STATE OF NEW YORK
________________________________________________________________________
5202--B
2023-2024 Regular Sessions
IN ASSEMBLY
March 6, 2023
___________
Introduced by M. of A. PHEFFER AMATO, FALL -- read once and referred to
the Committee on Governmental Employees -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee -- recommitted to the Committee on Governmental Employees in
accordance with Assembly Rule 3, sec. 2 -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
AN ACT to amend the administrative code of the city of New York, in
relation to the pensionable earnings of first grade police officers
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Legislative findings and declaration. The legislature here-
2 by finds and declares that an adjustment to pensionable earnings of
3 first grade police officers is necessary to enhance public safety and
4 prevent the loss of vital public services in this state. The legislature
5 hereby finds and declares that such adjustment is necessary to address,
6 inter alia, the historic police officer recruitment and retention
7 crisis, the increase in police overtime, and the rise in crime impacting
8 New Yorkers. Therefore, the legislature declares the necessity for the
9 enactment of this act to enhance public safety and protect against
10 disruption of vital public services in this state.
11 § 2. Section 14-111 of the administrative code of the city of New York
12 is amended by adding two new subdivisions c and d to read as follows:
13 c. When a first grade police officer of the New York city police
14 department shall have served in the rank of police officer for a period
15 of twenty-five years, he or she shall have the same rights in respect to
16 the New York state and local police and fire retirement system or the
17 New York city police pension fund as a police officer designated to act
18 as detective of the third grade who shall have served as such for a
19 period of time aggregating two years at the highest salary rate for a
20 detective of the third grade.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04845-05-4
A. 5202--B 2
1 d. When a first grade police officer of the New York city police
2 department shall have served in the rank of police officer for a period
3 of thirty years, he or she shall have the same rights in respect to the
4 New York state and local police and fire retirement system or the New
5 York city police pension fund as a sergeant who shall have served as
6 such for a period of time aggregating two years at the highest salary
7 rate for a sergeant.
8 § 3. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY: This proposed legislation, as it relates to the New York City
Police Pension Fund (POLICE), would increase the salary used for deter-
mining pension benefits for first grade NYPD officers who have served in
such rank for 25 or 30 years, to salaries equivalent to detective 3rd
grade or sergeant, respectively.
EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
by Fiscal Year for the first 25 years ($ in Millions)
Year POLICE
2025 0.0
2026 1.0
2027 2.0
2028 3.0
2029 4.0
2030 5.1
2031 6.2
2032 7.4
2033 8.6
2034 9.7
2035 10.9
2036 12.0
2037 13.1
2038 14.1
2039 15.1
2040 14.9
2041 14.7
2042 14.4
2043 14.0
2044 13.5
2045 13.1
2046 12.6
2047 12.1
2048 11.6
2049 11.1
Projected contributions are based on historical experience for Tier 2
members. Future retirement patterns may differ due to a larger Tier 3
population (e.g., Tier 2 is expected to retire at 20 years of service,
and Tier 3 is expected to retire at 25 years of service).
The entire increase in employer contributions will be allocated to New
York City.
EXPECTED INCREASE (DECREASE) IN ACTUARIAL LIABILITIES
The enactment of this proposed legislation is expected to increase the
Present Value of Future Benefits (PVFB) by approximately $8.2 million in
the first year and every year thereafter. Each year's PVFB increase will
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depend on the actual experience of benefiting retirees and will be
recognized in the year benefits are first payable.
AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
Recognized as Ongoing Gain/Loss POLICE
Number of Payments: 14
Fiscal Year of Last Payment: N/A
First-year Amortization Payment: $ 1.0 M
CENSUS DATA: The estimates presented herein are based on preliminary
census data collected as of June 30, 2023. The census data for POLICE
active members is summarized below.
POLICE
Active Members
- Number Count: 33,800
- Average Age: 37.6
- Average Service: 11.3
- Average Salary: 128,600
The salaries used in this analysis were provided by the Police Benevo-
lent Association of the City of New York and reflect the latest contract
negotiations. Below is a summary of the salary data provided:
* Police Officer 1st Grade - $105,146
* Detective 3rd Grade - $111,999
* Sergeant - $125,852
Data from prior actuarial valuations was used to estimate the number
of retirees who could potentially benefit from this proposed legislation
and is summarized below.
* Police Officer 1st Grade who retired with 25-29 years in rank - 930
retired over the past 10 years.
* Police Officer 1st Grade who retired with 30+ years in rank - 218
retired over the past 10 years.
IMPACT ON MEMBER BENEFITS: The proposed legislation would permit first
grade police officers, who have met certain service requirements, to
have their pension calculations based on a higher assumed salary.
For example, under this proposed legislation a Tier 2 Police Officer
1st Grade who holds such position for at least 25, or 30, years would
receive an increase in their annual pension benefit of approximately
$4,300 or $12,200 per year, respectively, due to the higher assumed
pensionable salary.
Based on an estimate of the number of POLICE members who are expected
to be impacted by the increased pensionable salary, it is estimated that
if this proposed legislation is enacted, the annual increase in POLICE
pension benefits paid will be approximately $0.7 million in the first
year and increase in every year thereafter.
With respect to an individual member, the impact on benefits due to
this proposed legislation could vary greatly depending on the member's
age, years of service, retirement cause, and Tier.
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 2025 employer contributions 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-
A. 5202--B 4
graphics were developed based on data for recent new hires and actuarial
judgement.
* Future contribution impacts have been developed assuming a homogene-
ous population and consistent retirement pattern.
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 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 2024-02 dated January 16,
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.
