Relates to primary social security retirement benefits for certain members; provides that in the computation of the normal service retirement benefit of members of the New York city fire department pension fund, there shall be no reduction for the primary social security retirement benefit.
STATE OF NEW YORK
________________________________________________________________________
5467--A
2023-2024 Regular Sessions
IN SENATE
March 6, 2023
___________
Introduced by Sens. GOUNARDES, KENNEDY, LANZA -- read twice and ordered
printed, and when printed to be committed to the Committee on Civil
Service and Pensions -- recommitted to the Committee on Civil Service
and Pensions in accordance with Senate Rule 6, sec. 8 -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
AN ACT to amend the retirement and social security law, in relation to
primary social security retirement benefits for police/fire members
who are members of the New York city fire department pension fund
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 505 of the retirement and social security law, as
2 amended by chapter 18 of the laws of 2012, is amended to read as
3 follows:
4 § 505. Service retirement benefits; police/fire members, New York city
5 uniformed correction/sanitation revised plan members and investigator
6 revised plan members. a. The normal service retirement benefit for
7 police/fire members, New York city uniformed correction/sanitation
8 revised plan members and investigator revised plan members at normal
9 retirement age shall be a pension equal to fifty percent of final aver-
10 age salary, less fifty percent of the primary social security retirement
11 benefit commencing at age sixty-two, as provided in section five hundred
12 eleven of this article, provided, however, that the computation of the
13 normal service retirement benefit of members of the New York city fire
14 department pension fund, shall not be reduced by the primary social
15 security retirement benefit commencing at age sixty-two as provided in
16 section five hundred eleven of this article.
17 b. The early service retirement benefit for police/fire members, New
18 York city uniformed correction/sanitation revised plan members and
19 investigator revised plan members shall be a pension equal to two and
20 one-tenths percent of final average salary times years of credited
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07867-07-4
S. 5467--A 2
1 service at the completion of twenty years of service or upon attainment
2 of age sixty-two, increased by one-third of one percent of final average
3 salary for each month of service in excess of twenty years, but not in
4 excess of fifty percent of final average salary, less fifty percent of
5 the primary social security retirement benefit commencing at age sixty-
6 two as provided in section five hundred eleven of this article,
7 provided, however, that New York city police/fire revised plan members,
8 New York city uniformed correction/sanitation revised plan members and
9 investigator revised plan members shall not be eligible to retire for
10 service prior to the attainment of twenty years of credited service, and
11 provided further that the early service retirement benefit of members of
12 the New York city fire department pension fund shall not be reduced by
13 the primary social security retirement benefit commencing at age sixty-
14 two as provided by section five hundred eleven of this article.
15 c. A police/fire member, a New York city uniformed
16 correction/sanitation revised plan member or an investigator revised
17 plan member who retires with twenty-two years of credited service or
18 less may become eligible for annual escalation of the service retirement
19 benefit if [he elects] they elect to have the payment of [his] their
20 benefit commence on the date [he] they would have completed twenty-two
21 years and one month or more of service. In such event, the service
22 retirement benefit shall equal two percent of final average salary for
23 each year of credited service, less fifty percent of the primary social
24 security retirement benefit commencing at age sixty-two as provided in
25 section five hundred eleven of this article, provided, however, that the
26 service retirement benefit of members of the New York city fire depart-
27 ment pension fund shall not be reduced by the primary social security
28 retirement benefit commencing at age sixty-two as provided by section
29 five hundred eleven of this article.
30 § 2. Section 511 of the retirement and social security law is amended
31 by adding a new subdivision h to read as follows:
32 h. Notwithstanding any provision of law to the contrary, this section
33 shall not apply to members of the New York city fire department pension
34 fund who receive a service retirement benefit pursuant to section five
35 hundred five of this article or a deferred vested benefit pursuant to
36 section five hundred sixteen of this article.
37 § 3. Subdivision c of section 516 of the retirement and social securi-
38 ty law, as amended by chapter 18 of the laws of 2012, is amended to read
39 as follows:
40 c. The deferred vested benefit of police/fire members, New York city
41 police/fire revised plan members, New York city uniformed
42 correction/sanitation revised plan members or investigator revised plan
43 members shall be a pension commencing at early retirement age equal to
44 two and one-tenths percent of final average salary times years of cred-
45 ited service, less fifty percent of the primary social security retire-
46 ment benefit commencing at age sixty-two, as provided in section five
47 hundred eleven of this article, provided however that the deferred vest-
48 ed benefit of members of the New York city fire department pension fund
49 and revised plan members who are members of the New York city fire
50 department pension fund shall not be reduced by the primary social secu-
51 rity retirement benefit commencing at age sixty-two as provided by
52 section five hundred eleven of this article. A police/fire member, a New
53 York city police/fire revised plan member, a New York city uniformed
54 correction/sanitation revised plan member or investigator revised plan
55 member may elect to receive [his] their vested benefit commencing at
56 early retirement age or age fifty-five. If the vested benefit commences
S. 5467--A 3
1 before early retirement age, the benefit shall be reduced by one-fif-
2 teenth for each year, if any, that the member's early retirement age is
3 in excess of age sixty, and by one-thirtieth for each additional year by
4 which the vested benefit commences prior to early retirement age. If
5 such vested benefit is deferred until after such member's normal retire-
6 ment age, the benefit shall be computed and subject to annual escalation
7 in the same manner as provided for an early retirement benefit pursuant
8 to subdivision c of section five hundred five of this article.
9 § 4. Notwithstanding the provisions of section 13-379 of the adminis-
10 trative code of the city of New York, the provisions of this act shall
11 apply to chapter three of title thirteen of the administrative code of
12 the city of New York.
13 § 5. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY: This proposed legislation would amend Sections of the Retire-
ment and Social Security Law (RSSL) to eliminate the offset equal to 50%
of the primary social security benefit in the service, early service,
and vested retirement benefits for Tier 3 members of the New York City
Fire Pension Fund (FIRE).
EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
by Fiscal Year for the first 25 years ($ in Millions)
Year FIRE
2025 8.3
2026 9.0
2027 9.8
2028 10.6
2029 11.5
2030 12.4
2031 13.4
2032 14.4
2033 15.4
2034 16.5
2035 17.6
2036 18.7
2037 19.9
2038 21.1
2039 22.3
2040 23.5
2041 24.8
2042 26.0
2043 24.5
2044 25.7
2045 26.9
2046 28.1
2047 29.2
2048 30.4
2049 31.5
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.
S. 5467--A 4
EXPECTED INCREASE (DECREASE) IN ACTUARIAL LIABILITIES
as of June 30, 2023 ($ in Millions)
Present Value (PV) FIRE
PV of Benefits: 117.4
PV of Employee Contributions: 0.0
PV of Employer Contributions: 117.4
Unfunded Accrued Liabilities: 26.5
AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
FIRE
Number of Payments: 18
Fiscal Year of Last Payment: 2042
Amortization Payment: 2.7 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.
FIRE
Active Members
- Number Count: 5,030
- Average Age: 33.5
- Average Service: 5.5
- Average Salary: 112,400
Term. Vested Members
- Number Count: 9
- Average Age: 37.6
IMPACT ON MEMBER BENEFITS: Currently, Tier 3 normal service retire-
ment, early service retirement, and vested retirement benefits are
subject to an offset equal to 50% of the primary social security benefit
as defined in RSSL Section 511 beginning at age 62.
Under the proposed legislation, the offset for such benefits would be
eliminated for FIRE members, resulting in an increase in benefits.
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.
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).
S. 5467--A 5
This Fiscal Note does not include cost analyses relating to provisions
contained in RSSL Section 500(c).
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 2024-03 dated January 26,
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.
