S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9392
 
                             I N  S E N A T E
 
                               May 24, 2022
                                ___________
 
 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  administrative code of the city of New York, in
   relation to promotions of detectives
 
   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. (1) WHEN A DETECTIVE OF THE THIRD GRADE SHALL HAVE  SERVED  IN  THE
 RANK  OF  DETECTIVE OF THE THIRD GRADE FOR A PERIOD OF FIFTEEN YEARS, HE
 OR SHE SHALL HAVE THE SAME RIGHTS IN RESPECT TO THE POLICE PENSION  FUND
 AS  A  DETECTIVE  OF THE THIRD GRADE DETAILED TO ACT AS DETECTIVE OF THE
 SECOND GRADE.
   (2) WHEN A DETECTIVE OF THE SECOND GRADE SHALL HAVE SERVED IN THE RANK
 OF DETECTIVE OF THE SECOND GRADE FOR A PERIOD OF TEN YEARS,  HE  OR  SHE
 SHALL  HAVE  THE  SAME RIGHTS IN RESPECT TO THE POLICE PENSION FUND AS A
 DETECTIVE OF THE SECOND GRADE DETAILED TO ACT AS DETECTIVE OF THE  FIRST
 GRADE.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY  OF BILL: This proposed legislation would amend Administrative
 Code of the City of New York (ACCNY)  Section  14-114  to  allow  for  a
 Detective  3rd  grade of the New York City Police Department (NYPD), who
 has been a Detective 3rd grade for at least 15 years, to have  the  same
 rights in respect to the New York City Police Pension Fund (POLICE) as a
 Detective  3rd  grade  detailed  to  act as a Detective 2nd grade and to
 allow for a Detective 2nd grade of the New York City Police  Department,
 who  has  been  a Detective 2nd grade for at least 10 years, to have the
 same rights in respect to POLICE as a Detective 2nd  grade  detailed  to
 act as a Detective 1st grade.
   Effective Date: Upon enactment.
   IMPACT  ON  BENEFITS: The proposed legislation would permit Detectives
 of the 3rd and 2nd grade, who have met certain service requirements,  to
 have their pension calculations based on a higher-grade salary.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD09982-02-2
 S. 9392                             2
 
   A  Detective  3rd  grade  who would benefit under this proposed legis-
 lation, if enacted, would receive an increase in  their  annual  pension
 benefit  of  approximately $8,200 per year and a Detective 2nd grade who
 would benefit under this proposed legislation, if enacted, would receive
 an increase in their annual pension benefit of approximately $11,100 per
 year,  due to the assumed higher salary grade and overtime, and assuming
 a service retirement benefit with 20 years of service.
   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 $1.2 million per year.
   With  respect  to  an individual member, the impact on benefits due to
 this proposed legislation could vary greatly depending on  the  member's
 age, years of service, retirement cause, and Tier.
   FINANCIAL  IMPACT - PRESENT VALUES: Based on the actuarial assumptions
 and methods described herein, the enactment of this proposed legislation
 would increase the Present Value of Future Benefits (PVFB)  by  approxi-
 mately $15.5 million every year.
   FINANCIAL  IMPACT  - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with
 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  Detectives  3rd
 grade  that  will retire with 15 or more years in rank or Detectives 2nd
 grade that will retire with 10 or more years in rank cannot be known  in
 advance  with  credibility,  the  PVFB  due to this legislation has been
 treated as an actuarial loss at the affected members' retirement.
   For the purposes of this Fiscal Note, the increase in  UAL  was  amor-
 tized  over a 15-year period (14 payments under the One-Year Lag Method-
 ology) using level dollar payments. This results in an increase in annu-
 al employer contributions of approximately $1.8 million each year.
   The costs above represent the estimated impact  for  retirees  in  the
 first  year  the bill is enacted. Future years' costs in addition to the
 aforementioned cost would depend on the number of retirees that  benefit
 under the legislation amongst other factors.
   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 Final June 30, 2021 actuar-
 ial valuation of POLICE. 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 2023.
   CENSUS  DATA:  These  estimates are based on data provided by the NYPD
 Detectives' Endowment Association which was not audited but was  checked
 for reasonableness. Below is a summary of the data provided:
     *   Salary   (excluding   overtime  and  outstanding  wage  contract
     increases)
       o Detective 3rd grade - $114,999
       o Detective 2nd grade - $128,034
       o Detective 1st grade - $145,548
     * Detectives 3rd grade who retired with 15+  years  in  rank  -  487
     retired over the past 18 years.
     *  Detectives  2nd  grade who retired with 10+ years in rank - 1,698
     retired over the past 19 years.
   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 Preliminary June
 S. 9392                             3

 30, 2021 (Lag) actuarial valuations used to  determine  the  Preliminary
 Fiscal Year 2023 employer contributions of POLICE.
   Due  to  the  outstanding  wage contract for Detectives as of the date
 this Fiscal Note was released, the salaries provided for  this  analysis
 have been adjusted to reflect the assumption of pattern bargaining based
 on the first year of the recently settled Captains Endowment Association
 contract of 7.95%.
   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  POLICE  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  methods 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 POLICE and other
     New York City agencies to implement the proposed legislation.
     * The impact of this proposed legislation  on  Other  Postemployment
     Benefit (OPEB) costs.
   STATEMENT  OF  ACTUARIAL  OPINION: I, Michael J. Samet, am the Interim
 Chief Actuary for, and independent of,  the  New  York  City  Retirement
 Systems and Pension Funds. I am a Fellow of the Society of Actuaries and
 a  Member of the American Academy of 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  2022-55  dated  May  18,
 2022  was  prepared  by  the Interim Chief Actuary for the New York City
 Police Pension Fund. This estimate is intended for use only  during  the
 2022 Legislative Session.