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S06980 Summary:

S06980 Actions:

S06980 Committee Votes:

S06980 Floor Votes:

S06980 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         6980--B
 
                               2021-2022 Regular Sessions
 
                    IN SENATE
 
                                      May 20, 2021
                                       ___________
 
        Introduced by Sens. GOUNARDES, KAMINSKY -- read twice and ordered print-
          ed, and when printed to be committed to the Committee on Civil Service
          and  Pensions -- committee discharged, bill amended, ordered reprinted
          as amended and recommitted to said committee  --  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
          authorizing  police/fire  members of the New York city fire department
          pension fund to obtain credit for service as an EMT member
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1. Paragraph 2 of subdivision c of section 513 of the retire-
     2  ment and social security law, as added by chapter 890  of  the  laws  of
     3  1976, is amended to read as follows:
     4    2.  (i)  A  police/fire  member shall be eligible to obtain credit for
     5  service with a public employer described in paragraph one only  if  such
     6  service,  if  rendered prior to July first, nineteen hundred seventy-six
     7  by a police/fire member who was subject to article eleven of this  chap-
     8  ter,  would  have been eligible for credit in the police/fire retirement
     9  system or plan involved.
    10    (ii) Notwithstanding any other provision of law  to  the  contrary,  a
    11  member of the New York city fire department pension fund subject to this
    12  article  shall  be eligible to obtain credit for any period of allowable
    13  service rendered as an EMT member, as such term is defined in  paragraph
    14  one  of  subdivision a of section six hundred four-e of this chapter, as
    15  added by chapter 577 of the laws of  2000,  which  immediately  precedes
    16  service  in  the uniformed force of the fire department and such service
    17  shall be deemed to be in service of the  uniformed  force  of  the  fire
    18  department for purposes of eligibility for benefits and to determine the
    19  amount of benefits under the New York city fire department pension fund,
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07873-05-2
        S. 6980--B                          2
 
     1  provided  that such member pays or transfers into the New York city fire
     2  department pension fund all member contributions set  forth  in  section
     3  five  hundred seventeen of this article plus interest, at a rate of five
     4  percent  per  annum.  For a member who transfers such contributions from
     5  the New York city employees' retirement system to the New York city fire
     6  department pension fund or for a member who withdraws such contributions
     7  from the New York  city  employees'  retirement  system,  such  member's
     8  membership in the New York city employees' retirement system shall cease
     9  upon such transfer or withdrawal and such member shall retain no credit-
    10  ed service in such system.
    11    (iii)  The  provisions  of this paragraph shall apply to a member with
    12  ten or more years of credited service in the New  York  city  employees'
    13  retirement system, notwithstanding the provisions of section six hundred
    14  thirteen of this chapter or any other provision of law to the contrary.
    15    § 2. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY  OF  BILL: This proposed legislation would amend subdivision c
        of section 513 of the Retirement and Social Security Law (RSSL) to allow
        New York City Fire Pension Fund (FIRE) members  subject  to  Article  14
        (Tier  3, Tier 3 Modified, and Tier 3 Enhanced) to obtain service credit
        for service rendered as an emergency medical technician (EMT)  with  the
        New  York  City  Employee's  Retirement System (NYCERS) that immediately
        precedes service in FIRE. If properly  transferred  or  purchased,  such
        service  shall  be deemed to be FIRE service for purposes of determining
        the eligibility for benefits (including the determination of the  number
        of  years  of required member contributions) and for determining benefit
        amounts.
          Effective Date: Upon enactment.
          BACKGROUND: Currently, the purchase or transfer of service rendered as
        a NYCERS EMT member does not provide an  additional  service  retirement
        benefit for FIRE members subject to Article 14.
          IMPACT  ON  BENEFITS:  Under  the  proposed legislation, eligible FIRE
        members would be able to purchase or transfer service earned as  an  EMT
        member  and  have  that  service  count  for purposes of determining the
        eligibility for benefits and for determining benefit  amounts  in  FIRE.
        Upon  attaining  eligible  service  credit  with  FIRE, the member would
        relinquish prior membership and applicable benefits with NYCERS.
          IMPACT ON PAYABILITY: Including EMT service towards eligibility  would
        increase and/or accelerate the payability date of benefits.
          MEMBER  CONTRIBUTIONS:  Eligible  FIRE  members with EMT service imme-
        diately preceding their FIRE service would have to pay, via purchase  or
        transfer  from  NYCERS, applicable Article 14 member contributions, plus
        5.0% annual interest for such purchased or transferred  service.  Member
        contributions  made as a NYCERS EMT member that exceed the amount needed
        for the applicable Article 14 contributions with interest would, if  not
        otherwise  utilized for a separate vested benefit, be refunded with 5.0%
        annual interest.
          FINANCIAL IMPACT - PRESENT VALUES: Based on the census  data  and  the
        actuarial  assumptions  and  methods  described herein, the enactment of
        this proposed legislation would increase the  Present  Value  of  Future
        Benefits  (PVFB) by approximately $14.9 million and decrease the Present
        Value of member contributions of approximately  $0.9  million.  The  net
        result  is  an increase in the Present Value of future employer contrib-
        utions of approximately $15.8 million.
          Under the Entry Age Normal cost method used to determine the  employer
        contributions  to  FIRE,  there  would  be  an  increase in the Unfunded
        S. 6980--B                          3
 
        Accrued Liability (UAL) of  approximately  $33.5  million  offset  by  a
        decrease  in  the  Present Value of future employer Normal Cost of $17.7
        million.
          FINANCIAL  IMPACT  - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with
        Section 13-638.2(k-2) of the Administrative Code of the City of New York
        (ACCNY) , new UAL attributable to benefit changes are to be amortized as
        determined by the Actuary but are generally amortized over the remaining
        working lifetime of those impacted by the benefit changes.  As  of  June
        30,  2021,  the  remaining  working  lifetime of the current FIRE Tier 3
        members potentially eligible to purchase EMT service is approximately 20
        years.
          For the purposes of this Fiscal Note, the increase in  UAL  was  amor-
        tized  over a 20-year period (19 payments under the One-Year Lag Method-
        ology (OYLM)) using level dollar payments.  This  payment  offset  by  a
        decrease  in  the  Normal Cost results in an increase in annual employer
        contributions of approximately $3.2 million each year. The average annu-
        al employer cost per member included in this fiscal note is approximate-
        ly $2,600 per year.
          CONTRIBUTION TIMING: For the purposes  of  this  Fiscal  Note,  it  is
        assumed  that  the  changes  in  the  Present  Value  of future employer
        contributions and annual employer contributions would be  reflected  for
        the  first  time in the Final June 30, 2021 actuarial valuation of FIRE.
        In accordance with the OYLM used to  determine  employer  contributions,
        the  increase  in  employer  contributions  would  first be reflected in
        Fiscal Year 2023.
          CENSUS DATA: The estimates presented herein are based  on  the  census
        data  used  in  the  June  30, 2021 (Lag) actuarial valuation of FIRE to
        determine the Preliminary Fiscal Year 2023 employer contributions.
          There are an estimated 1,224 active FIRE Tier 3 members as of June 30,
        2021 who could potentially benefit  from  the  proposed  legislation  by
        purchasing  service earned as an EMT member. These active members had an
        average age of approximately 31.5 years, average service of approximate-
        ly 4.5 years (before purchasing any additional service), and an  average
        salary  of approximately $89,000. On average, the 1,224 active FIRE Tier
        3 members would be able to purchase 3.0 years of service  earned  as  an
        EMT  member  with  an  estimated  purchase cost of $8,300 per former EMT
        member as of June 30, 2021.
          ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the Present Value of
        future  employer  contributions  and   annual   employer   contributions
        presented herein have been calculated based on the actuarial assumptions
        and  methods  in effect for the June 30, 2021 (Lag) actuarial valuations
        used to determine the Preliminary Fiscal  Year  2023  employer  contrib-
        utions of FIRE.
          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 FIRE 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  meth-
        ods  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  employer  costs  for  service  purchased by future FIRE Tier 3
        members for service earned as an EMT member. However,  as  noted  above,
        S. 6980--B                          4
 
        the average annual employer cost per member included in this Fiscal Note
        is approximately $2,600 per year.
          *  The  initial,  additional  administrative  costs  to  implement the
        proposed legislation.
          * The impact of this  proposed  legislation  on  Other  Postemployment
        Benefit costs.
          STATEMENT  OF  ACTUARIAL  OPINION: I, Michael J. Samet, am the Interim
        Chief Actuary for, and independent of,  the  New  York  City  Retirement
        Systems and Pension Funds. I am a Fellow of the Society of Actuaries and
        a  Member of the American Academy of 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 2022-29 dated  April  20,
        2022  was  prepared  by  the Interim Chief Actuary for the New York City
        Fire Pension Fund. This estimate is intended for  use  only  during  the
        2022 Legislative Session.