S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7875
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               May 28, 2019
                                ___________
 
 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 the pensionable earnings of first grade police officers
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section  14-111 of the administrative code of the city of
 New York is amended by adding two new subdivisions c and d  to  read  as
 follows:
   C.  WHEN A FIRST GRADE POLICE OFFICER SHALL HAVE SERVED IN THE RANK OF
 POLICE OFFICER FOR A PERIOD OF TWENTY-FIVE YEARS, HE OR SHE  SHALL  HAVE
 THE  SAME RIGHTS IN RESPECT TO THE POLICE PENSION FUND AS A POLICE OFFI-
 CER DESIGNATED TO ACT AS DETECTIVE OF THE THIRD  GRADE  WHO  SHALL  HAVE
 SERVED AS SUCH FOR A PERIOD OF TIME AGGREGATING TWO YEARS AT THE HIGHEST
 SALARY RATE FOR A DETECTIVE OF THE THIRD GRADE.
   D.  WHEN A FIRST GRADE POLICE OFFICER SHALL HAVE SERVED IN THE RANK OF
 POLICE OFFICER FOR A PERIOD OF THIRTY YEARS, HE OR SHE  SHALL  HAVE  THE
 SAME  RIGHTS  IN  RESPECT  TO  THE POLICE PENSION FUND AS A SERGEANT WHO
 SHALL HAVE SERVED AS SUCH FOR A PERIOD OF TIME AGGREGATING TWO YEARS  AT
 THE HIGHEST SALARY RATE FOR A SERGEANT.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   We  have  estimated  the  impact  of  the FAS Bill, a copy of which is
 attached, on the projected employer contributions of the New  York  City
 Police  Pension  Fund. A brief summary of the new provisions is outlined
 below:
   * When a first grade police officer achieves 25 years of service, s/he
 shall be entitled to the same base pay for the  purpose  of  pensionable
 earnings  as  a detective of the third grade who served in such position
 for a period of 2 years at the highest pay rate for that position.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02616-02-9
              

 A. 7875                             2
 
   * When a first grade police officer achieves 30 years of service, s/he
 shall be entitled to the same base pay for the  purpose  of  pensionable
 earnings  as  a  sergeant  who served in such position for a period of 2
 years at the highest pay rate for that position.
   The  table  below  summarizes the additional contributions that result
 from this bill by year.
                (in millions)
                ________________________________
                    Year            Annual Cost
                ________________________________
                    2020                   24.9
                    2021                   25.3
                    2022                   25.9
                    2023                   26.4
                    2024                   26.9
   While it is possible that  over  time,  these  plan  provisions  could
 influence  retirement  behavior, we are unable to accurately predict the
 specific behavior,  and  therefore  have  measured  the  cost  of  these
 provisions assuming no change to the retirement rates.
   Specific to this bill, we collected the data about the pensionable pay
 increases  at  the 25 and 30 year of service levels, based on historical
 information from the applicable contracts in place for  the  past  seven
 actuarial valuation dates.
   Taking  the  average  of the ratios over this 7-year historical period
 resulted in the following increases:
   * Increase at 25 Years of Service is 10.93% pay increase.
   * Increase at 30 Years of Service is 26.42% pay increase.
   These increases are applied to the prior 2 years of pay  (for  Tier  3
 and Tier 6) once the service level is achieved.
   The  assumptions  used in this analysis were those released by the New
 York City Office of the Actuary on January  2,  2019  in  the  "Proposed
 Changes in Actuarial Assumptions and Methods Used in Determining Employ-
 er  Contributions  for  Fiscal Years Beginning on and After July 1, 2018
 for the New York City Police Pension Fund"  document,  and  subsequently
 approved  by  the Police Pension Fund's Board on March 6, 2019. The data
 used to determine the cost was provided by the Police Pension  Fund  and
 was a snapshot of the active plan participants as of July 1, 2018.
   This  fiscal  note, dated May 6, 2019, is intended only for use in the
 2019 legislative session. The source of this fiscal  note  is  Heidi  E.
 Andorfer, FSA, EA, MAAA, Foster & Foster, Actuaries and Consultants, who
 is  familiar  with the immediate and long-term aspects of pension calcu-
 lations and meets the Qualification Standards of the American Academy of
 Actuaries necessary to render the actuarial opinions contained herein.