Modifies eligibility for ordinary disability benefits and re-employment of disability retirees of the New York city police pension fund Tier III plans.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9515A
SPONSOR: Pheffer Amato TITLE OF BILL:
An act to amend the retirement and social security law, in relation to
eligibility for ordinary disability benefits and re-employment of disa-
bility retirees of the New York city police pension fund Tier III plans
PURPOSE:
Provides for certain benefits and corrects inequities to the Tier 3
Ordinary Disability benefits of the New York City Police Pension fund.
SUMMARY OF PROVISIONS:
Section 1: Subdivisions (a) of section 506 of the retirement and social
security law, as added chapter 890 of the laws of 1976, and amended by
chapter 601 of the laws of 1997, chapter 559 of the Laws of 2005, chap-
ter 513 of the laws of 2010, and chapter 298 of the Laws of 2016, is
hereby amended to remove the requirement of having to serve at least 5
years of service to be eligible for an ordinary disability retirement.
Furthermore, it removes the requirement that members of the New York
City Police Pension Fund must apply and receive a primary social securi-
ty disability benefit to be eligible for the ordinary disability benefit
described in subdivision b of this section. Application for and the
determination of such ordinary disability benefit shall be governed by
section 13-251 of the Administrative Code of the City of New York.
Subdivisions (b) of section 506 of the retirement and social security
law, as added chapter 890 of the laws of 1976, and amended by chapter
601 of the laws of 1997, chapter 559 of the Laws of 2005, chapter 513 of
the laws of 2010, and chapter 298 of the Laws of 2016, is hereby amended
to provide for a member of the New York City Police Pension Fund who
qualified without being eligible for primary social security disability
benefits, the ordinary disability benefit shall be reduced by one-half
of such retiree's primary social security retirement benefit, commencing
at age sixty-two, in the same manner as provided for service retirement
benefits under section five hundred eleven of this article.
Section 2: Subdivision (d)
This subdivision shall not apply to members of the New York City Police
Pension Fund who shall be governed by section 13-254 of the Administra-
tive Code of the City of New York.
Section 3: This act shall be deemed to have been in effect since July 1,
2009.
JUSTIFICATION:
In July 2009, the members of the New York City Police Pension Fund were
placed into a different New York State and social security retirement
plan when the traditional Tier 2 plan extender was vetoed. The plan they
were placed in is commonly known as Tier 3. All new sworn members of the
NYPD hired after June 30, 2009 were placed into the Tier 3 plan, and
there were several benefit changes. Among them were certain restrictions
on receiving an ordinary disability retirement benefit, including
requiring a member to apply for and actually receive a Social Security
Disability Benefit, which is an extremely high threshold as it requires
an individual to be permanently disabled from any employment, not solely
the inability to perform the duties of a police officer. This mandate
could lead to a denial of benefits for members who are permanently disa-
bled from police work and bravely served and protected the residents of
the City of New York. When Tier 2 was vetoed in 2009 this benefit was
reduced as stated above, which was not the legislative intent. Restoring
this benefit would correct this inequity.
FISCAL IMPLICATIONS:
Please see the Fiscal Note
LEGISLATIVE HISTORY:
None
EFFECTIVE DATE:
This act shall be deemed to have been in effect since July 1, 2009.
STATE OF NEW YORK
________________________________________________________________________
9515--A
IN ASSEMBLY
March 20, 2024
___________
Introduced by M. of A. PHEFFER AMATO -- read once and referred to the
Committee on Governmental Employees -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
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.
LBD14498-06-4
A. 9515--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.
A. 9515--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.
A. 9515--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.
