STATE OF NEW YORK ________________________________________________________________________ 6481--A 2023-2024 Regular Sessions IN SENATE 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: 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, except that for members of the New York city 13 police pension fund, the normal service retirement benefit shall not be 14 reduced by the primary social security retirement benefit commencing at 15 age sixty-two as provided in section five hundred eleven of this 16 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. LBD08526-04-4S. 6481--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 for members of the New York city police pension 12 fund, the early service retirement benefit shall not be reduced by the 13 primary social security retirement benefit commencing at age sixty-two 14 as provided in 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 elects to have the payment of his benefit commence on the 20 date he would have completed twenty-two years and one month or more of 21 service. In such event, the service retirement benefit shall equal two 22 percent of final average salary for each year of credited service, less 23 fifty percent of the primary social security retirement benefit commenc- 24 ing at age sixty-two as provided in section five hundred eleven of this 25 article, except that for members of the New York city police pension 26 fund, the service retirement benefit shall not be reduced by the primary 27 social security retirement benefit commencing at age sixty-two as 28 provided in section five hundred eleven of this article. 29 § 2. Section 511 of the retirement and social security law is amended 30 by adding a new subdivision h to read as follows: 31 h. This section shall not apply to members of the New York city police 32 pension fund who receive a service retirement benefit pursuant to 33 section five hundred five of this article or a deferred vested benefit 34 pursuant to section five hundred sixteen of this article. 35 § 3. Subdivision c of section 516 of the retirement and social securi- 36 ty law, as amended by chapter 18 of the laws of 2012, is amended to read 37 as follows: 38 c. The deferred vested benefit of police/fire members, New York city 39 police/fire revised plan members, New York city uniformed 40 correction/sanitation revised plan members or investigator revised plan 41 members shall be a pension commencing at early retirement age equal to 42 two and one-tenths percent of final average salary times years of cred- 43 ited service, less fifty percent of the primary social security retire- 44 ment benefit commencing at age sixty-two, as provided in section five 45 hundred eleven of this article, except that for members of the New York 46 city police pension fund, the service retirement benefit shall not be 47 reduced by the primary social security retirement benefit commencing at 48 age sixty-two as provided in section five hundred eleven of this 49 article. A police/fire member, a New York city police/fire revised plan 50 member, a New York city uniformed correction/sanitation revised plan 51 member or investigator revised plan member may elect to receive his 52 vested benefit commencing at early retirement age or age fifty-five. If 53 the vested benefit commences before early retirement age, the benefit 54 shall be reduced by one-fifteenth for each year, if any, that the 55 member's early retirement age is in excess of age sixty, and by one- 56 thirtieth for each additional year by which the vested benefit commencesS. 6481--A 3 1 prior to early retirement age. If such vested benefit is deferred until 2 after such member's normal retirement age, the benefit shall be computed 3 and subject to annual escalation in the same manner as provided for an 4 early retirement benefit pursuant to subdivision c of section five 5 hundred five of this article. 6 § 4. This act shall take effect on the sixtieth day after it shall 7 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: 226.2S. 6481--A 4 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 andS. 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.