Bill Text: NY A07620 | 2019-2020 | General Assembly | Amended


Bill Title: Relates to allowing certain members of the New York city police pension fund to receive a membership date in such pension fund attributable to service in the titles of police cadet program or police cadet program II.

Spectrum: Partisan Bill (Democrat 17-0)

Status: (Introduced) 2019-06-20 - substituted by s5903a [A07620 Detail]

Download: New_York-2019-A07620-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         7620--A

                               2019-2020 Regular Sessions

                   IN ASSEMBLY

                                      May 14, 2019
                                       ___________

        Introduced  by  M.  of  A.  ABBATE,  CRUZ, ROZIC, PHEFFER AMATO, D'URSO,
          SOLAGES, BRAUNSTEIN, ORTIZ,  COLTON,  PERRY,  BARNWELL,  D. ROSENTHAL,
          DenDEKKER, LENTOL, WEPRIN, M. G. MILLER -- Multi-Sponsored by -- M. of
          A.  HEVESI  -- read once and referred to the Committee on Governmental
          Employees -- committee discharged, bill amended, ordered reprinted  as
          amended and recommitted to said committee

        AN  ACT  to  amend  the  general  municipal law, in relation to allowing
          certain members of the New York city police pension fund to receive  a
          membership  date in the New York city police pension fund attributable
          to service in the titles of  police  cadet  program  or  police  cadet
          program II in the New York city police department cadet program

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

     1    Section 1. The general municipal  law  is  amended  by  adding  a  new
     2  section 209-fff to read as follows:
     3    §  209-fff.  Provisions  relating to a membership date in the New York
     4  city police pension fund attributable to service in the titles of police
     5  cadet program and police cadet program II in the New  York  city  police
     6  department cadet program. 1. Notwithstanding any provision of law to the
     7  contrary,  upon election, any member of the New York city police pension
     8  fund who is subject to article fourteen of  the  retirement  and  social
     9  security  law,  and  who  served  in the New York city police department
    10  cadet program in the title of  police  cadet  program  or  police  cadet
    11  program  II  prior to April first, two thousand twelve, but did not join
    12  the New York city employees' retirement system while serving  in  either
    13  such title, may purchase credit for the period of service in such titles
    14  in  the New York city police department cadet program by paying into the
    15  New York city police pension fund all member contributions  plus  inter-
    16  est,  at a rate of five percent per annum, which would have been payable
    17  to the New York city employees' retirement system under any provision of
    18  law had such member joined  the  New  York  city  employees'  retirement

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07917-04-9

        A. 7620--A                          2

     1  system on the earliest date that he or she was appointed to the title of
     2  police  cadet  program  or  police cadet program II in the New York city
     3  police department cadet program, provided such payment  is  made  within
     4  five years after the effective date of this section.
     5    2.  Any  member  of the New York city police pension fund who acquires
     6  service credit pursuant to this section shall be entitled to all rights,
     7  benefits and privileges to which he or she would have been entitled  had
     8  his  or  her  membership  in the New York city police pension fund begun
     9  upon the earliest date that he or she was  appointed  to  the  title  of
    10  police  cadet  program  or  police cadet program II in the New York city
    11  police department cadet program, but in no event shall the service cred-
    12  it acquired pursuant to this section be deemed  to  be  service  in  the
    13  police  force  or  any  other  type  of service counted or creditable as
    14  service in the police force under section 13-218 of  the  administrative
    15  code  of  the  city  of  New  York, section five hundred thirteen of the
    16  retirement and social security law or any other  provision  of  law  for
    17  purposes  of  eligibility  for  benefits  and to determine the amount of
    18  benefits under the New York city police pension fund.
    19    § 2. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY OF BILL: The attached draft legislation would amend the Gener-
        al Municipal Law by adding a new Section 209-fff to allow New York  City
        Police  Pension  Fund (POLICE) members subject to Article 14 of the RSSL
        (Tier 3, Tier 3 Revised, and Tier 3 Enhanced) to purchase prior  service
        as a cadet in the New York Police Department (NYPD) and use the appoint-
        ment  date as a cadet to determine the initial date of POLICE membership
        for plan or tier eligibility provided such purchase of service  is  made
        within five years of the effective date.
          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
        POLICE nor would it provide additional service retirement benefits.
          IMPACT ON  BENEFITS:  Under  the  proposed  legislation,  if  enacted,
        purchased  NYPD  cadet  service  performed  while not a member of NYCERS
        would entitle members with a cadet service date before July 1,  2009  to
        be deemed Tier 2 member with all the rights and privileges of such Tier,
        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 POLICE after April 1, 2012 as a Tier 3
        Revised or Enhanced member to be deemed an original Tier 3  member  with
        all  the rights and privileges of a member who joined such Tier prior to
        April 1, 2012.
          Since eligibility for POLICE benefits  are  based  on  tier  or  plan,
        including  cadet service towards tier or plan eligibility would increase
        and/or accelerate the payability date of the 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 been
        payable to NYCERS had they joined on  their  initial  cadet  appointment
        date, plus 5% annual interest.
          Member  contributions  for  POLICE  are determined by tier and plan as
        follows:
          * Tier 2 - contribution rates are based on entry age.

        A. 7620--A                          3

          * Tier 3 and Tier 3 Revised - Basic Member Contributions (BMC) of 3%.
          *  Tier  3  Enhanced  - BMC of 3% plus Additional Member Contributions
        currently equal to 1%.
          FINANCIAL IMPACT - PRESENT VALUES:  Based  on  the  data  provided  by
        POLICE  and  the actuarial assumptions and methods described herein, the
        enactment of this proposed legislation would increase the Present  Value
        of  Future  Benefits  (PVFB) by approximately $37.6 million and decrease
        the Present Value of member contributions of approximately $7.5 million.
        The net result is an increase in the Present Value  of  future  employer
        contributions of approximately $45.1 million.
          Under  the Entry Age Normal cost method used to determine the employer
        contributions to POLICE, there would be  an  increase  in  the  Unfunded
        Accrued  Liability  (UAL) of approximately $17.0 million and an increase
        in the Present Value of future employer Normal Cost of $28.1 million.
          FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In  accordance  with
        Administrative   Code   of   the   City  of  New  York  (ACCNY)  Section
        13-638.2(k-2), new UAL attributable to benefit changes are to  be  amor-
        tized  as  determined  by  the  Actuary but generally over the remaining
        working lifetime of those impacted by the benefit changes.  As  of  June
        30,  2017,  the  remaining  working  lifetime  of the affected cadets is
        approximately 15 years.
          For the purposes of this Fiscal Note, the increase in  UAL  was  amor-
        tized  over a 15-year period (14 payments under the One-Year Lag Method-
        ology (OYLM))  using  level  dollar  payments.  This  payment  plus  the
        increase  in  the  Normal Cost results in an increase in annual employer
        contributions of approximately $5.6 million each year.
          OTHER COSTS: Not measured in this Fiscal Note are the following:
          * The initial, additional administrative costs of POLICE and other New
        York City agencies to implement the proposed legislation.
          * The impact of this  proposed  legislation  on  Other  Postemployment
        Benefit (OPEB) costs.
          CONTRIBUTION  TIMING:  For  the  purposes  of  this Fiscal Note, it is
        assumed that the  changes  in  the  Present  Value  of  future  employer
        contributions  and  annual employer contributions would be reflected for
        the first time in the June 30, 2019 actuarial valuation  of  POLICE.  In
        accordance  with  the OYLM used to determine employer contributions, the
        increase in employer contributions would first be  reflected  in  Fiscal
        Year 2021.
          CENSUS  DATA:  The  estimates presented herein are based on the census
        data used in the Preliminary June 30, 2018 (Lag) actuarial valuation  of
        POLICE  to  determine the Preliminary Fiscal Year 2020 employer contrib-
        utions.
          Additional data for the cadets was provided by POLICE. There were  358
        affected cadets as of June 30, 2018. These members had an average age of
        approximately  31.3  years,  average service of approximately 7.5 years,
        and an average salary of approximately $113,500.
          ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the Present Value of
        future  employer  contributions  and   annual   employer   contributions
        presented herein have been calculated based on the actuarial assumptions
        and  methods  in effect for the June 30, 2018 (Lag) actuarial valuations
        used to determine the Preliminary Fiscal  Year  2020  employer  contrib-
        utions  of  POLICE. Additionally, 1.2 years of cadet service was assumed
        based on the amount of cadet service previously purchased by members  of
        POLICE.
          RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
        highly on the actuarial assumptions and methods used and are subject  to

        A. 7620--A                          4

        change  based  on  the realization of potential investment, demographic,
        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.
          STATEMENT  OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu-
        ary for, and independent of, the New York City  Retirement  Systems  and
        Pension  Funds.  I  am a Fellow of the Society of Actuaries, an Enrolled
        Actuary under the Employee Retirement Income and Security Act of 1974, a
        Member of the American Academy of Actuaries, and a Fellow of the Confer-
        ence of Consulting Actuaries. 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 2019-36  dated  June  15,
        2019  was  prepared  by  the  Chief Actuary for the New York City Police
        Pension Fund. This estimate is intended for use  only  during  the  2019
        Legislative Session.
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