Bill Text: NY S06082 | 2021-2022 | General Assembly | Amended


Bill Title: Relates to primary social security retirement benefits for certain members; provides that in the computation of the normal service retirement benefit of members of the New York city fire department pension fund, there shall be no reduction for the primary social security retirement benefit.

Spectrum: Moderate Partisan Bill (Democrat 4-1)

Status: (Introduced - Dead) 2022-05-10 - REPORTED AND COMMITTED TO FINANCE [S06082 Detail]

Download: New_York-2021-S06082-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         6082--A

                               2021-2022 Regular Sessions

                    IN SENATE

                                      April 7, 2021
                                       ___________

        Introduced  by  Sens.  GOUNARDES,  KAMINSKY,  MARTUCCI -- 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
          primary  social  security  retirement benefits for police/fire members
          who are members of the New York city fire department pension fund

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Section 505 of the retirement and social security law, as
     2  amended by chapter 18 of the  laws  of  2012,  is  amended  to  read  as
     3  follows:
     4    § 505. Service retirement benefits; police/fire members, New York city
     5  uniformed  correction/sanitation  revised  plan members and investigator
     6  revised plan members. a.  The  normal  service  retirement  benefit  for
     7  police/fire  members,  New  York  city  uniformed  correction/sanitation
     8  revised plan members and investigator revised  plan  members  at  normal
     9  retirement  age shall be a pension equal to fifty percent of final aver-
    10  age salary, less fifty percent of the primary social security retirement
    11  benefit commencing at age sixty-two, as provided in section five hundred
    12  eleven of this article, provided, however, that the computation  of  the
    13  normal  service  retirement benefit of members of the New York city fire
    14  department pension fund, shall not be  reduced  by  the  primary  social
    15  security  retirement  benefit commencing at age sixty-two as provided in
    16  section five hundred eleven of this article.
    17    b. The early service retirement benefit for police/fire  members,  New
    18  York  city  uniformed  correction/sanitation  revised  plan  members and
    19  investigator revised plan members shall be a pension equal  to  two  and
    20  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.
                                                                   LBD08553-08-2

        S. 6082--A                          2

     1  service at the completion of twenty years of service or upon  attainment
     2  of age sixty-two, increased by one-third of one percent of final average
     3  salary  for  each month of service in excess of twenty years, but not in
     4  excess  of  fifty percent of final average salary, less fifty percent of
     5  the primary social security retirement benefit commencing at age  sixty-
     6  two  as  provided  in  section  five  hundred  eleven  of  this article,
     7  provided, however, that New York city police/fire revised plan  members,
     8  New  York  city uniformed correction/sanitation revised plan members and
     9  investigator revised plan members shall not be eligible  to  retire  for
    10  service prior to the attainment of twenty years of credited service, and
    11  provided further that the early service retirement benefit of members of
    12  the  New  York city fire department pension fund shall not be reduced by
    13  the primary social security retirement benefit commencing at age  sixty-
    14  two as provided by section five hundred eleven of this article.
    15    c.    A    police/fire    member,    a   New   York   city   uniformed
    16  correction/sanitation revised plan member  or  an  investigator  revised
    17  plan  member  who  retires  with twenty-two years of credited service or
    18  less may become eligible for annual escalation of the service retirement
    19  benefit if he or she elects to have the payment of his  or  her  benefit
    20  commence on the date he or she would have completed twenty-two years and
    21  one  month  or  more  of  service. In such event, the service retirement
    22  benefit shall equal two percent of final average salary for each year of
    23  credited service, less fifty percent  of  the  primary  social  security
    24  retirement  benefit  commencing  at age sixty-two as provided in section
    25  five hundred eleven of this article, provided, however, that the service
    26  retirement benefit of members of  the  New  York  city  fire  department
    27  pension fund shall not be reduced by the primary social security retire-
    28  ment  benefit  commencing  at  age sixty-two as provided by section five
    29  hundred eleven of this article.
    30    § 2. Section 511 of the retirement and social security law is  amended
    31  by adding a new subdivision h to read as follows:
    32    h.  Notwithstanding any provision of law to the contrary, this section
    33  shall not apply to members of the New York city fire department  pension
    34  fund  who  receive a service retirement benefit pursuant to section five
    35  hundred five of this article or a deferred vested  benefit  pursuant  to
    36  section five hundred sixteen of this article.
    37    § 3. Subdivision c of section 516 of the retirement and social securi-
    38  ty law, as amended by chapter 18 of the laws of 2012, is amended to read
    39  as follows:
    40    c.  The  deferred vested benefit of police/fire members, New York city
    41  police/fire   revised   plan   members,   New   York   city    uniformed
    42  correction/sanitation  revised plan members or investigator revised plan
    43  members shall be a pension commencing at early retirement age  equal  to
    44  two  and one-tenths percent of final average salary times years of cred-
    45  ited service, less fifty percent of the primary social security  retire-
    46  ment  benefit  commencing  at age sixty-two, as provided in section five
    47  hundred eleven of this article, provided however that the deferred vest-
    48  ed benefit of members of the New York city fire department pension  fund
    49  and  revised  plan  members  who  are  members of the New York city fire
    50  department pension fund shall not be reduced by the primary social secu-
    51  rity retirement benefit commencing  at  age  sixty-two  as  provided  by
    52  section five hundred eleven of this article. A police/fire member, a New
    53  York  city  police/fire  revised  plan member, a New York city uniformed
    54  correction/sanitation revised plan member or investigator  revised  plan
    55  member  may  elect  to  receive  his or her vested benefit commencing at
    56  early retirement age or age fifty-five. If the vested benefit  commences

        S. 6082--A                          3

     1  before  early  retirement  age, the benefit shall be reduced by one-fif-
     2  teenth for each year, if any, that the member's early retirement age  is
     3  in excess of age sixty, and by one-thirtieth for each additional year by
     4  which  the  vested  benefit  commences prior to early retirement age. If
     5  such vested benefit is deferred until after such member's normal retire-
     6  ment age, the benefit shall be computed and subject to annual escalation
     7  in the same manner as provided for an early retirement benefit  pursuant
     8  to subdivision c of section five hundred five of this article.
     9    §  4. Notwithstanding the provisions of section 13-379 of the adminis-
    10  trative code of the city of New York, the provisions of this  act  shall
    11  apply  to  chapter three of title thirteen of the administrative code of
    12  the city of New York.
    13    § 5. This act shall take effect immediately.
          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  service,  early  service, and vested retirement benefits for Tier 3
        original, modified, and enhanced plan members of the New York City  Fire
        Pension Fund (FIRE).
          Effective Date: Upon enactment.
          IMPACT  ON  BENEFITS: Currently, the Tier 3 normal service retirement,
        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, if enacted, the offset for such bene-
        fits would be eliminated resulting in an increase in benefits.
          FINANCIAL IMPACT - SUMMARY: The financial impact will increase as  the
        impacted  populations of Tier 3 members of FIRE increases over time. The
        estimated financial impact of removing the  social  security  offset  as
        described  above results in an increase in Present Value of Future Bene-
        fits (PVFB) and an increase in  the  annual  employer  contributions  of
        FIRE. The estimate of these increases for Fiscal Years 2023 through 2027
        based  on the applicable actuarial assumptions and methods noted herein,
        are shown in the table below.
          Fiscal          Increase in                     Increase in
          Year    Present Value of Future Benefits   Employer Contributions
                          ($ Millions)                    ($ Millions)
          2023              $72.5                          $4.8
          2024              $85.2                          $5.4
          2025              $98.9                          $6.0
          2026              $113.5                         $6.6
          2027              $129.1                         $7.2
          In accordance with Section 13-638.2(k-2) of the Administrative Code of
        the City of New York  (ACCNY),  new  Unfunded  Accrued  Liability  (UAL)
        attributable to benefit changes are to be amortized as determined by the
        Actuary  but are generally amortized over the remaining working lifetime
        of those impacted by the benefit changes.  As  of  June  30,  2021,  the
        remaining  working  lifetime  of  FIRE  members subject to Article 14 is
        approximately 20 years.
          For the purposes of this Fiscal Note, the increase in the UAL for FIRE
        was amortized over a 20-year period (19 payments under the One-Year  Lag
        Methodology (OYLM)) using level dollar payments.
          CONTRIBUTION  TIMING:  For  the  purposes  of  this Fiscal Note, it is
        assumed that the changes in the PVFB and annual  employer  contributions
        would be reflected for the first time in the Final June 30, 2021 actuar-

        S. 6082--A                          4

        ial  valuation  of  FIRE.  In accordance with the OYLM used to determine
        employer contributions, the increase  in  employer  contributions  would
        first be reflected in Fiscal Year 2023.
          CENSUS  DATA:  The  estimates presented herein are based on the census
        data used in the Preliminary June 30, 2021 (Lag) actuarial valuation  of
        FIRE  to  determine  the  Preliminary Fiscal Year 2023 employer contrib-
        utions.
          The 3,973 active FIRE Tier 3 members as of June 30, 2021 had an  aver-
        age  age  of  approximately 32.4 years, average service of approximately
        4.9 years, and an average salary of approximately $99,200.
          ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the PVFB and  annual
        employer  contributions  presented  herein have been calculated based on
        the actuarial assumptions and methods in effect for the  June  30,  2021
        (Lag) actuarial valuations used to determine the Preliminary Fiscal Year
        2023 employer contributions of FIRE.
          New  entrants  were projected to replace the members expected to leave
        the active population to maintain a steady-state population. New entrant
        demographics and future salary increases are consistent with those  that
        will  be  used in projections for the New York City Office of Management
        and Budget in April 2022 (Preliminary Projections).
          RISK AND UNCERTAINTY: The costs presented in this Fiscal  Note  depend
        highly  on the realization of the actuarial assumptions used, as well as
        certain demographic characteristics of FIRE and other exogenous  factors
        such  as investment, contribution, and other risks. If actual experience
        deviates from actuarial assumptions, the actual costs could differ  from
        those  presented herein. Costs are also dependent on the actuarial meth-
        ods 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 of FIRE and  other  New
        York City agencies to implement the proposed legislation.
          * Pension costs for future members of FIRE hired on or after 7/1/2025.
          *  The  impact  of  this  proposed legislation on Other Postemployment
        Benefit (OPEB) costs.
          * Cost analyses relating  to  provisions  contained  in  RSSL  Section
        500(c).
          STATEMENT  OF  ACTUARIAL  OPINION: I, Michael J. Samet, am the Interim
        Chief Actuary for, and independent of,  the  New  York  City  Retirement
        Systems and Pension Funds. I am a Fellow of the Society of Actuaries and
        a  Member of the American Academy of Actuaries. 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 2022-07 dated  March  24,
        2022  was  prepared  by  the Interim Chief Actuary for the New York City
        Fire Pension Fund. This estimate is intended for  use  only  during  the
        2022 Legislative Session.
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