S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7220
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               May 15, 2023
                                ___________
 
 Introduced  by  M.  of A. PHEFFER AMATO -- read once and referred to the
   Committee on Governmental Employees
 
 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
 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD03776-02-3
 A. 7220                             2
              

 
 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 (NYSLPFRS) 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 they first became a member  of  the
 NYSLPFRS or within one year of the effective date of this bill, whichev-
 er  occurs  later. The amount of service credit received in the NYSLPFRS
 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 2023  legislative  session,  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 in the
 NYSLPFRS.
   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, 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.
 A. 7220                             3
 
   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  February  28,  2023, and intended for use only
 during the  2023  Legislative  Session,  is  Fiscal  Note  No.  2023-87,
 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 current or former
 New  York City Employees' Retirement System (NYCERS) members employed as
 New York City Department of Environmental Protection (DEP) police  offi-
 cers 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,  or  full  credit exceeding 10 years in an underlying age-based
 State retirement plan. 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, or full credit exceeding 10 years in  an  underlying  age-based
 State  retirement  plan.  This  service would be included in the benefit
 calculation payable 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
 Additional 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.
 A. 7220                             4
 
   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
 $43,100, 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.
   Based on the actuarial assumptions and methods  described  below,  the
 enactment  of  this proposed legislation is estimated to increase annual
 employer contributions by approximately $5,100,  on  average,  for  each
 eligible member who transfers to PFRS.
   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  the event.   Consequently, changes in employer
 contributions have been estimated assuming that the increase in the  UAL
 will  be  recognized  as  an  actuarial  loss and financed over a closed
 15-year period (14 payments under the One-Year  Lag  Methodology)  using
 level dollar payments.
   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 June 30, 2022 actuarial valuation of NYCERS  to  deter-
 mine the Preliminary Fiscal Year 2024 employer contributions.
   There are 190 active DEP police officers who participate in NYCERS and
 have  at  least  two  years of service as of June 30, 2022. Of these, 96
 active members have 15 or fewer  years  of  service  and  are  therefore
 assumed  to  potentially benefit from the proposed legislation. These 96
 active members have an average age of approximately 34.7 years,  average
 service  of  approximately  7.8 years, and an average salary of approxi-
 mately $74,700. There are also 56 former DEP police  officers  who  have
 separated from service with between two and 15 years of service.
   ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
 been  calculated based on the actuarial assumptions and methods used for
 the Preliminary Fiscal Year 2024 employer contributions of NYCERS.
   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.
   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.
 A. 7220                             5

   Not measured in this Fiscal Note are the following:
   *  The  initial  additional  administrative  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 2023-27 dated  April  12,
 2023  was prepared by the Chief Actuary for the New York City Employees'
 Retirement System.  This estimate is intended for use  only  during  the
 2023 Legislative Session.