LBD15237-03-6
A. 10055 2
adjustment effective on the ensuing April first. For the purpose of
calculation a member's primary federal social security retirement or
disability benefit, wages shall, in any calendar year, be limited to the
portion of the member's wages which would be subject to tax under
section three thousand one hundred twenty-one of the internal revenue
code of nineteen hundred fifty-four, or any predecessor or successor
provision relating thereto, if such member was employed by a private
employer. For members who first become members of the New York state and
local employees' retirement system on or after the effective date of the
chapter of the laws of two thousand twelve which amended this subdivi-
sion, the following items shall not be included in the definition of
wages: (a) wages in excess of the annual salary paid to the governor
pursuant to section three of article four of the state constitution, (b)
lump sum payments for deferred compensation, sick leave, accumulated
vacation or other credits for time not worked, (c) any form of termi-
nation pay, (d) any additional compensation paid in anticipation of
retirement, and (e) in the case of employees who receive wages from
three or more employers in a twelve month period, the wages paid by the
third and each successive employer. FOR NEW YORK CITY ENHANCED PLAN
MEMBERS WHO RECEIVE THE ORDINARY DISABILITY BENEFIT PROVIDED FOR IN
SUBDIVISION C-1 OF SECTION FIVE HUNDRED SIX OF THIS ARTICLE OR THE ACCI-
DENTAL DISABILITY BENEFIT PROVIDED FOR IN PARAGRAPH THREE OF SUBDIVISION
C OF SECTION FIVE HUNDRED SEVEN OF THIS ARTICLE, THE FOLLOWING ITEMS
SHALL NOT BE INCLUDED IN THE DEFINITION OF WAGES: (A) LUMP SUM PAYMENTS
FOR DEFERRED COMPENSATION, SICK LEAVE, ACCUMULATED VACATION OR OTHER
CREDITS FOR TIME NOT WORKED; (B) ANY FORM OF TERMINATION PAY; (C) ANY
ADDITIONAL COMPENSATION PAID IN ANTICIPATION OF RETIREMENT; AND (D) IN
THE CASE OF EMPLOYEES WHO RECEIVE WAGES FROM THREE OR MORE EMPLOYERS IN
A TWELVE MONTH PERIOD, THE WAGES PAID BY THE THIRD AND EACH SUCCESSIVE
EMPLOYER.
S 2. Section 501 of the retirement and social security law is amended
by adding a new subdivision 28 to read as follows:
28. "NEW YORK CITY ENHANCED PLAN MEMBER" SHALL MEAN (A) A NEW YORK
CITY POLICE/FIRE REVISED PLAN MEMBER WHO BECOMES SUBJECT TO THE
PROVISIONS OF THIS ARTICLE ON OR AFTER JUNE FIRST, TWO THOUSAND SIXTEEN
AND WHO IS A MEMBER OF THE NEW YORK CITY FIRE DEPARTMENT PENSION FUND,
(B) A POLICE/FIRE MEMBER WHO IS A MEMBER OF THE NEW YORK CITY FIRE
DEPARTMENT PENSION FUND AND WHO MAKES AN ELECTION, WHICH SHALL BE IRREV-
OCABLE AND SHALL BE DULY EXECUTED AND FILED WITH THE ADMINISTRATIVE HEAD
OF SUCH PENSION FUND NO LATER THAN ONE HUNDRED TWENTY DAYS AFTER THE
EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND SIXTEEN WHICH
ADDED THIS SUBDIVISION, TO BE SUBJECT TO THE PROVISIONS OF THIS ARTICLE
RELATED TO NEW YORK CITY ENHANCED PLAN MEMBERS, OR (C) A NEW YORK CITY
POLICE/FIRE REVISED PLAN MEMBER WHO BECAME SUBJECT TO THE PROVISIONS OF
THIS ARTICLE BEFORE JUNE FIRST, TWO THOUSAND SIXTEEN, WHO IS A MEMBER OF
THE NEW YORK CITY FIRE DEPARTMENT PENSION FUND, AND WHO MAKES AN
ELECTION, WHICH SHALL BE IRREVOCABLE AND SHALL BE DULY EXECUTED AND
FILED WITH THE ADMINISTRATIVE HEAD OF SUCH PENSION FUND NO LATER THAN
ONE HUNDRED TWENTY DAYS AFTER THE EFFECTIVE DATE OF THE CHAPTER OF THE
LAWS OF TWO THOUSAND SIXTEEN WHICH ADDED THIS SUBDIVISION, TO BE SUBJECT
TO THE PROVISIONS OF THIS ARTICLE RELATED TO NEW YORK CITY ENHANCED PLAN
MEMBERS.
S 3. Section 506 of the retirement and social security law is amended
by adding a new subdivision c-1 to read as follows:
C-1. NOTWITHSTANDING THE PROVISIONS OF SUBDIVISIONS A AND B OF THIS
SECTION, THE ORDINARY DISABILITY BENEFIT FOR A NEW YORK CITY ENHANCED
A. 10055 3
PLAN MEMBER IN ACTIVE SERVICE SHALL BE A PENSION EQUAL TO THE GREATER OF
(I) THIRTY-THREE AND ONE-THIRD PERCENT OF FINAL AVERAGE SALARY, OR (II)
TWO PERCENT OF FINAL AVERAGE SALARY TIMES YEARS OF CREDITED SERVICE NOT
IN EXCESS OF THE MAXIMUM YEARS OF SERVICE FOR COMPUTING SERVICE RETIRE-
MENT, SUCH BENEFIT IN EACH CASE TO BE REDUCED BY ONE HUNDRED PERCENT OF
ANY WORKERS' COMPENSATION BENEFITS PAYABLE.
S 4. Subdivisions c and e of section 507 of the retirement and social
security law, subdivision c as amended by chapter 18 of the laws of
2012, and subdivision e as added by chapter 890 of the laws of 1976, are
amended to read as follows:
c. 1. In the case of a member of a retirement system other than the
New York state and local employees' retirement system, the New York
state teachers' retirement system, the New York city employees' retire-
ment system, the New York city board of education retirement system or
the New York city teachers' retirement system, or in the case of a
member of the New York city employees' retirement system who is a New
York city uniformed correction/sanitation revised plan member or an
investigator revised plan member, the accidental disability benefit
hereunder shall be a pension equal to two percent of final average sala-
ry times years of credited service which such member would have attained
if employment had continued until such member's full escalation date,
not in excess of the maximum years of service creditable for the normal
service retirement benefit, less (i) fifty percent of the primary social
security disability benefit, if any, as provided in section five hundred
eleven of this article, and (ii) one hundred percent of any workers'
compensation benefits payable. THE PROVISIONS OF THIS PARAGRAPH SHALL
NOT APPLY TO NEW YORK CITY ENHANCED PLAN MEMBERS.
2. In the case of a member of the New York state and local employees'
retirement system, the New York state teachers' retirement system, the
New York city employees' retirement system (other than a New York city
uniformed correction/sanitation revised plan member or an investigator
revised plan member), the New York city board of education retirement
system or the New York city teachers' retirement system, the accidental
disability benefit hereunder shall be a pension equal to sixty percent
of final average salary, less (i) fifty percent of the primary social
security disability benefit, if any, as provided in section five hundred
eleven of this article, and (ii) one hundred percent of any workers'
compensation benefits payable. In the event a disability retiree from
any retirement system is not eligible for the primary social security
disability benefit and continues to be eligible for disability benefits
hereunder, such disability benefit shall be reduced by one-half of such
retiree's primary social security retirement benefit, commencing at age
sixty-two, in the same manner as provided for service retirement bene-
fits under section five hundred eleven of this article.
3. IN THE CASE OF A NEW YORK CITY ENHANCED PLAN MEMBER, THE ACCIDENTAL
DISABILITY BENEFIT HEREUNDER SHALL BE A PENSION EQUAL TO SEVENTY-FIVE
PERCENT OF FINAL AVERAGE SALARY, LESS ONE HUNDRED PERCENT OF ANY WORK-
ERS' COMPENSATION BENEFITS PAYABLE.
e. A member, EXCEPT A NEW YORK CITY ENHANCED PLAN MEMBER, shall not be
eligible to apply for disability benefits under section five hundred six
or this section unless such member shall, at the time of application,
sign a waiver prepared by the retirement system and approved by the
administrative head of such system pursuant to which such member agrees
to waive the benefits of any statutory presumption relating to the cause
of disability or eligibility for disability benefits, and a determi-
A. 10055 4
nation of eligibility for benefits hereunder shall be made without
regard to any such statutory provision.
S 5. Section 507 of the retirement and social security law is amended
by adding a new subdivision j to read as follows:
J. NOTWITHSTANDING ANY INCONSISTENT PROVISION OF THIS CHAPTER OR ANY
LAW, ANY CONDITION OF IMPAIRMENT OF HEALTH CAUSED BY DISEASES OF THE
LUNG, RESULTING IN DISABILITY OR DEATH TO A MEMBER OF THE NEW YORK CITY
FIRE DEPARTMENT PENSION FUND WHO IS A NEW YORK CITY ENHANCED PLAN
MEMBER, WHO SUCCESSFULLY PASSED A PHYSICAL EXAMINATION ON ENTRY INTO
SERVICE AS A FIREFIGHTER, WHICH EXAMINATION FAILED TO DISCLOSE EVIDENCE
OF ANY DISEASE OR OTHER IMPAIRMENT OF THE LUNG, SHALL BE PRESUMPTIVE
EVIDENCE THAT IT WAS INCURRED IN THE PERFORMANCE AND DISCHARGE OF DUTY,
UNLESS THE CONTRARY BE PROVED BY COMPETENT EVIDENCE.
S 6. Section 510 of the retirement and social security law is amended
by adding a new subdivision i to read as follows:
I. NOTWITHSTANDING ANY OTHER PROVISION OF THIS ARTICLE, THE ANNUAL
ESCALATION PROVIDED IN THIS SECTION SHALL NOT APPLY TO THE ORDINARY
DISABILITY BENEFIT FOR NEW YORK CITY ENHANCED PLAN MEMBERS PROVIDED FOR
IN SUBDIVISION C-1 OF SECTION FIVE HUNDRED SIX OF THIS ARTICLE OR THE
ACCIDENTAL DISABILITY BENEFIT FOR NEW YORK CITY ENHANCED PLAN MEMBERS
PROVIDED FOR IN PARAGRAPH THREE OF SUBDIVISION C OF SECTION FIVE HUNDRED
SEVEN OF THIS ARTICLE. SUCH MEMBERS WHO RECEIVE SUCH ORDINARY DISABILITY
BENEFIT OR ACCIDENTAL DISABILITY BENEFIT SHALL HAVE A COST-OF-LIVING
ADJUSTMENT FOR SUCH BENEFIT, WHICH SHALL BE COMPUTED IN THE SAME MANNER
AS PROVIDED FOR BY SECTION 13-696 OF THE ADMINISTRATIVE CODE OF THE CITY
OF NEW YORK.
S 7. Section 511 of the retirement and social security law is amended
by adding a new subdivision g to read as follows:
G. THIS SECTION SHALL NOT APPLY TO A NEW YORK CITY ENHANCED PLAN
MEMBER WHO RECEIVES THE ORDINARY DISABILITY BENEFIT PROVIDED FOR IN
SUBDIVISION C-1 OF SECTION FIVE HUNDRED SIX OF THIS ARTICLE OR THE ACCI-
DENTAL DISABILITY BENEFIT PROVIDED FOR IN PARAGRAPH THREE OF SUBDIVISION
C OF SECTION FIVE HUNDRED SEVEN OF THIS ARTICLE.
S 8. Subdivision a of section 512 of the retirement and social securi-
ty law, as amended by chapter 18 of the laws of 2012, is amended to read
as follows:
a. A member's final average salary shall be the average wages earned
by such a member during any three consecutive years which provide the
highest average wage; provided, however, if the wages earned during any
year included in the period used to determine final average salary
exceeds that of the average of the previous two years by more than ten
percent, the amount in excess of ten percent shall be excluded from the
computation of final average salary. Notwithstanding the preceding
provisions of this subdivision to the contrary, for a member who first
becomes a member of the New York state and local employees' retirement
system on or after April first, two thousand twelve, or for a New York
city police/fire revised plan member, A NEW YORK CITY ENHANCED PLAN
MEMBER WHO RECEIVES THE ORDINARY DISABILITY BENEFIT PROVIDED FOR IN
SUBDIVISION C-1 OF SECTION FIVE HUNDRED SIX OF THIS ARTICLE OR THE ACCI-
DENTAL DISABILITY BENEFIT PROVIDED FOR IN PARAGRAPH THREE OF SUBDIVISION
C OF SECTION FIVE HUNDRED SEVEN OF THIS ARTICLE, a New York city
uniformed correction/sanitation revised plan member or an investigator
revised plan member, a member's final average salary shall be the aver-
age wages earned by such a member during any five consecutive years
which provide the highest average wage; provided, however, if the wages
earned during any year included in the period used to determine final
A. 10055 5
average salary exceeds that of the average of the previous four years by
more than ten percent, the amount in excess of ten percent shall be
excluded from the computation of final average salary. In determining
final average salary pursuant to any provision of this subdivision,
where the period used to determine final average salary is the period
which immediately precedes the date of retirement, any month or months
(not in excess of twelve) which would otherwise be included in computing
final average salary but during which the member was on authorized leave
of absence at partial pay or without pay shall be excluded from the
computation of final average salary and the month or an equal number of
months immediately preceding such period shall be substituted in lieu
thereof.
S 9. Section 517 of the retirement and social security law is amended
by adding a new subdivision h to read as follows:
H. NOTWITHSTANDING ANY INCONSISTENT PROVISION OF SUBDIVISION A OF THIS
SECTION, NEW YORK CITY ENHANCED PLAN MEMBERS SHALL, AS OF THE EFFECTIVE
DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND SIXTEEN WHICH ADDED THIS
SUBDIVISION, CONTRIBUTE SIX PERCENT OF ANNUAL WAGES TO THE PENSION FUND
IN WHICH THEY HAVE MEMBERSHIP.
S 10. Notwithstanding any other law to the contrary, any condition of
impairment of health caused by diseases of the lung, diseases of the
heart, or by a stroke, resulting in disability or death to a medical
officer of the fire department of the city of New York who is a member
of the New York city fire department pension fund, who is presently
employed, and who shall have sustained such disability while so
employed, shall be presumptive evidence that it was incurred in the
performance and discharge of duty, unless the contrary be proved by
competent evidence, provided that (i) such officer successfully passed a
physical examination for entry into public service, or authorized
release of all relevant medical records, if such officer did not undergo
a physical examination for entry into public service, and (ii) there is
no evidence of the qualifying condition or impairment of health that
formed the basis for the disability in such physical examination for
entry into public service or in the relevant medical records, prior to
such officer's entry into public service.
S 11. Notwithstanding any other law to the contrary, any medical offi-
cer of the fire department of the city of New York who is a member of
the New York city fire department pension fund, who is presently
employed, and who contracts HIV (where the officer may have been exposed
to a bodily fluid of a person under his or her care or treatment, or
while the officer examined, transported, rescued or otherwise had
contact with such person, in the performance of his or her duties),
tuberculosis or hepatitis, who shall have contracted such disease while
so employed, will be presumed to have contracted such disease as a
natural or proximate result of an accidental injury received in the
performance and discharge of his or her duties and not as a result of
his or her willful negligence, unless the contrary be proved by compe-
tent evidence, provided that (i) such officer successfully passed a
physical examination for entry into public service, or authorized
release of all relevant medical records, if such officer did not undergo
a physical examination for entry into public service, and (ii) there is
no evidence of the qualifying disease that formed the basis for the
disability in such physical examination for entry into public service or
in the relevant medical records, prior to such officer's entry into
public service.
A. 10055 6
S 12. Notwithstanding any other law to the contrary, any condition of
impairment of health caused by (a) any condition of cancer affecting the
lymphatic, digestive, hematological, urinary, neurological, breast,
reproductive, or prostate systems or (b) melanoma resulting in total or
partial disability or death, resulting in disability or death to a
medical officer of the fire department of the city of New York who is a
member of the New York city fire department pension fund, who is pres-
ently employed, and who shall have sustained such disability while so
employed, shall be presumptive evidence that it was incurred in the
performance and discharge of duty, unless the contrary be proved by
competent evidence; provided that (i) such officer successfully passed a
physical examination for entry into public service, or authorized
release of all relevant medical records, if such officer did not undergo
a physical examination for entry into public service, and (ii) there is
no evidence of the qualifying condition or impairment of health that
formed the basis for the disability in such physical examination for
entry into public service or in the relevant medical records, prior to
such officer's entry into public service.
S 13. Section 81 of chapter 18 of the laws of 2012 shall not apply to
this act.
S 14. This act shall take effect immediately.
FISCAL NOTE.-- Pursuant to Legislative Law, Section 50:
PROVISIONS OF PROPOSED LEGISLATION: With respect to the New York Fire
Department Pension Fund (FIRE), the proposed legislation would amend
Sections 501, 506, 507, 510, 511, 512, and 517 of the Retirement and
Social Security Law (RSSL) to provide changes to the Accidental Disabil-
ity Retirement (ADR) and Ordinary Disability Retirement (ODR) benefit
provisions of Tier 3 and Revised Tier 3 FIRE members. The proposed
legislation would also change the eligibility requirements for Medical
Officers of FIRE to utilize applicable statutory presumptions for
purposes of ADR.
The Effective Date of the proposed legislation would be the date of
enactment.
For purposes of this Fiscal Note, all FIRE members subject to Article
14 of the RSSL will be referred to as "Tier 3 FIRE Members." Of those
Tier 3 FIRE Members who have a date of membership prior to April 1,
2012, they will be referred to as "Original Tier 3 FIRE Members." Of
those Tier 3 FIRE Members who have a date of membership on or after
April 1, 2012, they will be referred to as "Revised Tier 3 FIRE
Members." Existing Tier 3 FIRE Members who elect and receive the bene-
fits of this proposed legislation, and members who join FIRE after the
effective date of this proposed legislation and receive such benefits
will be referred to as "Affected Members."
IMPACT ON ODR BENEFITS PAYABLE: The current ODR benefits for Tier 3
FIRE Members are equal to the greater of:
* 33 1/3% of Five-Year Final Average Salary (FAS), or
* 2% of FAS multiplied by years of credited service (not in excess of
22 years),
Reduced by:
* 50% of the Primary Social Security Disability benefits (determined
under RSSL Section 511), and
* 100% of Workers' Compensation benefits (if any).
Final Average Salary is a Three-Year average (FAS3) for Original Tier
3 FIRE Members and a Five-year average (FAS5) for Revised Tier 3 FIRE
Members.
A. 10055 7
It is the understanding of the Actuary that FIRE Members are not
covered by Workers' Compensation.
Under the proposed changes the ODR benefits for Affected Members would
be revised to be equal to the greater of:
* 33 1/3% of FAS, or
* 2% of FAS multiplied by years of credited service.
In addition, the proposed legislation would NOT apply the Escalation
available under RSSL Section 510 to ODR benefits for Affected Members.
However, such ODR benefits would still be eligible for Cost-of-Living
Adjustments (COLA) under Chapter 125 of the Laws of 2000.
Tier 3 FIRE Members who are FIRE members prior to the effective date
of this proposed legislation would have the option of remaining under
the current ODR benefits or electing to be covered under the proposed
ODR benefits.
IMPACT ON ADR BENEFITS PAYABLE: The current ADR benefits for Tier 3
FIRE Members is equal to:
* 50% multiplied by FAS.
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).
It is the understanding of the Actuary that FIRE Members are not
covered by Workers' Compensation.
Under the proposed changes the eligibility requirements for ADR bene-
fits for Tier 3 FIRE Members would be the same as those currently
provided, with the exception that they could be eligible for and utilize
applicable statutory presumptions (e.g., certain lung diseases) for
purposes of ADR. In addition, under the proposed legislation, Medical
Officers may satisfy the eligibility to utilize the statutory presump-
tions provided the Medical Officer authorized release of all relevant
medical records, and there is no evidence of the qualifying condition or
impairment that formed the basis for the disability in such medical
records.
Under the proposed legislation, if enacted, the ADR benefit for
Affected 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 Affected Members.
However, such ADR benefits would still be eligible for COLA under Chap-
ter 125 of the Laws of 2000.
Tier 3 FIRE Members who are FIRE 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.
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 FIRE. Under the One-Year Lag
Methodology (OYLM), the first year in which changes in benefits for
A. 10055 8
Affected Members could impact employer contributions to FIRE would be
Fiscal Year 2017.
Note that since the assumptions used in the actuarial valuation do not
distinguish between Medical Officers and other FIRE members and those
assumptions for Tier 2 members already incorporate the presumptions
available under law, there will be only a de minimis change in employer
contributions for the three medical officers who are Tier 3 members. The
increase in employer costs for providing presumptions to all medical
officers has been estimated to be approximately $100,000 to $200,000 per
year.
In accordance with ACNY Section 13.638.2(k-2), new UAAL attributable
to benefit changes are to be amortized as determined by the Actuary but
generally over the remaining working lifetime of those impacted by the
benefit changes. As of June 30, 2015, the remaining working lifetime of
the Tier 3 FIRE members is approximately 23 years. Recognizing that
these periods will decrease over time as the group of Affected Members
matures, the Actuary would likely choose to amortize the new UAAL
attributable to this proposed legislation over a 15-year to 20-year
period (between 14 and 19 payments under the OYLM Methodology). For
purposes of this Fiscal Note, the Actuary has elected to amortize the
change in UAAL over a 15-year period (14 payments).
The following Table 1 presents an estimate of the increases in the APV
of future employer contributions and in employer contributions to FIRE
for Fiscal Years 2017 through 2021 due to the changes in ODR and ADR
provisions for Affected Members and the changes in eligibility require-
ments for presumptions for FIRE Medical Officers based on the applicable
actuarial assumptions and methods noted herein:
Table 1
Estimated Financial Impact on FIRE
If Certain Revisions are Made to
Provisions for ODR and ADR Benefits for Tier 3 FIRE Members
and to Presumption Eligibility Requirements for Medical Officers
($ Millions)
Increase in APV of Increase
Fiscal Year Future Employer Contributions In Employer Contributions
2017 24.2 4.2
2018 31.2 5.5
2019 35.8 6.5
2020 39.4 7.5
2021 42.6 8.3
The estimated increases in employer contributions shown in Table 1 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 in February, 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:
A. 10055 9
* The initial, additional administrative costs of FIRE to implement
the proposed legislation.
* The potential impact if this proposed legislation were to be
extended to other public safety employees.
* 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 FIRE to determine the Preliminary
Fiscal Year 2017 employer contributions.
The 318 Tier 3 FIRE members who have a date of membership prior to
April 1, 2012 had an average age of approximately 29, average service of
approximately 2.0 years and an average salary of approximately $54,300
as of June 30, 2015. The 1,065 Tier 3 FIRE Members who have a date of
membership on or after April 1, 2012 had an average age of approximately
28, average service of approximately 0.8 years and an average salary of
approximately $47,500 as of June 30, 2015. There are 3 Tier 3 Medical
Officers in FIRE as of June 30, 2015.
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 FIRE.
In determining the change in employer contributions, the probabilities
of accidental disability used for Tier 3 FIRE members equal those
currently used for Tier 2 FIRE members.
It has been further assumed that all Tier 3 FIRE members who became
members prior to the effective date of the proposed legislation will
choose the new disability provisions.
The actuarial valuation methodology does not include a calculation of
the value of an offset for Worker's Compensation benefits for Tier 3
FIRE members as it is the understanding of the Actuary that these
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 members expected to leave
the active population to maintain a steady-state population.
For purposes of estimating the impact of Escalation for retired
Affected 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 a
1.0% minimum and 3.0% maximum) on the first $18,000 of benefit.
The following Table 2 presents the total number of active employees of
FIRE used in the projections, assuming a level work force, and the cumu-
lative number (i.e., net of withdrawals) of Tier 3 Members as of each
June 30 from 2015 through 2019.
Table 2
Surviving Actives from Census Data on June 30, 2015
and
A. 10055 10
Cumulative Tier 3 FIRE Members from 2015
Used In the Projections*
June 30 Tier 1 & 2 Tier 3 Total
2015 9,397 1,383 10,780
2016 8,827 1,953 10,780
2017 8,335 2,445 10,780
2018 7,864 2,916 10,780
2019 7,398 3,382 10,780
* Total active members included in the projections assume a level work
force based on the June 30, 2015 (Lag) actuarial valuation census data.
STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am 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 2016-26, dated
May 5, 2016 prepared by the Chief Actuary for the New York FIRE Depart-
ment Pension Fund.