Relates to promotions of lieutenants; grants a lieutenant who has served for a period of fifteen years the same rights in respect to the police pension fund as a lieutenant detailed to act as lieutenant commander detective squad, or lieutenant special assignment.
STATE OF NEW YORK
________________________________________________________________________
7637--A
2019-2020 Regular Sessions
IN ASSEMBLY
May 14, 2019
___________
Introduced by M. of A. ABBATE -- read once and referred to the Committee
on Governmental Employees -- recommitted to the Committee on Govern-
mental Employees in accordance with Assembly Rule 3, sec. 2 -- commit-
tee discharged, bill amended, ordered reprinted as amended and recom-
mitted to said committee
AN ACT to amend the administrative code of the city of New York, in
relation to promotions of lieutenants
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 14-114 of the administrative code of the city of
2 New York is amended by adding a new subdivision d to read as follows:
3 d. When a lieutenant shall have served in the rank of lieutenant for a
4 period of fifteen years, he or she shall have the same rights in respect
5 to the police pension fund as a lieutenant detailed to act as lieutenant
6 commander detective squad or lieutenant special assignment.
7 § 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: This proposed legislation would amend Administrative
Code of the City of New York (ACCNY) Section 14-114 to allow for a Lieu-
tenant of the New York City Police Department (NYPD), who has been a
Lieutenant for at least 15 years, to have the same rights in respect to
the New York City Police Pension Fund (POLICE) as a Lieutenant detailed
to act as a Lieutenant Commander Detective Squad or Lieutenant Special
Assignment.
Effective Date: Upon enactment.
IMPACT ON BENEFITS: The proposed legislation would permit Lieutenants,
who have served in the rank of Lieutenant for at least 15 years, to have
their pension calculations based on a higher-grade salary.
A Lieutenant, assuming a service retirement benefit with 20 years of
service (15 of which was in the title of a Lieutenant), who would bene-
fit under this proposed legislation, if enacted, would receive an
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07972-03-0
A. 7637--A 2
increase in their annual pension benefit, due to the assumed higher
salary grade and overtime, of approximately $7,000 per year.
Based on this increase and an estimate of the number of POLICE members
that are expected to be impacted by this change, it is estimated that if
this proposed legislation is enacted, the annual increase in POLICE
pension benefits paid will be approximately $162,000 per year.
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.
FINANCIAL IMPACT - PRESENT VALUES: Based on the actuarial assumptions
and methods described herein, the enactment of this proposed legislation
would increase the Present Value of Future Benefits (PVFB) by approxi-
mately $2.1 million.
FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with
ACCNY Section 13-638.2(k-2), new Unfunded Accrued Liability (UAL)
attributable to benefit changes are to be amortized as determined by the
Actuary but generally over the remaining working lifetime of those
impacted by the benefit changes. Since the number of Lieutenants who
will retire with 15 or more years in rank cannot be known in advance
with credibility, the PVFB due to this legislation has been treated as
an actuarial loss at the affected members' retirement.
For the purposes of this Fiscal Note, the increase in UAL was amor-
tized over a 15-year period (14 payments under the One-Year Lag Method-
ology) using level dollar payments. This results in an increase in annu-
al employer contributions of approximately $248,000 each year.
CONTRIBUTION TIMING: For the purposes of this Fiscal Note, it is
assumed that the changes in the PVFB and annual employer contributions
would be reflected for the first time in the June 30, 2020 actuarial
valuation of POLICE. In accordance with the One-Year Lag Methodology
(OYLM) used to determine employer contributions, the increase in employ-
er contributions would first be reflected in Fiscal Year 2022. Future
years' costs in addition to the aforementioned cost would depend on the
number of retirees that benefit under the legislation amongst other
factors.
CENSUS DATA: These estimates are based on data provided by the NYPD
Lieutenants Benevolent Association which was not audited but was checked
for reasonableness. Below is a summary of the data provided:
* Salary (excluding overtime)
o Lieutenant - $125,530
o Lieutenant Commander of Detective Squad and Lieutenant Special
Assignment - $138,089
* Lieutenants who retired with 15+ years in rank - 44 retired from
January 1, 2018 through January 1, 2020.
ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the PVFB and annual
employer contributions presented herein have been calculated based on
the actuarial assumptions and methods in effect for the June 30, 2018
(Lag) actuarial valuations used to determine the Preliminary Fiscal Year
2020 employer contributions of POLICE.
RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend
highly on the realization of the actuarial assumptions used, as well as
certain demographic characteristics of the Plan and other exogenous
factors such as investment, contribution, and other risks. If actual
experience deviates from actuarial 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
A. 7637--A 3
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 of POLICE and other New
York City agencies to implement the proposed legislation.
* The impact of this proposed legislation on Other Postemployment
Benefit (OPEB) costs.
STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu-
ary for, and independent of, the New York City Retirement Systems and
Pension Funds. I am a Fellow of the Society of Actuaries, an Enrolled
Actuary under the Employee Retirement Income and Security Act of 1974, a
Member of the American Academy of Actuaries, and a Fellow of the Confer-
ence of Consulting 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 2020-05 dated February
10, 2020 was prepared by the Chief Actuary for the New York City Police
Pension Fund. This estimate is intended for use only during the 2020
Legislative Session.