S T A T E O F N E W Y O R K
________________________________________________________________________
6290
2023-2024 Regular Sessions
I N S E N A T E
April 11, 2023
___________
Introduced by Sen. SCARCELLA-SPANTON -- 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
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
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10166-02-3
S. 6290 2
1, 2000 (original Tier 2 members), 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.
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.
S. 6290 3
Not measured in this Fiscal Note are the following:
* 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.
