A07698 Summary:

BILL NOA07698
 
SAME ASNo Same As
 
SPONSORPheffer Amato
 
COSPNSR
 
MLTSPNSR
 
Add 503-a, R & SS L
 
Affords certain police/fire members who are members of the fire department pension fund to continue in service past normal retirement age with an additional pension benefit for each year of additional service; provides an additional amount computed at the rate of one-fortieth of his or her final salary for each year of such additional service.
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A07698 Actions:

BILL NOA07698
 
06/06/2023referred to governmental employees
01/03/2024referred to governmental employees
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A07698 Committee Votes:

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A07698 Floor Votes:

There are no votes for this bill in this legislative session.
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A07698 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A7698
 
SPONSOR: Pheffer Amato
  TITLE OF BILL: An act to amend the retirement and social security law, in relation to affording certain police/fire members who are members of the fire department pension fund to continue in service past normal retirement age with an additional pension benefit for each year of additional service   PURPOSE: Affords certain police/fire members who are members of the fire depart- ment pension fund to continue in service past normal retirement age with an additional pension benefit for each year of additional service   SUMMARY OF PROVISIONS: Section one of the bill creates a new section of retirement and social security law, 503-a, which allows for any police or fire member of the NYFD Pension fund, upon serving past retirement age there shall be added pension credit which shall be computed at a rate of 1/40 of his or her salary for each year of such additional service. Section two of the bill provides that this act shall take effect imme- diately.   EXISTING LAW: All correction officers, including correction officers employed by New York City, are considered to be peace officers under current law.   JUSTIFICATION: As we face a serious retention and hiring problem in our public sector. As we work to fix that, we need to thank and protect the brave men and women who risk their lives to protect us, even after they have the option to retire. This bill would grant 1/40 of the final salary of a fire or police member in the New York City Fire Department Pension Fund to their pension after he or she has reached the eligible age for retirement.   LEGISLATIVE HISTORY: New Law   FISCAL IMPLICATIONS: Please See Fiscal Note.   EFFECTIVE DATE: This act shall take effect immediately.
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A07698 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          7698
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                      June 6, 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
          affording  certain  police/fire  members  who  are members of the fire
          department pension fund to continue in service past normal  retirement
          age  with  an  additional  pension benefit for each year of additional
          service
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section 1. The retirement and social security law is amended by adding
     2  a new section 503-a to read as follows:
     3    §  503-a. Extra pension service credits. Notwithstanding any provision
     4  of law to the contrary, a police/fire member who is a member of the  New
     5  York  city fire department pension fund may continue in service past the
     6  date that he or she attains normal retirement age.  In  such  event  and
     7  upon  his  or  her  retirement  for any cause whatsoever, there shall be
     8  added to his or her annual pension to which he or she shall upon his  or
     9  her  retirement be entitled an additional amount computed at the rate of
    10  one-fortieth of his or her final salary for each year of such additional
    11  service.
    12    § 2. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY OF BILL: This proposed legislation would  add  a  new  Section
        503-a  to  the  Retirement  and Social Security Law (RSSL) to provide an
        additional 1/40th of "final salary" benefit, subject to applicable esca-
        lation, for each additional year of credited service, or fraction there-
        of, beyond 22 years of  service  for  Tier  3  Original,  Modified,  and
        Enhanced plan members (Tier 3 members) of the New York City Fire Pension
        Fund (FIRE).
          Effective Date: Upon enactment.
          IMPACT ON BENEFITS: Currently, upon reaching 22 or more years of cred-
        ited  service, the Tier 3 normal service retirement and non-Enhanced ADR
        benefit is equal to:
          * 50% of Final Average Salary (FAS),
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10130-02-3

        A. 7698                             2
 
          * Reduced by 50% of the Primary Social  Security  benefit  (determined
        under RSSL Section 511), plus
          * Annual escalation as provided in RSSL Section 510.
          where FAS is defined as:
          * Three-Year FAS (FAS 3) for Original Tier 3 Members, and
          * Five-Year FAS (FAS 5) for Modified Plan Members.
          The current Enhanced ADR benefit is equal to:
          * 75% of FAS 5 subject to Cost-of-Living Adjustment (COLA) pursuant to
        Administrative Code of the City of New York (ACCNY) Section 13-696.
          Under the proposed legislation, if enacted, the retirement benefit for
        Tier  3  members  who  retire  for service or non-Enhanced ADR after the
        effective date of the proposed legislation with  22  or  more  years  of
        credited service would be equal to:
          * 50% of FAS for the first 22 years of credited service, plus
          * 1/40th of Final Salary for each additional year of credited service,
        or fraction thereof, exceeding 22 years (if any),
          *  Reduced  by  50% of the Primary Social Security benefit (determined
        under RSSL Section 511), plus
          * Annual escalation as provided in RSSL Section 510.
          where FAS is defined as:
          * Three-Year FAS (FAS 3) for Original Tier 3 Members, and
          * Five-Year FAS (FAS 5) for Modified Plan Members.
          and where Final Salary is interpreted to mean the  pensionable  salary
        for  each  additional  year  of  credited  service, or fraction thereof,
        exceeding 22 years.
          Under the proposed legislation, if enacted, the Enhanced  ADR  benefit
        for  Tier 3 members who retire with 22 or more years of credited service
        after the effective date of the proposed legislation would be equal to:
          * 75% of FAS 5 subject to COLA pursuant to ACCNY Section 13-696, plus
          * 1/40th of Final Salary for each additional year of credited service,
        or fraction thereof, exceeding 22 years  (if  any),  subject  to  annual
        escalation as provided in RSSL Section 510.
          FINANCIAL  IMPACT:  Based on the census data and the actuarial assump-
        tions and methods described  herein,  the  enactment  of  this  proposed
        legislation  would result in an initial increase in the present value of
        future employer contributions of approximately $520.2 million.
          The  financial  impact  will  increase  as  the  impacted   population
        increases  over  time.  The  estimate of the increase in annual employer
        contributions for Fiscal Years 2024 through 2028 are shown in the  table
        below.
 
                                           Increase in Employer
                         Fiscal                Contributions
                          Year                 ($ Millions)
 
                          2024                     $34.1
                          2025                     $37.7
                          2026                     $41.5
                          2027                     $45.2
                          2028                     $49.2
 
          New  Unfunded  Accrued Liability (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

        A. 7698                             3
 
        amortized over a 19-year period (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 4,469 active Tier 3 members of FIRE as of June 30, 2022 and
        they have an average age of approximately 32.9 years, average service of
        approximately  5.2  years,  and  an  average  salary  of   approximately
        $106,300.
          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 with the
        exception of the probability of Tier 3 members working beyond  22  years
        of  service,  which  was  increased to recognize the impact the proposed
        legislation would have on retirement behavior.
          New entrants were projected to replace the members expected  to  leave
        the active population to maintain a steady-state population. New entrant
        demographics were developed based on data for recent new hires and actu-
        arial judgement.
          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  initial  additional  administrative  costs  to  implement  the
        proposed legislation.
          * Pension costs for future members of FIRE hired on or after 7/1/2026.
          *  The  impact  of  this  proposed legislation on Other Postemployment
        Benefit costs.
          * Cost analyses relating  to  provisions  contained  in  RSSL  Section
        500(c).
          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 2023-57 dated May 23,
        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.
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