Senate Bill S7979A

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  7979--A
 
                             I N  S E N A T E
 
                              March 15, 2018
                                ___________
 
 Introduced  by  Sen. SANDERS -- read twice and ordered printed, 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
 
 AN  ACT to amend the retirement and social security law and the adminis-
   trative code of the city of New York, in relation to granting  members
   of  the  city's  police  force  eligibility for retirement and pension
   based on previous service as traffic enforcement agents
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.   Section 343 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  LAW  TO  THE  CONTRARY,  A
 MEMBER OF THE NEW YORK STATE AND LOCAL POLICE AND FIRE RETIREMENT SYSTEM
 WHO PREVIOUSLY SERVED AS A NEW YORK CITY TRAFFIC ENFORCEMENT AGENT SHALL
 BE  ENTITLED  TO  RECEIVE  HIS  OR HER SERVICE CREDIT EARNED EXCLUSIVELY
 WHILE WORKING IN THAT CAPACITY IN THE NEW YORK CITY  EMPLOYEES'  RETIRE-
 MENT  SYSTEM TO THE NEW YORK STATE POLICE AND FIRE RETIREMENT SYSTEM AND
 MAY BUY BACK AND RECEIVE SERVICE CREDIT FOR  THE  PERIOD  OF  TIME  SUCH
 MEMBER  WAS  PREVIOUSLY  EMPLOYED AS A NEW YORK CITY TRAFFIC ENFORCEMENT
 AGENT. PROVIDED, HOWEVER, THAT A MEMBER SHALL NOT  UTILIZE  THE  BUYBACK
 PROVISION  UNDER  THIS SUBDIVISION TO REVERT TO A PREVIOUS ORIGINAL DATE
 OF MEMBERSHIP DIFFERENT THAN THE ORIGINAL DATE OF MEMBERSHIP IN THE  NEW
 YORK STATE AND LOCAL POLICE AND FIRE RETIREMENT SYSTEM.
   § 2. The retirement and social security law is amended by adding a new
 section 381-c to read as follows:
   §  381-C. SERVICE CREDIT FOR MEMBERS WITH PREVIOUS SERVICE AS NEW YORK
 CITY TRAFFIC ENFORCEMENT AGENTS. NOTWITHSTANDING ANY OTHER PROVISION  OF
 LAW TO THE CONTRARY, A MEMBER OF THE NEW YORK STATE AND LOCAL POLICE AND
 FIRE  RETIREMENT SYSTEM ENROLLED IN A PLAN PURSUANT TO THE PROVISIONS OF
 THIS TITLE WHO PREVIOUSLY SERVED AS A NEW YORK CITY TRAFFIC  ENFORCEMENT
 AGENT  SHALL  BE  ENTITLED  TO TRANSFER HIS OR HER SERVICE CREDIT EARNED
 EXCLUSIVELY WHILE WORKING IN THAT CAPACITY IN THE NEW YORK CITY  EMPLOY-
 EES'  RETIREMENT SYSTEM TO THE NEW YORK STATE POLICE AND FIRE RETIREMENT
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD14029-04-8

 S. 7979--A                          2

 SYSTEM AND MAY BUY BACK AND RECEIVE SERVICE CREDIT  FOR  THE  PERIOD  OF
 TIME  SUCH  MEMBER  WAS  PREVIOUSLY  EMPLOYED AS A NEW YORK CITY TRAFFIC
 ENFORCEMENT AGENT. PROVIDED, HOWEVER, THAT A MEMBER  SHALL  NOT  UTILIZE
 THE  BUYBACK  PROVISION  UNDER  THIS  SECTION  TO  REVERT  TO A PREVIOUS
 ORIGINAL DATE OF MEMBERSHIP DIFFERENT THAN THE ORIGINAL DATE OF  MEMBER-
 SHIP IN THE NEW YORK STATE AND LOCAL POLICE AND FIRE RETIREMENT SYSTEM.
   § 3. The retirement and social security law is amended by adding a new
 section 446-a to read as follows:
   §  446-A.  TRANSFER  OF MEMBERS OF THE NEW YORK CITY POLICE DEPARTMENT
 FROM TRAFFIC ENFORCEMENT TO THE POLICE FORCE. A. THE TIME  SERVED  AS  A
 MEMBER  OF THE CITY'S TRAFFIC ENFORCEMENT WHO HAS BECOME A MEMBER OF THE
 POLICE FORCE OF THE CITY OF NEW YORK, WHETHER BY TRANSFER OR AS A RESULT
 OF A COMPETITIVE EXAMINATION AND APPOINTMENT, AND WHO IS STILL A  MEMBER
 OF  THE  POLICE  FORCE  OF  THE  CITY OF NEW YORK, SHALL BE INCLUDED AND
 COUNTED AS SERVICE IN THE POLICE FORCE FOR THE POLICE DEPARTMENT OF  THE
 CITY  OF  NEW  YORK IN DETERMINING RETIREMENT AND PENSION AS PROVIDED IN
 THIS SECTION, PROVIDED, HOWEVER, THAT NO PERSON BECOMING A MEMBER OF THE
 POLICE DEPARTMENT OF THE CITY OF NEW YORK IN THE MANNER HEREIN PROVIDED,
 SHALL BE ENTITLED TO PARTICIPATE IN THE BENEFITS OF THE  POLICE  PENSION
 FUND, UNLESS HE OR SHE SHALL PAY INTO SUCH FUND THE TOTAL SUM THAT HE OR
 SHE  WOULD HAVE BEEN REQUIRED TO PAY IN ORDER TO PARTICIPATE THEREIN HAD
 HE OR SHE BEEN A MEMBER OF SUCH FORCE FROM THE TIME HE  OR  SHE  ENTERED
 THE  SERVICE  OF  TRAFFIC  ENFORCEMENT.  THESE  PROVISIONS  SHALL NOT BE
 SUBJECT TO ANY RESTRICTION RELATIVE TO TRANSFERS CONTAINED IN THE  CIVIL
 SERVICE LAW OR IN THE RULES AND REGULATIONS OF THE CIVIL SERVICE COMMIS-
 SION OF THE STATE, OR ANY SUBDIVISION THEREOF.
   B.  NOTWITHSTANDING  ANY  OTHER  PROVISIONS  OF LAW TO THE CONTRARY, A
 MEMBER OF THE NEW YORK CITY POLICE DEPARTMENT SHALL BE ENTITLED  TO  BUY
 BACK  AND  RECEIVE SERVICE CREDIT FOR THE PERIOD OF TIME SUCH MEMBER WAS
 PREVIOUSLY EMPLOYED AS A NEW YORK CITY TRAFFIC ENFORCEMENT AGENT  PURSU-
 ANT  TO  SUBDIVISION A OF THIS SECTION. PROVIDED, HOWEVER, THAT A MEMBER
 SHALL NOT UTILIZE THE BUYBACK PROVISION UNDER THIS SECTION TO REVERT  TO
 A  PREVIOUS ORIGINAL DATE OF MEMBERSHIP DIFFERENT THAN THE ORIGINAL DATE
 OF MEMBERSHIP IN THE POLICE PENSION FUND OF THE CITY OF NEW YORK.
   § 4. The retirement and social security law is amended by adding a new
 section 517-d to read as follows:
   § 517-D. TRANSFER OF MEMBERS OF THE NEW YORK  CITY  POLICE  DEPARTMENT
 FROM  TRAFFIC  ENFORCEMENT  TO THE POLICE FORCE. A. THE TIME SERVED AS A
 MEMBER OF THE CITY'S TRAFFIC ENFORCEMENT WHO HAS BECOME A MEMBER OF  THE
 POLICE  FORCE  OF  THE  CITY  WHO SERVED AS A TRAFFIC ENFORCEMENT AGENT,
 WHETHER BY TRANSFER OR AS A RESULT  OF  A  COMPETITIVE  EXAMINATION  AND
 APPOINTMENT,  AND  WHO IS STILL A MEMBER OF THE POLICE FORCE OF THE CITY
 OF NEW YORK, SHALL BE INCLUDED AND COUNTED  AS  SERVICE  IN  THE  POLICE
 FORCE  FOR  THE POLICE DEPARTMENT OF THE CITY OF NEW YORK IN DETERMINING
 RETIREMENT AND PENSION AS PROVIDED IN THIS SECTION,  PROVIDED,  HOWEVER,
 THAT NO PERSON BECOMING A MEMBER OF THE POLICE DEPARTMENT OF THE CITY OF
 NEW YORK IN THE MANNER HEREIN PROVIDED, SHALL BE ENTITLED TO PARTICIPATE
 IN  THE  BENEFITS OF THE POLICE PENSION FUND, UNLESS HE OR SHE SHALL PAY
 INTO SUCH FUND THE TOTAL SUM THAT HE OR SHE WOULD HAVE BEEN REQUIRED  TO
 PAY  IN ORDER TO PARTICIPATE THEREIN HAD HE OR SHE BEEN A MEMBER OF SUCH
 FORCE FROM THE TIME HE OR SHE ENTERED THE SERVICE  OF  TRAFFIC  ENFORCE-
 MENT.  THESE PROVISIONS SHALL NOT BE SUBJECT TO ANY RESTRICTION RELATIVE
 TO TRANSFERS CONTAINED IN THE CIVIL SERVICE LAW  OR  IN  THE  RULES  AND
 REGULATIONS  OF THE CIVIL SERVICE COMMISSION OF THE STATE, OR ANY SUBDI-
 VISION THEREOF.

 S. 7979--A                          3
 
   B. NOTWITHSTANDING ANY OTHER PROVISIONS OF  LAW  TO  THE  CONTRARY,  A
 MEMBER  OF  THE NEW YORK CITY POLICE DEPARTMENT SHALL BE ENTITLED TO BUY
 BACK AND RECEIVE SERVICE CREDIT FOR THE PERIOD OF TIME SUCH  MEMBER  WAS
 PREVIOUSLY  EMPLOYED AS A NEW YORK CITY TRAFFIC ENFORCEMENT AGENT PURSU-
 ANT  TO  SUBDIVISION A OF THIS SECTION. PROVIDED, HOWEVER, THAT A MEMBER
 SHALL NOT UTILIZE THE BUYBACK PROVISION UNDER THIS SECTION TO REVERT  TO
 A  PREVIOUS ORIGINAL DATE OF MEMBERSHIP DIFFERENT THAN THE ORIGINAL DATE
 OF MEMBERSHIP IN THE POLICE PENSION FUND OF THE CITY OF NEW YORK.
   § 5. The administrative code of the city of New  York  is  amended  by
 adding a new section 13-633 to read as follows:
   §  13-633  TRANSFER  OF MEMBERS OF THE NEW YORK CITY POLICE DEPARTMENT
 FROM TRAFFIC ENFORCEMENT TO THE POLICE FORCE. A. THE TIME  SERVED  AS  A
 MEMBER  OF THE CITY'S TRAFFIC ENFORCEMENT WHO HAS BECOME A MEMBER OF THE
 POLICE FORCE OF THE CITY WHO SERVED  AS  A  TRAFFIC  ENFORCEMENT  AGENT,
 WHETHER  BY  TRANSFER  OR  AS  A RESULT OF A COMPETITIVE EXAMINATION AND
 APPOINTMENT, AND WHO IS STILL A MEMBER OF THE POLICE FORCE OF THE  CITY,
 SHALL  BE  INCLUDED  AND  COUNTED AS SERVICE IN THE POLICE FORCE FOR THE
 POLICE DEPARTMENT OF THE CITY IN DETERMINING RETIREMENT AND PENSION   AS
 PROVIDED  IN  THIS  CODE,  PROVIDED,  HOWEVER, THAT NO PERSON BECOMING A
 MEMBER OF THE POLICE  DEPARTMENT  OF  THE  CITY  IN  THE  MANNER  HEREIN
 PROVIDED, SHALL BE ENTITLED TO PARTICIPATE IN THE BENEFITS OF THE POLICE
 PENSION  FUND,  UNLESS  HE OR SHE SHALL PAY INTO SUCH FUND THE TOTAL SUM
 THAT HE OR SHE WOULD HAVE BEEN REQUIRED TO PAY IN ORDER  TO  PARTICIPATE
 THEREIN  HAD  HE  OR SHE BEEN A MEMBER OF SUCH FORCE FROM THE TIME HE OR
 SHE ENTERED THE SERVICE OF TRAFFIC ENFORCEMENT. THESE  PROVISIONS  SHALL
 NOT BE SUBJECT TO ANY RESTRICTION RELATIVE TO TRANSFERS CONTAINED IN THE
 CIVIL  SERVICE  LAW OR IN THE RULES AND REGULATIONS OF THE CIVIL SERVICE
 COMMISSION OF THE STATE, OR ANY SUBDIVISION THEREOF.
   B. NOTWITHSTANDING ANY OTHER PROVISIONS OF LAW, A MEMBER  OF  THE  NEW
 YORK  CITY  POLICE  DEPARTMENT SHALL BE ENTITLED TO BUY BACK AND RECEIVE
 SERVICE CREDIT FOR  THE  PERIOD  OF  TIME  SUCH  MEMBER  WAS  PREVIOUSLY
 EMPLOYED AS A NEW YORK CITY TRAFFIC ENFORCEMENT AGENT PURSUANT TO SUBDI-
 VISION  A  OF THIS SECTION.   PROVIDED, HOWEVER, THAT A MEMBER SHALL NOT
 UTILIZE THE BUYBACK PROVISION UNDER THIS SECTION TO REVERT TO A PREVIOUS
 ORIGINAL DATE OF MEMBERSHIP DIFFERENT THAN THE ORIGINAL DATE OF  MEMBER-
 SHIP IN THE POLICE PENSION FUND.
   §  6.  This  act shall take effect on the thirtieth day after it shall
 have become a law.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would modify the laws governing certain New York City public
 retirement systems in regards to granting creditable service for employ-
 ment as a New York City traffic enforcement agent.
   This bill would also affect the New York State and  Local  Police  and
 Fire  Retirement  System  (NYSLPFRS). Members who transfer into NYSLPFRS
 with traffic enforcement agent service would receive creditable  service
 towards  retirement under a special 20 or 25 year retirement plan in the
 NYSLPFRS. Currently, traffic enforcement agent service is not creditable
 service in a 20 or 25 year retirement plan in the NYSLPFRS.
   If this bill is  enacted,  insofar  as  this  bill  would  affect  the
 NYSLPFRS,  for  such members who transfer to the NYSLPFRS in the future,
 there would be no cost to the NYSLPFRS.
   However, there would be a cost for any member who has  already  trans-
 ferred to the NYSLPFRS and would receive additional service credit under
 a  special  20  or 25 year retirement plan. The cost would depend on the
 age, service, salary and plan of such affected members. IN  all  likeli-
 hood, very few members would be affected. Costs for any affected members

 S. 7979--A                          4
 
 would  be  borne  by  the  State  of  New York and all the participating
 employers in the NYSLPFRS.
   Summary of relevant resources:
   The  membership  data  used  in  measuring  the impact of the proposed
 change was the same as that used in the March 31, 2017  actuarial  valu-
 ation.    Distributions  and  other  statistics can be found in the 2017
 Report of the  Actuary  and  the  2017  Comprehensive  Annual  Financial
 Report.
   The  actuarial assumptions and methods used are described in the 2015,
 2016 and 2017 Annual Report to the Comptroller on Actuarial Assumptions,
 and the Codes Rules and Regulations of the State of New York: Audit  and
 Control.
   The Market Assets and GASB Disclosures are found in the March 31, 2017
 New  York  State  and  Local  Retirement System Financial Statements and
 Supplementary Information.
   I am a member of the American Academy of Actuaries and meet the Quali-
 fication Standards to render the actuarial opinion contained herein.
   This estimate, dated January 19,  2018,  and  intended  for  use  only
 during  the  2018  Legislative  Session,  is  Fiscal  Note  No. 2018-19,
 prepared by the Actuary for the New  York  State  and  Local  Retirement
 System.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   With respect to the New York City (City) Police Pension Fund (POLICE),
 the  proposed  legislation  would amend provisions of the Retirement and
 Social Security Law (RSSL) and the Administrative Code of  the  City  of
 New  York  (ACCNY)  to  deem prior service as a City Traffic Enforcement
 Agent (TEA), that was purchased or transferred from the  New  York  City
 Employees'  Retirement  System  (NYCERS), as service in the police force
 for purposes of POLICE retirement benefits in all applicable Tiers.
   Effective Date: 30th day after enactment.
   BACKGROUND: Currently Tier 1 and Tier 2 members of  POLICE  receive  a
 benefit  based  on  75%  of  1/60th  times  the average earnings for the
 member's last five years of  service  for  each  year  of  non-uniformed
 civilian  service,  such  as prior TEA service. Tier 3 and Modified Tier
 3/6 (i.e Revised Plan and Enhanced Plan) members are currently not enti-
 tled to receive an additional pension calculation for prior TEA service.
   Under the proposed legislation, purchased or transferred  NYCERS'  TEA
 service will be classified as Allowable Service in the police force, and
 will  be  included  in  the minimum service required for eligibility and
 payment of an unreduced service retirement benefit  for  all  applicable
 POLICE Tiers.
   FINANCIAL  IMPACT  -  ACTUARIAL PRESENT VALUES: With respect to POLICE
 and based on the actuarial assumptions and methods described herein, the
 enactment of the proposed legislation would increase the Actuarial Pres-
 ent Value (APV) of Benefits (APVB) by approximately  $29.5  million  and
 decrease the Actuarial Present Value of member contributions of approxi-
 mately  $1.5  million,  resulting  in  an  increase in the APV of future
 employer contributions of $31.0 million.
   Under the Entry Age Normal cost  method  used  to  determine  employer
 contributions  to  POLICE,  there  would  be an increase in the Unfunded
 Accrued Liability (UAL) of  approximately  $46.6  million  offset  by  a
 decrease in the APV of Future Employer Normal Costs of $15.6 million.
   FINANCIAL  IMPACT  - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with
 ACCNY Section 13-638.2(k-2), new 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. As

 S. 7979--A                          5
 
 of June 30, 2017 the remaining working lifetime of former  TEA  who  are
 POLICE  members,  assuming  this  proposed  legislation  is  enacted, is
 approximately 13 years.
   For  this  proposed  legislation, the increase in UAL of $46.6 million
 was amortized over a 13-year period (12 payments under the One-Year  Lag
 Methodology)  using  level  dollar  payments resulting in an increase in
 annual employer contributions of approximately $6.3  million  per  year,
 beginning  in  Fiscal  Year 2020. Future years' costs in addition to the
 aforementioned cost would depend on factors such as, but not limited to,
 the number of TEA who become Police officers, years of TEA service,  and
 salaries.
   OTHER COSTS: Not measured in this Fiscal Note are:
   *  the initial, additional administrative costs of POLICE, NYCERS, and
 other city agencies to implement the proposed legislation, and
   * the costs associated with the purchase of prior service.
   CONTRIBUTION TIMING: For purposes of this Fiscal Note, it  is  assumed
 that  the changes in the APV of future employer contributions and annual
 employer contributions would be reflected for the first time in the June
 30, 2018 actuarial valuation of POLICE. In accordance with the  One-Year
 Lag  Methodology  (OYLM)  used  to determine employer contributions, the
 increase in employer contributions would first be  reflected  in  Fiscal
 Year 2020.
   CENSUS  DATA:  The  estimates presented herein are based on the census
 data used in the Preliminary June 30, 2017 (Lag) actuarial valuation  of
 POLICE  to  determine the Preliminary Fiscal Year 2019 employer contrib-
 utions.
   This data was supplemented by data provided by  the  New  York  Police
 Department  for  529 Police members who had prior service as a TEA as of
 June 30, 2017. These 529 members  had,  on  average,  approximately  3.1
 years of TEA service. The Preliminary Fiscal Year 2019 employer contrib-
 utions were based on these members having an average age of approximate-
 ly 35.8 years, average POLICE service of approximately 6.2 years, and an
 average salary of approximately $86,500. Table 1 contains a breakdown of
 the census data by Tier.
                                   Table 1
 
                                                             Average
                                         Average             Uniformed
                                         Uniformed  Average  Service
                    Average   Average    Service      TEA     (Post
 Tier      Number     Age      Salary    (Current)  Service  Legislation)
 Tier 2     248      40.5     $109,202      10.6      3.9       14.5
 Tier 3/6   281      31.8     $66,511       2.3       2.4       4.7
 Total      529      35.8     $86,525       6.2       3.1       9.3
   ACTUARIAL  ASSUMPTIONS  AND  METHODS: The changes in the APV of future
 employer contributions and annual employer contributions presented here-
 in have been calculated based on  the  same  actuarial  assumptions  and
 methods  in effect for the June 30, 2017 (Lag) actuarial valuations used
 to determine the Preliminary Fiscal Year 2019 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  Fiscal  Year
 2019.
   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

 S. 7979--A                          6

 (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.
   FISCAL NOTE IDENTIFICATION: This Fiscal Note 2018-21 dated  April  27,
 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.