Relates to promotions of detectives; grants detectives of the third grade and detectives of the second grade the same rights in respect to the police pension fund as detectives of a grade higher after a certain period of time.
STATE OF NEW YORK
________________________________________________________________________
7643--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 detectives
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. (1) When a detective of the third grade shall have served in the
4 rank of detective of the third grade for a period of fifteen years, he
5 or she shall have the same rights in respect to the police pension fund
6 as a detective of the third grade detailed to act as detective of the
7 second grade.
8 (2) When a detective of the second grade shall have served in the rank
9 of detective of the second grade for a period of ten years, he or she
10 shall have the same rights in respect to the police pension fund as a
11 detective of the second grade detailed to act as detective of the first
12 grade.
13 § 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
Detective 3rd grade of the New York City Police Department (NYPD), who
has been a Detective 3rd grade for at least 15 years, to have the same
rights in respect to the New York City Police Pension Fund (POLICE) as a
Detective 3rd grade detailed to act as a Detective 2nd grade and to
allow for a Detective 2nd grade of the New York City Police Department,
who has been a Detective 2nd grade for a least 10 years, to have the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07971-03-0
A. 7643--A 2
same rights in respect to POLICE as a Detective 2nd grade detailed to
act as a Detective 1st grade.
Effective Date: Upon enactment.
IMPACT ON BENEFITS: The proposed legislation would permit Detectives
of the 3rd and 2nd grade, who have met certain service requirements, to
have their pension calculations based on a higher-grade salary.
A Detective 3rd grade who would benefit under this proposed legis-
lation, if enacted, would receive an increase in their annual pension
benefit of approximately $7,800 per year and a Detective 2nd grade who
would benefit under this proposed legislation, if enacted, would receive
an increase in their annual pension benefit of approximately $10,500 per
year, due to the assumed higher salary grade and overtime, and assuming
a service retirement benefit with 20 years of service.
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 $1.1 million 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 $14.0 million every year.
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 Detectives 3rd
grade that will retire with 15 or more years in rank or Detectives 2nd
grade that will retire with 10 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 $1.7 million each year.
The costs above represent the estimated impact for retirees in the
first year the bill is enacted. Future years' costs in addition to the
aforementioned cost would depend on the number of retirees that benefit
under the legislation amongst other factors.
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.
CENSUS DATA: These estimates are based on data provided by the NYPD
Detectives' Endowment Association which was not audited but was checked
for reasonableness. Below is a summary of the data provided:
* Salary (excluding overtime and outstanding wage contract increases)
* Detective 3rd grade - $114,999
* Detective 2nd grade - $128,034
* Detective 1st grade - $145,548
* Detectives 3rd grade who retired with 15+ years in rank - 386
retired over the past 16 years.
A. 7643--A 3
* Detectives 2nd grade who retired with 10+ years in rank - 1,451
retired over the past 17 years.
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.
Due to the outstanding wage contract for Detectives as of the date
this Fiscal Note was released, the salaries provided for this analysis
have been adjusted to reflect the assumption of pattern bargaining based
on the 1st year of the recently settled Captains Endowment Association
contract of 2.25%.
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 POLICE 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
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 2020-06 dated February
24, 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.
