S T A T E   O F   N E W   Y O R K
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                                  10044

                          I N  A S S E M B L Y

                               May 6, 2016
                               ___________

Introduced by M. of A. ABBATE -- read once and referred to the Committee
  on Governmental Employees

AN  ACT  to  amend  the general municipal law, in relation to creating a
  state-wide, uniform, minimum accidental disability benefit  of  three-
  quarters of final average salary for all police officers

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Legislative findings and declaration. The legislature here-
by finds and declares that there is a substantial state interest in  the
fair and equitable treatment of police officers throughout the state who
are  disabled  as  a result of an accident incurred in the line of duty.
That substantial state interest would be furthered by  establishing  and
maintaining a minimum level of accidental disability benefits for police
officers  in  New York state who are rendered disabled by an accident in
the performance of their duties. The legislature also finds and declares
that accidental disability retirement benefits of less than  three-quar-
ters  of  final average salary to police officers injured as a result of
an accident incurred in the line of duty do  not  adequately  compensate
disabled  police  officers for the sacrifice of their health and liveli-
hood in the cause of public service. Therefore, the legislature declares
the necessity for the enactment of this act to establish a minimum acci-
dental disability retirement benefit of three-quarters of final  average
salary for police officers throughout the state.
  S  2.  The  general  municipal  law is amended by adding a new section
209-ff to read as follows:
  S 209-FF.  MINIMUM  ACCIDENTAL  DISABILITY  RETIREMENT  ALLOWANCE  FOR
POLICEMEN  IN  CITIES,  TOWNS  AND  VILLAGES WHO ARE MEMBERS OF A POLICE
PENSION OR RETIREMENT SYSTEM. 1. AS  USED  IN  THIS  SECTION,  THE  TERM
"POLICE  ACCIDENTAL  DISABILITY  RETIREMENT  ALLOWANCE"  SHALL  MEAN THE
ALLOWANCE GRANTED TO ANY PERSON WHO IS  AN  OFFICER  OR  MEMBER  OF  THE
UNIFORMED FORCE OR A POLICE DEPARTMENT OF ANY CITY, TOWN OR VILLAGE, AND
WHO  IS  A  MEMBER OF A POLICE PENSION OR RETIREMENT SYSTEM, PURSUANT TO
SECTION FIVE HUNDRED SEVEN OF THE RETIREMENT AND SOCIAL SECURITY LAW, OR
SECTION THREE HUNDRED SIXTY-THREE OF THE RETIREMENT AND SOCIAL  SECURITY

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD15045-02-6

A. 10044                            2

LAW,  OR  ANY  SIMILAR  ACCIDENTAL  DISABILITY  PENSION  PROVIDED BY THE
PENSION FUND OF WHICH HE OR SHE IS A MEMBER.
  2.  NOTWITHSTANDING  THE  PROVISIONS  OF ANY GENERAL, SPECIAL OR LOCAL
LAW, CHARTER OR ADMINISTRATIVE CODE TO THE CONTRARY, AND IN LIEU OF  ANY
LESSER  AMOUNT  OTHERWISE  PRESCRIBED,  ANY POLICE ACCIDENTAL DISABILITY
RETIREMENT ALLOWANCE SHALL NOT BE LESS THAN THREE-QUARTERS OF THE MEMBER
OF THE POLICE PENSION OR RETIREMENT SYSTEM'S  FINAL  AVERAGE  SALARY  OR
ANNUAL COMPENSATION, AS SUCH FINAL AVERAGE SALARY OR ANNUAL COMPENSATION
IS  OTHERWISE  PRESCRIBED  BY  LAW. SUCH ALLOWANCE SHALL NOT BE REDUCED,
DIMINISHED OR OFFSET BY A  MEMBER'S  RECEIPT  OF,  OR  ELIGIBILITY  FOR,
SOCIAL SECURITY BENEFITS.
  3.  NOTWITHSTANDING  THE  PROVISIONS  OF ANY GENERAL, SPECIAL OR LOCAL
LAW, CHARTER OR ADMINISTRATIVE CODE TO THE CONTRARY, AND IN LIEU OF  ANY
AMOUNT  PRESCRIBED  BY  SECTION  FIVE  HUNDRED TEN OF THE RETIREMENT AND
SOCIAL SECURITY LAW OR OTHERWISE PRESCRIBED BY LAW,  A  COST  OF  LIVING
ADJUSTMENT  SHALL  BE PAYABLE ON POLICE ACCIDENTAL DISABILITY RETIREMENT
ALLOWANCES UNDER THE SAME TERMS  AND  CONDITIONS  AS  PROVIDED  IN  SUCH
SYSTEMS IMMEDIATELY PRIOR TO JULY FIRST, TWO THOUSAND NINE.
  4.  NOTWITHSTANDING  THE  PROVISIONS  OF ANY GENERAL, SPECIAL OR LOCAL
LAW, CHARTER OR ADMINISTRATIVE CODE TO THE CONTRARY,  SUBDIVISION  D  OF
SECTION  FIVE  HUNDRED  SEVEN  OF THE RETIREMENT AND SOCIAL SECURITY LAW
SHALL NOT APPLY TO MEMBERS OF A POLICE PENSION OR RETIREMENT SYSTEM  WHO
RECEIVE POLICE ACCIDENTAL DISABILITY RETIREMENT ALLOWANCES. SUCH MEMBERS
SHALL  BE  SUBJECT  TO  POST-RETIREMENT  MEDICAL EXAMINATIONS, AND WHERE
APPLICABLE, MODIFICATION OF RETIREMENT ALLOWANCES FOLLOWING  SUCH  EXAM-
INATIONS, IN THE SAME MANNER AND UNDER THE SAME CONDITIONS PRESCRIBED BY
LAW  IMMEDIATELY  PRIOR  TO JULY FIRST, TWO THOUSAND NINE FOR MEMBERS OF
SUCH POLICE PENSION OR RETIREMENT SYSTEM.
  S 3. This act shall take effect immediately.
  FISCAL NOTE. -- Pursuant to Legislative Law, Section 50:
  PROVISIONS OF PROPOSED LEGISLATION: With respect to the New York  City
Police  Pension  Fund (POLICE), the proposed legislation would amend the
General Municipal Law (GML) by adding a new section 209-ff to provide  a
revised  benefit  payable  as  the  result  of  an Accidental Disability
Retirement (ADR) to Tier 3 and Revised  Tier  3  members.  The  proposed
legislation  would also make these members who retire on an ADR, subject
to the same post-retirement medical examinations and subject to the same
modification of retirement allowances following  such  examinations,  as
Tier 2 POLICE members.
  The  Effective  Date  of the proposed legislation would be the date of
enactment.
  For purposes of this Fiscal Note, all POLICE Members subject to  Arti-
cle  14  of the RSSL will be referred to as "Tier 3 POLICE Members."  Of
those Tier 3 POLICE members who have a date of membership prior to April
1, 2012, they will be referred to as "Original Tier 3  POLICE  Members."
Of those Tier 3 POLICE Members who have a date of membership on or after
April  1,  2012,  they  will  be  referred  to as "Revised Tier 3 POLICE
Members."
  IMPACT ON ADR BENEFITS PAYABLE: The current ADR benefits  for  Tier  3
POLICE Members are equal to the greater of:
  * 50% multiplied by Final Average Salary,
  Reduced by:
  *  50% of Primary Social Security disability benefit or Primary Social
Security benefits, whichever begins first (determined under RSSL Section
511), and
  * 100% of Workers' Compensation benefits (if any).

A. 10044                            3

  Final Average Salary is a Three-Year average (FAS3) for Original  Tier
3  POLICE  Members  and  a  Five-year  average (FAS5) for Revised Tier 3
POLICE Members.
  It  is  the  understanding  of the Actuary that POLICE Members are not
covered by Workers' Compensation.
  Under the proposed legislation, if enacted, the ADR benefit for Tier 3
POLICE Members would be revised to equal a  retirement  allowance  equal
to:
  * 75% multiplied by FAS,
  * Reduced by 100% of Workers' Compensation benefits (if any).
  In  addition,  the proposed legislation would NOT apply the Escalation
available under RSSL Section 510 to  ADR  benefits  for  Tier  3  POLICE
members.  However,  such  ADR  benefits would still be eligible for COLA
under Chapter 125 of the Laws of 2000.
  Tier 3 POLICE Members who are POLICE members prior  to  the  effective
date  of  this  proposed  legislation would have the option of remaining
under the current ADR benefits or  electing  to  be  covered  under  the
proposed ADR benefits.
  Eligibility  for  ADR  will  be unchanged from the current eligibility
provisions for Tier 3. Therefore, the ability to be eligible for and  to
utilize  the  presumptive conditions that qualify for ADR that is avail-
able to Tier 1 and Tier 2 POLICE Members will not be available for  Tier
3 POLICE Members.
  Finally,  the  proposed  legislation would also make these members who
retire on an ADR, subject to the same post-retirement  medical  examina-
tions  and  subject  to  the  same modification of retirement allowances
following such examinations, as Tier 2 POLICE members.
  FINANCIAL IMPACT - CHANGES IN PROJECTED  ACTUARIAL  PRESENT  VALUE  OF
FUTURE  EMPLOYER CONTRIBUTIONS AND PROJECTED EMPLOYER CONTRIBUTIONS: For
purposes of this Fiscal Note, it is assumed  that  the  changes  in  the
Actuarial Present Value (APV) of benefits (APVB), APV of member contrib-
utions,  the  Unfunded  Actuarial  Accrued  Liability  (UAAL) and APV of
future employer contributions would be reflected for the first  time  in
the  June 30, 2015 actuarial valuation of POLICE. Under the One-Year Lag
Methodology (OYLM), the first year that changes in benefits for  Tier  3
POLICE  Members  could  impact employer contributions to POLICE would be
Fiscal Year 2017.
  In accordance with ACNY Section 13.638.2(k-2), new  UAAL  attributable
to  benefit changes are to be amortized as determined by the Actuary but
generally over the remaining working lifetime of those impacted  by  the
benefit  changes. As of June 30, 2015, the remaining working lifetime of
the Tier 3 POLICE Members is approximately 18  years.  Recognizing  that
this  period  will  decrease  over  time  as the group of Tier 3 Members
matures, for purposes of this Fiscal Note, the Actuary  has  elected  to
amortize the change in UAAL over a 15-year period (14 payments under the
OYLM Methodology).
  Table  1  presents  an  estimate of the increases in the APV of future
employer contributions and  in  employer  contributions  to  POLICE  for
Fiscal  Years 2017 through 2021 due to the changes in ADR provisions for
Tier 3 POLICE Members assuming no increase in the incidence of ADRs  and
based on the applicable actuarial assumptions and methods noted herein:

                                 Table 1

                  Estimated Financial Impact on POLICE
                    If Certain Revisions are Made to

A. 10044                            4

                       Provisions for ADR Benefits
                        for Tier 3 POLICE Members

                              ($ Millions)

    Fiscal Year        Increase in APV of           Increase in Employer
                     Future Employer Contributions      Contributions

        2017              $182.5                            $21.7
        2018               215.9                             25.0
        2019               243.4                             27.7
        2020               271.8                             30.4
        2021               300.4                             32.8
  For  illustrative  purposes,  Table  2  presents  an  estimate  of the
increases in the APV of future employer contributions  and  in  employer
contributions  to  POLICE  for Fiscal Years 2017 through 2021 due to the
changes in ADR provisions for Tier 3 POLICE Members assuming the  change
in  the  ADR  benefit provisions would increase the incidence of ADRs to
equal the midpoint of the current Tier 2 and Tier 3 probabilities of ADR
for POLICE members:

                                 Table 2

                  Estimated Financial Impact on POLICE
                    If Certain Revisions are Made to
                       Provisions for ADR Benefits
                        for Tier 3 POLICE Members

                              ($ Millions)

                           Increase in APV of
                             Future Employer        Increase in Employer
     Fiscal Year              Contributions            Contributions

       2017                      $209.7                    $27.0
       2018                       245.9                     30.9
       2019                       274.7                     34.1
       2020                       304.5                     37.2
       2021                       334.1                     40.0

  The estimated increases in employer contributions shown in Table 1 and
Table 2 are based upon the following projection assumptions:
  * Level workforce (i.e., new employees are hired to replace those  who
leave active status).
  * Salary increases consistent with those used in projections presented
to  the  New York City Office of Management and Budget for use in Febru-
ary, 2016 (Preliminary Projections).
  * New entrant salaries consistent with those used in  the  Preliminary
Projections.
  OTHER COSTS: Not measured in this Fiscal Note are the following poten-
tial costs:
  * The initial, additional administrative costs of POLICE and other New
York City agencies to implement the proposed legislation.
  *  The  potential  impact  if  this  proposed  legislation  were to be
extended to other public safety employees (e.g., firefighters).

A. 10044                            5

  * The impact of this  proposed  legislation  on  Other  Postemployment
Benefit (OPEB) costs.
  CENSUS  DATA:  The  starting  census  data  used  for the calculations
presented herein is the census data used in  the  Preliminary  June  30,
2015  (Lag)  actuarial  valuation of POLICE to determine the Preliminary
Fiscal Year 2017 employer contributions.
  The 3,337 Original Tier 3 POLICE Members as of June 30,  2015  had  an
average  age  of  approximately 30, average service of approximately 4.2
years and an average salary of approximately $71,900.
  The 5,124 Revised Tier 3 POLICE Members as of June  30,  2015  had  an
average  age  of  approximately 28, average service of approximately 1.6
years and an average salary of approximately $55,900.
  Overall, the 8,461 Tier 3 POLICE Members as of June 30,  2015  had  an
average  age  of  approximately 29, average service of approximately 2.6
years, and an average salary of approximately $62,200.
  ACTUARIAL ASSUMPTIONS AND METHODS: The  additional  employer  contrib-
utions  presented  herein  have  been  calculated based on the actuarial
assumptions and methods in effect for  the  Preliminary  June  30,  2015
(Lag) actuarial valuations used to determine the Preliminary Fiscal Year
2017 employer contributions of POLICE.
  It  has been further assumed that all Tier 3 POLICE Members who became
members prior to the effective date of  the  proposed  legislation  will
choose to be covered by the new disability provisions.
  The  results  shown  in Table 1 above assume that here is no change in
the incidence of ADRs as a result of the change in ADR  provisions.  The
results  shown in Table 2 above assume that the probabilities of ADR for
Tier 3 POLICE Members will equal the midpoint of the current Tier 2  and
Tier 3 probabilities of ADR for POLICE members.
  The  actuarial valuation methodology does not include a calculation of
the value of an offset for Workers' Compensation benefits as it  is  the
understanding of the Actuary that POLICE Members are not covered by such
benefits.
  Employer  contributions  under current methodology have been estimated
assuming the additional APVB would be  financed  through  future  normal
contributions  including an amortization of the new UAAL attributable to
this proposed legislation over a 15-year period (14 payments  under  the
OYLM Methodology).
  New  entrants were projected to replace the POLICE members expected to
leave the active population to maintain a steady-state population.
  For purposes of estimating the impact of Escalation for retired Tier 3
POLICE Members, an assumption of 2.5% was used, which is consistent with
the underlying Consumer Price Inflation (CPI)  assumption  of  2.5%  per
year.
  This  compares  with  the current Chapter 125 of the Laws of 2000 COLA
assumption of 1.5% per year (i.e., 50% of CPI adjusted to recognize 1.0%
minimum and 3.0% maximum) on the first $18,000 of benefit.
  Table 3 presents the total number of active employees of  POLICE  used
in  the  projections,  assuming  a  level work force, and the cumulative
number (i.e., net of withdrawals) of Revised Tier 3 Members as  of  each
June 30 from 2015 through 2019.

                                 Table 3

           Surviving Actives from Census Data on June 30, 2015
                                   and

A. 10044                            6

               Cumulative Tier 3 POLICE Members from 2015
                        Used in the Projections*

                                 Original        Revised
June 30         Tier 1&2         Tier 3          Tier 3       Total

2015            25,974           3,337           5,124        34,435
2016            23,902           3,246           7,287        34,435
2017            22,097           3,158           9,108        34,435
2018            20,192           3,076           11,167       34,435
2019            18,469           2,999           12,967       34,435

*  Total  active members included in the projections assume a level work
force based on the June 30, 2015 (Lag) actuarial valuation  census  data
and assume no increase in the probabilities of ADR.
  STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, and the Chief Actu-
ary  for  the New York City Retirement Systems. I am an Associate of the
Society of Actuaries, a Fellow of the Conference of Consulting Actuaries
and a Member of the American Academy of Actuaries. I meet the Qualifica-
tion Standards of the American Academy of Actuaries to render the  actu-
arial opinion contained herein.
  FISCAL  NOTE  IDENTIFICATION:  This  estimate is intended for use only
during the 2016 Legislative Session. It is Fiscal  Note  2016-24,  dated
April 25, 2016 prepared by the Chief Actuary of the New York City Police
Pension Fund.