S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5557--A
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                              March 11, 2021
                                ___________
 
 Introduced by Sens. MAYER, ADDABBO, BROOKS, HARCKHAM, JACKSON, KAMINSKY,
   SANDERS  --  read  twice  and  ordered printed, and when printed to be
   committed to the Committee on Civil Service and Pensions --  recommit-
   ted  to the Committee on Civil Service and Pensions in accordance with
   Senate Rule 6, sec. 8 -- committee discharged, bill  amended,  ordered
   reprinted as amended and recommitted to said committee
 
 AN  ACT  to amend the retirement and social security law, in relation to
   the calculation of past service credit for police officers employed by
   the division of law enforcement in  the  department  of  environmental
   protection  in  the city of New York transferring between the New York
   city employees' retirement system to the  New  York  state  and  local
   police and fire retirement system
 
   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. 1. NOTWITHSTANDING ANY OTHER LAW, RULE OR REGULATION TO THE CONTRA-
 RY,  FOR  ANY POLICE OFFICER EMPLOYED BY THE DIVISION OF LAW ENFORCEMENT
 IN THE DEPARTMENT OF ENVIRONMENTAL PROTECTION IN THE CITY  OF  NEW  YORK
 TRANSFERRING  FROM THE NEW YORK CITY EMPLOYEES' RETIREMENT SYSTEM TO THE
 NEW YORK STATE AND LOCAL POLICE AND FIRE  RETIREMENT  SYSTEM  AFTER  THE
 EFFECTIVE  DATE  OF  THIS  SUBDIVISION  AND  ANY POLICE OFFICER FORMERLY
 EMPLOYED BY THE DIVISION OF LAW ENFORCEMENT IN THE DEPARTMENT  OF  ENVI-
 RONMENTAL  PROTECTION IN THE CITY OF NEW YORK HAVING MADE SUCH TRANSFER,
 SUCH POLICE OFFICER'S DIVISION OF LAW ENFORCEMENT IN THE  DEPARTMENT  OF
 ENVIRONMENTAL PROTECTION IN THE CITY OF NEW YORK SERVICE CREDIT SHALL BE
 DEEMED CREDITABLE SERVICE, IN SUCH POLICE OFFICER'S TWENTY YEAR OR TWEN-
 TY-FIVE  YEAR  RETIREMENT PLAN, IF SUCH POLICE OFFICER HAS SERVED FOR AT
 LEAST TWO YEARS IN SUCH EMPLOYMENT AND IF, WITHIN ONE YEAR OF  THE  DATE
 ON WHICH HE OR SHE FIRST BECAME A MEMBER OF THE NEW YORK STATE AND LOCAL
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08678-13-2
 S. 5557--A                          2
              

 
 POLICE  AND  FIRE  RETIREMENT SYSTEM OR WITHIN ONE YEAR OF THE EFFECTIVE
 DATE OF THIS SUBDIVISION, SUCH MEMBER ELECTS TO DO SO.
   2.  THE  AMOUNT OF SUCH SERVICE CREDITED TO THE MEMBER IN THE NEW YORK
 STATE AND LOCAL POLICE AND FIRE RETIREMENT SYSTEM PLAN SHALL NOT  EXCEED
 THE  AMOUNT  OF  SERVICE  CREDITED  TO  THE  MEMBER IN THE NEW YORK CITY
 EMPLOYEES' RETIREMENT SYSTEM PLAN.
   3. IF THE MEMBER SUBSEQUENTLY RETIRES ON AN AGE-BASED RETIREMENT  PLAN
 IN  THE  NEW  YORK  STATE  AND  LOCAL  POLICE AND FIRE RETIREMENT SYSTEM
 INSTEAD OF A TWENTY YEAR OR TWENTY-FIVE YEAR PLAN, THE  FULL  AMOUNT  OF
 SERVICE  CREDIT  EARNED, AS A POLICE OFFICER EMPLOYED BY THE DIVISION OF
 LAW ENFORCEMENT IN THE DEPARTMENT OF  ENVIRONMENTAL  PROTECTION  IN  THE
 CITY OF NEW YORK SHALL BE GRANTED.
   4. IN NO EVENT SHALL THE DIVISION OF LAW ENFORCEMENT IN THE DEPARTMENT
 OF  ENVIRONMENTAL PROTECTION IN THE CITY OF NEW YORK SERVICE CREDITED TO
 A MEMBER OF THE NEW YORK STATE AND  LOCAL  POLICE  AND  FIRE  RETIREMENT
 SYSTEM PURSUANT TO THIS SUBDIVISION EXCEED A TOTAL OF TEN YEARS.
   5.  NOTWITHSTANDING  ANY OTHER PROVISION OF LAW IN THIS SECTION TO THE
 CONTRARY, THE RESERVE ON SUCH MEMBER'S  BENEFITS  SHALL  BE  TRANSFERRED
 FROM  THE  NEW  YORK  CITY  EMPLOYEES' RETIREMENT SYSTEM TO THE NEW YORK
 STATE AND LOCAL POLICE AND FIRE RETIREMENT  SYSTEM  IN  ACCORDANCE  WITH
 SUBDIVISIONS C AND D OF THIS SECTION.
   6.  NO MEMBER WHO RECEIVES SERVICE CREDIT PURSUANT TO THIS SUBDIVISION
 SHALL BE ELIGIBLE TO  RECEIVE  ADDITIONAL  SERVICE  CREDIT  PURSUANT  TO
 SUBDIVISION  B OF SECTION THREE HUNDRED EIGHTY-FOUR-E OF THIS ARTICLE IF
 HIS OR HER EMPLOYER HAS ELECTED TO PROVIDE SUCH SERVICE CREDIT.
   § 2. This act shall take effect on the sixtieth  day  after  it  shall
 have become a law.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This  bill  would  expand  the  definition of service creditable under
 20-year and 25-year plans in the New York State  and  Local  Police  and
 Fire  Retirement  System  (PFRS)  to  include service transferred by any
 police officer employed or formerly employed  by  the  Division  of  Law
 Enforcement in the Department of Environmental Protection in the City of
 New  York,  provided  that such police officer has at least two years of
 such employment.  The member must elect to  obtain  the  service  credit
 within  one year of the date on which he or she first became a member of
 the PFRS or within one year of the effective date of this bill, whichev-
 er occurs later. The amount of service credit received in PFRS shall not
 exceed the minimum of the amount of service credited to  the  member  in
 the  New  York  City  Employees'  Retirement  System (NYCERS) plan or 10
 years.
   If this bill is enacted during the 2022 legislative  session,  insofar
 as this proposal affects the PFRS, it is estimated that the past service
 cost  will  average approximately 25% of an affected member's salary for
 each year of additional service that is credited on a 20-year or 25-year
 plan.  This cost will be offset by any  reserves  transferred  from  the
 NYCERS.   The remaining cost will be shared by the State of New York and
 the participating employers of the PFRS.
   The exact number of current members as  well  as  future  members  who
 could be affected by this legislation cannot be readily determined.
   Summary of relevant resources:
   Membership  data as of March 31, 2021 was used in measuring the impact
 of the proposed change, the same data used in the April 1, 2021 actuari-
 al valuation.  Distributions and other statistics can be  found  in  the
 2021  Report  of the Actuary and the 2021 Comprehensive Annual Financial
 Report.
 S. 5557--A                          3
 
   The actuarial assumptions and methods used are described in  the  2020
 and  2021 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, 2021
 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 fiscal note does not constitute a legal opinion on the  viability
 of  the  proposed change nor is it intended to serve as a substitute for
 the professional judgment of an attorney.
   This estimate, dated December 22, 2021,  and  intended  for  use  only
 during the 2022 Legislative Session, is Fiscal Note No. 2022-9, prepared
 by the Actuary for the New York State and Local Retirement System.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY  OF BILL: This proposed legislation would amend Section 343 of
 the Retirement and Social Security Law (RSSL) to  allow  New  York  City
 Employees'  Retirement  System  (NYCERS)  members  currently or formerly
 employed as New York City Department of Environmental  Protection  (DEP)
 police  officers  to  transfer,  within specified timeframes, to the New
 York State and Local  Police  and  Fire  Retirement  System  (PFRS)  and
 receive  up  to  10 years of credit in the 20-year and 25-year Plans for
 such equal DEP service.  Employer paid pension reserves  would  also  be
 transferred from NYCERS to PFRS for each such transfer.
   Effective Date: Sixty days after enactment.
   BACKGROUND:  Currently, NYCERS members employed as DEP police officers
 who subsequently become employed by the State are eligible  to  transfer
 their  NYCERS  membership  to  PFRS but generally do not receive service
 credit in the 20-year and 25-year PFRS Plans.  Upon successful  applica-
 tion  for transfers between NYCERS and PFRS, member accumulated contrib-
 utions (with accrued interest) are generally transferred but  additional
 employer paid reserves are not.
   Under  the  proposed  legislation, if enacted, DEP police officers who
 served in such title for a minimum of two years and then transfer  their
 NYCERS  membership to PFRS within one year of becoming a PFRS member (or
 one year of the effective date, if later) would receive up to  10  years
 of  credit  in  the  20-year  and  25-year PFRS Plans for such equal DEP
 service. This service would be included in the benefit calculation paya-
 ble by PFRS.
   Additionally, NYCERS would be  required  to  calculate  and  pay  such
 member's  pension  reserve,  net  of  any  accumulated salary deductions
 otherwise transferred, to PFRS. It should be  noted  that  the  proposed
 legislation  does not provide a reciprocal transfer of reserves should a
 member transfer from PFRS to NYCERS.
   FINANCIAL IMPACT - OVERVIEW: There is no data  available  to  estimate
 the  number  of  NYCERS  members who would potentially take advantage of
 this proposed legislation. Therefore, the estimated financial impact has
 been calculated on a per event basis equal to the increase  in  Unfunded
 Accrued  Liability (UAL) for an average NYCERS member who is employed as
 a DEP police officer  and  transfers  to  PFRS.  This  increase  in  UAL
 consists  of  the  required amount to be transferred to PFRS, plus Addi-
 tional Member Contributions (AMC) to be refunded to the member, if  any,
 offset  by the reduction in Accrued Liability since the member, assuming
 all service credit is transferred, would no longer be entitled to future
 NYCERS benefits.
 S. 5557--A                          4
 
   For purposes of this  Fiscal  Note,  it  has  been  assumed  that  the
 impacted  NYCERS  members  would  generally  not  have transferred their
 membership to PFRS absent this proposed legislation. It has been further
 assumed that members with more than 15 years of service would not trans-
 fer their membership even under the proposed legislation.
   With  respect  to  an  individual  member, the additional cost of this
 proposed legislation could vary greatly depending on the member's length
 of service, age, and salary history.
   FINANCIAL IMPACT - PRESENT VALUES: Based on the census  data  and  the
 actuarial  assumptions  and  methods  described herein, the enactment of
 this proposed  legislation  would  increase  the  UAL  by  approximately
 $50,400, on average, for each eligible member who transfers to PFRS.
   FINANCIAL  IMPACT  -  ANNUAL EMPLOYER CONTRIBUTIONS: Enactment of this
 proposed legislation would increase employer contributions,  where  such
 amount  would  depend on the number of members affected as well as other
 characteristics including the age, years of service, and salary  history
 of the member.
   As  there  is  no  data  currently available to estimate the number of
 members who may transfer to PFRS, the financial impact would  be  recog-
 nized  at the time of event.  Consequently, changes in employer contrib-
 utions have been estimated assuming that the increase in the UAL will be
 financed over the same time period used for actuarial losses in  accord-
 ance  with  Section 13-638.2(k-2) of the Administrative Code of the City
 of New York. Using this approach, the increase in UAL would be amortized
 over a closed 15-year period (14 payments under the One-Year Lag Method-
 ology) using level dollar payments.
   Based on the actuarial assumptions and methods  described  below,  the
 enactment  of  this proposed legislation is estimated to increase annual
 employer contributions by approximately $6,000,  on  average,  for  each
 eligible member who transfers to PFRS.
   With  respect to the timing, increases in employer contributions would
 depend upon when eligible members file  their  application  to  transfer
 their  NYCERS  membership  to  PFRS  but,  generally, increased employer
 contributions will first occur the  second  fiscal  year  following  the
 transfer of reserves to PFRS.
   CENSUS  DATA:  The  estimates presented herein are based on the census
 data used in the Preliminary June 30, 2021 (Lag) actuarial valuation  of
 NYCERS  to  determine the Preliminary Fiscal Year 2023 employer contrib-
 utions.
   There are 190 active DEP police officers who participate in NYCERS and
 have at least two years of service as of June 30,  2021.  Of  these,  98
 active  members  have  15  or  fewer  years of service and are therefore
 assumed to potentially benefit from the proposed legislation.  These  98
 active  members have an average age of approximately 35.9 years, average
 service of approximately 9.3 years, and an average  salary  of  approxi-
 mately  $74,200.  There  are also 42 former DEP police officers who have
 separated from service with between two and 15 years of service.
   ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the UAL  and  annual
 employer  contributions  presented  herein have been calculated based on
 the actuarial assumptions and methods in effect for the  June  30,  2021
 (Lag) actuarial valuations used to determine the Preliminary Fiscal Year
 2023 employer contributions of NYCERS.
   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  NYCERS  and  other  exogenous
 factors such as investment, contribution, and  other  risks.  If  actual
 S. 5557--A                          5

 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 NYCERS 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 2022-26 dated  April  19,
 2022  was  prepared  by  the Interim Chief Actuary for the New York City
 Employees' Retirement System.  This estimate is intended  for  use  only
 during the 2022 Legislative Session.