S T A T E O F N E W Y O R K
________________________________________________________________________
6536
2023-2024 Regular Sessions
I N S E N A T E
April 25, 2023
___________
Introduced by Sens. MAYER, ADDABBO, HARCKHAM, JACKSON, SANDERS -- 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
the calculation of past service credit for police officers employed by
the division of law enforcement in the department of environmental
protection in the city of New York transferring between the New York
city employees' retirement system to the New York state and local
police and fire retirement system
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 343 of the retirement and social security law is
amended by adding a new subdivision i to read as follows:
I. 1. NOTWITHSTANDING ANY OTHER LAW, RULE OR REGULATION TO THE CONTRA-
RY, FOR ANY POLICE OFFICER EMPLOYED BY THE DIVISION OF LAW ENFORCEMENT
IN THE DEPARTMENT OF ENVIRONMENTAL PROTECTION IN THE CITY OF NEW YORK
TRANSFERRING FROM THE NEW YORK CITY EMPLOYEES' RETIREMENT SYSTEM TO THE
NEW YORK STATE AND LOCAL POLICE AND FIRE RETIREMENT SYSTEM AFTER THE
EFFECTIVE DATE OF THIS SUBDIVISION AND ANY POLICE OFFICER FORMERLY
EMPLOYED BY THE DIVISION OF LAW ENFORCEMENT IN THE DEPARTMENT OF ENVI-
RONMENTAL PROTECTION IN THE CITY OF NEW YORK HAVING MADE SUCH TRANSFER,
SUCH POLICE OFFICER'S DIVISION OF LAW ENFORCEMENT IN THE DEPARTMENT OF
ENVIRONMENTAL PROTECTION IN THE CITY OF NEW YORK SERVICE CREDIT SHALL BE
DEEMED CREDITABLE SERVICE, IN SUCH POLICE OFFICER'S TWENTY YEAR OR TWEN-
TY-FIVE YEAR RETIREMENT PLAN, IF SUCH POLICE OFFICER HAS SERVED FOR AT
LEAST TWO YEARS IN SUCH EMPLOYMENT AND IF, WITHIN ONE YEAR OF THE DATE
ON WHICH HE OR SHE FIRST BECAME A MEMBER OF THE NEW YORK STATE AND LOCAL
POLICE AND FIRE RETIREMENT SYSTEM OR WITHIN ONE YEAR OF THE EFFECTIVE
DATE OF THIS SUBDIVISION, SUCH MEMBER ELECTS TO DO SO.
2. THE AMOUNT OF SUCH SERVICE CREDITED TO THE MEMBER IN THE NEW YORK
STATE AND LOCAL POLICE AND FIRE RETIREMENT SYSTEM PLAN SHALL NOT EXCEED
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03776-02-3
S. 6536 2
THE AMOUNT OF SERVICE CREDITED TO THE MEMBER IN THE NEW YORK CITY
EMPLOYEES' RETIREMENT SYSTEM PLAN.
3. IF THE MEMBER SUBSEQUENTLY RETIRES ON AN AGE-BASED RETIREMENT PLAN
IN THE NEW YORK STATE AND LOCAL POLICE AND FIRE RETIREMENT SYSTEM
INSTEAD OF A TWENTY YEAR OR TWENTY-FIVE YEAR PLAN, THE FULL AMOUNT OF
SERVICE CREDIT EARNED, AS A POLICE OFFICER EMPLOYED BY THE DIVISION OF
LAW ENFORCEMENT IN THE DEPARTMENT OF ENVIRONMENTAL PROTECTION IN THE
CITY OF NEW YORK SHALL BE GRANTED.
4. IN NO EVENT SHALL THE DIVISION OF LAW ENFORCEMENT IN THE DEPARTMENT
OF ENVIRONMENTAL PROTECTION IN THE CITY OF NEW YORK SERVICE CREDITED TO
A MEMBER OF THE NEW YORK STATE AND LOCAL POLICE AND FIRE RETIREMENT
SYSTEM PURSUANT TO THIS SUBDIVISION EXCEED A TOTAL OF TEN YEARS.
5. NOTWITHSTANDING ANY OTHER PROVISION OF LAW IN THIS SECTION TO THE
CONTRARY, THE RESERVE ON SUCH MEMBER'S BENEFITS SHALL BE TRANSFERRED
FROM THE NEW YORK CITY EMPLOYEES' RETIREMENT SYSTEM TO THE NEW YORK
STATE AND LOCAL POLICE AND FIRE RETIREMENT SYSTEM IN ACCORDANCE WITH
SUBDIVISIONS C AND D OF THIS SECTION.
6. NO MEMBER WHO RECEIVES SERVICE CREDIT PURSUANT TO THIS SUBDIVISION
SHALL BE ELIGIBLE TO RECEIVE ADDITIONAL SERVICE CREDIT PURSUANT TO
SUBDIVISION B OF SECTION THREE HUNDRED EIGHTY-FOUR-E OF THIS ARTICLE IF
HIS OR HER EMPLOYER HAS ELECTED TO PROVIDE SUCH SERVICE CREDIT.
§ 2. This act shall take effect on the sixtieth day after it shall
have become a law.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would expand the definition of service creditable under
20-year and 25-year plans in the New York State and Local Police and
Fire Retirement System (NYSLPFRS) to include service transferred by any
police officer employed or formerly employed by the Division of Law
Enforcement in the Department of Environmental Protection in the City of
New York, provided that such police officer has at least two years of
such employment. The member must elect to obtain the service credit
within one year of the date on which they first became a member of the
NYSLPFRS or within one year of the effective date of this bill, whichev-
er occurs later. The amount of service credit received in the NYSLPFRS
shall not exceed the minimum of the amount of service credited to the
member in the New York City Employees' Retirement System (NYCERS) plan
or 10 years.
If this bill is enacted during the 2023 legislative session, it is
estimated that the past service cost will average approximately 25% of
an affected member's salary for each year of additional service that is
credited on a 20-year or 25- year plan. This cost will be offset by any
reserves transferred from the NYCERS. The remaining cost will be shared
by the State of New York and the participating employers in the
NYSLPFRS.
The exact number of current members as well as future members who
could be affected by this legislation cannot be readily determined.
Summary of relevant resources:
Membership data as of March 31, 2022 was used in measuring the impact
of the proposed change, the same data used in the April 1, 2022 actuari-
al valuation. Distributions and other statistics can be found in the
2022 Report of the Actuary and the 2022 Annual Comprehensive Financial
Report.
The actuarial assumptions and methods used are described in the 2020,
2021, and 2022 Annual Report to the Comptroller on Actuarial Assump-
tions, and the Codes, Rules and Regulations of the State of New York:
Audit and Control.
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The Market Assets and GASB Disclosures are found in the March 31, 2022
New York State and Local Retirement System Financial Statements and
Supplementary Information.
I am a member of the American Academy of Actuaries and meet the Quali-
fication Standards to render the actuarial opinion contained herein.
This fiscal note does not constitute a legal opinion on the viability
of the proposed change nor is it intended to serve as a substitute for
the professional judgment of an attorney.
This estimate, dated February 28, 2023, and intended for use only
during the 2023 Legislative Session, is Fiscal Note No. 2023-87,
prepared by the Actuary for the New York State and Local Retirement
System.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: This proposed legislation would amend Section 343 of
the Retirement and Social Security Law (RSSL) to allow current or former
New York City Employees' Retirement System (NYCERS) members employed as
New York City Department of Environmental Protection (DEP) police offi-
cers to transfer, within specified timeframes, to the New York State and
Local Police and Fire Retirement System (PFRS) and receive up to 10
years of credit in the 20-year and 25-year Plans for such equal DEP
service, or full credit exceeding 10 years in an underlying age-based
State retirement plan. Employer paid pension reserves would also be
transferred from NYCERS to PFRS for each such transfer.
Effective Date: Sixty days after enactment.
BACKGROUND: Currently, NYCERS members employed as DEP police officers
who subsequently become employed by the State are eligible to transfer
their NYCERS membership to PFRS but generally do not receive service
credit in the 20-year and 25-year PFRS Plans. Upon successful applica-
tion for transfers between NYCERS and PFRS, member accumulated contrib-
utions (with accrued interest) are generally transferred but additional
employer paid reserves are not.
Under the proposed legislation, if enacted, DEP police officers who
served in such title for a minimum of two years and then transfer their
NYCERS membership to PFRS within one year of becoming a PFRS member (or
one year of the effective date, if later) would receive up to 10 years
of credit in the 20-year and 25-year PFRS Plans for such equal DEP
service, or full credit exceeding 10 years in an underlying age-based
State retirement plan. This service would be included in the benefit
calculation payable by PFRS.
Additionally, NYCERS would be required to calculate and pay such
member's pension reserve, net of any accumulated salary deductions
otherwise transferred, to PFRS. It should be noted that the proposed
legislation does not provide a reciprocal transfer of reserves should a
member transfer from PFRS to NYCERS.
FINANCIAL IMPACT - OVERVIEW: There is no data available to estimate
the number of NYCERS members who would potentially take advantage of
this proposed legislation. Therefore, the estimated financial impact
has been calculated on a per event basis equal to the increase in
Unfunded Accrued Liability (UAL) for an average NYCERS member who is
employed as a DEP police officer and transfers to PFRS. This increase in
UAL consists of the required amount to be transferred to PFRS, plus
Additional Member Contributions (AMC) to be refunded to the member, if
any, offset by the reduction in Accrued Liability since the member,
assuming all service credit is transferred, would no longer be entitled
to future NYCERS benefits.
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With respect to an individual member, the additional cost of this
proposed legislation could vary greatly depending on the member's length
of service, age, and salary history.
FINANCIAL IMPACT - PRESENT VALUES: Based on the census data and the
actuarial assumptions and methods described herein, the enactment of
this proposed legislation would increase the UAL by approximately
$43,100, on average, for each eligible member who transfers to PFRS.
FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: Enactment of this
proposed legislation would increase employer contributions, where such
amount would depend on the number of members affected as well as other
characteristics including the age, years of service, and salary history
of the member.
Based on the actuarial assumptions and methods described below, the
enactment of this proposed legislation is estimated to increase annual
employer contributions by approximately $5,100, on average, for each
eligible member who transfers to PFRS.
As there is no data currently available to estimate the number of
members who may transfer to PFRS, the financial impact would be recog-
nized at the time of the event. Consequently, changes in employer
contributions have been estimated assuming that the increase in the UAL
will be recognized as an actuarial loss and financed over a closed
15-year period (14 payments under the One-Year Lag Methodology) using
level dollar payments.
With respect to the timing, increases in employer contributions would
depend upon when eligible members file their application to transfer
their NYCERS membership to PFRS but, generally, increased employer
contributions will first occur the second fiscal year following the
transfer of reserves to PFRS.
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.
There are 190 active DEP police officers who participate in NYCERS and
have at least two years of service as of June 30, 2022. Of these, 96
active members have 15 or fewer years of service and are therefore
assumed to potentially benefit from the proposed legislation. These 96
active members have an average age of approximately 34.7 years, average
service of approximately 7.8 years, and an average salary of approxi-
mately $74,700. There are also 56 former DEP police officers who have
separated from service with between two and 15 years of service.
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.
For purposes of this Fiscal Note, it has been assumed that the
impacted NYCERS members would generally not have transferred their
membership to PFRS absent this proposed legislation. It has been further
assumed that members with more than 15 years of service would not trans-
fer their membership even under the proposed legislation.
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.
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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 2023-27 dated April 12,
2023 was prepared by the Chief Actuary for the New York City Employees'
Retirement System. This estimate is intended for use only during the
2023 Legislative Session.
