STATE OF NEW YORK
________________________________________________________________________
10029
IN ASSEMBLY
April 29, 2022
___________
Introduced by M. of A. ABBATE -- read once and referred to the Committee
on Governmental Employees
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,
20 provided that such member pays or transfers into the New York city fire
21 department pension fund all member contributions set forth in section
22 five hundred seventeen of this article plus interest, at a rate of five
23 percent per annum. For a member who transfers such contributions from
24 the New York city employees' retirement system to the New York city fire
25 department pension fund or for a member who withdraws such contributions
26 from the New York city employees' retirement system, such member's
27 membership in the New York city employees' retirement system shall cease
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07873-06-2
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1 upon such transfer or withdrawal and such member shall retain no credit-
2 ed service in such system.
3 (iii) The provisions of this paragraph shall apply to a member with
4 ten or more years of credited service in the New York city employees'
5 retirement system, notwithstanding the provisions of section six hundred
6 thirteen of this chapter or any other provision of law to the contrary.
7 § 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
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
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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,
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. 10029 4
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.
