NY State Senate Bill 2023-S6560A

Senate Bill S6560A

2023-2024 Legislative Session

Relates to increasing benefits payable by the correction officers' variable supplements fund to beneficiaries

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Current Bill Status - In Senate Committee Civil Service And Pensions 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
Mar 20, 2024	print number 6560a
Mar 20, 2024	amend and recommit to civil service and pensions
Jan 03, 2024	referred to civil service and pensions
Apr 26, 2023	referred to civil service and pensions

Bill Amendments

Original

A (Active)

2023-S6560 - Details

See Assembly Version of this Bill:: A6862
Current Committee:: Senate Civil Service And Pensions
Law Section:: New York City Administrative Code
Laws Affected:: Amd §13-194, NYC Ad Cd
Versions Introduced in Other Legislative Sessions:: 2019-2020: S6135
2021-2022: S6983

2023-S6560 - Summary

Increases benefits payable by the correction officers' variable supplements fund to beneficiaries.

2023-S6560 - Sponsor Memo

2023-S6560 - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6560
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              April 26, 2023
                                ___________
 
 Introduced  by  Sen. JACKSON -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
 
 AN ACT to amend the administrative code of the  city  of  New  York,  in
   relation  to  increasing  benefits payable by the correction officers'
   variable supplements fund to beneficiaries

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section  13-194 of the administrative code of the city of
 New York is amended by adding a new subdivision 12 to read as follows:
   12. IN ADDITION TO THE PAYMENTS SET FORTH IN PARAGRAPHS (C) AND (D) OF
 SUBDIVISION FOUR OF THIS SECTION, THERE SHALL BE PAID TO EACH  BENEFICI-
 ARY  ON  OR ABOUT THE DECEMBER FIFTEENTH NEXT SUCCEEDING HIS OR HER DATE
 OF RETIREMENT, AN AMOUNT EQUAL TO  THE  VARIABLE  SUPPLEMENTS  PAYMENTS,
 SUBJECT  TO  THE PROVISIONS OF ITEMS (I) AND (II) OF SUBPARAGRAPH ONE OF
 PARAGRAPH (E) OF SUBDIVISION FOUR OF THIS SECTION, THAT HE OR SHE  WOULD
 HAVE  RECEIVED, HAD HE OR SHE RETIRED ON THE DATE OF HIS OR HER EARLIEST
 ELIGIBILITY FOR SERVICE RETIREMENT, IN THE PERIOD MEASURED FROM (1)  THE
 LATER  OF (I) SUCH EARLIEST ELIGIBILITY DATE AND (II) JANUARY FIRST, TWO
 THOUSAND TWENTY-FOUR AND (2) HIS OR HER DATE OF RETIREMENT.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: This bill provides certain New York  City  Employees'
 Retirement  System  (NYCERS) Correction officers a lump sum benefit upon
 retirement, commonly referred to as a Deferred  Retirement  Option  Plan
 (DROP),  equal  to the amount of Correction Officer Variable Supplements
 Fund (COVSF) payments such officer would have received if he or she  had
 retired  at  the  later  of their respective earliest service retirement
 eligibility date or January 1, 2024.
   Effective Date: Upon enactment.
   BACKGROUND: Correction officers who  participate  in  NYCERS  and  who
 retire with immediate payability of a service retirement at their earli-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08663-02-3

 S. 6560                             2
 
 est  service  retirement eligibility date (e.g., after 20 or 25 years of
 credited service) are entitled to receive supplemental non-pension COVSF
 benefits in the amount of $12,000 per calendar year. Correction officers
 who  continue to work beyond their earliest service retirement eligibil-
 ity date are ineligible to receive COVSF payments until retirement, even
 though they would be eligible to retire from service and  receive  COVSF
 benefits.
   IMPACT ON BENEFITS: This bill would provide to NYCERS correction offi-
 cers  who  continue  to  work  beyond  their earliest service retirement
 eligibility date a lump sum DROP payment consisting of the annual  COVSF
 payment  each year beyond the later of their earliest service retirement
 date or January 1, 2024 (i.e., the COVSF payments the retiree would have
 received if he or she had retired at his or her earliest service retire-
 ment eligibility date or January 1, 2024, whichever  is  later)  without
 any adjustment for interest.
   The DROP does not apply to deaths or to disability retirement, even if
 those  events  occur  after  the earliest service retirement eligibility
 date.
   FINANCIAL IMPACT - PRESENT VALUES: Based on the actuarial  assumptions
 and methods described herein, the enactment of this proposed legislation
 would  increase  the Present Value of Future Benefits (PVFB) by approxi-
 mately $76.7 million.
   Under the Entry Age Normal cost method used to determine the  employer
 contributions  to  NYCERS,  there  would  be an increase in the Unfunded
 Accrued Liability (UAL) of approximately $42.8 million and  an  increase
 in the Present Value of future employer Normal Cost of $33.9 million.
   FINANCIAL  IMPACT  -  ANNUAL  EMPLOYER CONTRIBUTIONS: The enactment of
 this proposed legislation would result in an initial increase in  annual
 employer  contributions  for New York City of approximately $9.8 million
 which is the result of an increase in the Normal Cost in addition to the
 UAL payment.
   New 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 11 years
 and the increase in UAL was therefore amortized over  a  11-year  period
 (10  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 Preliminary June 30, 2022 actuarial valuation of NYCERS
 to determine the Preliminary Fiscal Year 2024 employer contributions.
   The  6,711 NYCERS Correction officers as of June 30, 2022 had an aver-
 age age of approximately 42.2 years, and average service of approximate-
 ly 11.6 years.
   ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
 been calculated based on the actuarial assumptions and methods in effect
 for the Preliminary Fiscal Year 2024 employer contributions of NYCERS.
   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 NYCERS 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.
 S. 6560                             3
 
   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 of NYCERS and other New
 York City agencies to implement the proposed legislation.
   * The impact of this  proposed  legislation  on  Other  Postemployment
 Benefit (OPEB) costs.
   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 2023-38 dated April 25,
 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.

2023-S6560A (ACTIVE) - Details

See Assembly Version of this Bill:: A6862
Current Committee:: Senate Civil Service And Pensions
Law Section:: New York City Administrative Code
Laws Affected:: Amd §13-194, NYC Ad Cd
Versions Introduced in Other Legislative Sessions:: 2019-2020: S6135
2021-2022: S6983

2023-S6560A (ACTIVE) - Summary

Increases benefits payable by the correction officers' variable supplements fund to beneficiaries.

2023-S6560A (ACTIVE) - Sponsor Memo

2023-S6560A (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6560--A
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              April 26, 2023
                                ___________
 
 Introduced  by  Sen. JACKSON -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
   -- recommitted to the Committee  on  Civil  Service  and  Pensions  in
   accordance  with  Senate  Rule 6, sec. 8 -- committee discharged, bill
   amended, ordered reprinted as amended and recommitted to said  commit-
   tee
 
 AN  ACT  to  amend  the  administrative code of the city of New York, in
   relation to increasing benefits payable by  the  correction  officers'
   variable supplements fund to beneficiaries
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 13-194 of the administrative code of  the  city  of
 New York is amended by adding a new subdivision 12 to read as follows:
   12. IN ADDITION TO THE PAYMENTS SET FORTH IN PARAGRAPHS (C) AND (D) OF
 SUBDIVISION  FOUR OF THIS SECTION, THERE SHALL BE PAID TO EACH BENEFICI-
 ARY ON OR ABOUT THE DECEMBER FIFTEENTH NEXT SUCCEEDING HIS OR  HER  DATE
 OF  RETIREMENT,  AN  AMOUNT  EQUAL TO THE VARIABLE SUPPLEMENTS PAYMENTS,
 SUBJECT TO THE PROVISIONS OF ITEMS (I) AND (II) OF SUBPARAGRAPH  ONE  OF
 PARAGRAPH  (E) OF SUBDIVISION FOUR OF THIS SECTION, THAT HE OR SHE WOULD
 HAVE RECEIVED, HAD HE OR SHE RETIRED ON THE DATE OF HIS OR HER  EARLIEST
 ELIGIBILITY  FOR SERVICE RETIREMENT, IN THE PERIOD MEASURED FROM (1) THE
 LATER OF (I) SUCH EARLIEST ELIGIBILITY DATE AND (II) JANUARY FIRST,  TWO
 THOUSAND TWENTY-FOUR AND (2) HIS OR HER DATE OF RETIREMENT.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY:    This  proposed  legislation  would  provide certain NYCERS
 Correction  officers  a  lump  sum  benefit  upon  retirement,  commonly
 referred  to  as  a Deferred Retirement Option Plan (DROP), equal to the
 amount of Correction Officer Variable Supplements Fund (COVSF)  payments
 such  officer  would have received if he or she had retired at the later
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08663-04-4
 S. 6560--A                          2

 
 of their respective earliest  service  retirement  eligibility  date  or
 January 1, 2024.
          EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
           by Fiscal Year for the first 25 years ($ in Millions)
                           Year   NYCERS
                           2025   9.9
                           2026   10.0
                           2027   10.2
                           2028   10.4
                           2029   10.6
                           2030   10.8
                           2031   11.0
                           2032   11.2
                           2033   11.4
                           2034   4.7
                           2035   4.9
                           2036   5.1
                           2037   5.2
                           2038   5.4
                           2039   5.5
                           2040   5.6
                           2041   5.6
                           2042   5.7
                           2043   5.7
                           2044   5.7
                           2045   5.6
                           2046   5.7
                           2047   5.7
                           2048   5.8
                           2049   5.9
   Employer  Contribution  impact  beyond  Fiscal Year 2049 is not shown.
 Projected contributions include future new hires that may be impacted.
 
   The entire 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)              NYCERS
                 PV of Benefits:                   71.9
                 PV of Employee Contributions:      0.0
                 PV of Employer Contributions:     71.9
                 Unfunded Accrued Liabilities:     43.0
 
                AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
 
                                                 NYCERS
                 Number of Payments:                9
                 Fiscal Year of Last Payment:      2033
                 Amortization Payment:            6.8 M
 
   Unfunded Accrued Liability increases were amortized over the  expected
 remaining  working  lifetime  of  those  impacted by the benefit changes
 using level dollar payments.
 S. 6560--A                          3
 
   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.
 
                                                 NYCERS
                 Active Members
                 - Number Count:                 6,097
                 - Average Age:                  43.0
                 - Average Service:              12.4
                 - Average Salary:               128,500
 
   IMPACT  ON MEMBER BENEFITS: This proposed legislation would provide to
 NYCERS correction officers who continue to work  beyond  their  earliest
 service  retirement  eligibility date a lump sum DROP payment consisting
 of the annual COVSF payment each year beyond the later of their earliest
 service retirement date or January 1, 2024 (i.e., the COVSF payments the
 retiree would have received if he or she  had  retired  at  his  or  her
 earliest  service retirement eligibility date or January 1, 2024, which-
 ever is later) without any adjustment for interest.
   The DROP would not apply to deaths or to disability  retirement,  even
 if  those events occur after the earliest service retirement eligibility
 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. In addition:
   * New entrants were assumed to replace exiting members so  that  total
 payroll increases by 3% each year for impacted groups. New entrant demo-
 graphics were developed based on data for recent new hires and actuarial
 judgement.
   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 2024-30 dated  March  19,
 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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