S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6434
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                              March 13, 2025
                                ___________
 
 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 THEIR 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 THEY WOULD  HAVE
 RECEIVED,  HAD  SUCH  BENEFICIARY  RETIRED ON THE DATE OF THEIR 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-FIVE AND (2) THEIR 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
 of  their  respective  earliest  service  retirement eligibility date or
 January 1, 2025.
 
          EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
           by Fiscal Year for the first 25 years ($ in Millions)
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04098-02-5
              

 S. 6434                             2
 
                            Year    NYCERS
                            2026      10.3
                            2027      10.5
                            2028      10.6
                            2029      10.8
                            2030      10.9
                            2031      11.1
                            2032      11.2
                            2033      11.4
                            2034      11.5
                            2035       4.5
                            2036       4.6
                            2037       4.7
                            2038       4.8
                            2039       4.8
                            2040       4.8
                            2041       4.8
                            2042       4.7
                            2043       4.7
                            2044       4.5
                            2045       4.4
                            2046       4.4
                            2047       4.4
                            2048       4.5
                            2049       4.5
                            2050       4.5
 
   Projected contributions include future new hires that may be impacted.
 For Fiscal Year 2051 and beyond, the expected increase in normal cost as
 a level percent of pay for impacted new entrants is approximately 0.17%.
   The entire increase in employer contributions will be allocated to New
 York City.
   PRESENT  VALUE  OF  BENEFITS:  The  Present  Value  of Benefits is the
 discounted expected value of benefits paid to  current  members  if  all
 assumptions are met, including future service accrual and pay increases.
 Future new hires are not included in this present value.
 
          INITIAL INCREASE (DECREASE) IN ACTUARIAL PRESENT VALUES
                    as of June 30, 2024 ($ in Millions)
 
           Present Value (PV)                 NYCERS
           (1) PV of Employer Contributions:    75.5
           (2) PV of Employee Contributions:     0.0
           Total PV of Benefits (1) + (2):      75.5
 
   UNFUNDED  ACCRUED  LIABILITY  (UAL): Actuarial Accrued Liabilities are
 the portion of the Present Value of Benefits allocated to past  service.
 Changes  in UAL were amortized over the expected remaining working life-
 time of those impacted using level dollar payments.
 
                AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
 
                                              NYCERS
           Increase (Decrease) in UAL:        45.2 M
           Number of Payments:                   9
           Amortization Payment:               7.2 M
 S. 6434                             3
 
   CENSUS DATA: The estimates presented herein are based  on  preliminary
 census  data  collected  as  of  June  30, 2024. The census data for the
 impacted population is summarized below.
 
                                              NYCERS
           Active Members
           - Number Count:                     5,716
           - Average Age:                       43.4
           - Average Service:                   12.7
           - Average Salary:                 133,900
 
   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, 2025 (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, 2025, 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). This Fiscal Note does not reflect any chapter
 laws that may have been enacted during the current legislative session.
   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 2025-23 dated February
 28, 2025 was prepared by the Chief Actuary for the New York City Retire-
 ment Systems and Pension Funds and is intended for use only  during  the
 2025 Legislative Session.