Allow Retired Officers to Teach

Section 1. Section 211 of the retirement and social security law is amended by adding a new subdivision 9 to read as follows:

9. Any person employed by a community college as a faculty member under a criminal justice program of the state university of New York or city university of New York who retired from public employment while a member of the New York state and local police and fire retirement system, the New York city police pension fund, or the New York city fire department pension fund and who is entitled to receive a retirement allowance from such retirement system prior to the commencement date of such employment by a community college shall automatically be deemed to have been granted a waiver of retirement earnings limitation and such person may be employed by a community college without loss, suspension or diminution of his or her retirement allowance. Any person employed by a community college as a faculty member under a criminal justice program of the state university of New York or city university of New York who has not retired as a member of the New York state and local police and fire retirement system, the New York city police pension fund, or the New York city fire department pension fund shall not automatically be deemed to have been granted a waiver of retirement earnings limitation.

§ 2. This act shall take effect immediately.

FISCAL NOTE.--Pursuant to Legislative Law, Section 50:

This bill will allow certain retirees of the New York State and Local

Police and Fire Retirement System (NYSLPFRS), the New York City Police

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD06636-04-9

A. 7261--A 2

Pension Fund (NYCPPF), and the New York City Fire Department Pension

Fund (NYCFDPF) to work in a community college as a faculty member of a

criminal justice program of the state university of New York or city

university of New York to automatically be deemed to have been granted a

waiver of retirement earnings limitation without loss, suspension or

diminution of his or her retirement allowance. Any such person employed

who has not retired from the NYSLPFRS, NYCPPF or NYCFDPF shall not auto-

matically be deemed to have been granted a waiver of retirement earnings

limitation.

If this bill is enacted, insofar as it will affect the New York State

and Local Police and Fire Retirement System, we expect few retirees to

be affected. There would be negligible additional annual costs. However,

if large numbers of retirees are hired into such positions, there would

be additional annual costs which would be shared by the state of New

York and all of the participating employers in the System.

Summary of relevant resources:

The membership data used in measuring the impact of the proposed

change was the same as that used in the March 31, 2018 actuarial valu-

ation. Distributions and other statistics can be found in the 2018

Report of the Actuary and the 2018 Comprehensive Annual Financial

Report.

The actuarial assumptions and methods used are described in the 2015,

2016, 2017 and 2018 Annual Report to the Comptroller on Actuarial

Assumptions, and the Codes Rules and Regulations of the State of New

York: Audit and Control.

The Market Assets and GASB Disclosures are found in the March 31, 2018

New York State and Local Retirement System Financial Statements and

Supplementary Information.

I am a member of the American Academy of Actuaries and meet the Quali-

fication Standards to render the actuarial opinion contained herein.

This fiscal note does not constitute a legal opinion on the viability

of the proposed change nor is it intended to serve as a substitute for

the professional judgment of an attorney.

This estimate, dated March 5, 2019, and intended for use only during

the 2019 Legislative Session, is Fiscal Note No. 2019-87, prepared by

the Actuary for the New York State and Local Retirement System.

FISCAL NOTE.--Pursuant to Legislative Law, Section 50:

SUMMARY OF BILL: This proposed legislation would amend Retirement and

Social Security Law (RSSL) Section 211 to permit eligible retirees of

the New York City Police Pension Fund (POLICE) or the New York City Fire

Pension Fund (FIRE) to serve as faculty members in the criminal justice

programs of the State University of New York (SUNY) or City University

of New York (CUNY) by way of an automatic post-retirement earnings waiv-

er pursuant to the provisions of RSSL Section 211.

Effective Date: Upon enactment.

IMPACT ON PENSION PAYMENTS: Currently, retirees of public pension

funds and retirement systems who return to public service within New

York, and do not rejoin the applicable public fund or system, are gener-

ally subject to various post-retirement earnings restrictions. Police

and Fire retirees are subject to, among other things, post-retirement

earnings restrictions as provided in RSSL Sections 211 and 212.

Those who elect to be covered under the provisions of RSSL Section 212

are permitted to earn post-retirement earnings from a public employer in

an amount not exceeding a specific dollar limit in each calendar year

without loss, suspension, or diminution of their retirement allowances.

Once this dollar limit is reached, the retiree's retirement allowance is

A. 7261--A 3

suspended for the remainder of that calendar year. Generally, there are

no earnings limitations in, or following, the calendar year in which the

retiree attains age 65. Currently, the RSSL Section 212 post-retirement

earnings limitation in effect for calendar year 2007 and each year ther-

eafter is $30,000.

When certain exigent criteria are met and approval is given to the

employer by a specially designated entity, a waiver pursuant to RSSL

Section 211 may be granted, for a two-year period. Under RSSL Section

211, there is no salary restriction for reemployment with a public enti-

ty that is not the former employer.

Under the proposed legislation, if enacted, the RSSL Section 211 post-

retirement public service earnings waiver would be automatically grant-

ed, without the need to satisfy the criteria currently required pursuant

to RSSL Section 211, to retired Police and Fire members employed as a

faculty member in a SUNY or CUNY criminal justice program.

For purposes of this fiscal note, it has been assumed that Police and

Fire retirees who are or would be employed as faculty members in a SUNY

or CUNY criminal justice program would not be subject to any post-re-

tirement earnings limitation pursuant to RSSL Section 211 since they

would not be working for their former employer.

For illustrative purposes only, the table below presents the estimated

additional retirement allowances paid if RSSL Section 211 waivers are

granted in lieu of applying RSSL Section 212 post-retirement earnings

limitation for various sample combinations of post-retirement annual

earnings and annual retirement allowance amounts.

Annual Retirement Annual Post-Retirement Earnings in Calendar Year

Allowance $40,000 $50,000 $60,000

____________________________________________________________________

$30,000 $ 7,500 $12,000 $15,000

$40,000 $10,000 $16,000 $20,000

$50,000 $12,500 $20,000 $25,000

$60,000 $15,000 $24,000 $30,000

$70,000 $17,500 $28,000 $35,000

FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with

Administrative Code of the City of New York (ACCNY) Section

13-638.2(k-2), new UAL attributable to benefit changes are to be amor-

tized as determined by the Actuary but generally over the remaining

working lifetime of those impacted by the benefit changes. However,

since changes in the applicable retirement allowances paid to Police and

Fire retirees under this proposed legislation are not known in advance,

the increase in pension payments due to this legislation would be treat-

ed as an actuarial loss. These actuarial losses would be amortized over

a 15-year period (14 payments under the One-Year Lag Methodology (OYLM))

using level dollar payments.

The number of Police and Fire retirees who could potentially be

impacted by this proposed legislation cannot be readily determined.

However, the Actuary believes the increase in pension payments, if the

proposed legislation is enacted, would be approximately $1.5 million to

$2.0 million per year for each 100 faculty SUNY and CUNY criminal

justice program positions created for eligible Police and Fire service

retirees. This would result in an increase in annual employer contrib-

utions of $180,000 to $240,000 compounded each year (e.g. $240,000 in

the first year, $480,000 in the second year, $720,000 in the third year,

etc.) for 14 years and then will remain level thereafter, assuming 100

A. 7261--A 4

such faculty members are employed each year. Future years' costs would

depend on factors such as, but not limited to, the number of retirees

that benefit under the legislation and the amount of their earnings and

retirement allowances.

OTHER COSTS: Not measured in this Fiscal Note are the following:

* The initial, additional administrative costs of POLICE, FIRE and

other New York City agencies to implement the proposed legislation.

* The impact of this proposed legislation on Other Postemployment

Benefit (OPEB) costs.

CONTRIBUTION TIMING: For the purposes of this Fiscal Note, it is

assumed that the changes in the Present Value of future employer

contributions and annual employer contributions would be reflected for

the first time in the June 30, 2020 actuarial valuations of POLICE and

FIRE. In accordance with the OYLM used to determine employer contrib-

utions, the increase in employer contributions would first be reflected

in Fiscal Year 2022.

CENSUS DATA: For purposes of analyzing the impact of the proposed

legislation, illustrative examples with various salary and retirement

allowance amounts have been provided above.

ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the Present Value of

future employer contributions and annual employer contributions

presented herein have been calculated based on the actuarial assumptions

and methods in effect for the June 30, 2018 (Lag) actuarial valuations

used to determine the Preliminary Fiscal Year 2020 employer contrib-

utions of POLICE and FIRE.

RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend

highly on the actuarial assumptions and methods used and are subject to

change based on the realization of potential investment, demographic,

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.

STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu-

ary for, and independent of, the New York City Retirement Systems and

Pension Funds. I am a Fellow of the Society of Actuaries, an Enrolled

Actuary under the Employee Retirement Income and Security Act of 1974, a

Member of the American Academy of Actuaries, and a Fellow of the Confer-

ence of Consulting Actuaries. 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 2019-06 dated April 11,

2019 was prepared by the Chief Actuary for the New York City Police

Pension Fund and the New York City Fire Pension Fund. This estimate is

intended for use only during the 2019 Legislative Session.