S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6481--A
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              April 24, 2023
                                ___________
 
 Introduced  by  Sens.  SKOUFIS,  ADDABBO,  CHU,  WEBER -- 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 committee
 
 AN ACT to amend the retirement and social security law, in  relation  to
   service  retirement  benefits  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 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 MEMBERS OF  THE  NEW  YORK  CITY
 POLICE  PENSION FUND, 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

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08526-04-4
              

 S. 6481--A                          2
 
 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
 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 MEMBERS OF THE NEW YORK CITY POLICE PENSION
 FUND, 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 MEMBERS OF THE NEW  YORK  CITY  POLICE  PENSION
 FUND, 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 MEMBERS OF THE NEW YORK CITY POLICE
 PENSION  FUND  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 MEMBERS OF THE NEW  YORK
 CITY  POLICE  PENSION  FUND, 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
 S. 6481--A                          3
 
 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: This proposed legislation would amend Sections of the Retire-
 ment and Social Security Law (RSSL) to eliminate the offset equal to 50%
 of  the  primary  social security benefit in the service, early service,
 and vested retirement benefits for Tier 3 members of the New  York  City
 Police Pension Fund (POLICE).
 
          EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
           by Fiscal Year for the first 25 years ($ in Millions)
                      Year     POLICE
                      2025       62.1
                      2026       66.6
                      2027       72.4
                      2028       78.7
                      2029       84.9
                      2030       91.5
                      2031       97.7
                      2032      103.0
                      2033      108.2
                      2034      113.2
                      2035      118.0
                      2036      122.8
                      2037      127.5
                      2038      132.4
                      2039      137.2
                      2040      142.1
                      2041      122.3
                      2042      127.3
                      2043      132.6
                      2044      138.1
                      2045      143.5
                      2046      149.0
                      2047      154.6
                      2048      160.6
                      2049      166.8
 
    Employer Contribution impact beyond Fiscal Year 2049 is not shown.
  Projected contributions include future new hires that may be impacted.
 
   The entire increase in employer contributions will be allocated to New
 York City.
 
           EXPECTED INCREASE (DECREASE) IN ACTUARIAL LIABILITIES
                    as of June 30, 2023 ($ in Millions)
              Present Value (PV)                 POLICE
              PV of Benefits:                    788.6
              PV of Employee Contributions:      0.0
              PV of Employer Contributions:      788.6
              Unfunded Accrued Liabilities:      226.2
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                AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
                                                 POLICE
              Number of Payments:                16
              Fiscal Year of Last Payment:       2040
              Amortization Payment:              24.8 M
 
   Unfunded  Accrued Liability increases were amortized over the expected
 remaining working lifetime of those  impacted  by  the  benefit  changes
 using level dollar payments.
   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.
 
                                                 POLICE
              Active Members
              - Number Count:                    20,176
              - Average Age:                     32.8
              - Average Service:                 6.1
              - Average Salary:                  107,600
              Term. Vested Members
              - Number Count:                    924
              - Average Age:                     34.7
 
   IMPACT  ON  MEMBER  BENEFITS: Currently, Tier 3 normal service retire-
 ment, early service  retirement,  and  vested  retirement  benefits  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 for POLICE members, resulting in an increase in benefits.
   ASSUMPTIONS AND METHODS: The  estimates  presented  herein  have  been
 calculated  based  on the Revised 2021 Actuarial Assumptions and Methods
 of the impacted retirement systems. In addition:
   * New entrants were assumed to replace exiting members so  that  total
 payroll increases by 3% each year for impacted groups. New entrant demo-
 graphics were developed based on data for recent new hires and actuarial
 judgement.
   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).
   This Fiscal Note does not include cost analyses relating to provisions
 contained in RSSL Section 500(c).
   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
 S. 6481--A                          5
 
 procedures  and  with  the Actuarial Standards of Practice issued by the
 Actuarial Standards Board.
   FISCAL NOTE IDENTIFICATION: This Fiscal Note 2024-04 dated January 22,
 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.