Assembly Bill A10487

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10487
 
                           I N  A S S E M B L Y
 
                               May 29, 2024
                                ___________
 
 Introduced   by   COMMITTEE  ON  RULES  --  (at  request  of  M.  of  A.
   Pheffer Amato) -- read once and referred to the Committee  on  Govern-
   mental Employees
 
 AN  ACT  to  amend  the  administrative code of the city of New York, in
   relation to promotions of sergeants
 
   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. WHEN A SERGEANT SHALL HAVE SERVED IN THE RANK  OF  SERGEANT  FOR  A
 PERIOD  OF  FIFTEEN  YEARS,  SUCH SERGEANT SHALL HAVE THE SAME RIGHTS IN
 RESPECT TO THE POLICE PENSION FUND AS A  SERGEANT  DETAILED  TO  ACT  AS
 SERGEANT COMMANDER DETECTIVE SQUAD OR SERGEANT SPECIAL ASSIGNMENT.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.-- Pursuant to Legislative Law, Section 50:
   SUMMARY:  This proposed legislation would increase the salary used for
 determining pension benefits for a sergeant of the New York City  Police
 Department  (NYPD),  who  has  been a sergeant for at least 15 years, to
 salaries equivalent to a sergeant commander detective squad or  sergeant
 special assignment.
              ILLUSTRATION - INCREASE IN EMPLOYER CONTRIBUTIONS
           by Fiscal Year for the first 25 years ($ in Millions)
 
                          Year           Police
                          2025           0.0
                          2026           1.4
                          2027           2.8
                          2028           4.2
                          2029           5.7
                          2030           7.2
                          2031           8.8
                          2032           10.4
                          2033           12.1
                          2034           13.9
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD10163-02-4
 A. 10487                            2
 
                          2035           15.8
                          2036           17.7
                          2037           19.8
                          2038           22.2
                          2039           24.6
                          2040           25.8
                          2041           27.1
                          2042           28.4
                          2043           29.8
                          2044           31.2
                          2045           32.7
                          2046           34.2
                          2047           35.8
                          2048           37.4
                          2049           39.0
   Projected contributions are based on historical experience for Tier 2
 members. Future retirement experience may differ as Tier 3 members begin
                                to retire.
   The entire increase in employer contributions will be allocated to New
 York City.
 
           EXPECTED INCREASE (DECREASE) IN ACTUARIAL LIABILITIES
   The enactment of this proposed legislation is expected to increase the
 Present  Value  of Future Benefits (PVFB) by approximately $11.5 million
 in the first year and every year thereafter. Each year's  PVFB  increase
 will  depend on the actual experience of benefiting retirees and will be
 recognized in the year benefits are first payable.
 
                AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
                Recognized as Ongoing Gain/Loss  POLICE
                Number of Payments:              14
                Fiscal Year of Last Payment:     N/A
                First-year Amortization Payment: $1.4 M
 
   CENSUS DATA: The estimates presented herein are based on data provided
 by the Police Pension Fund which was not audited  but  was  checked  for
 reasonableness.
   Historical  experience was used to estimate the number of retirees who
 could potentially benefit from this proposed legislation and  is  summa-
 rized below.
   o  Sergeants who retired after serving in such rank for 15 years - 396
 retired over the past five years.
   The average age of all sergeants who retired over the past five  years
 is 49.3 for males and 48.5 for females, where approximately 81% of reti-
 rees were male.
   IMPACT  ON  MEMBER  BENEFITS:  The  proposed  legislation would permit
 police sergeants, who have served in such rank for at least 15 years, to
 have their pension calculations based on the  salary  for  the  rank  of
 sergeant commander of detective squad or sergeant special assignment.
   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.
   ASSUMPTIONS  AND  METHODS:  The  estimates  presented herein have been
 calculated based on the actuarial assumptions and methods to be used for
 the Preliminary Fiscal Year 2025 employer contributions of the  impacted
 retirement systems. In addition:
 A. 10487                            3
 
   o  Future  retirement  patterns were assumed to remain consistent with
 prior experience. The number of sergeants who retire  after  serving  in
 such rank for 15 years was assumed to be 80 per year.
   o For police sergeants who retire and benefit from the proposed legis-
 lation  in  the  first  year,  annual  pension  benefits  are assumed to
 increase by $11,000 for Tier 2 members and $10,700 for Tier  3  members.
 Each  year  thereafter,  annual  pension  benefits  for new retirees are
 assumed to increase by an additional 3% per year.
   o For police sergeants who benefit from the proposed legislation,  the
 assumed  number  of retirements for each gender, and the assumed retire-
 ment ages for each gender are assumed to remain the same.
   RISK AND UNCERTAINTY: The costs presented in this Fiscal  Note  depend
 highly  on  the  actuarial  assumptions, methods, and models used, demo-
 graphics of the impacted population, and other factors such  as  invest-
 ment,  contribution, and other risks. If actual experience deviates from
 actuarial  assumptions,  the  actual  costs  could  differ  from   those
 presented  herein.  Quantifying  these risks is beyond the scope of this
 Fiscal Note.
   This Fiscal Note is intended to measure  pension-related  impacts  and
 does  not  include other potential costs (e.g., administrative and Other
 Postemployment Benefits).
   STATEMENT OF ACTUARIAL OPINION: Marek Tyszkiewicz and Gregory Zelikov-
 sky are members of the Society of Actuaries and the American Academy  of
 Actuaries.  We  are  members of NYCERS but do not believe it impairs our
 objectivity and we meet the  Qualification  Standards  of  the  American
 Academy  of  Actuaries to render the actuarial opinion contained herein.
 To the best of our 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 2024-58 dated May 14,
 2024 was prepared by the Chief Actuary for the New York City  Retirement
 Systems and Pension Funds. This estimate is intended for use only during
 the 2024 Legislative Session.