NY State Assembly Bill 2023-A6502A

Assembly Bill A6502A

2023-2024 Legislative Session

Relates to determination of salary base for members of the city of New York fire department pension fund

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Current Bill Status - In Assembly Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Apr 19, 2024	print number 6502a
Apr 19, 2024	amend and recommit to governmental employees
Jan 03, 2024	referred to governmental employees
Apr 12, 2023	referred to governmental employees

Bill Amendments

Original

A (Active)

2023-A6502 - Details

See Senate Version of this Bill:: S5571
Current Committee:: Assembly Governmental Employees
Law Section:: Retirement
Laws Affected:: Amd §2, Chap 540 of 2021

2023-A6502 - Summary

Relates to determination of salary base for members of the city of New York fire department pension fund.

2023-A6502 - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6502
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              April 12, 2023
                                ___________
 
 Introduced  by  M.  of A. PHEFFER AMATO -- read once and referred to the
   Committee on Governmental Employees
 
 AN ACT to amend chapter 540 of the laws of 2021 amending the  retirement
   and  social  security law relating to determination of salary base for
   members of the city of New  York  fire  department  pension  fund,  in
   relation to the application thereof
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 2 of chapter 540 of the laws of 2021  amending  the
 retirement  and  social security law relating to determination of salary
 base for members of the city of New York fire department  pension  fund,
 is amended to read as follows:
   § 2. This act shall take effect immediately and shall apply to members
 of  the  city  of  New  York  fire department pension fund who retire OR
 RETIRED on and after [such effective date] JULY 1, 2000.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: This proposed legislation would amend Chapter 540  of
 the  Laws  of  2021 (Chapter 540) to extend the benefits of such chapter
 law to members who retired prior to the effective date  of  Chapter  540
 (i.e., October 29, 2021).
   Effective Date: Upon enactment.
   BACKGROUND:  Prior  to the passage of Chapter 540, the salary base use
 to calculate pension benefits for Tier 2 members of the  New  York  Fire
 Pension  Fund  (FIRE)  hired  on or after July 1, 2000, was equal to the
 pensionable earnings earned in the final  12  months  of  service  only.
 Chapter 540 revised the salary base for such members to equal the great-
 er of
   (1) the pensionable earnings in the final 12 months of service, or
   (2)  the  average pensionable earnings earned in any consecutive three
 years of service.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD00174-02-3

 A. 6502                             2
 
   Chapter 540 did not apply to members who had  already  retired.  Under
 this  proposed  legislation,  the  pension benefits for such Tier 2 FIRE
 members would be recalculated to the extent that the three-year  average
 referenced above is larger than the pensionable earnings in the final 12
 months of service.
   For  the  purposes  of  this Fiscal Note, it has been assumed that any
 increased benefits resulting from this  proposed  legislation  would  be
 applied retroactively to the member's retirement date.
   FINANCIAL  IMPACT  -  PRESENT VALUES: Based on the census data and the
 actuarial assumptions and methods described  herein,  the  enactment  of
 this  proposed  legislation  would  result in an increase in the Present
 Value of Future Benefits (PVFB) and the present value of future employer
 contributions of approximately $41.3 million.
   FINANCIAL IMPACT -  EMPLOYER  CONTRIBUTIONS:  The  enactment  of  this
 proposed  legislation  would  result  in an increase in Fiscal Year 2024
 employer contributions of approximately $45.7 million.
   New UAL attributable to benefit changes are generally  amortized  over
 the remaining working lifetime of those impacted by the benefit changes.
 For the purposes of this Fiscal Note, since those that would benefit are
 retired,  and  therefore  have no remaining working lifetime, the entire
 increase in PVFB would be recognized immediately.
   CENSUS DATA: The estimates presented herein are based  on  the  census
 data  used in the June 30, 2022 actuarial valuation of FIRE to determine
 the Preliminary Fiscal Year 2024 employer  contributions.  Since  actual
 historical  salary  data  was unavailable, historical valuation data was
 used to approximate the impact of recalculating members' benefits.
   The 386 retired members and beneficiaries assumed to benefit from this
 proposed legislation as of June 30, 2022 had an average age of  approxi-
 mately  46.1  years, and have been retired an average of 3.6 years.  The
 average annual benefit increase resulting from this proposed legislation
 is approximately $6,500.
   ACTUARIAL 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 2024 employer contributions of
 FIRE.
   For the purposes of this Fiscal Note, it is assumed that  the  changes
 would  be  reflected  for  the first time in the June 30, 2022 actuarial
 valuation of FIRE used to determine employer  contributions  for  Fiscal
 Year 2024.
   RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
 highly on the realization of the actuarial assumptions used,  demograph-
 ics  of  the  impacted  population 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 additional administrative
 costs  to  implement  the  proposed  legislation  (e.g.,   recalculating
 pensioner benefits).
   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
 A. 6502                             3
 
 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 2023-07  dated  March  3,
 2023  was  prepared  by  the  Chief  Actuary  for the New York City Fire
 Pension Fund. This estimate is intended for use  only  during  the  2023
 Legislative Session.

2023-A6502A (ACTIVE) - Details

See Senate Version of this Bill:: S5571
Current Committee:: Assembly Governmental Employees
Law Section:: Retirement
Laws Affected:: Amd §2, Chap 540 of 2021

2023-A6502A (ACTIVE) - Summary

Relates to determination of salary base for members of the city of New York fire department pension fund.

2023-A6502A (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6502--A
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              April 12, 2023
                                ___________
 
 Introduced  by  M.  of A. PHEFFER AMATO -- read once and referred to the
   Committee on Governmental Employees -- recommitted to the Committee on
   Governmental Employees in accordance with Assembly Rule 3, sec.  2  --
   committee  discharged,  bill amended, ordered reprinted as amended and
   recommitted to said committee

 AN ACT to amend chapter 540 of the laws of 2021 amending the  retirement
   and  social  security law relating to determination of salary base for
   members of the city of New  York  fire  department  pension  fund,  in
   relation to the application thereof
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 2 of chapter 540 of the laws of 2021  amending  the
 retirement  and  social security law relating to determination of salary
 base for members of the city of New York fire department  pension  fund,
 is amended to read as follows:
   § 2. This act shall take effect immediately and shall apply to members
 of  the  city  of  New  York  fire department pension fund who retire OR
 RETIRED on and after [such effective date] JULY 1, 2000.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY: This proposed legislation would extend the calculation of the
 salary base used to determine pension benefits enacted by Chapter 540 of
 the Laws of 2021 to members of the  New  York  City  Fire  Pension  Fund
 (FIRE) who retired prior to the effective date.
 
          EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
           by Fiscal Year for the first 25 years ($ in Millions)
 
                          Year           FIRE
                          2025           43.5
                          2026           0.0
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD00174-04-4

 A. 6502--A                          2
 
                          2027           0.0
                          2028           0.0
                          2029           0.0
                          2030           0.0
                          2031           0.0
                          2032           0.0
                          2033           0.0
                          2034           0.0
                          2035           0.0
                          2036           0.0
                          2037           0.0
                          2038           0.0
                          2039           0.0
                          2040           0.0
                          2041           0.0
                          2042           0.0
                          2043           0.0
                          2044           0.0
                          2045           0.0
                          2046           0.0
                          2047           0.0
                          2048           0.0
                          2049           0.0
 
   The  increase  in employer contributions will be allocated to New York
 City.
 
           INITIAL INCREASE (DECREASE) IN ACTUARIAL LIABILITIES
                    as of June 30, 2023 ($ in Millions)
 
 Present Value (PV)                      FIRE
 PV of Benefits:                         39.3
 PV of Employee Contributions:           0.0
 PV of Employer Contributions:           39.3
 Unfunded Accrued Liabilities:           39.3

                AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
                                         FIRE
 Number of Payments:                     1
 Fiscal Year of Last Payment:            2025
 Amortization Payment:                   43.5 M
 
   The Unfunded Accrued Liability attributable to  current  retirees  was
 recognized in the first year.
   CENSUS  DATA:  The estimates presented herein are based on preliminary
 census data collected as of June 30,  2023.  The  census  data  for  the
 impacted population is summarized below.
 
                                                   FIRE
 Receiving Members
 - Number Count:                                   351
 - Average Age:                                    47.1
 - Average years retired:                          4.7
 - Average annual accrued benefit increase:        $6,400
 A. 6502--A                          3
 
   IMPACT  ON MEMBER BENEFITS: Prior to the passage of Chapter 540 of the
 Laws of 2021, the salary base used to  calculate  pension  benefits  for
 Tier  2 members of FIRE hired on or after July 1, 2000, was equal to the
 pensionable earnings earned in the final 12 months of service only.
   Chapter  540  revised  the  salary  base for such members to equal the
 greater of
   (1) the pensionable earnings in the final 12 months of service, or
   (2) the average pensionable earnings earned in any  consecutive  three
 years of service.
   Chapter  540  did  not apply to members who had already retired. Under
 this proposed legislation, the pension benefits for  such  Tier  2  FIRE
 members  would be recalculated to the extent that the three-year average
 referenced above is larger than the pensionable earnings in the final 12
 months of service.
   For the purposes of this Fiscal Note, it has  been  assumed  that  any
 increased  benefits  resulting  from  this proposed legislation would be
 applied retroactively to the member's retirement date.
   ASSUMPTIONS AND METHODS: The  estimates  presented  herein  have  been
 calculated  based  on the Revised 2021 Actuarial Assumptions and Methods
 of the impacted retirement systems.
   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 2024-42 dated April 9,
 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.

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