STATE OF NEW YORK ________________________________________________________________________ 5792--A 2023-2024 Regular Sessions IN SENATE March 16, 2023 ___________ Introduced by Sens. JACKSON, CHU -- 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 commit- tee AN ACT to amend the retirement and social security law, in relation to service retirement benefits for certain members of the New York city employees' retirement system 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 police/fire members of the New 13 York city fire department pension fund or the New York city police 14 pension fund, the New York city uniformed correction/sanitation revised 15 plan members or investigator revised plan members of the New York city 16 employees' retirement system, the normal service retirement benefit 17 shall not be reduced by the primary social security retirement benefit 18 commencing at age sixty-two as provided in section five hundred eleven 19 of this article. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD06954-04-4
S. 5792--A 2 1 b. The early service retirement benefit for police/fire members, New 2 York city uniformed correction/sanitation revised plan members and 3 investigator revised plan members shall be a pension equal to two and 4 one-tenths percent of final average salary times years of credited 5 service at the completion of twenty years of service or upon attainment 6 of age sixty-two, increased by one-third of one percent of final average 7 salary for each month of service in excess of twenty years, but not in 8 excess of fifty percent of final average salary, less fifty percent of 9 the primary social security retirement benefit commencing at age sixty- 10 two as provided in section five hundred eleven of this article, 11 provided, however, that New York city police/fire revised plan members, 12 New York city uniformed correction/sanitation revised plan members and 13 investigator revised plan members shall not be eligible to retire for 14 service prior to the attainment of twenty years of credited service, and 15 provided further that for police/fire members of the New York city fire 16 department pension fund or the New York city uniformed 17 correction/sanitation revised plan members or investigator revised plan 18 members of the New York city employees' retirement system, the early 19 service retirement benefit shall not be reduced by the primary social 20 security retirement benefit commencing at age sixty-two as provided in 21 section five hundred eleven of this article. 22 c. A police/fire member, a New York city uniformed 23 correction/sanitation revised plan member or an investigator revised 24 plan member who retires with twenty-two years of credited service or 25 less may become eligible for annual escalation of the service retirement 26 benefit if he elects to have the payment of his benefit commence on the 27 date he would have completed twenty-two years and one month or more of 28 service. In such event, the service retirement benefit shall equal two 29 percent of final average salary for each year of credited service, less 30 fifty percent of the primary social security retirement benefit commenc- 31 ing at age sixty-two as provided in section five hundred eleven of this 32 article, except that for police/fire members of the New York city fire 33 department pension fund or the New York city police pension fund, New 34 York city uniformed correction/sanitation revised plan members or inves- 35 tigator revised plan members of the New York city employees' retirement 36 system, the service retirement benefit shall not be reduced by the 37 primary social security retirement benefit commencing at age sixty-two 38 as provided in section five hundred eleven of this article. 39 § 2. Section 511 of the retirement and social security law is amended 40 by adding a new subdivision h to read as follows: 41 h. This section shall not apply to police/fire members of the New York 42 city fire department pension fund or the New York city police pension 43 fund, to New York city uniformed correction/sanitation revised plan 44 members or investigator revised plan members of the New York city 45 employees' retirement system who receive a service retirement benefit 46 pursuant to section five hundred five of this article or a deferred 47 vested benefit pursuant to section five hundred sixteen of this article. 48 § 3. Subdivision c of section 516 of the retirement and social securi- 49 ty law, as amended by chapter 18 of the laws of 2012, is amended to read 50 as follows: 51 c. The deferred vested benefit of police/fire members, New York city 52 police/fire revised plan members, New York city uniformed 53 correction/sanitation revised plan members or investigator revised plan 54 members shall be a pension commencing at early retirement age equal to 55 two and one-tenths percent of final average salary times years of cred- 56 ited service, less fifty percent of the primary social security retire-
S. 5792--A 3 1 ment benefit commencing at age sixty-two, as provided in section five 2 hundred eleven of this article, except that for police/fire members of 3 the New York city fire department pension fund or the New York city 4 police pension fund, New York city uniformed correction/sanitation 5 revised plan members or investigator revised plan members of the New 6 York city employees' retirement system, the service retirement benefit 7 shall not be reduced by the primary social security retirement benefit 8 commencing at age sixty-two as provided in section five hundred eleven 9 of this article. A police/fire member, a New York city police/fire 10 revised plan member, a New York city uniformed correction/sanitation 11 revised plan member or investigator revised plan member may elect to 12 receive his vested benefit commencing at early retirement age or age 13 fifty-five. If the vested benefit commences before early retirement age, 14 the benefit shall be reduced by one-fifteenth for each year, if any, 15 that the member's early retirement age is in excess of age sixty, and by 16 one-thirtieth for each additional year by which the vested benefit 17 commences prior to early retirement age. If such vested benefit is 18 deferred until after such member's normal retirement age, the benefit 19 shall be computed and subject to annual escalation in the same manner as 20 provided for an early retirement benefit pursuant to subdivision c of 21 section five hundred five of this article. 22 § 4. This act shall take effect on the sixtieth day after it shall 23 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 certain Tier 3 members of NYCERS, POLICE, and FIRE. EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS by Fiscal Year for the first 25 years ($ in Millions) Year NYCERS POLICE FIRE TOTAL 2025 32.6 62.1 8.3 103.0 2026 34.5 66.6 9.0 110.1 2027 37.3 72.4 9.8 119.5 2028 40.3 78.7 10.6 129.6 2029 43.5 84.9 11.5 139.9 2030 46.8 91.5 12.4 150.7 2031 49.9 97.7 13.4 161.0 2032 52.5 103.0 14.4 169.9 2033 55.3 108.2 15.4 178.9 2034 58.3 113.2 16.5 188.0 2035 61.1 118.0 17.6 196.7 2036 63.8 122.8 18.7 205.3 2037 66.4 127.5 19.9 213.8 2038 69.1 132.4 21.1 222.6 2039 71.7 137.2 22.3 231.2 2040 74.4 142.1 23.5 240.0 2041 62.9 122.3 24.8 210.0 2042 65.5 127.3 26.0 218.8 2043 68.1 132.6 24.5 225.2 2044 70.9 138.1 25.7 234.7 2045 73.7 143.5 26.9 244.1 2046 76.4 149.0 28.1 253.5 2047 79.1 154.6 29.2 262.9
S. 5792--A 4 2048 81.9 160.6 30.4 272.9 2049 84.7 166.8 31.5 283.0 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) NYCERS POLICE FIRE PV of Benefits: 369.5 788.6 117.4 PV of Employee Contributions:0.0 0.0 0.0 PV of Employer Contributions:369.5 788.6 117.4 Unfunded Accrued Liabilities:128.0 226.2 26.5 AMORTIZATION OF UNFUNDED ACCRUED LIABILITY NYCERS POLICE FIRE Number of Payments: 16 16 18 Fiscal Year of Last Payment: 2040 2040 2042 Amortization Payment: 14.0 M 24.8 M 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. NYCERS POLICE FIRE Active Members - Number Count: 7,495 20,176 5,030 - Average Age: 39.1 32.8 33.5 - Average Service: 6.6 6.1 5.5 - Average Salary: 100,000 107,600 112,400 Term. Vested Members - Number Count: 600 924 9 - Average Age: 38.6 34.7 37.6 IMPACT ON MEMBER BENEFITS: Currently, Tier 3 normal service retire- ment, early service retirement, and vested retirement benefits for members in 22-Year Plans 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 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
S. 5792--A 5 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 and procedures and with the Actuarial Standards of Practice issued by the Actuarial Standards Board. FISCAL NOTE IDENTIFICATION: This Fiscal Note 2024-05 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.