NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7791A
SPONSOR: Pheffer Amato TITLE OF BILL:
An act to amend the retirement and social security law, in relation to
the restoration of 20 year service retirement for New York city police
officers
PURPOSE OR GENERAL IDEA OF BILL:
To restore the 20-year service retirement for New York City police offi-
cers hired on or after July 1, 2009.
SUMMARY OF PROVISIONS:
Section one of the bill amends subdivision 17 of section 501 of the
Retirement and Social Security Law to state that for police/fire members
of the New York city police pension fund, normal retirement age shall be
the age at which a member completes or would have completed twenty years
of service.
Section two of the bill amends subdivision d of section 503 of the
Retirement and Social Security Law to state that the normal service
retirement benefit specified in section five hundred five of this Arti-
cle shall be paid to police/fire members of the New York city police
pension fund, after twenty years of service.
Section three of the bill amends section 505 of the Retirement and
Social Security Law to add a new subdivision d that states that notwith-
standing anything to the contrary in any other law, police/fire members
of the New York city police pension fund shall be eligible for a normal
service retirement benefit in lieu of an early service retirement bene-
fit upon completing twenty years of service pursuant to subdivision d of
section five hundred three of this Article.
JUSTIFICATION:
This bill seeks to remedy a glaring inequity facing recently-hired New
York City police officers. Throughout New York State, police officers
become eligible for a full service retirement benefit of half of their
final salary after 20 years. And in New York City, police officers hired
prior to July 1, 2009 become eligible for a full service retirement
benefit after 20 years. However, under current law New York City police
officers hired on or after July 1, 2009 do not become eligible for a
full service retirement benefit until they have worked at least 22
years.
This inequity has played a role in the unprecedented crisis New York
City is experiencing in regard to the recruitment and retention of
police officers. With respect to retention, 2022 saw the most New York
City police officer resignations in at least two decades, including an
increase of more than 600% from 10 years ago. Departing police officers
regularly cite their inferior pensions and the additional service
requirement as reasons for joining other police departments. With
respect to recruitment, the NYPD has been unable to fill and graduate
sufficient police academy classes.
These issues have a profound impact on both New York City police offi-
cers and New Yorkers. Many of the NYPD's best, brightest, and most
diverse officers are fleeing for neighboring jurisdictions, where they
not only are eligible for a 20-year service retirement, but can also
earn more wages, work less, and improve their quality of life. For simi-
lar reasons, promising young men and women interested in pursuing
careers in law enforcement are choosing to join other police agencies or
pursue other careers altogether. The loss of these talented individu-
als-and the attendant impact on remaining officers who are forced to
work overtime due to staffing shortages-makes New York City less safe.
And, it has a direct financial impact on the New York taxpayer, both
through the significant resources wasted on training officers who soon
depart (costs for such training are estimated to be in excess of
$100,000 per recruit), as well as the additional overtime costs incurred
due to lack of adequate staffing.
Finally, and importantly, this bill would merely restore the 20-year
service retirement for all New York City police officers as it existed
prior to the veto of the Tier 2 extender by Governor. David Paterson in
2009, which was never intended to take away this meaningful benefit for
New York City police officers.
PRIOR LEGISLATIVE HISTORY:
New Bill.
FISCAL IMPLICATIONS:
Please see Bill.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
7791--A
2023-2024 Regular Sessions
IN ASSEMBLY
June 15, 2023
___________
Introduced by M. of A. PHEFFER AMATO, FALL, BERGER, BRAUNSTEIN, LAVINE,
STERN, COLTON -- read once and referred to the Committee on Govern-
mental Employees -- recommitted to the Committee on Governmental
Employees in accordance with Assembly Rule 3, sec. 2 -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
AN ACT to amend the retirement and social security law, in relation to
the restoration of 20 year service retirement for New York city police
officers
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 17 of section 501 of the retirement and social
2 security law, as amended by chapter 18 of the laws of 2012, is amended
3 to read as follows:
4 17. "Normal retirement age" shall be age sixty-two, for general
5 members, and the age at which a member completes or would have completed
6 twenty-two years of service, for police/fire members, New York city
7 uniformed correction/sanitation revised plan members and investigator
8 revised plan members, except that for police/fire members of the New
9 York city police pension fund, normal retirement age shall be the age at
10 which a member completes or would have completed twenty years of
11 service.
12 § 2. Subdivision d of section 503 of the retirement and social securi-
13 ty law, as amended by chapter 18 of the laws of 2012, is amended to read
14 as follows:
15 d. The normal service retirement benefit specified in section five
16 hundred five of this article shall be paid to police/fire members, New
17 York city uniformed correction/sanitation revised plan members and
18 investigator revised plan members without regard to age upon retirement
19 after twenty-two years of service, except that the normal service
20 retirement benefit specified in section five hundred five of this arti-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD11368-03-4
A. 7791--A 2
1 cle shall be paid to police/fire members of the New York city police
2 pension fund, after twenty years of service. Early service retirement
3 shall be permitted upon retirement after twenty years of credited
4 service or attainment of age sixty-two, provided, however, that New York
5 city police/fire revised plan members, New York city uniformed
6 correction/sanitation revised plan members and investigator revised plan
7 members shall not be eligible to retire for service prior to the attain-
8 ment of twenty years of credited service.
9 § 3. Section 505 of the retirement and social security law is amended
10 by adding a new subdivision d to read as follows:
11 d. Notwithstanding anything to the contrary in any other law,
12 police/fire members of the New York city police pension fund shall be
13 eligible for a normal service retirement benefit in lieu of an early
14 service retirement benefit upon completing twenty years of service
15 pursuant to subdivision d of section five hundred three of this article.
16 § 4. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY: This proposed legislation would reduce the Normal Retirement
Age for Tier 3 original, revised, and enhanced plan members of the New
York City Police Pension Fund (POLICE) to be the age at which a member
completes or would have completed twenty years of service.
EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
by Fiscal Year for the first 25 years ($ in Millions)
Year POLICE
2025 12.5
2026 13.3
2027 14.4
2028 15.6
2029 16.7
2030 17.9
2031 18.9
2032 19.8
2033 20.7
2034 21.5
2035 22.4
2036 23.2
2037 24.1
2038 24.8
2039 25.6
2040 26.4
2041 22.1
2042 22.9
2043 23.7
2044 24.5
2045 25.2
2046 26.0
2047 26.7
2048 27.4
2049 28.2
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.
A. 7791--A 3
INITIAL INCREASE (DECREASE) IN ACTUARIAL LIABILITIES
as of June 30, 2023 ($ in Millions)
Present Value (PV) POLICE
PV of Benefits: 85.0
PV of Employee Contributions: (9.1)
PV of Employer Contributions: 94.0
Unfunded Accrued Liabilities: 45.6
AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
POLICE
Number of Payments: 16
Fiscal Year of Last Payment: 2040
Amortization Payment: 5.0 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, Tier 3 POLICE members who retire
with at least 20 years of service are eligible to receive an annual
benefit that is equal to 42% of Final Average Salary (FAS), plus 0.33%
of FAS for each month of service (up to 24 months) in excess of 20 years
of service, resulting in a benefit of 50% of FAS after 22 years of
service.
Under the proposed legislation, Tier 3 POLICE members who retire with
at least 20 years of service would be eligible to receive an annual
benefit that is equal to 50% of FAS.
ASSUMPTIONS AND METHODS: The estimates presented herein have been
calculated based on the Revised 2021 Actuarial Assumptions and Methods
of the impacted retirement systems except for:
* Retirement rates were adjusted to reflect the earlier payability of
the service retirement benefit associated with the proposed legislation.
* 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).
A. 7791--A 4
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 2024-13 dated February 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.
