S T A T E O F N E W Y O R K
________________________________________________________________________
7698
2023-2024 Regular Sessions
I N A S S E M B L Y
June 6, 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
affording certain police/fire members who are members of the fire
department pension fund to continue in service past normal retirement
age with an additional pension benefit for each year of additional
service
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The retirement and social security law is amended by adding
a new section 503-a to read as follows:
§ 503-A. EXTRA PENSION SERVICE CREDITS. NOTWITHSTANDING ANY PROVISION
OF LAW TO THE CONTRARY, A POLICE/FIRE MEMBER WHO IS A MEMBER OF THE NEW
YORK CITY FIRE DEPARTMENT PENSION FUND MAY CONTINUE IN SERVICE PAST THE
DATE THAT HE OR SHE ATTAINS NORMAL RETIREMENT AGE. IN SUCH EVENT AND
UPON HIS OR HER RETIREMENT FOR ANY CAUSE WHATSOEVER, THERE SHALL BE
ADDED TO HIS OR HER ANNUAL PENSION TO WHICH HE OR SHE SHALL UPON HIS OR
HER RETIREMENT BE ENTITLED AN ADDITIONAL AMOUNT COMPUTED AT THE RATE OF
ONE-FORTIETH OF HIS OR HER FINAL SALARY FOR EACH YEAR OF SUCH ADDITIONAL
SERVICE.
§ 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: This proposed legislation would add a new Section
503-a to the Retirement and Social Security Law (RSSL) to provide an
additional 1/40th of "final salary" benefit, subject to applicable esca-
lation, for each additional year of credited service, or fraction there-
of, beyond 22 years of service for Tier 3 Original, Modified, and
Enhanced plan members (Tier 3 members) of the New York City Fire Pension
Fund (FIRE).
Effective Date: Upon enactment.
IMPACT ON BENEFITS: Currently, upon reaching 22 or more years of cred-
ited service, the Tier 3 normal service retirement and non-Enhanced ADR
benefit is equal to:
* 50% of Final Average Salary (FAS),
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10130-02-3
A. 7698 2
* Reduced by 50% of the Primary Social Security benefit (determined
under RSSL Section 511), plus
* Annual escalation as provided in RSSL Section 510.
where FAS is defined as:
* Three-Year FAS (FAS 3) for Original Tier 3 Members, and
* Five-Year FAS (FAS 5) for Modified Plan Members.
The current Enhanced ADR benefit is equal to:
* 75% of FAS 5 subject to Cost-of-Living Adjustment (COLA) pursuant to
Administrative Code of the City of New York (ACCNY) Section 13-696.
Under the proposed legislation, if enacted, the retirement benefit for
Tier 3 members who retire for service or non-Enhanced ADR after the
effective date of the proposed legislation with 22 or more years of
credited service would be equal to:
* 50% of FAS for the first 22 years of credited service, plus
* 1/40th of Final Salary for each additional year of credited service,
or fraction thereof, exceeding 22 years (if any),
* Reduced by 50% of the Primary Social Security benefit (determined
under RSSL Section 511), plus
* Annual escalation as provided in RSSL Section 510.
where FAS is defined as:
* Three-Year FAS (FAS 3) for Original Tier 3 Members, and
* Five-Year FAS (FAS 5) for Modified Plan Members.
and where Final Salary is interpreted to mean the pensionable salary
for each additional year of credited service, or fraction thereof,
exceeding 22 years.
Under the proposed legislation, if enacted, the Enhanced ADR benefit
for Tier 3 members who retire with 22 or more years of credited service
after the effective date of the proposed legislation would be equal to:
* 75% of FAS 5 subject to COLA pursuant to ACCNY Section 13-696, plus
* 1/40th of Final Salary for each additional year of credited service,
or fraction thereof, exceeding 22 years (if any), subject to annual
escalation as provided in RSSL Section 510.
FINANCIAL IMPACT: Based on the census data and the actuarial assump-
tions and methods described herein, the enactment of this proposed
legislation would result in an initial increase in the present value of
future employer contributions of approximately $520.2 million.
The financial impact will increase as the impacted population
increases over time. The estimate of the increase in annual employer
contributions for Fiscal Years 2024 through 2028 are shown in the table
below.
Increase in Employer
Fiscal Contributions
Year ($ Millions)
2024 $34.1
2025 $37.7
2026 $41.5
2027 $45.2
2028 $49.2
New Unfunded Accrued Liability (UAL) attributable to benefit changes
are generally amortized over the remaining working lifetime of those
impacted by the benefit changes. The remaining working lifetime for this
group is approximately 19 years and the increase in UAL was therefore
A. 7698 3
amortized over a 19-year period (18 payments under the One-Year Lag
Methodology) using level dollar payments.
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.
There are 4,469 active Tier 3 members of FIRE as of June 30, 2022 and
they have an average age of approximately 32.9 years, average service of
approximately 5.2 years, and an average salary of approximately
$106,300.
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 FIRE with the
exception of the probability of Tier 3 members working beyond 22 years
of service, which was increased to recognize the impact the proposed
legislation would have on retirement behavior.
New entrants were projected to replace the members expected to leave
the active population to maintain a steady-state population. New entrant
demographics were developed based on data for recent new hires and actu-
arial judgement.
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 following:
* The initial additional administrative costs to implement the
proposed legislation.
* Pension costs for future members of FIRE hired on or after 7/1/2026.
* The impact of this proposed legislation on Other Postemployment
Benefit costs.
* Cost analyses relating to provisions contained in RSSL Section
500(c).
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 2023-57 dated May 23,
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.
I am in favor of this bill. Which is well deserved for my total years of service