Allows certain police and firefighters to participate in an optional 20 year retirement plan in certain circumstances

Summary of provisions

Amends retirement and social security law by adding a new section 384-f, affecting the rights of professional firefighters and police as follows. Firefighters and police whose membership in retirement system commenced between July first, two thousand nine and March thirty-first. two thousand twelve are provided an opportunity to participate in optional twenty year retirement plan.

Justification

In 2009 the legislature passed a new Tier V pension bill for public employees and starting January 2010 this statute shall take effect. The intention of the pension bill is to place any firefighters hired after January 2010 into the Tier V plan. Those firefighters hired between July 1, 2005 and the effective date of Tier V (January 9, 2010) working under a current collective bargaining agreement will remain in a non-contributory twenty year plan until the expiration of their contract. This same protection for firefighters working without a contract for years, appears to have been overlooked.

The Buffalo professional Firefighters have operated honorably without a new collective bargaining agreement since 2001. Their original contract places members under the tier II retirement system and under Taylor law it remains the standard until a new agreement is reached.

Legislative history

New bill.

Fiscal implications

This bill would grant that an individual who became a Tier 3 or a Tier 5 member of the New York State and Local Police and Fire Retirement System (PFRS) and whose employer has elected to provide the provisions of Section 384-d, and who is not subject to a collective bargaining agreement, would no longer be required to make mandatory employee contributions.

This bill would also allow a small number of individuals who became members of the PFRS on or after July 1, 2009 and before January 9, 2010 and who did not timely file an application to become covered under

the provisions of Section 384-d within the one year required filing period to file for such coverage.

If this bill is enacted, we anticipate that the employers of such Tier 3 and Tier 5 members who would no longer be required to contribute would see an increase in their annual employer contributions for the fiscal year ending March 31, 2013 of approximately 3.9% of the annual salaries of such members.

In addition to these costs, there would be a future annual cost which would be borne by any employer of a member who would become eligible to file for Section 384-d coverage. These costs would depend on the current plan coverage and salaries of affected members. There would also be a past service cost for each such member, which would depend on the age, service, salary and plan coverage of the member. These past service costs would be borne by all the employers in the PFRS.

Effective date

Immediate

Fiscal note

Pursuant to Legislative Law, Section 50:

Re: Fiscal Note #2012-141

"This bill would grant that an individual who became a Tier 3 or a Tier 5 member of the New York State and Local Police and Fire Retirement System (PFRS) and whose employer has elected to provide the provisions of Section 384-d, and who is not subject to a collective bargaining agreement, would no longer be required to make mandatory employee contributions.

"This bill would also allow a small number of individuals who became members of the PFRS on or after July 1, 2009 and before January 9, 2010 and who did not timely file an application to become covered under the provisions of Section 384-d within the one year required filing period to file for such coverage.

"If this bill is enacted, we anticipate that the employers of such Tier 3 and Tier 5 members who would no longer be required to contribute would see an increase in their annual employer contributions for the fiscal year ending March 31, 2013 of approximately 3.9% of the annual salaries of such members.

"In addition to these costs, there would be a future annual cost which would be borne by any employer of a member who would become eligible to file for Section 384-d coverage. These costs would depend on the current plan coverage and salaries of affected members. There would also be a past service cost for each such member, which would depend on the age, service, salary and plan coverage of the member. These past service costs would be borne by all the employers in the PFRS.

"Summary of relevant resources:

"Data: March 31, 2011 Actuarial Year End File with distributions of membership and other statistics displayed in the 2011 Report of the Actuary and 2011 Comprehensive Annual Financial Report.

"Assumptions and Methods: 2010 and 2011 Annual Report to the Comptroller on Actuarial Assumptions, Codes Rules and Regulations of the State of New York: Audit and Control.

"Market Assets and GASB Disclosures: March 31, 2011 New York State and Local Retirement System Financial Statements and Supplementary Information.

"Valuations of Benefit Liabilities and Actuarial Assets: summarized in the 2011 Actuarial Valuations report.

"I am a member of the American Academy of Actuaries and meet the Qualification Standards to render the actuarial opinion contained herein.

"This estimate, dated April 25, 2012, and intended for use only during the 2012 Legislative Session, is Fiscal Note No. 2012-141, prepared by the Actuary for the New York Stale and Local Police and Fire Retirement System."