] is old law to be omitted. LBD10936-02-3S. 7128--A 2 1 had such member joined the New York city employees' retirement system on 2 the earliest date that he or she was appointed to the title of police 3 cadet program or police cadet program II in the New York city police 4 department cadet program, provided such payment is made within five 5 years after the effective date of this section. 6 2. Any member of the New York city police pension fund or the New York 7 city fire department pension fund who acquires service credit pursuant 8 to this section shall be entitled to all rights, benefits and privileges 9 to which he or she would have been entitled had his or her membership in 10 the New York city police pension fund or the New York city fire depart- 11 ment pension fund begun upon the earliest date that he or she was 12 appointed to the title of police cadet program or police cadet program 13 II in the New York city police department cadet program, but in no event 14 shall the service credit acquired pursuant to this section be deemed to 15 be: (a) service in the police force or any other type of service counted 16 or creditable as service in the police force under section 13-218 of the 17 administrative code of the city of New York[,]; (b) service in the fire 18 department of the city of New York or any other type of service counted 19 or credible as service in such fire department under section 13-318 of 20 the administrative code of the city of New York; or (c) service under 21 section five hundred thirteen of the retirement and social security law 22 or any other provision of law for purposes of eligibility for benefits 23 and to determine the amount of benefits under the New York city police 24 pension fund or the New York city fire department pension fund. 25 § 2. This act shall take effect immediately. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: SUMMARY OF BILL: This proposed legislation would amend Section 209-fff of the General Municipal Law (GML) to allow New York City Fire Pension Fund (FIRE) members subject to Article 14 of the Retirement and Social Security Law (RSSL) (Tier 3, Tier 3 Modified, and Tier 3 Enhanced) to purchase prior service as a cadet in the New York Police Department (NYPD) and use the appointment date as a cadet to determine the initial date of FIRE membership for plan or tier eligibility provided such purchase of service is made within five years of October 29, 2019. Effective Date: Upon enactment. BACKGROUND: Currently, the purchase of prior NYPD cadet service performed while not a member of the New York City Employees' Retirement System (NYCERS) does not provide a retroactive date of membership in FIRE, nor would it provide additional service retirement benefits for members subject to Article 14 of the RSSL. IMPACT ON BENEFITS: Under the proposed legislation, if enacted, purchased NYPD cadet service performed while not a member of NYCERS would entitle such member with a cadet service date before July 1, 2009 to be deemed a Tier 2 member, and such service would be included in the calculation of benefits as non-qualifying service credit. Also, under the proposed legislation, if enacted, purchased NYPD cadet service would entitle members with cadet service between July 1, 2009 and April 1, 2012 who joined FIRE after April 1, 2012 as a Tier 3 Modi- fied or Enhanced member to be deemed an original Tier 3 member. IMPACT ON PAYABILITY: Since eligibility for FIRE benefits are based on tier or plan, including cadet service towards tier or plan, eligibility would increase and/or accelerate the payability date of benefits in accordance with applicable earlier tiers or plans. ADDITIONAL MEMBER CONTRIBUTIONS: For cadets who did not join NYCERS, the member would have to pay member contributions that would have beenS. 7128--A 3 payable to NYCERS had they joined on their initial cadet appointment date, plus 5.0% annual interest. Member contributions for FIRE are determined by tier and plan as follows: * Tier 2 - contribution rates are based on entry age. * Tier 3 and Tier 3 Modified - Basic Member Contributions (BMC) of 3.0%. * Tier 3 Enhanced - BMC of 3.0% plus Additional Member Contributions currently equal to 2.0%. The additional contribution rate of 2.0% can be raised to 3.0% based on a financial analysis performed by the Actuary every three years. At no time can the total contribution rate exceed 6.0%. FINANCIAL IMPACT - SUMMARY: There is no data currently available to estimate the number of members who might benefit from the proposed legislation. For the purposes of this Fiscal Note, the estimated finan- cial impact has been calculated on a per event basis for an average FIRE member who is either currently a Tier 3 member and could benefit from the enactment of this proposed legislation by being deemed a Tier 2 member or is currently a Tier 3 Modified or Enhanced member who could benefit by being deemed an original Tier 3 member. A breakdown of the financial impact by Tier is shown in the table below. Additional Estimated First Year New Tier Present Value of Future Employer Contributions Employer Contributions (average per event) (average per event) Tier 2 $401,800 $30,200 Original Tier 3 $11,900 $700 Enactment of this proposed legislation would increase employer contributions, where such amount would depend on the number of members affected as well as other characteristics including the age, years of service, and salary history of the member. Based on the census data and the actuarial assumptions and methods described herein, the enactment of this proposed legislation would increase the present value of future employer contributions and esti- mated first year employer contributions by an amount which would depend on the Tier granted by the purchase of prior cadet service. As there is no data currently available to estimate the number of members who may purchase cadet service, the financial impact would be recognized at the time of the event. Consequently, changes in employer contributions have been estimated assuming that the increase in present value of future contributions will be recognized as an actuarial loss and financed over a closed 15-year period (14 payments under the One- Year Lag Methodology) using level dollar payments. CENSUS DATA: The estimates presented herein are based on the census data used in the June 30, 2022 actuarial valuation of FIRE to determine the Preliminary Fiscal Year 2024 employer contributions. There are 2,998 active FIRE members as of June 30, 2022 who are currently in Tier 3, Tier 3 Modified, or Tier 3 Enhanced and who could potentially benefit from the proposed legislation by being deemed a Tier 2 member (i.e., age 31 and older). These active members had an average age of approximately 35.0 years, average service of approximately 6.1 years, and an average salary of approximately $116,900.S. 7128--A 4 There are 3,588 active FIRE members as of June 30, 2022 who are currently in Tier 3 Modified or Tier 3 Enhanced and could potentially benefit from the proposed legislation by being deemed an original Tier 3 member (i.e., age 28 and older). These active members had an average age of approximately 33.5 years, average service of approximately 5.3 years, and an average salary of approximately $108,800. ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have been calculated based on the actuarial assumptions and methods used for the Preliminary Fiscal Year 2024 employer contributions of FIRE. Addi- tionally, 1.2 years of cadet service was assumed based on the amount of cadet service previously purchased by members of the New York City Police Pension Fund. RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend highly on the realization of the actuarial assumptions used, demograph- ics of the impacted population, and other factors such as investment, contribution, and other risks. If actual experience deviates from actu- arial assumptions, the actual costs could differ from those presented herein. Costs are also dependent on the actuarial methods 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: * Future purchases of non-qualifying service by members who would be deemed Tier 2 were this bill to pass. * The initial additional administrative costs to implement the proposed legislation. * The impact of this proposed legislation on Other Postemployment Benefit costs. STATEMENT OF ACTUARIAL OPINION: I, Marek Tyszkiewicz, am the Chief Actuary for, and independent of, the New York City Retirement Systems and Pension Funds. I am an Associate of the Society of Actuaries and a Member of the American Academy of Actuaries. I am a member of NYCERS but do not believe it impairs my objectivity and 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 2023-64 dated May 31, 2023 was prepared by the Chief Actuary for the New York City Fire Pension Fund. This estimate is intended for use only during the 2023 Legislative Session.