S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6419--A
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               April 6, 2023
                                ___________
 
 Introduced  by  M.  of  A.  STIRPE,  GUNTHER,  McDONALD -- read once and
   referred to the  Committee  on  Governmental  Employees  --  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
   increasing the earning limitations for retired law  enforcement  offi-
   cers; and providing for the repeal of such provisions upon the expira-
   tion thereof
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 212 of the retirement and social  security  law  is
 amended by adding a new subdivision 4 to read as follows:
   4.  NOTWITHSTANDING THE PROVISIONS OF SUBDIVISIONS ONE AND TWO OF THIS
 SECTION, THE EARNINGS LIMITATION FOR THE YEAR TWO  THOUSAND  TWENTY-FOUR
 AND  THEREAFTER  SHALL  BE SIXTY-FIVE THOUSAND DOLLARS FOR A RETIRED LAW
 ENFORCEMENT OFFICER EMPLOYED AS A LAW  ENFORCEMENT  OFFICER  AFTER  SUCH
 RETIREMENT.  FOR  THE PURPOSES OF THIS SECTION, "RETIRED LAW ENFORCEMENT
 OFFICER" SHALL MEAN A RETIRED POLICE OFFICER, A RETIRED  STATE  TROOPER,
 OR A RETIRED DEPUTY SHERIFF.
   §  2.  This  act shall take effect immediately and shall expire and be
 deemed repealed January 1, 2029.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   Insofar as it would affect the New York  State  and  Local  Retirement
 System (NYSLRS), this bill would allow retired police officers and depu-
 ty sheriffs to be reemployed in a law enforcement capacity with an annu-
 al  salary  of $65,000 or less to continue to receive their full retire-
 ment benefit for the 5-year period beginning January 1, 2024 and  ending
 December  31,  2028.  Currently,  the  post-retirement earnings limit is
 $35,000.
   If this bill were enacted during the  2023  legislative  session,  the
 direct  cost  incurred  would  be the retiree's post-retirement earnings
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD03862-07-3
              

 A. 6419--A                          2
 
 more than $35,000 each calendar year, not to  exceed  the  full  pension
 benefit paid by the NYSLRS during that period.
   The  number  of  members  and  retirees  who could be affected by this
 legislation cannot be readily determined. For each retiree hired  pursu-
 ant to this proposal, an annual cost of $30,000 is expected.
   In addition to the direct costs quoted above, insofar as this proposal
 disrupts  the usual pattern and timing of employee turnover (that is, if
 members retire earlier than expected and participating employers hire  a
 retiree  instead  of  a  new billable member), shifts in member behavior
 could generate losses that increase the average billing rate in  20-year
 and 25-year service-based plans from 27.8% to 40.4%. The actual increase
 in  billing rates will depend upon member and employer utilization, with
 the rate above representing an upper maximum.
   All costs will be shared by the State of New York and all  participat-
 ing employers in the NYSLRS and spread over future billing cycles. Since
 this  proposal  exclusively  benefits  retirees, the increased costs are
 primarily attributable to retirees from Tiers 1 - 4. Approximately  half
 the  contributions  required  to fund this proposal will be collected on
 salary reported for current members of Tier 6.
   Summary of relevant resources:
   Membership data as of March 31, 2022 was used in measuring the  impact
 of the proposed change, the same data used in the April 1, 2022 actuari-
 al  valuation.  Distributions  and  other statistics can be found in the
 2022 Report of the Actuary and the 2022 Annual  Comprehensive  Financial
 Report.
   The  actuarial assumptions and methods used are described in the 2020,
 2021, and 2022 Annual Report to the  Comptroller  on  Actuarial  Assump-
 tions,  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, 2022
 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 March 30, 2023, and intended for use only during
 the 2023 Legislative Session, is Fiscal Note No. 2023-3, 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, as it relates to  the  New
 York  City  Retirement  Systems  and  Pension Funds and, would add a new
 subdivision 4 to Section 212 of the Retirement and Social  Security  Law
 (RSSL)  to increase the post-retirement public employment earnings limit
 from $35,000 per year to $65,000 per year for retired New York City  law
 enforcement  officers,  which  include New York City Police Pension Fund
 (POLICE) Police Officer and New York City Employees'  Retirement  System
 (NYCERS) Deputy Sheriff retirees.
   Effective Date: Upon enactment, and expiring and being deemed repealed
 on January 1, 2029.
   IMPACT  ON PENSION BENEFITS: Retirees who return to public service and
 elect to be covered under the provisions of RSSL Section 212 are permit-
 ted to earn while working  in  retirement  an  amount  not  exceeding  a
 specific dollar limit in each calendar year without loss, suspension, or
 diminution  of  their  retirement  allowances. Once this dollar limit is
 A. 6419--A                          3
 
 reached, the retiree's retirement allowance is suspended for the remain-
 der of that calendar year. Generally, there are no earnings  limitations
 in, or following, the calendar year in which the retiree attains age 65.
   Currently,  the  Section  212  post-retirement  earnings limitation in
 effect for calendar year 2023 and each year thereafter is $35,000. Under
 the proposed legislation, the RSSL Section  212  post-retirement  public
 service  earnings limitation would, for eligible retired law enforcement
 officers, be increased to $65,000  per  year  for  calendar  years  2024
 through 2028.
   The total amount of RSSL Section 212 retirement allowance suspensions,
 given certain RSSL Section 212 limits, are contingent upon both individ-
 ual  post-retirement  earnings  and  individual annual retirement allow-
 ances. Therefore,  for  illustrative  purposes  only,  the  table  below
 presents  the  estimated  additional  retirement  allowances paid (i.e.,
 those benefits that  would  not  be  subject  to  suspension),  if  this
 proposed  legislation  is  enacted,  for  various sample combinations of
 post-retirement annual earnings and annual retirement allowance amounts.
 
 Annual Retirement   Annual Post-Retirement Earnings in Calendar Year
    Allowance           $40,000          $60,000        $80,000
     $30,000             $3,750          $12,500        $11,250
     $40,000             $5,000          $16,667        $15,000
     $50,000             $6,250          $20,833        $18,750
     $60,000             $7,500          $25,000        $22,500
     $70,000             $8,750          $29,167        $26,250
 
 FINANCIAL IMPACT - ANNUAL  EMPLOYER  CONTRIBUTIONS:  Enactment  of  this
 proposed  legislation  would increase employer contributions, where such
 amount would depend on the number of retirees  that  benefit  under  the
 legislation  and the amount of their earnings and retirement allowances.
 As there is no data currently available to estimate the  number  of  law
 enforcement  officers  who might become reemployed, the financial impact
 would be recognized at the  time  of  event.  Consequently,  changes  in
 employer contributions have been estimated assuming that the increase in
 pension  payments  will  be  financed  over  a closed 15-year period (14
 payments under the One-Year Lag Methodology (OLYM)) using  level  dollar
 payments.
   The  number  of  retirees  who  could  potentially be impacted by this
 proposed legislation cannot be readily determined. However, for each 100
 positions that would be impacted if this legislation were  to  pass  and
 assuming  post-retirement  earnings of $50,000 to $60,000 for each reti-
 ree, the increase in pension payments is calculated to be  approximately
 $1.5  million  to  $2.0  million per year if the proposed legislation is
 enacted. This would result in an increase in  annual  employer  contrib-
 utions of $180,000 to $240,000.
   CENSUS  DATA:  For  purposes  of  analyzing the impact of the proposed
 legislation, illustrative examples with various  salary  and  retirement
 allowance amounts have been provided above.
   ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
 been  calculated  based on the actuarial assumptions and methods used to
 determine the Preliminary Fiscal Year  2024  employer  contributions  of
 NYCERS and POLICE.
   For the purposes of this Fiscal Note, it is assumed that the change in
 the  pension  payments would be reflected for the first time in the June
 30, 2024 actuarial valuations of NYCERS and  POLICE  used  to  determine
 employer contributions for Fiscal Year 2026.
 A. 6419--A                          4
 
   RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
 highly on the realization of the actuarial assumptions used, demographic
 of the impacted populations,  and  other  factors  such  as  investment,
 contribution,  and other risks. If actual experience deviates from actu-
 arial  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 initial additional adminis-
 trative costs to implement the proposed legislation.
   STATEMENT OF ACTUARIAL OPINION: I, Marek  Tyszkiewicz,  am  the  Chief
 Actuary  for,  and  independent of, the New York City Retirement Systems
 and Pension Funds. I am an Associate of the Society of Actuaries  and  a
 Member of the American Academy of Actuaries. I am a member of NYCERS but
 do  not  believe  it impairs my objectivity and 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  2023-58  dated  May  24,
 2023  was  prepared by the Chief Actuary for the New York City Employees
 Retirement System and New York City Police Pension Fund.  This  estimate
 is intended for use only during the 2023 Legislative Session.