STATE OF NEW YORK ________________________________________________________________________ 5467--A 2023-2024 Regular Sessions IN SENATE March 6, 2023 ___________ Introduced by Sens. GOUNARDES, KENNEDY, LANZA -- 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. LBD07867-07-4
S. 5467--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 elects] they elect to have the payment of [his] their 20 benefit commence on the date [he] they would have completed twenty-two 21 years and one month or more of service. In such event, the service 22 retirement benefit shall equal two percent of final average salary for 23 each year of credited service, less fifty percent of the primary social 24 security retirement benefit commencing at age sixty-two as provided in 25 section five hundred eleven of this article, provided, however, that the 26 service retirement benefit of members of the New York city fire depart- 27 ment pension fund shall not be reduced by the primary social security 28 retirement benefit commencing at age sixty-two as provided by section 29 five 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] their vested benefit commencing at 56 early retirement age or age fifty-five. If the vested benefit commences
S. 5467--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: 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 Fire Pension Fund (FIRE). EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS by Fiscal Year for the first 25 years ($ in Millions) Year FIRE 2025 8.3 2026 9.0 2027 9.8 2028 10.6 2029 11.5 2030 12.4 2031 13.4 2032 14.4 2033 15.4 2034 16.5 2035 17.6 2036 18.7 2037 19.9 2038 21.1 2039 22.3 2040 23.5 2041 24.8 2042 26.0 2043 24.5 2044 25.7 2045 26.9 2046 28.1 2047 29.2 2048 30.4 2049 31.5 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.
S. 5467--A 4 EXPECTED INCREASE (DECREASE) IN ACTUARIAL LIABILITIES as of June 30, 2023 ($ in Millions) Present Value (PV) FIRE PV of Benefits: 117.4 PV of Employee Contributions: 0.0 PV of Employer Contributions: 117.4 Unfunded Accrued Liabilities: 26.5 AMORTIZATION OF UNFUNDED ACCRUED LIABILITY FIRE Number of Payments: 18 Fiscal Year of Last Payment: 2042 Amortization Payment: 2.7 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. FIRE Active Members - Number Count: 5,030 - Average Age: 33.5 - Average Service: 5.5 - Average Salary: 112,400 Term. Vested Members - Number Count: 9 - Average Age: 37.6 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 FIRE 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).
S. 5467--A 5 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 procedures and with the Actuarial Standards of Practice issued by the Actuarial Standards Board. FISCAL NOTE IDENTIFICATION: This Fiscal Note 2024-03 dated January 26, 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.