S T A T E   O F   N E W   Y O R K
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                                  7128--A
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                               May 18, 2023
                                ___________
 
 Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
   --  committee  discharged,  bill amended, ordered reprinted as amended
   and recommitted to said committee
 
 AN ACT to amend the general  municipal  law,  in  relation  to  allowing
   certain  members  of the New York city fire department pension fund to
   receive a membership date in the New York city fire department pension
   fund attributable to service in the titles of police cadet program  or
   police  cadet  program II in the New York city police department cadet
   program
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section 209-fff of the general municipal law, as added by
 chapter 431 of the laws of 2019, is amended to read as follows:
   § 209-fff. Provisions relating to a membership date in  the  New  York
 city  police  pension fund OR THE FIRE DEPARTMENT PENSION FUND attribut-
 able to service in the titles of police cadet program and  police  cadet
 program  II  in  the  New  York city police department cadet program. 1.
 Notwithstanding any provision of law to the contrary, upon election, any
 member of the New York city police pension fund OR  THE  NEW  YORK  CITY
 FIRE  DEPARTMENT  PENSION FUND who is subject to article fourteen of the
 retirement and social security law, and who served in the New York  city
 police  department cadet program in the title of police cadet program or
 police cadet program II prior to April first, two thousand  twelve,  but
 did  not join the New York city employees' retirement system while serv-
 ing in either such title, may purchase credit for the period of  service
 in  such  titles in the New York city police department cadet program by
 paying into the New York city police pension fund OR THE NEW  YORK  CITY
 FIRE  DEPARTMENT PENSION FUND all member contributions plus interest, at
 a rate of five percent per annum, which would have been payable  to  the
 New  York  city  employees' retirement system under any provision of law
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10936-02-3
              

 S. 7128--A                          2
 
 had such member joined the New York city employees' retirement system on
 the earliest date that he or she was appointed to the  title  of  police
 cadet  program  or  police  cadet program II in the New York city police
 department  cadet  program,  provided  such  payment is made within five
 years after the effective date of this section.
   2. Any member of the New York city police pension fund OR THE NEW YORK
 CITY FIRE DEPARTMENT PENSION FUND who acquires service  credit  pursuant
 to this section shall be entitled to all rights, benefits and privileges
 to which he or she would have been entitled had his or her membership in
 the  New York city police pension fund OR THE NEW YORK CITY FIRE DEPART-
 MENT PENSION FUND begun upon the  earliest  date  that  he  or  she  was
 appointed  to  the title of police cadet program or police cadet program
 II in the New York city police department cadet program, but in no event
 shall the service credit acquired pursuant to this section be deemed  to
 be: (A) service in the police force or any other type of service counted
 or creditable as service in the police force under section 13-218 of the
 administrative  code of the city of New York[,]; (B) SERVICE IN THE FIRE
 DEPARTMENT OF THE CITY OF NEW YORK OR ANY OTHER TYPE OF SERVICE  COUNTED
 OR  CREDIBLE  AS SERVICE IN SUCH FIRE DEPARTMENT UNDER SECTION 13-318 OF
 THE ADMINISTRATIVE CODE OF THE CITY OF NEW YORK; OR  (C)  SERVICE  UNDER
 section  five hundred thirteen of the retirement and social security law
 or any other provision of law for purposes of eligibility  for  benefits
 and  to  determine the amount of benefits under the New York city police
 pension fund OR THE NEW YORK CITY FIRE DEPARTMENT PENSION FUND.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY OF BILL: This proposed legislation would amend Section 209-fff
 of the General Municipal Law (GML) to allow New York City  Fire  Pension
 Fund  (FIRE)  members subject to Article 14 of the Retirement and Social
 Security Law (RSSL) (Tier 3, Tier 3 Modified, and Tier  3  Enhanced)  to
 purchase  prior  service  as  a  cadet in the New York Police Department
 (NYPD) and use the appointment date as a cadet to determine the  initial
 date  of  FIRE  membership  for  plan  or tier eligibility provided such
 purchase of service is made within five years of October 29, 2019.
   Effective Date: Upon enactment.
   BACKGROUND: Currently,  the  purchase  of  prior  NYPD  cadet  service
 performed  while not a member of the New York City Employees' Retirement
 System (NYCERS) does not provide a retroactive  date  of  membership  in
 FIRE,  nor  would  it provide additional service retirement benefits for
 members subject to Article 14 of the RSSL.
   IMPACT ON  BENEFITS:  Under  the  proposed  legislation,  if  enacted,
 purchased  NYPD  cadet  service  performed  while not a member of NYCERS
 would entitle such member with a cadet service date before July 1,  2009
 to  be deemed a Tier 2 member, and such service would be included in the
 calculation of benefits as non-qualifying service credit.
   Also, under the proposed legislation, if enacted, purchased NYPD cadet
 service would entitle members with cadet service between  July  1,  2009
 and  April 1, 2012 who joined FIRE after April 1, 2012 as a Tier 3 Modi-
 fied or Enhanced member to be deemed an original Tier 3 member.
   IMPACT ON PAYABILITY: Since eligibility for FIRE benefits are based on
 tier or plan, including cadet service towards tier or plan,  eligibility
 would  increase  and/or  accelerate  the  payability date of benefits in
 accordance with applicable earlier tiers or plans.
   ADDITIONAL MEMBER CONTRIBUTIONS: For cadets who did not  join  NYCERS,
 the  member  would have to pay member contributions that would have been
 S. 7128--A                          3
 
 payable to NYCERS had they joined on  their  initial  cadet  appointment
 date, plus 5.0% annual interest.
   Member  contributions  for  FIRE  are  determined  by tier and plan as
 follows:
   * Tier 2 - contribution rates are based on entry age.
   * Tier 3 and Tier 3 Modified - Basic  Member  Contributions  (BMC)  of
 3.0%.
   *  Tier  3 Enhanced - BMC of 3.0% plus Additional Member Contributions
 currently equal to 2.0%. The additional contribution rate of 2.0% can be
 raised to 3.0% based on a financial analysis performed  by  the  Actuary
 every  three  years.  At  no time can the total contribution rate exceed
 6.0%.
   FINANCIAL IMPACT - SUMMARY: There is no data  currently  available  to
 estimate  the  number  of  members  who  might benefit from the proposed
 legislation. For the purposes of this Fiscal Note, the estimated  finan-
 cial impact has been calculated on a per event basis for an average FIRE
 member  who  is  either currently a Tier 3 member and could benefit from
 the enactment of this proposed legislation by  being  deemed  a  Tier  2
 member  or  is  currently a Tier 3 Modified or Enhanced member who could
 benefit by being deemed an original Tier 3 member. A  breakdown  of  the
 financial impact by Tier is shown in the table below.
 
                          Additional           Estimated First Year
      New Tier       Present Value of Future   Employer Contributions
                     Employer Contributions     (average per event)
                       (average per event)
 
 Tier 2                     $401,800                 $30,200

 Original Tier 3             $11,900                    $700
 
   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 census data and the  actuarial  assumptions  and  methods
 described  herein,  the  enactment  of  this  proposed legislation would
 increase the present value of future employer  contributions  and  esti-
 mated  first year employer contributions by an amount which would depend
 on the Tier granted by the purchase of prior cadet service.
   As there is no data currently available  to  estimate  the  number  of
 members  who  may  purchase cadet service, the financial impact would be
 recognized at the time of the event. Consequently, changes  in  employer
 contributions  have been estimated assuming that the increase in present
 value of future contributions 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.
   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 2,998 active FIRE members  as  of  June  30,  2022  who  are
 currently  in  Tier 3, Tier 3 Modified, or Tier 3 Enhanced and who could
 potentially benefit from the proposed legislation by being deemed a Tier
 2 member (i.e., age 31 and older). These active members had  an  average
 age  of  approximately  35.0 years, average service of approximately 6.1
 years, and an average salary of approximately $116,900.
 S. 7128--A                          4
 
   There are 3,588 active FIRE members  as  of  June  30,  2022  who  are
 currently  in  Tier  3 Modified or Tier 3 Enhanced and could potentially
 benefit from the proposed legislation by being deemed an original Tier 3
 member (i.e., age 28 and older). These active members had an average age
 of approximately 33.5 years, average service of approximately 5.3 years,
 and an average salary of approximately $108,800.
   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.  Addi-
 tionally,  1.2 years of cadet service was assumed based on the amount of
 cadet service previously purchased by  members  of  the  New  York  City
 Police Pension Fund.
   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:
   *  Future  purchases of non-qualifying service by members who would be
 deemed Tier 2 were this bill to pass.
   *  The  initial  additional  administrative  costs  to  implement  the
 proposed legislation.
   *  The  impact  of  this  proposed legislation on Other Postemployment
 Benefit 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  2023-64  dated  May  31,
 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.