STATE OF NEW YORK
________________________________________________________________________
6560--A
2023-2024 Regular Sessions
IN SENATE
April 26, 2023
___________
Introduced by Sen. JACKSON -- 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 commit-
tee
AN ACT to amend the administrative code of the city of New York, in
relation to increasing benefits payable by the correction officers'
variable supplements fund to beneficiaries
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 13-194 of the administrative code of the city of
2 New York is amended by adding a new subdivision 12 to read as follows:
3 12. In addition to the payments set forth in paragraphs (c) and (d) of
4 subdivision four of this section, there shall be paid to each benefici-
5 ary on or about the December fifteenth next succeeding his or her date
6 of retirement, an amount equal to the variable supplements payments,
7 subject to the provisions of items (i) and (ii) of subparagraph one of
8 paragraph (e) of subdivision four of this section, that he or she would
9 have received, had he or she retired on the date of his or her earliest
10 eligibility for service retirement, in the period measured from (1) the
11 later of (i) such earliest eligibility date and (ii) January first, two
12 thousand twenty-four and (2) his or her date of retirement.
13 § 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY: This proposed legislation would provide certain NYCERS
Correction officers a lump sum benefit upon retirement, commonly
referred to as a Deferred Retirement Option Plan (DROP), equal to the
amount of Correction Officer Variable Supplements Fund (COVSF) payments
such officer would have received if he or she had retired at the later
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08663-04-4
S. 6560--A 2
of their respective earliest service retirement eligibility date or
January 1, 2024.
EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
by Fiscal Year for the first 25 years ($ in Millions)
Year NYCERS
2025 9.9
2026 10.0
2027 10.2
2028 10.4
2029 10.6
2030 10.8
2031 11.0
2032 11.2
2033 11.4
2034 4.7
2035 4.9
2036 5.1
2037 5.2
2038 5.4
2039 5.5
2040 5.6
2041 5.6
2042 5.7
2043 5.7
2044 5.7
2045 5.6
2046 5.7
2047 5.7
2048 5.8
2049 5.9
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) NYCERS
PV of Benefits: 71.9
PV of Employee Contributions: 0.0
PV of Employer Contributions: 71.9
Unfunded Accrued Liabilities: 43.0
AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
NYCERS
Number of Payments: 9
Fiscal Year of Last Payment: 2033
Amortization Payment: 6.8 M
Unfunded Accrued Liability increases were amortized over the expected
remaining working lifetime of those impacted by the benefit changes
using level dollar payments.
S. 6560--A 3
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.
NYCERS
Active Members
- Number Count: 6,097
- Average Age: 43.0
- Average Service: 12.4
- Average Salary: 128,500
IMPACT ON MEMBER BENEFITS: This proposed legislation would provide to
NYCERS correction officers who continue to work beyond their earliest
service retirement eligibility date a lump sum DROP payment consisting
of the annual COVSF payment each year beyond the later of their earliest
service retirement date or January 1, 2024 (i.e., the COVSF payments the
retiree would have received if he or she had retired at his or her
earliest service retirement eligibility date or January 1, 2024, which-
ever is later) without any adjustment for interest.
The DROP would not apply to deaths or to disability retirement, even
if those events occur after the earliest service retirement eligibility
date.
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).
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 2024-30 dated March 19,
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.
