S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5492
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                               March 6, 2023
                                ___________
 
 Introduced  by  Sen. JACKSON -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
 
 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  NEW  YORK  CITY  UNIFORMED
 CORRECTION/SANITATION  REVISED PLAN MEMBERS OF THE NEW YORK CITY EMPLOY-
 EES' 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
 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08386-02-3
              

 S. 5492                             2
 
 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 NEW YORK CITY UNIFORMED  CORRECTION/SANITATION
 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 NEW YORK CITY UNIFORMED CORRECTION/SANITATION
 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  NEW  YORK   CITY   UNIFORMED
 CORRECTION/SANITATION  REVISED PLAN MEMBERS OF THE NEW YORK CITY EMPLOY-
 EES' RETIREMENT SYSTEM WHO RECEIVE A SERVICE RETIREMENT BENEFIT PURSUANT
 TO SECTION FIVE HUNDRED FIVE OF THIS ARTICLE OR A DEFERRED VESTED  BENE-
 FIT 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 NEW YORK CITY  UNIFORMED
 CORRECTION/SANITATION  REVISED PLAN MEMBERS OF THE NEW YORK CITY EMPLOY-
 EES' 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-
 S. 5492                             3
 
 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 Sanitation and Correction members in the original,  revised,  and
 enhanced plans (i.e., the 22-Year Plans) of the New York City EmployeesÆ
 Retirement System (NYCERS) 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
 Sanitation and Correction 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 $313.8 million.
   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.
 
                     Fiscal            Increase in
                     Year           Employer Contributions
                                       ($ Millions)
                     2024                 $27.1
                     2025                 $29.0
                     2026                 $30.7
                     2027                 $32.9
                     2028                 $35.3
 
   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 17 years and the increase in  UAL  was  therefore
 amortized  over  a  17-year  period  (16 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 NYCERS to deter-
 mine the Preliminary Fiscal Year 2024 employer contributions.
   The 7,015 active Tier 3 Sanitation and Correction members  in  Article
 14 22-Year Plans as of June 30, 2022 had an average age of approximately
 38.5  years,  average service of approximately 6.3 years, and an average
 salary of approximately $96,800.
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   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.
   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 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  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 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 2023-05  dated  March  1,
 2023  was prepared by the Chief Actuary for the New York City EmployeesÆ
 Retirement System.  This estimate is intended for use  only  during  the
 2023 Legislative Session.