2035         0.2
                               2036         0.1
                               2037         0.1
                               2038         0.1
                               2039         0.1
                               2040         0.1
                               2041         0.0
                               2042         0.0
                               2043         0.0
                               2044         0.0
                               2045         0.0
                               2046         0.0
                               2047         0.0
                               2048         0.0
                               2049         0.0
   Employer Contribution impact beyond Fiscal Year 2049 is not shown.
 
 The  entire  increase in employer contributions will be allocated to New
 York City.
 
           INITIAL INCREASE (DECREASE) IN ACTUARIAL LIABILITIES
                    as of June 30, 2023 ($ in Millions)
           Present Value (PV)                 POLICE
           PV of Benefits:                      16.0
           PV of Employee Contributions:         0.0
           PV of Employer Contributions:        16.0
           Unfunded Accrued Liabilities:        12.6
 
                AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
 
                                                   POLICE
                Number of Payments:                  5
                Fiscal Year of Last Payment:        2029
                Amortization Payment:              3.2 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.
 A. 6403--A                          3
 
                                         POLICE
                Active Members
                 - Number Count:         11,723
                 - Average Age:          43.4
                 - Average Service:      17.6
                 - Average Salary:       156,600
 
   IMPACT ON MEMBER BENEFITS: Pension benefits are primarily derived as a
 percentage of salary base. For Tier 2 POLICE members hired prior to July
 1, 2000, the salary base is equal to the greater of
   (1) the pensionable earnings in the final 12 months of service, or
   (2)  the  average pensionable earnings earned in any consecutive three
 years of service.
   For Tier 2 POLICE members hired on or after July 1, 2000,  the  salary
 base  is equal to the pensionable earnings earned in the final 12 months
 of service only.
   Under the proposed legislation, the salary base  shall  be  determined
 the  same for Tier 2 POLICE members hired on or after July 1, 2000 as it
 is for Tier 2 members hired prior to July 1, 2000.
   Note, pensionable earnings in the final 12 months or the highest three
 consecutive years, are subject to certain limits.
   ASSUMPTIONS AND METHODS: The  estimates  presented  herein  have  been
 calculated  based  on the Revised 2021 Actuarial Assumptions and Methods
 of the impacted retirement systems.
   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).
   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
 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 2024-28 dated March 15,
 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.

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