S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3972
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 30, 2025
                                ___________
 
 Introduced  by  M.  of A. PHEFFER AMATO -- read once and referred to the
   Committee on Governmental Employees
 
 AN ACT to amend the retirement and social security law, in  relation  to
   eligibility  for  ordinary  disability  benefits  and re-employment of
   disability retirees of the New York city police pension fund Tier  III
   plans

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 506 of the retirement and social  security  law  is
 amended by adding a new subdivision a-1 to read as follows:
   A-1.  THE  PROVISIONS OF SUBDIVISION A OF THIS SECTION SHALL NOT APPLY
 TO MEMBERS OF THE NEW YORK CITY POLICE PENSION FUND.   MEDICAL  EXAMINA-
 TION  OF A POLICE PENSION MEMBER IN CITY-SERVICE FOR ORDINARY DISABILITY
 SHALL BE MADE UPON THE APPLICATION OF THE POLICE COMMISSIONER,  OR  UPON
 THE  APPLICATION  OF  SUCH MEMBER OR OF A PERSON ACTING ON SUCH MEMBER'S
 BEHALF, STATING THAT SUCH MEMBER IS PHYSICALLY OR MENTALLY INCAPACITATED
 FOR THE PERFORMANCE OF DUTY AND OUGHT TO BE  RETIRED.  IF  SUCH  MEDICAL
 EXAMINATION  SHOWS  THAT SUCH MEMBER IS PHYSICALLY OR MENTALLY INCAPACI-
 TATED FOR THE PERFORMANCE OF DUTY AND OUGHT TO BE RETIRED,  THE  MEDICAL
 BOARD  SHALL  SO REPORT AND THE BOARD SHALL RETIRE SUCH MEMBER FOR ORDI-
 NARY DISABILITY.
   § 2. Subdivision d of section 507 of the retirement and social securi-
 ty law, as added by chapter 890 of the laws of 1976, is amended to  read
 as follows:
   d.  If a member shall cease to be eligible for primary social security
 benefits before attaining age sixty-five, or, if receipt of social secu-
 rity benefits is not a  condition  for  disability  benefits  hereunder,
 shall  engage  in  such  employment or business activity as would render
 such member ineligible for social security disability benefits (had  [he
 or  she]  SUCH MEMBER otherwise been eligible), benefits hereunder shall
 cease.  Provided, however, if such member  is  otherwise  eligible,  the
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01285-02-5
              

 A. 3972                             2
 
 state civil service department or appropriate municipal commission shall
 place the name of such person, as a preferred eligible, on the appropri-
 ate eligible lists prepared by it for positions for which such person is
 stated  to  be qualified in a salary grade not exceeding that from which
 such person retired. In such event, disability benefits shall be contin-
 ued for such member until such member first shall be offered a  position
 in public service at such salary grade. THIS SUBDIVISION SHALL NOT APPLY
 TO  MEMBERS  OF  THE  NEW  YORK  CITY  POLICE  PENSION FUND WHO SHALL BE
 GOVERNED BY SECTION 13-254 OF THE ADMINISTRATIVE CODE OF THE CITY OF NEW
 YORK.
   § 3. This act shall take effect immediately and  shall  be  deemed  to
 have been in full force and effect on and after July 1, 2009.
   FISCAL NOTE. --Pursuant to Legislative Law, Section 50:
   SUMMARY:   This  proposed  legislation  modifies  Ordinary  Disability
 Retirement (ODR) eligibility, and provides an  additional  ODR  benefit,
 for  Tier  3 members of POLICE by removing the requirements of having at
 least five years of credited service  and  being  eligible  for  primary
 Social Security disability benefits (SSDI).
                 EXPECTED IMPACT ON EMPLOYER CONTRIBUTIONS
                              ($ in Millions)
                Year           POLICE
                2026           6.2
                2027           7.3
                2028           8.4
                2029           9.5
                2030           10.7
                2031           11.8
                2032           12.7
                2033           13.6
                2034           14.5
                2035           15.4
                2036           16.2
                2037           17.0
                2038           17.8
                2039           18.6
                2040           19.4
                2041           20.2
                2042           23.1
                2043           24.0
                2044           24.8
                2045           25.8
                2046           26.7
                2047           27.6
                2048           28.5
                2049           29.5
                2050           30.5
   Projected contributions include future new hires that may be impacted.
 For  Fiscal  Year  2051  and beyond, the increase in normal cost for new
 entrants will remain level as a percent of pay for  the  impacted  popu-
 lation (approximately 0.32%).
   The entire increase in employer contributions will be allocated to New
 York City.
   PRESENT  VALUE  OF  BENEFITS:  The  Present  Value  of Benefits is the
 discounted expected value of benefits paid to  current  members  if  all
 assumptions are met, including future service accrual and pay increases.
 Future new hires are not included in this present value.
 A. 3972                             3
 
          INITIAL INCREASE (DECREASE) IN ACTUARIAL PRESENT VALUES
                    as of June 30, 2024 ($ in Millions)
 
           Present Value (PV)                      POLICE
           (1) PV of Employer Contributions:       103.5
           (2) PV of Employee Contributions:       0.0
           Total PV of Benefits:(1)+(2):           103.5
   UNFUNDED  ACCRUED  LIABILITY  (UAL): Actuarial Accrued Liabilities are
 the portion of the Present Value of Benefits allocated to past  service.
 Changes  in UAL were amortized over the expected remaining working life-
 time of those impacted using level dollar payments.
                AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
 
                                                           POLICE
                   Increase (Decrease) in UAL:             (19.6)M
                     Number of Payments:                     16
                   Amortization Payment:                   (2.1)M
   CENSUS DATA: The estimates presented herein are based  on  preliminary
 census  data  collected  as  of  June  30, 2024. The census data for the
 impacted population is summarized below.
                                                   POLICE
           Active Members
           -Number Count:                          21,782
           -Average Age:                           33.2
           -Average Service:                       6.5
           -Average Salary:                        116,200
   IMPACT ON MEMBER BENEFITS: Currently, active Tier 3 POLICE members are
 eligible for an ODR benefit if they are approved for SSDI  benefits  and
 have at least five years of credited service.
   Under  the  proposed  legislation,  active  or separated Tier 3 POLICE
 members who are determined to be disabled by the  POLICE  Medical  Board
 would  be  eligible for an ODR benefit, irrespective of SSDI eligibility
 and credited service. The safeguards  provisions  associated  with  SSDI
 would be replaced with Tier 1 and Tier 2 safeguards.
   The  proposed  ODR  benefit  would  be  equal to the greater of 1/3 of
 applicable Final Average Salary (FAS) or 2% of applicable FAS multiplied
 by credited service. This benefit would be subject to an offset,  begin-
 ning  at  age 62, equal to 50% of the primary social security benefit as
 defined in Retirement and Social Security Law  Section  (RSSL)  511,  if
 any,  and would be subject to annual escalation pursuant to RSSL Section
 510.
   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.
   *  For  purposes of this Fiscal Note, it has been assumed that 100% of
 members exiting for ODR under current ODR rates would be ineligible  for
 SSDI.
   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
 A. 3972                             4
 
 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 reflect any chapter
 laws that may have been enacted during the current legislative session.
   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 2025-01 dated January 13,
 2025  was prepared by the Chief Actuary for the New York City Retirement
 Systems and Pension Funds and is intended for use only during  the  2025
 Legislative Session.