NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5055
SPONSOR: Pheffer Amato SUMMARY OF PROVISIONS:
Section one of this bill amends paragraph 2 of subdivision c of section
513 of the Retirement and Social Security Law.
Section two sets the effective date.
JUSTIFICATION:
This bill will give Tier III members of the New York City Fire Depart-
ment Pension Fund who have prior creditable service as an Emergency
Medical Technician with the Fire Department of the City of New York the
ability to receive Fire Department Pension service credit for such
service and have it apply to their minimum number of years needed for a
vested, early, or regular service retirement. This will provide parity
with Tier II firefighters who are already able to purchase time for EMT
service. This bill aims to correct this discrepancy between tiers by
allowing Tier III firefighters to purchase EMT time.
PRIOR LEGISLATIVE HISTORY:
2022: S6980B - Vetoed, Veto Memo No. 126
2021: S6980A - Referred to Civil Service and Pensions
FISCAL IMPLICATIONS:
See bill.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
5055
2023-2024 Regular Sessions
IN ASSEMBLY
February 28, 2023
___________
Introduced by M. of A. PHEFFER AMATO -- read once and referred to the
Committee on Governmental Employees
AN ACT to amend the retirement and social security law, in relation to
authorizing police/fire members of the New York city fire department
pension fund to obtain credit for service as an EMT member
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 2 of subdivision c of section 513 of the retire-
2 ment and social security law, as added by chapter 890 of the laws of
3 1976, is amended to read as follows:
4 2. (i) A police/fire member shall be eligible to obtain credit for
5 service with a public employer described in paragraph one only if such
6 service, if rendered prior to July first, nineteen hundred seventy-six
7 by a police/fire member who was subject to article eleven of this chap-
8 ter, would have been eligible for credit in the police/fire retirement
9 system or plan involved.
10 (ii) Notwithstanding any other provision of law to the contrary, a
11 member of the New York city fire department pension fund subject to this
12 article shall be eligible to obtain credit for any period of allowable
13 service rendered as an EMT member, as such term is defined in paragraph
14 one of subdivision a of section six hundred four-e of this chapter, as
15 added by chapter five hundred seventy-seven of the laws of two thousand,
16 which immediately precedes service in the uniformed force of the fire
17 department and such service shall be deemed to be in service of the
18 uniformed force of the fire department for purposes of eligibility for
19 benefits and to determine the amount of benefits under the New York city
20 fire department pension fund, provided that such member pays or trans-
21 fers into the New York city fire department pension fund all member
22 contributions set forth in section five hundred seventeen of this arti-
23 cle plus interest, at a rate of five percent per annum. For a member who
24 transfers such contributions from the New York city employees' retire-
25 ment system to the New York city fire department pension fund or for a
26 member who withdraws such contributions from the New York city employ-
27 ees' retirement system, such member's membership in the New York city
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02007-02-3
A. 5055 2
1 employees' retirement system shall cease upon such transfer or with-
2 drawal and such member shall retain no credited service in such system.
3 (iii) The provisions of this paragraph shall apply to a member with
4 ten or more years of credited service in the New York city employees'
5 retirement system, notwithstanding the provisions of section six hundred
6 thirteen of this chapter or any other provision of law to the contrary.
7 § 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: This proposed legislation would amend subdivision c
of section 513 of the Retirement and Social Security Law (RSSL) to allow
New York City Fire Pension Fund (FIRE) members subject to Article 14
(Tier 3, Tier 3 Modified, and Tier 3 Enhanced) to obtain service credit
for service rendered as an emergency medical technician (EMT) with the
New York City Employee's Retirement System (NYCERS).
The EMT service credit with NYCERS must immediately precede service in
FIRE. If properly transferred or purchased, such service shall be deemed
as pensionable service for purposes of determining the eligibility for
benefits and benefit amounts in FIRE.
Upon attaining eligible service credit with FIRE, the member would
relinquish prior membership and applicable benefits with NYCERS.
Effective Date: Upon enactment.
IMPACT ON BENEFITS/PAYABILITY: Currently, the purchase or transfer of
service rendered as a NYCERS EMT member does not provide an additional
service retirement benefit for FIRE members subject to Article 14.
Under the proposed legislation, EMT service transferred or purchased
would count for purposes of determining benefit amounts and eligibility
in FIRE and would increase and/or accelerate the payability date of
benefits.
MEMBER CONTRIBUTIONS: Member contributions as defined in Article 14,
plus 5.0% annual interest, for EMT service purchased or transferred
would apply.
Member contributions made as a NYCERS EMT member in excess of the
amount required would, if not otherwise utilized for a separate vested
benefit, be refunded with 5.0% annual interest.
FINANCIAL IMPACT - PRESENT VALUES: Based on the census data and the
actuarial assumptions and methods described herein, the enactment of
this proposed legislation would result in an increase in the present
value of future employer contributions of approximately $19.3 million.
This net increase is a result of an increase in the Present Value of
Future Benefits (PVFB) of approximately $16.7 million and a decrease in
the present value of member contributions of approximately $2.6 million.
Under the Entry Age Normal cost method used to determine the employer
contributions to FIRE, there would be an increase in the Unfunded
Accrued Liability (UAL) of approximately $40.6 million offset by a
decrease in the present value of future employer Normal Cost of approxi-
mately $21.3 million.
FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: The enactment of
this proposed legislation would result in an initial increase in annual
employer contributions of approximately $3.9 million which is the result
of a decrease in the Normal Cost offset by the UAL payment. The average
annual employer cost per member included in this fiscal note is approxi-
mately $3,100.
New UAL attributable to benefit changes are generally amortized over
the remaining working lifetime of those impacted by the benefit changes.
The remaining working lifetime for this group is approximately 19 years
and the increase in UAL was therefore amortized over a 19-year period
A. 5055 3
(18 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 an estimated 1,261 active FIRE Tier 3 members as of June 30,
2022 who could potentially benefit from the proposed legislation by
purchasing or transferring service earned as an EMT member. These active
members had an average age of approximately 32.3 years, average service
of approximately 5.3 years (before purchasing any additional service),
and an average salary of approximately $98,500.
On average, the 1,261 active FIRE Tier 3 members would be able to
purchase 3.0 years of service earned as an EMT member with an estimated
purchase cost of $7,400 per former EMT member as of June 30, 2022.
ACTUARIAL 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 2024 employer contributions of
FIRE.
For the purposes of this Fiscal Note, it is assumed that the changes
would be reflected for the first time in the June 30, 2022 actuarial
valuation of FIRE used to determine employer contributions for Fiscal
Year 2024.
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:
* The employer costs for service purchased by future FIRE Tier 3
members for service earned as an EMT member. However, as noted above,
the average annual employer cost per member included in this Fiscal Note
is approximately $3,100.
* 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 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 2023-01 dated February
10, 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.
