Bill Text: NY A05202 | 2023-2024 | General Assembly | Amended


Bill Title: Provides for the pension benefits for first grade police officers of the city of New York who have served for 25 or 30 years.

Spectrum: Partisan Bill (Democrat 10-0)

Status: (Introduced) 2024-01-22 - print number 5202b [A05202 Detail]

Download: New_York-2023-A05202-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         5202--B

                               2023-2024 Regular Sessions

                   IN ASSEMBLY

                                      March 6, 2023
                                       ___________

        Introduced  by M. of A. PHEFFER AMATO, FALL -- read once and referred to
          the Committee on Governmental Employees -- committee discharged,  bill
          amended,  ordered reprinted as amended and recommitted to said commit-
          tee -- recommitted to  the  Committee  on  Governmental  Employees  in
          accordance  with Assembly Rule 3, sec. 2 -- committee discharged, bill
          amended, ordered reprinted as amended and recommitted to said  commit-
          tee

        AN  ACT  to  amend  the  administrative code of the city of New York, in
          relation to the pensionable earnings of first grade police officers

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

     1    Section 1. Legislative findings and declaration. The legislature here-
     2  by  finds  and  declares  that  an adjustment to pensionable earnings of
     3  first grade police officers is necessary to enhance  public  safety  and
     4  prevent the loss of vital public services in this state. The legislature
     5  hereby  finds and declares that such adjustment is necessary to address,
     6  inter alia,  the  historic  police  officer  recruitment  and  retention
     7  crisis, the increase in police overtime, and the rise in crime impacting
     8  New  Yorkers.  Therefore, the legislature declares the necessity for the
     9  enactment of this act to  enhance  public  safety  and  protect  against
    10  disruption of vital public services in this state.
    11    § 2. Section 14-111 of the administrative code of the city of New York
    12  is amended by adding two new subdivisions c and d to read as follows:
    13    c.    When  a  first  grade police officer of the New York city police
    14  department shall have served in the rank of police officer for a  period
    15  of twenty-five years, he or she shall have the same rights in respect to
    16  the  New  York  state and local police and fire retirement system or the
    17  New York city police pension fund as a police officer designated to  act
    18  as  detective  of  the  third  grade who shall have served as such for a
    19  period of time aggregating two years at the highest salary  rate  for  a
    20  detective of the third grade.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD04845-05-4

        A. 5202--B                          2

     1    d.  When  a  first  grade  police  officer of the New York city police
     2  department shall have served in the rank of police officer for a  period
     3  of  thirty years, he or she shall have the same rights in respect to the
     4  New York state and local police and fire retirement system  or  the  New
     5  York  city  police  pension  fund as a sergeant who shall have served as
     6  such for a period of time aggregating two years at  the  highest  salary
     7  rate for a sergeant.
     8    § 3. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY: This proposed legislation, as it relates to the New York City
        Police  Pension Fund (POLICE), would increase the salary used for deter-
        mining pension benefits for first grade NYPD officers who have served in
        such rank for 25 or 30 years, to salaries equivalent  to  detective  3rd
        grade or sergeant, respectively.

                 EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
                  by Fiscal Year for the first 25 years ($ in Millions)

                             Year      POLICE

                             2025      0.0
                             2026      1.0
                             2027      2.0
                             2028      3.0
                             2029      4.0
                             2030      5.1
                             2031      6.2
                             2032      7.4
                             2033      8.6
                             2034      9.7
                             2035      10.9
                             2036      12.0
                             2037      13.1
                             2038      14.1
                             2039      15.1
                             2040      14.9
                             2041      14.7
                             2042      14.4
                             2043      14.0
                             2044      13.5
                             2045      13.1
                             2046      12.6
                             2047      12.1
                             2048      11.6
                             2049      11.1

          Projected  contributions are based on historical experience for Tier 2
        members. Future retirement patterns may differ due to a  larger  Tier  3
        population  (e.g.,  Tier 2 is expected to retire at 20 years of service,
        and Tier 3 is expected to retire at 25 years of service).
          The entire increase in employer contributions will be allocated to New
        York City.
                   EXPECTED INCREASE (DECREASE) IN ACTUARIAL LIABILITIES
          The enactment of this proposed legislation is expected to increase the
        Present Value of Future Benefits (PVFB) by approximately $8.2 million in
        the first year and every year thereafter. Each year's PVFB increase will

        A. 5202--B                          3

        depend on the actual experience  of  benefiting  retirees  and  will  be
        recognized in the year benefits are first payable.
                        AMORTIZATION OF UNFUNDED ACCRUED LIABILITY

              Recognized as Ongoing Gain/Loss         POLICE

              Number of Payments:                     14
              Fiscal Year of Last Payment:            N/A
              First-year Amortization Payment:        $ 1.0 M

          CENSUS  DATA:  The estimates presented herein are based on preliminary
        census data collected as of June 30, 2023. The census  data  for  POLICE
        active members is summarized below.

                                                 POLICE
                   Active Members
                   - Number Count:               33,800
                   - Average Age:                37.6
                   - Average Service:            11.3
                   - Average Salary:             128,600

          The salaries used in this analysis were provided by the Police Benevo-
        lent Association of the City of New York and reflect the latest contract
        negotiations. Below is a summary of the salary data provided:
          * Police Officer 1st Grade - $105,146
          * Detective 3rd Grade - $111,999
          * Sergeant - $125,852
          Data  from  prior actuarial valuations was used to estimate the number
        of retirees who could potentially benefit from this proposed legislation
        and is summarized below.
          * Police Officer 1st Grade who retired with 25-29 years in rank -  930
        retired over the past 10 years.
          *  Police  Officer  1st Grade who retired with 30+ years in rank - 218
        retired over the past 10 years.
          IMPACT ON MEMBER BENEFITS: The proposed legislation would permit first
        grade police officers, who have met  certain  service  requirements,  to
        have their pension calculations based on a higher assumed salary.
          For  example,  under this proposed legislation a Tier 2 Police Officer
        1st Grade who holds such position for at least 25, or  30,  years  would
        receive  an  increase  in  their annual pension benefit of approximately
        $4,300 or $12,200 per year, respectively,  due  to  the  higher  assumed
        pensionable salary.
          Based  on an estimate of the number of POLICE members who are expected
        to be impacted by the increased pensionable salary, it is estimated that
        if this proposed legislation is enacted, the annual increase  in  POLICE
        pension  benefits  paid  will be approximately $0.7 million in the first
        year and increase in every year thereafter.
          With respect to an individual member, the impact on  benefits  due  to
        this  proposed  legislation could vary greatly depending on the member's
        age, years of service, retirement cause, and Tier.
          ASSUMPTIONS AND METHODS: The  estimates  presented  herein  have  been
        calculated based on the actuarial assumptions and methods to be used for
        the  Preliminary Fiscal Year 2025 employer contributions 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-

        A. 5202--B                          4

        graphics were developed based on data for recent new hires and actuarial
        judgement.
          * Future contribution impacts have been developed assuming a homogene-
        ous population and consistent retirement pattern.
          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).
          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 2024-02 dated January 16,
        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.
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