S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7681
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               June 5, 2023
                                ___________
 
 Introduced  by  M.  of A. PHEFFER AMATO -- read once and referred to the
   Committee on Governmental Employees
 
 AN ACT to amend the general  municipal  law,  in  relation  to  allowing
   certain  members  of the New York city fire department pension fund to
   receive a membership date in the New York city fire department pension
   fund attributable to service in the titles of police cadet program  or
   police  cadet  program II in the New York city police department cadet
   program
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section 209-fff of the general municipal law, as added by
 chapter 431 of the laws of 2019, is amended to read as follows:
   § 209-fff. Provisions relating to a membership date in  the  New  York
 city  police  pension fund OR THE FIRE DEPARTMENT PENSION FUND attribut-
 able to service in the titles of police cadet program and  police  cadet
 program  II  in  the  New  York city police department cadet program. 1.
 Notwithstanding any provision of law to the contrary, upon election, any
 member of the New York city police pension fund OR  THE  NEW  YORK  CITY
 FIRE  DEPARTMENT  PENSION FUND who is subject to article fourteen of the
 retirement and social security law, and who served in the New York  city
 police  department cadet program in the title of police cadet program or
 police cadet program II prior to April first, two thousand  twelve,  but
 did  not join the New York city employees' retirement system while serv-
 ing in either such title, may purchase credit for the period of  service
 in  such  titles in the New York city police department cadet program by
 paying into the New York city police pension fund OR THE NEW  YORK  CITY
 FIRE  DEPARTMENT PENSION FUND all member contributions plus interest, at
 a rate of five percent per annum, which would have been payable  to  the
 New  York  city  employees' retirement system under any provision of law
 had such member joined the New York city employees' retirement system on
 the earliest date that he or she was appointed to the  title  of  police
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10936-03-3
              

 A. 7681                             2
 
 cadet  program  or  police  cadet program II in the New York city police
 department cadet program, provided such  payment  is  made  within  five
 years after the effective date of this section.
   2. Any member of the New York city police pension fund OR THE NEW YORK
 CITY  FIRE  DEPARTMENT PENSION FUND who acquires service credit pursuant
 to this section shall be entitled to all rights, benefits and privileges
 to which he or she would have been entitled had his or her membership in
 the New York city police pension fund OR THE NEW YORK CITY FIRE  DEPART-
 MENT  PENSION  FUND  begun  upon  the  earliest  date that he or she was
 appointed to the title of police cadet program or police  cadet  program
 II in the New York city police department cadet program, but in no event
 shall  the service credit acquired pursuant to this section be deemed to
 be: (A) service in the police force or any other type of service counted
 or creditable as service in the police force under section 13-218 of the
 administrative code of the city of New York[,]; (B) SERVICE IN THE  FIRE
 DEPARTMENT  OF THE CITY OF NEW YORK OR ANY OTHER TYPE OF SERVICE COUNTED
 OR CREDIBLE AS SERVICE IN SUCH FIRE DEPARTMENT UNDER SECTION  13-318  OF
 THE  ADMINISTRATIVE  CODE  OF THE CITY OF NEW YORK; OR (C) SERVICE UNDER
 section five hundred thirteen of the retirement and social security  law
 or  any  other provision of law for purposes of eligibility for benefits
 and to determine the amount of benefits under the New York  city  police
 pension fund OR THE NEW YORK CITY FIRE DEPARTMENT PENSION FUND.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: This proposed legislation would amend Section 209-fff
 of  the  General Municipal Law (GML) to allow New York City Fire Pension
 Fund (FIRE) members subject to Article 14 of the Retirement  and  Social
 Security  Law  (RSSL)  (Tier 3, Tier 3 Modified, and Tier 3 Enhanced) to
 purchase prior service as a cadet in  the  New  York  Police  Department
 (NYPD)  and use the appointment date as a cadet to determine the initial
 date of FIRE membership for  plan  or  tier  eligibility  provided  such
 purchase of service is made within five years of October 29, 2019.
   Effective Date: Upon enactment.
   BACKGROUND:  Currently,  the  purchase  of  prior  NYPD  cadet service
 performed while not a member of the New York City Employees'  Retirement
 System  (NYCERS)  does  not  provide a retroactive date of membership in
 FIRE, nor would it provide additional service  retirement  benefits  for
 members subject to Article 14 of the RSSL.
   IMPACT  ON  BENEFITS:  Under  the  proposed  legislation,  if enacted,
 purchased NYPD cadet service performed while  not  a  member  of  NYCERS
 would  entitle such member with a cadet service date before July 1, 2009
 to be deemed a Tier 2 member, and such service would be included in  the
 calculation of benefits as non-qualifying service credit.
   Also, under the proposed legislation, if enacted, purchased NYPD cadet
 service  would  entitle  members with cadet service between July 1, 2009
 and April 1, 2012 who joined FIRE after April 1, 2012 as a Tier 3  Modi-
 fied or Enhanced member to be deemed an original Tier 3 member.
   IMPACT ON PAYABILITY: Since eligibility for FIRE benefits are based on
 tier  or plan, including cadet service towards tier or plan, eligibility
 would increase and/or accelerate the  payability  date  of  benefits  in
 accordance with applicable earlier tiers or plans.
   ADDITIONAL  MEMBER  CONTRIBUTIONS: For cadets who did not join NYCERS,
 the member would have to pay member contributions that would  have  been
 payable  to  NYCERS  had  they joined on their initial cadet appointment
 date, plus 5.0% annual interest.
 A. 7681                             3
 
   Member contributions for FIRE are  determined  by  tier  and  plan  as
 follows:
   * Tier 2 - contribution rates are based on entry age.
   *  Tier  3  and  Tier 3 Modified - Basic Member Contributions (BMC) of
 3.0%.
   * Tier 3 Enhanced - BMC of 3.0% plus Additional  Member  Contributions
 currently equal to 2.0%. The additional contribution rate of 2.0% can be
 raised  to  3.0%  based on a financial analysis performed by the Actuary
 every three years. At no time can the  total  contribution  rate  exceed
 6.0%.
   FINANCIAL  IMPACT  -  SUMMARY: There is no data currently available to
 estimate the number of members  who  might  benefit  from  the  proposed
 legislation.  For the purposes of this Fiscal Note, the estimated finan-
 cial impact has been calculated on a per event basis for an average FIRE
 member who is either currently a Tier 3 member and  could  benefit  from
 the  enactment  of  this  proposed  legislation by being deemed a Tier 2
 member or is currently a Tier 3 Modified or Enhanced  member  who  could
 benefit  by  being  deemed an original Tier 3 member. A breakdown of the
 financial impact by Tier is shown in the table below.
 
                          Additional           Estimated First Year
      New Tier       Present Value of Future   Employer Contributions
                     Employer Contributions     (average per event)
                       (average per event)
 
 Tier 2                     $401,800                 $30,200
 
 Original Tier 3             $11,900                    $700
 
   Enactment  of  this  proposed  legislation  would  increase   employer
 contributions,  where  such amount would depend on the number of members
 affected as well as other characteristics including the  age,  years  of
 service, and salary history of the member.
   Based  on  the  census  data and the actuarial assumptions and methods
 described herein, the  enactment  of  this  proposed  legislation  would
 increase  the  present  value of future employer contributions and esti-
 mated first year employer contributions by an amount which would  depend
 on the Tier granted by the purchase of prior cadet service.
   As  there  is  no  data  currently available to estimate the number of
 members who may purchase cadet service, the financial  impact  would  be
 recognized  at  the time of the event. Consequently, changes in employer
 contributions have been estimated assuming that the increase in  present
 value  of  future  contributions will be recognized as an actuarial loss
 and financed over a closed 15-year period (14 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 FIRE to  determine
 the Preliminary Fiscal Year 2024 employer contributions.
   There  are  2,998  active  FIRE  members  as  of June 30, 2022 who are
 currently in Tier 3, Tier 3 Modified, or Tier 3 Enhanced and  who  could
 potentially benefit from the proposed legislation by being deemed a Tier
 2  member  (i.e., age 31 and older). These active members had an average
 age of approximately 35.0 years, average service  of  approximately  6.1
 years, and an average salary of approximately $116,900.
   There  are  3,588  active  FIRE  members  as  of June 30, 2022 who are
 currently in Tier 3 Modified or Tier 3 Enhanced  and  could  potentially
 A. 7681                             4
 
 benefit from the proposed legislation by being deemed an original Tier 3
 member (i.e., age 28 and older). These active members had an average age
 of approximately 33.5 years, average service of approximately 5.3 years,
 and an average salary of approximately $108,800.
   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  FIRE.  Addi-
 tionally,  1.2 years of cadet service was assumed based on the amount of
 cadet service previously purchased by  members  of  the  New  York  City
 Police Pension Fund.
   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:
   *  Future  purchases of non-qualifying service by members who would be
 deemed Tier 2 were this bill to pass.
   *  The  initial  additional  administrative  costs  to  implement  the
 proposed legislation.
   *  The  impact  of  this  proposed legislation on Other Postemployment
 Benefit costs.
   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  2023-64  dated  May  31,
 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.