S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9776
 
                           I N  A S S E M B L Y
 
                             February 7, 2018
                                ___________
 
 Introduced by M. of A. ABBATE -- read once and referred to the Committee
   on Governmental Employees
 
 AN  ACT  to  amend  the  administrative code of the city of New York, in
   relation to promotions of lieutenants
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section  1.  Section  14-114 of the administrative code of the city of
 New York is amended by adding a new subdivision d to read as follows:
   D. WHEN A LIEUTENANT SHALL HAVE SERVED IN THE RANK OF LIEUTENANT FOR A
 PERIOD OF FIFTEEN YEARS, HE OR SHE SHALL HAVE THE SAME RIGHTS IN RESPECT
 TO THE POLICE PENSION FUND AS A LIEUTENANT DETAILED TO ACT AS LIEUTENANT
 COMMANDER DETECTIVE SQUAD OR LIEUTENANT SPECIAL ASSIGNMENT.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: The enactment  of  this  proposed  legislation  would
 amend Administrative Code of the City of New York (ACCNY) Section 14-114
 to  allow  for  a Lieutenant of the New York City Police Department, who
 has been a Lieutenant for at least 15 years, to have the same rights  in
 respect  to the New York City Police Pension Fund (POLICE) as a Lieuten-
 ant detailed to act as a lieutenant commander detective squad  or  lieu-
 tenant special assignment.
   IMPACT  ON  BENEFITS  PAYABLE:  The  proposed legislation would permit
 Lieutenants, who have served in the rank of Lieutenant for at  least  15
 years,  to have their pension calculations based on a higher-grade sala-
 ry.
   A Lieutenant, assuming a service retirement benefit with 20  years  of
 service  (15 of which was in the title of a Lieutenant), who would bene-
 fit under this  proposed  legislation,  if  enacted,  would  receive  an
 increase  in  their  annual  pension  benefit, due to the assumed higher
 salary grade and overtime, of approximately $7,000 per year.
   Based on this increase and an estimate of the number of POLICE members
 that are expected to be impacted by this change, it is estimated that if
 this proposed legislation is enacted,  the  annual  increase  in  POLICE
 pension benefits paid will be approximately $115,000 per year.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD06507-03-8

 A. 9776                             2
 
   Effective Date for this proposed legislation: Upon enactment.
   FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES (APV): With respect to the
 Lieutenants  who  would  be  impacted  by this proposed legislation, the
 enactment of this proposed legislation would increase the APV  of  Bene-
 fits (APVB) by approximately $1.5 million.
   FINANCIAL  IMPACT  -  EMPLOYER  CONTRIBUTIONS:  In accordance with the
 ACCNY  Section  13.638.2(k-2),  new  Unfunded  Accrued  Liability  (UAL)
 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. Since the number  of  Lieutenants  that
 will  retire  with  15  or more years in rank cannot be known in advance
 with credibility, the APVB due to this legislation has been  treated  as
 an  actuarial  loss at the affected members' retirement. These actuarial
 losses were amortized over a 15-year period (14 payments under the  One-
 Year  Lag  Methodology)  using  level dollar payments for the purpose of
 this Fiscal Note.
   Based on the assumption that the first full group of retirees impacted
 by this legislation would occur during Fiscal Year 2019  and  the  esti-
 mated  increase  in  APVB  of  $1.5  million,  the estimated increase in
 employer contributions would  be  approximately  $175,000  beginning  in
 Fiscal  Year 2021. Future years' costs in addition to the aforementioned
 cost would depend on the number  of  retirees  that  benefit  under  the
 legislation amongst other factors.
   CENSUS  DATA:  These  estimates are based on data provided by the NYPD
 Lieutenants Benevolent Association which was not audited but was checked
 for reasonableness. Below is a summary of the data provided:
   Salary
   Lieutenant Commander of Detective Squad and Lieutenant Special Assign-
 ment - $134,067
   Lieutenant - $121,874
   Lieutenants who retired with 15+ years in rank - 33 retired from Janu-
 ary 1, 2016 through January 3, 2018.
   ACTUARIAL ASSUMPTIONS AND METHODS: The  additional  employer  contrib-
 utions presented herein have been calculated based on the same actuarial
 assumptions  and methods in effect for the June 30, 2016 (Lag) actuarial
 valuations used to determine the Preliminary Fiscal Year  2018  employer
 contributions  of  POLICE. Please note these assumptions and methods are
 subject to change as this valuation is not considered  final  until  the
 end of the Fiscal Year 2018.
   For  purposes  of analyzing the impact of the proposed legislation, it
 was assumed that the benefit impacted by the increase in salary would be
 a service benefit based on 20 years of service.  The  ultimate  employer
 cost  for  this proposed legislation would be based on the number, ages,
 years of service, and salary of  those  Lieutenants,  who  retire  after
 serving in the rank of Lieutenant for at least 15 years.
   STATEMENT  OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu-
 ary for, and independent of, the New York City  Retirement  Systems  and
 Pension  Funds.  I  am a Fellow of the Society of Actuaries, an Enrolled
 Actuary under the Employee Retirement Income and Security  Act  of  1974
 (ERISA),  a Member of the American Academy of Actuaries, and a Fellow of
 the Conference of Consulting Actuaries. I meet the Qualification  Stand-
 ards  of the American Academy of Actuaries to render the actuarial opin-
 ion contained herein. To the best of my knowledge, the results contained
 herein have been prepared in accordance with generally accepted actuari-
 al principles and procedures, and with the Actuarial Standards of  Prac-
 tice issued by the Actuarial Standards Board.

 A. 9776                             3
 
   FISCAL NOTE IDENTIFICATION: This Fiscal Note 2018-03 dated January 31,
 2018,  was  prepared  by  the Chief Actuary for the New York City Police
 Pension Fund. This estimate is intended for use  only  during  the  2018
 Legislative Session.