Removes eligibility or receipt of primary social security disability benefits as a condition for ordinary disability retirement for New York city enhanced plan members in active service who are not eligible for a normal retirement benefit and have completed five years or more of service.
STATE OF NEW YORK
________________________________________________________________________
10465
IN ASSEMBLY
May 29, 2024
___________
Introduced by COMMITTEE ON RULES -- (at request of M. of A.
Pheffer Amato) -- read once and referred to the Committee on Govern-
mental Employees
AN ACT to amend the retirement and social security law, in relation to
removing eligibility or receipt of primary social security disability
benefits as a condition for ordinary disability retirement for certain
members
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision c-1 of section 506 of the retirement and social
2 security law, as added by chapter 298 of the laws of 2016, is amended to
3 read as follows:
4 c-1. Notwithstanding any inconsistent provision of subdivision a or b
5 of this section, the ordinary disability benefit for a New York city
6 enhanced plan member in active service who is not eligible for a normal
7 retirement benefit, has completed five years or more of service, [and
8 has been determined to be eligible for primary social security disabili-
9 ty benefits] shall be a pension equal to the greater of (i) thirty-three
10 and one-third percent of final average salary, or (ii) two percent of
11 final average salary times years of credited service not in excess of
12 the maximum years of service for computing service retirement, such
13 benefit in each case to be reduced by one hundred percent of any work-
14 ers' compensation benefits payable. A benefit pursuant to the provisions
15 of this subdivision shall not be conditioned upon eligibility for, or
16 receipt of, primary social security disability benefits.
17 § 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY: This proposed legislation modifies Ordinary Disability
Retirement (ODR) eligibility for Tier 3 members of POLICE and FIRE by
removing the requirement of being eligible for primary Social Security
disability benefits (SSDI).
EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
by Fiscal Year for the first 25 years ($ in Millions)
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD14127-02-4
A. 10465 2
Year POLICE FIRE TOTAL
2025 3.1 0.3 3.4
2026 3.4 0.3 3.7
2027 3.8 0.4 4.2
2028 4.3 0.4 4.7
2029 4.8 0.5 5.3
2030 5.3 0.5 5.8
2031 5.8 0.5 6.3
2032 6.2 0.6 6.8
2033 6.5 0.6 7.1
2034 6.9 0.7 7.6
2035 7.3 0.7 8.0
2036 7.6 0.8 8.4
2037 8.0 0.8 8.8
2038 8.4 0.9 9.3
2039 8.7 1.0 9.7
2040 9.1 1.0 10.1
2041 9.3 1.1 10.4
2042 9.7 1.1 10.8
2043 10.0 1.1 11.1
2044 10.4 1.2 11.6
2045 10.9 1.3 12.2
2046 11.3 1.3 12.6
2047 11.7 1.4 13.1
2048 12.1 1.4 13.5
2049 12.6 1.5 14.1
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.
INITIAL INCREASE (DECREASE) IN ACTUARIAL LIABILITIES
as of June 30, 2023 ($ in Millions)
Present Value (PV) POLICE FIRE
PV of Benefits: 44.7 4.5
PV of Employee Contributions: 0.0 0.0
PV of Employer Contributions: 44.7 4.5
Unfunded Accrued Liabilities: 1.4 0.5
AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
POLICE FIRE
Number of Payments: 16 18
Fiscal Year of Last Payment: 2040 2042
Amortization Payment: 0.2 M 0.1 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 FIRE
Active Members
A. 10465 3
- Number Count: 19,938 5,028
- Average Age: 32.7 33.5
- Average Service: 6.1 5.5
- Average Salary: 107,200 112,400
IMPACT ON ELIGIBILITY: Currently, active Tier 3 POLICE and FIRE
enhanced plan members with at least five years of credited service are
only eligible for an ODR benefit if they are approved for primary Social
Security disability benefits (SSDI).
Under the proposed legislation, Tier 3 POLICE and FIRE enhanced plan
members with at least five years of credited service would be eligible
for an ODR benefit, irrespective of SSDI eligibility.
The formula for calculating Enhanced Plan ODR benefits would remain
unchanged.
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.
* It is assumed that the Medical Board will be responsible for deter-
mining the eligibility for ODR benefits in place of the SSDI require-
ment.
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 2024-47 dated April 25,
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.
