Bill Text: NY S08764 | 2023-2024 | General Assembly | Amended


Bill Title: Modifies eligibility for ordinary disability benefits and re-employment of disability retirees of the New York city police pension fund Tier III plans.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-03-21 - PRINT NUMBER 8764A [S08764 Detail]

Download: New_York-2023-S08764-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         8764--A

                    IN SENATE

                                      March 8, 2024
                                       ___________

        Introduced  by  Sen. JACKSON -- read twice and ordered printed, and when
          printed to be committed to the Committee on Civil Service and Pensions
          -- 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
          eligibility for ordinary  disability  benefits  and  re-employment  of
          disability  retirees of the New York city police pension fund Tier III
          plans

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

     1    Section  1.  Section  506 of the retirement and social security law is
     2  amended by adding a new subdivision a-1 to read as follows:
     3    a-1. The provisions of subdivision a of this section shall  not  apply
     4  to  members  of the New York city police pension fund.  Medical examina-
     5  tion of a police pension member in city-service for ordinary  disability
     6  shall  be  made upon the application of the police commissioner, or upon
     7  the application of such member or of a person acting  on  such  member's
     8  behalf, stating that such member is physically or mentally incapacitated
     9  for  the  performance  of  duty and ought to be retired. If such medical
    10  examination shows that such member is physically or  mentally  incapaci-
    11  tated  for  the performance of duty and ought to be retired, the medical
    12  board shall so report and the board shall retire such member  for  ordi-
    13  nary disability.
    14    § 2. Subdivision d of section 507 of the retirement and social securi-
    15  ty  law, as added by chapter 890 of the laws of 1976, is amended to read
    16  as follows:
    17    d. If a member shall cease to be eligible for primary social  security
    18  benefits before attaining age sixty-five, or, if receipt of social secu-
    19  rity  benefits  is  not  a  condition for disability benefits hereunder,
    20  shall engage in such employment or business  activity  as  would  render
    21  such  member ineligible for social security disability benefits (had [he
    22  or she] such member otherwise been eligible), benefits  hereunder  shall
    23  cease.    Provided,  however,  if such member is otherwise eligible, the
    24  state civil service department or appropriate municipal commission shall

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14498-05-4

        S. 8764--A                          2

     1  place the name of such person, as a preferred eligible, on the appropri-
     2  ate eligible lists prepared by it for positions for which such person is
     3  stated to be qualified in a salary grade not exceeding that  from  which
     4  such person retired. In such event, disability benefits shall be contin-
     5  ued  for such member until such member first shall be offered a position
     6  in public service at such salary grade. This subdivision shall not apply
     7  to members of the New  York  city  police  pension  fund  who  shall  be
     8  governed by section 13-254 of the administrative code of the city of New
     9  York.
    10    §  3.  This  act  shall take effect immediately and shall be deemed to
    11  have been in full force and effect on and after July 1, 2009.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY:  This  proposed  legislation  modifies  Ordinary   Disability
        Retirement  (ODR)  eligibility,  and provides an additional ODR benefit,
        for Tier 3 members of the New York City Police Pension Fund (POLICE)  by
        removing  the  requirements  of  having  at least five years of credited
        service and being eligible for primary Social Security disability  bene-
        fits (SSDI).

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

                            Year      POLICE
                            2025      4.7
                            2026      5.5
                            2027      6.4
                            2028      7.5
                            2029      8.5
                            2030      9.6
                            2031      10.6
                            2032      11.4
                            2033      12.3
                            2034      13.1
                            2035      13.8
                            2036      14.6
                            2037      15.3
                            2038      16.0
                            2039      16.7
                            2040      17.4
                            2041      20.0
                            2042      20.7
                            2043      21.5
                            2044      22.3
                            2045      23.1
                            2046      23.9
                            2047      24.7
                            2048      25.6
                            2049      26.5

           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. 8764--A                          3

                  INITIAL INCREASE (DECREASE) IN ACTUARIAL LIABILITIES
                           as of June 30, 2023 ($ in Millions)

                       Present Value (PV)                 POLICE
                       PV of Benefits:                    80.6
                       PV of Employee Contributions:      0.0
                       PV of Employer Contributions:      80.6
                       Unfunded Accrued Liabilities:      (17.5)

                       AMORTIZATION OF UNFUNDED ACCRUED LIABILITY

                                                          POLICE
                       Number of Payments:                16
                       Fiscal Year of Last Payment:       2040
                       Amortization Payment:              (1.9) 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.

                                                POLICE
                       Active Members
                       - Number Count:          20,176
                       - Average Age:           32.8
                       - Average Service:       6.1
                       - Average Salary:        107,600

          IMPACT ON MEMBER BENEFITS: Currently, active Tier 3 POLICE members are
        eligible  for  an ODR benefit if they are approved for SSDI benefits and
        have at least five years of credited service.
          Under the proposed legislation, active  or  separated  Tier  3  POLICE
        members  who  are  determined to be disabled by the POLICE Medical Board
        would be eligible for an ODR benefit, irrespective of  SSDI  eligibility
        and  credited  service.  The  safeguards provisions associated with SSDI
        would be replaced with Tier 1 and Tier 2 safeguards.
          The proposed ODR benefit would be equal  to  the  greater  of  1/3  of
        applicable Final Average Salary (FAS) or 2% of applicable FAS multiplied
        by  credited service. This benefit would be subject to an offset, begin-
        ning at age 62, equal to 50% of the primary social security  benefit  as
        defined  in  Retirement  and  Social Security Law Section (RSSL) 511, if
        any, and would be subject to annual escalation pursuant to RSSL  Section
        510.
          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.
          * For purposes of this Fiscal Note, it has been assumed that  100%  of
        members  exiting for ODR under current ODR rates would be ineligible for
        SSDI.

        S. 8764--A                          4

          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 does not quantify the potential cost for members who
        may qualify for ordinary disability benefits before enactment.
          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 2024-33 dated March 21,
        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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