Senate Bill S8764A

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8764
 
                             I N  S E N A T E
 
                               March 8, 2024
                                ___________
 
 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 retirement and social security law, in  relation  to
   eligibility  for  ordinary  disability  benefits  and re-employment of
   disability retirees of the New York city police pension fund Tier  III
   plans

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivisions a and b of section 506 of the  retirement  and
 social security law, subdivision a as amended by chapter 513 of the laws
 of  2010  and subdivision b as added by chapter 890 of the laws of 1976,
 are amended to read as follows:
   a. A member in active service who is not eligible for a normal retire-
 ment benefit shall, upon completing five years or more  of  service,  be
 eligible  for the ordinary disability benefit described in subdivision b
 of this section if such member has been determined to  be  eligible  for
 primary  social security disability benefits; provided, however, that no
 member of the New York state teachers' retirement system, the  New  York
 city  employees' retirement system, the New York city board of education
 retirement system, the New York city teachers'  retirement  system,  THE
 NEW  YORK  CITY  POLICE  PENSION  FUND  or  the New York state and local
 employees' retirement system who  is  otherwise  eligible  for  ordinary
 disability benefits pursuant to this section shall be deemed to be inel-
 igible  for  such  benefits because such member is eligible for a normal
 service retirement benefit. MEMBERS OF THE NEW YORK CITY POLICE  PENSION
 FUND NEED NOT COMPLETE FIVE YEARS OR MORE OF SERVICE NOR BE ELIGIBLE FOR
 PRIMARY  SOCIAL SECURITY DISABILITY BENEFITS IN ORDER TO BE ELIGIBLE FOR
 THE ORDINARY DISABILITY BENEFIT  DESCRIBED  IN  SUBDIVISION  B  OF  THIS
 SECTION. APPLICATION FOR AND THE DETERMINATION OF SUCH ORDINARY DISABIL-
 ITY  BENEFIT  SHALL  BE GOVERNED BY SECTION 13-251 OF THE ADMINISTRATIVE
 CODE OF THE CITY OF NEW YORK.
   b. The ordinary disability benefit hereunder shall be a pension  equal
 to  the greater of (i) thirty-three and one-third percent of final aver-
 age salary, or (ii) two percent of final average salary times  years  of
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD14498-02-4
 S. 8764                             2
 
 credited  service  not  in  excess  of  the maximum years of service for
 computing service retirement, such benefit in each case to be reduced by
 fifty percent of the  primary  social  security  disability  benefit  as
 provided  in  section five hundred eleven and one hundred percent of any
 workmen's compensation benefits payable, PROVIDED, HOWEVER, THAT, FOR  A
 MEMBER  OF  THE  NEW YORK CITY POLICE PENSION FUND WHO QUALIFIED WITHOUT
 BEING ELIGIBLE FOR PRIMARY  SOCIAL  SECURITY  DISABILITY  BENEFITS,  THE
 ORDINARY  DISABILITY  BENEFIT  SHALL  BE  REDUCED  BY  ONE-HALF  OF SUCH
 RETIREE'S PRIMARY SOCIAL SECURITY RETIREMENT BENEFIT, COMMENCING AT  AGE
 SIXTY-TWO,  IN  THE SAME MANNER AS PROVIDED FOR SERVICE RETIREMENT BENE-
 FITS UNDER SECTION FIVE HUNDRED ELEVEN OF THIS ARTICLE.
   § 2. Subdivision d of section 507 of the retirement and social securi-
 ty law, as added by chapter 890 of the laws of 1976, is amended to  read
 as follows:
   d.  If a member shall cease to be eligible for primary social security
 benefits before attaining age sixty-five, or, if receipt of social secu-
 rity benefits is not a  condition  for  disability  benefits  hereunder,
 shall  engage  in  such  employment or business activity as would render
 such member ineligible for social security disability benefits  (had  he
 or  she  otherwise  been  eligible),  benefits  hereunder  shall  cease.
 Provided, however, if such member is otherwise eligible, the state civil
 service department or appropriate municipal commission shall  place  the
 name  of such person, as a preferred eligible, on the appropriate eligi-
 ble lists prepared by it for positions for which such person  is  stated
 to  be  qualified  in  a salary grade not exceeding that from which such
 person retired. In such event, disability benefits  shall  be  continued
 for  such  member until such member first shall be offered a position in
 public service at such salary grade. THIS SUBDIVISION SHALL NOT APPLY TO
 MEMBERS OF THE NEW YORK CITY POLICE PENSION FUND WHO SHALL  BE  GOVERNED
 BY SECTION 13-254 OF THE ADMINISTRATIVE CODE OF THE CITY OF NEW YORK.
   §  3.  This  act  shall take effect immediately and shall be deemed to
 have been in full force and effect on and after July 1, 2009.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY:  This  proposed  legislation  modifies  Ordinary   Disability
 Retirement  (ODR)  eligibility,  and provides an additional ODR benefit,
 for Tier 3 members of the New York City Police Pension Fund (POLICE)  by
 removing  the  requirements  of  having  at least five years of credited
 service and being eligible for primary Social Security disability  bene-
 fits (SSDI).

          EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
           by Fiscal Year for the first 25 years ($ in Millions)
                     Year      POLICE
                     2025         4.7
                     2026         5.5
                     2027         6.4
                     2028         7.5
                     2029         8.5
                     2030         9.6
                     2031        10.6
                     2032        11.4
                     2033        12.3
                     2034        13.1
                     2035        13.8
                     2036        14.6
                     2037        15.3
 S. 8764                             3
 
                     2038        16.0
                     2039        16.7
                     2040        17.4
                     2041        20.0
                     2042        20.7
                     2043        21.5
                     2044        22.3
                     2045        23.1
                     2046        23.9
                     2047        24.7
                     2048        25.6
                     2049        26.5
    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)                 POLICE
              PV of Benefits:                     80.6
              PV of Employee Contributions:        0.0
              PV of Employer Contributions:       80.6
              Unfunded Accrued Liabilities:      (17.5)
 
                AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
                                                  POLICE
              Number of Payments:                     16
              Fiscal Year of Last Payment:          2040
              Amortization Payment:              (1.9) M
 
   Unfunded  Accrued Liability increases were amortized over the expected
 remaining working lifetime of those  impacted  by  the  benefit  changes
 using level dollar payments.
   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.
 
                                                 POLICE
              Active Members
              - Number Count:                     20,176
              - Average Age:                        32.8
              - Average Service:                     6.1
              - Average Salary:                  107,600
 
   IMPACT ON MEMBER BENEFITS: Currently, active Tier 3 POLICE members are
 eligible  for  an ODR benefit if they are approved for SSDI benefits and
 have at least five years of credited service.
   Under the proposed legislation, active  or  separated  Tier  3  POLICE
 members  who  are  determined to be disabled by the POLICE Medical Board
 would be eligible for an ODR benefit, irrespective of  SSDI  eligibility
 and  credited  service.  The  safeguards provisions associated with SSDI
 would be replaced with Tier 1 and Tier 2 safeguards.
   The proposed ODR benefit would be equal  to  the  greater  of  1/3  of
 applicable Final Average Salary (FAS) or 2% of applicable FAS multiplied
 S. 8764                             4
 
 by  credited service. This benefit would be subject to an offset, begin-
 ning at age 62, equal to 50% of the primary social security  benefit  as
 defined  in  Retirement  and  Social Security Law Section (RSSL) 511, if
 any,  and would be subject to annual escalation pursuant to RSSL Section
 510.
   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.
   *  For  purposes of this Fiscal Note, it has been assumed that 100% of
 members exiting for ODR under current ODR rates would be ineligible  for
 SSDI.
   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 does not quantify the potential cost for members who
 may qualify for ordinary disability benefits before enactment.
   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 2024-21 dated March 7,
 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.