S T A T E O F N E W Y O R K
________________________________________________________________________
6082
2021-2022 Regular Sessions
I N S E N A T E
April 7, 2021
___________
Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
printed to be committed to the Committee on Civil Service and Pensions
AN ACT to amend the retirement and social security law, in relation to
primary social security retirement benefits for police/fire members
who are members of the New York city fire department pension fund
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 505 of the retirement and social security law, as
amended by chapter 18 of the laws of 2012, is amended to read as
follows:
§ 505. Service retirement benefits; police/fire members, New York city
uniformed correction/sanitation revised plan members and investigator
revised plan members. a. The normal service retirement benefit for
police/fire members, New York city uniformed correction/sanitation
revised plan members and investigator revised plan members at normal
retirement age shall be a pension equal to fifty percent of final aver-
age salary, less fifty percent of the primary social security retirement
benefit commencing at age sixty-two, as provided in section five hundred
eleven of this article, PROVIDED, HOWEVER, THAT THE COMPUTATION OF THE
NORMAL SERVICE RETIREMENT BENEFIT OF MEMBERS OF THE NEW YORK CITY FIRE
DEPARTMENT PENSION FUND, SHALL NOT BE REDUCED BY THE PRIMARY SOCIAL
SECURITY RETIREMENT BENEFIT COMMENCING AT AGE SIXTY-TWO AS PROVIDED IN
SECTION FIVE HUNDRED ELEVEN OF THIS ARTICLE.
b. The early service retirement benefit for police/fire members, New
York city uniformed correction/sanitation revised plan members and
investigator revised plan members shall be a pension equal to two and
one-tenths percent of final average salary times years of credited
service at the completion of twenty years of service or upon attainment
of age sixty-two, increased by one-third of one percent of final average
salary for each month of service in excess of twenty years, but not in
excess of fifty percent of final average salary, less fifty percent of
the primary social security retirement benefit commencing at age sixty-
two as provided in section five hundred eleven of this article,
provided, however, that New York city police/fire revised plan members,
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08553-03-1
S. 6082 2
New York city uniformed correction/sanitation revised plan members and
investigator revised plan members shall not be eligible to retire for
service prior to the attainment of twenty years of credited service, AND
PROVIDED FURTHER THAT THE EARLY SERVICE RETIREMENT BENEFIT OF MEMBERS OF
THE NEW YORK CITY FIRE DEPARTMENT PENSION FUND SHALL NOT BE REDUCED BY
THE PRIMARY SOCIAL SECURITY RETIREMENT BENEFIT COMMENCING AT AGE SIXTY-
TWO AS PROVIDED BY SECTION FIVE HUNDRED ELEVEN OF THIS ARTICLE.
c. A police/fire member, a New York city uniformed
correction/sanitation revised plan member or an investigator revised
plan member who retires with twenty-two years of credited service or
less may become eligible for annual escalation of the service retirement
benefit if he OR SHE elects to have the payment of his OR HER benefit
commence on the date he OR SHE would have completed twenty-two years and
one month or more of service. In such event, the service retirement
benefit shall equal two percent of final average salary for each year of
credited service, less fifty percent of the primary social security
retirement benefit commencing at age sixty-two as provided in section
five hundred eleven of this article, PROVIDED, HOWEVER, THAT THE SERVICE
RETIREMENT BENEFIT OF MEMBERS OF THE NEW YORK CITY FIRE DEPARTMENT
PENSION FUND SHALL NOT BE REDUCED BY THE PRIMARY SOCIAL SECURITY RETIRE-
MENT BENEFIT COMMENCING AT AGE SIXTY-TWO AS PROVIDED BY SECTION FIVE
HUNDRED ELEVEN OF THIS ARTICLE.
§ 2. Section 511 of the retirement and social security law is amended
by adding a new subdivision h to read as follows:
H. NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, THIS SECTION
SHALL NOT APPLY TO MEMBERS OF THE NEW YORK CITY FIRE DEPARTMENT PENSION
FUND WHO RECEIVE A SERVICE RETIREMENT BENEFIT PURSUANT TO SECTION FIVE
HUNDRED FIVE OF THIS ARTICLE OR A DEFERRED VESTED BENEFIT PURSUANT TO
SECTION FIVE HUNDRED SIXTEEN OF THIS ARTICLE.
§ 3. Subdivision c of section 516 of the retirement and social securi-
ty law, as amended by chapter 18 of the laws of 2012, is amended to read
as follows:
c. The deferred vested benefit of police/fire members, New York city
police/fire revised plan members, New York city uniformed
correction/sanitation revised plan members or investigator revised plan
members shall be a pension commencing at early retirement age equal to
two and one-tenths percent of final average salary times years of cred-
ited service, less fifty percent of the primary social security retire-
ment benefit commencing at age sixty-two, as provided in section five
hundred eleven of this article, PROVIDED HOWEVER THAT THE DEFERRED VEST-
ED BENEFIT OF MEMBERS OF THE NEW YORK CITY FIRE DEPARTMENT PENSION FUND
AND REVISED PLAN MEMBERS WHO ARE MEMBERS OF THE NEW YORK CITY FIRE
DEPARTMENT PENSION FUND SHALL NOT BE REDUCED BY THE PRIMARY SOCIAL SECU-
RITY RETIREMENT BENEFIT COMMENCING AT AGE SIXTY-TWO AS PROVIDED BY
SECTION FIVE HUNDRED ELEVEN OF THIS ARTICLE. A police/fire member, a New
York city police/fire revised plan member, a New York city uniformed
correction/sanitation revised plan member or investigator revised plan
member may elect to receive his OR HER vested benefit commencing at
early retirement age or age fifty-five. If the vested benefit commences
before early retirement age, the benefit shall be reduced by one-fif-
teenth for each year, if any, that the member's early retirement age is
in excess of age sixty, and by one-thirtieth for each additional year by
which the vested benefit commences prior to early retirement age. If
such vested benefit is deferred until after such member's normal retire-
ment age, the benefit shall be computed and subject to annual escalation
S. 6082 3
in the same manner as provided for an early retirement benefit pursuant
to subdivision c of section five hundred five of this article.
§ 4. Notwithstanding the provisions of section 13-379 of the adminis-
trative code of the city of New York, the provisions of this act shall
apply to chapter three of title thirteen of the administrative code of
the city of New York.
§ 5. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: This proposed legislation would amend Sections 505,
511, and 516 of the Retirement and Social Security Law (RSSL) to elimi-
nate the offset equal to 50% of the primary social security benefit in
the service, early service, and vested retirement benefits for Tier 3
original, revised, and enhanced plan members of the New York City Fire
Pension Fund (FIRE).
Effective Date: Upon enactment.
IMPACT ON BENEFITS: Currently, the Tier 3 normal service retirement,
early service retirement, and vested retirement benefits are subject to
an offset equal to 50% of the primary social security benefit as defined
in RSSL Section 511 beginning at age 62.
Under the proposed legislation, if enacted, the offset for such bene-
fits would be eliminated resulting in an increase in benefits.
FINANCIAL IMPACT - SUMMARY: The financial impact will increase as the
impacted populations of Tier 3 members of FIRE increases over time. The
estimated financial impact of removing the social security offset as
described above results in an increase in Present Value of Future Bene-
fits (PVFB) and an increase in the annual employer contributions of
FIRE. The estimate of these increases for Fiscal Years 2022 through 2026
based on the applicable actuarial assumptions and methods noted herein,
are shown in the table below.
Fiscal Increase in Increase in
Year Present Value of Future Benefits Employer Contributions
($ Millions) ($ Millions)
2022 $ 64.7 $3.9
2023 $ 76.3 $4.5
2024 $ 88.6 $5.1
2025 $102.0 $5.7
2026 $116.7 $6.3
In accordance with Section 13-638.2(k-2) of the Administrative Code of
the City of New York (ACCNY), new Unfunded Accrued Liability (UAL)
attributable to benefit changes are to be amortized as determined by the
Actuary, but are generally amortized over the remaining working lifetime
of those impacted by the benefit changes. As of June 30, 2020, the
remaining working lifetime of FIRE members subject to Article 14 is
approximately 20 years.
For the purposes of this Fiscal Note, the increase in the UAL for FIRE
was amortized over a 20-year period (19 payments under the One-Year Lag
Methodology (OYLM)) using level dollar payments.
CONTRIBUTION TIMING: For the purposes of this Fiscal Note, it is
assumed that the changes in the PVFB and annual employer contributions
would be reflected for the first time in the June 30, 2020 actuarial
valuation of FIRE. In accordance with the One-Year Lag Methodology
(OYLM) used to determine employer contributions, the increase in employ-
er contributions would first be reflected in Fiscal Year 2022.
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CENSUS DATA: The estimates presented herein are based on the census
data used in the Preliminary June 30, 2020 (Lag) actuarial valuation of
FIRE to determine the Preliminary Fiscal Year 2022 employer contrib-
utions.
The 3,852 FIRE Tier 3 members as of June 30, 2020 had an average age
of approximately 31.6 years, average service of approximately 4.0 years,
and an average salary of approximately $88,100.
ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the PVFB and annual
employer contributions presented herein have been calculated based on
the actuarial assumptions and methods in effect for the June 30, 2019
(Lag) actuarial valuations used to determine the Preliminary Fiscal Year
2021 employer contributions of FIRE.
New entrants were projected to replace the members expected to leave
the active population to maintain a steady-state population. New entrant
demographics and future salary increases are consistent with those used
in projections for the New York City Office of Management and Budget in
April 2020 (Preliminary Projections).
The Actuary is proposing a set of changes for use beginning with the
June 30, 2019 (Lag) actuarial valuations of FIRE to determine the Final
Fiscal Year 2021 Employer Contributions (2021 A&M). If the 2021 A&M is
enacted it is estimated that it would produce PVFB and annual employer
contributions results that are not materially different than the results
shown above.
RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend
highly on the realization of the actuarial assumptions used, as well as
certain demographic characteristics of FIRE and other exogenous factors
such as investment, contribution, and other risks. If actual experience
deviates from actuarial assumptions, the actual costs could differ from
those presented herein. Costs are also dependent on the actuarial meth-
ods used, and therefore different actuarial methods could produce
different results. Quantifying these risks is beyond the scope of this
Fiscal Note.
Not measured in this Fiscal Note are the following:
* The initial, additional administrative costs of FIRE and other New
York City agencies to implement the proposed legislation.
* Pension costs for future members of FIRE hired on or after 7/1/2024.
* The impact of this proposed legislation on Other Postemployment
Benefit (OPEB) costs.
* Cost analyses relating to provisions contained in RSSL Section
500(c).
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, a
Member of the American Academy of Actuaries, and a Fellow of the Confer-
ence of Consulting Actuaries. I meet the Qualification Standards of the
American Academy of Actuaries to render the actuarial opinion contained
herein. To the best of my knowledge, the results contained herein have
been prepared in accordance with generally accepted actuarial principles
and procedures and with the Actuarial Standards of Practice issued by
the Actuarial Standards Board.
FISCAL NOTE IDENTIFICATION: This Fiscal Note 2021-18 dated April 5,
2021 was prepared by the Chief Actuary for the New York City Fire
Pension Fund. This estimate is intended for use only during the 2021
Legislative Session.
