NY State Senate Bill 2023-S5571A

Senate Bill S5571A

2023-2024 Legislative Session

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

download bill text pdf

Current Bill Status - In Senate Committee Civil Service And Pensions 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
Apr 11, 2024	print number 5571a
Apr 11, 2024	amend and recommit to civil service and pensions
Jan 03, 2024	referred to civil service and pensions
Mar 08, 2023	referred to civil service and pensions

Bill Amendments

Original

A (Active)

2023-S5571 - Details

See Assembly Version of this Bill:: A6502
Current Committee:: Senate Civil Service And Pensions
Law Section:: Retirement
Laws Affected:: Amd §2, Chap 540 of 2021

2023-S5571 - Summary

Relates to determination of salary base for members of the city of New York fire department pension fund.

2023-S5571 - Sponsor Memo

                                 
BILL NUMBER: S5571

SPONSOR: GOUNARDES
 
TITLE OF BILL:

An act to amend chapter 540 of the laws of 2021 amending the retirement
and social security law relating to determination of salary base for
members of the city of New York fire department pension fund, in
relation to the application thereof

 
PURPOSE OR GENERAL IDEA OF BILL:

To make Chapter 540 of 2021 retroactive to the beginning of Tier 2.

 
SUMMARY OF PROVISIONS:

Section one of this bill changes the applicability of the effective date
of Ch. 540 of 2021 to July 1st, 2000.

Section two sets the effective date of the bill amending Ch. 540.

JUSTIFICATION:

Chapter 540 of 2021, or S6405 Gounardes/A7640 Abbate, fixed a longstand-
ing inequity for members of the New York City Fire Department Pension
Fund. At the time of its passage, the fund had broken its Tier 2
members, covering a wide range of hires from July 1st, 1973 through June
30th, 2009, into two different groups depending on their first date of
service. Hires made between July 1st, 1973 but before July 1st, 2000
(deemed "original" Tier 2 members) had their final average salary (FAS)
calculated based on their most recent 12 months or their three highest-
earning years, whichever was higher. Hires made between July 1st, 2000
and June 30th, 20009, however ("new" Tier 2 members), based their FAS on
the most recent 12 months of service, with no opportunity to look at
averages over a longer period of time.

Chapter 540 fixed this disparity by mandating that all Tier 2 members of
the New York City Fire Department Pension Fund be afforded the same FAS
calculation, regardless of when within the tier they were hired. The
bill applied only to firefighters who retired on or after the effective
date of the bill, however, wrongly excluding those who had retired
before it was signed on October 29th, 2021. This bill would make the
effective date of the new law retroactive to the beginning of the "new"
Tier 2, treating all New York City firefighters who were meant to be
covered by this law equally.

 
PRIOR LEGISLATIVE HISTORY:

None

 
FISCAL IMPLICATIONS:

See bill.

 
EFFECTIVE DATE:
Immediate

2023-S5571 - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5571
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                               March 8, 2023
                                ___________
 
 Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
 
 AN  ACT to amend chapter 540 of the laws of 2021 amending the retirement
   and social security law relating to determination of salary  base  for
   members  of  the  city  of  New  York fire department pension fund, in
   relation to the application thereof
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section 2 of chapter 540 of the laws of 2021 amending the
 retirement and social security law relating to determination  of  salary
 base  for  members of the city of New York fire department pension fund,
 is amended to read as follows:
   § 2. This act shall take effect immediately and shall apply to members
 of the city of New York fire  department  pension  fund  who  retire  OR
 RETIRED on and after [such effective date] JULY 1, 2000.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY  OF BILL: This proposed legislation would amend Chapter 540 of
 the Laws of 2021 (Chapter 540) to extend the benefits  of  such  chapter
 law  to  members  who retired prior to the effective date of Chapter 540
 (i.e., October 29, 2021).
   Effective Date: Upon enactment.
   BACKGROUND: Prior to the passage of Chapter 540, the salary  base  use
 to  calculate  pension  benefits for Tier 2 members of the New York Fire
 Pension Fund (FIRE) hired on or after July 1, 2000,  was  equal  to  the
 pensionable  earnings  earned  in  the  final 12 months of service only.
 Chapter 540 revised the salary base for such members to equal the great-
 er 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.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD00174-02-3

 S. 5571                             2
 
   Chapter  540  did  not apply to members who had already retired. Under
 this proposed legislation, the pension benefits for  such  Tier  2  FIRE
 members  would be recalculated to the extent that the three-year average
 referenced above is larger than the pensionable earnings in the final 12
 months of service.
   For  the  purposes  of  this Fiscal Note, it has been assumed that any
 increased benefits resulting from this  proposed  legislation  would  be
 applied retroactively to the member's retirement date.
   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 $41.3 million.
   FINANCIAL IMPACT -  EMPLOYER  CONTRIBUTIONS:  The  enactment  of  this
 proposed  legislation  would  result  in an increase in Fiscal Year 2024
 employer contributions of approximately $45.7 million.
   New UAL attributable to benefit changes are generally  amortized  over
 the remaining working lifetime of those impacted by the benefit changes.
 For the purposes of this Fiscal Note, since those that would benefit are
 retired,  and  therefore  have no remaining working lifetime, the entire
 increase in PVFB would be recognized immediately.
   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.  Since  actual
 historical  salary  data  was unavailable, historical valuation data was
 used to approximate the impact of recalculating members' benefits.
   The 386 retired members and beneficiaries assumed to benefit from this
 proposed legislation as of June 30, 2022 had an average age of  approxi-
 mately  46.1  years, and have been retired an average of 3.6 years.  The
 average annual benefit increase resulting from this proposed legislation
 is approximately $6,500.
   ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
 been calculated based on the actuarial assumptions  and  methods  to  be
 used  for  the  Preliminary  Fiscal  Year 2024 employer contributions of
 FIRE.
   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 additional administrative
 costs  to  implement  the  proposed  legislation  (e.g.,   recalculating
 pensioner benefits).
   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
 S. 5571                             3
 
 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 2023-07  dated  March  3,
 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.

co-Sponsors

2023-S5571A (ACTIVE) - Details

See Assembly Version of this Bill:: A6502
Current Committee:: Senate Civil Service And Pensions
Law Section:: Retirement
Laws Affected:: Amd §2, Chap 540 of 2021

2023-S5571A (ACTIVE) - Summary

Relates to determination of salary base for members of the city of New York fire department pension fund.

2023-S5571A (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S5571A

SPONSOR: GOUNARDES
 
TITLE OF BILL:

An act to amend chapter 540 of the laws of 2021 amending the retirement
and social security law relating to determination of salary base for
members of the city of New York fire department pension fund, in
relation to the application thereof

 
PURPOSE OR GENERAL IDEA OF BILL:

To make Chapter 540 of 2021 retroactive to the beginning of Tier 2.

 
SUMMARY OF PROVISIONS:

Section one of this bill changes the applicability of the effective date
of Ch. 540 of 2021 to July 1st, 2000.

Section two sets the effective date of the bill amending Ch. 540.

JUSTIFICATION:

Chapter 540 of 2021, or S6405 Gounardes/A7640 Abbate, fixed a longstand-
ing inequity for members of the New York City Fire Department Pension
Fund. At the time of its passage, the fund had broken its Tier 2
members, covering a wide range of hires from July 1st, 1973 through June
30th, 2009, into two different groups depending on their first date of
service. Hires made between July 1st, 1973 but before July 1st, 2000
(deemed "original" Tier 2 members) had their final average salary (FAS)
calculated based on their most recent 12 months or their three highest-
earning years, whichever was higher. Hires made between July 1st, 2000
and June 30th, 2009, however ("new" Tier 2 members), based their FAS on
the most recent 12 months of service, with no opportunity to look at
averages over a longer period of time.

Chapter 540 fixed this disparity by mandating that all Tier 2 members of
the New York City Fire Department Pension Fund be afforded the same FAS
calculation, regardless of when within the tier they were hired. The
bill applied only to firefighters who retired on or after the effective
date of the bill, however, wrongly excluding those who had retired
before it was signed on October 29th, 2021. This bill would make the
effective date of the new law retroactive to the beginning of the "new"
Tier 2, treating all New York City firefighters who were meant to be
covered by this law equally.

 
PRIOR LEGISLATIVE HISTORY:

2023: S5571 - Referred to Civil Service and Pensions

 
FISCAL IMPLICATIONS:

See bill.

 
EFFECTIVE DATE:
Immediate

2023-S5571A (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5571--A
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                               March 8, 2023
                                ___________
 
 Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
   --  recommitted  to  the  Committee  on  Civil Service and Pensions in
   accordance with Senate Rule 6, sec. 8 --  committee  discharged,  bill
   amended,  ordered reprinted as amended and recommitted to said commit-
   tee
 
 AN ACT to amend chapter 540 of the laws of 2021 amending the  retirement
   and  social  security law relating to determination of salary base for
   members of the city of New  York  fire  department  pension  fund,  in
   relation to the application thereof
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 2 of chapter 540 of the laws of 2021  amending  the
 retirement  and  social security law relating to determination of salary
 base for members of the city of New York fire department  pension  fund,
 is amended to read as follows:
   § 2. This act shall take effect immediately and shall apply to members
 of  the  city  of  New  York  fire department pension fund who retire OR
 RETIRED on and after [such effective date] JULY 1, 2000.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY: This proposed legislation would extend the calculation of the
 salary base used to determine pension benefits enacted by Chapter 540 of
 the Laws of 2021 to members of the  New  York  City  Fire  Pension  Fund
 (FIRE) who retired prior to the effective date.
 
          EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
           by Fiscal Year for the first 25 years ($ in Millions)
 
                          Year           FIRE
                          2025           43.5
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD00174-03-4

 S. 5571--A                          2
 
                          2026           0.0
                          2027           0.0
                          2028           0.0
                          2029           0.0
                          2030           0.0
                          2031           0.0
                          2032           0.0
                          2033           0.0
                          2034           0.0
                          2035           0.0
                          2036           0.0
                          2037           0.0
                          2038           0.0
                          2039           0.0
                          2040           0.0
                          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
 
   The  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)                      FIRE
 PV of Benefits:                         39.3
 PV of Employee Contributions:           0.0
 PV of Employer Contributions:           39.3
 Unfunded Accrued Liabilities:           39.3
 
                AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
                                         FIRE
 Number of Payments:                     1
 Fiscal Year of Last Payment:            2025
 Amortization Payment:                   43.5 M
 
   The Unfunded Accrued Liability attributable to  current  retirees  was
 recognized in the first year.
   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
 Receiving Members
 - Number Count:                                   351
 - Average Age:                                    47.1
 - Average years retired:                          4.7
 - Average annual accrued benefit increase:        $6,400
 S. 5571--A                          3

   IMPACT  ON MEMBER BENEFITS: Prior to the passage of Chapter 540 of the
 Laws of 2021, the salary base used to  calculate  pension  benefits  for
 Tier  2 members of FIRE hired on or after July 1, 2000, was equal to the
 pensionable earnings earned in the final 12 months of service only.
   Chapter  540  revised  the  salary  base for such members to equal 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.
   Chapter  540  did  not apply to members who had already retired. Under
 this proposed legislation, the pension benefits for  such  Tier  2  FIRE
 members  would be recalculated to the extent that the three-year average
 referenced above is larger than the pensionable earnings in the final 12
 months of service.
   For the purposes of this Fiscal Note, it has  been  assumed  that  any
 increased  benefits  resulting  from  this proposed legislation would be
 applied retroactively to the member's retirement date.
   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 2024-42 dated April 9,
 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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