S T A T E O F N E W Y O R K
________________________________________________________________________
5792
2023-2024 Regular Sessions
I N S E N A T E
March 16, 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 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
S. 5792 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
S. 5792 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
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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
S. 5792 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.
