What's happening
This bill changes the pension salary base calculation for certain New York City firefighters hired after July 1, 2000 to match that of those hired before that date.
Why it matters
Levels the playing field for post-2000 NYC firefighters. by allowing those hired after July 1, 2000 to use either their highest 12-month salary or the average of their highest three consecutive years when calculating pension benefits—potentially increasing their pension compared to current rules.
Addresses a long-standing disparity within the fire department. , which could improve morale, retention, and perceptions of fairness among different generations of firefighters.
Increases costs for New York City. by raising both current and future employer pension contributions—estimated at about $350,000 more per year—highlighting a tangible fiscal impact for city budgets.
May set a precedent for other uniformed services. (like police), who could pursue similar benefit adjustments, potentially leading to broader pension reform and additional citywide financial implications.
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Who cares
Tier 2 FDNY members hired on or after July 1, 2000
Those retiring on or after the bill’s effective date could use the greater of final-year pensionable earnings or their highest three-year average, subject to earnings limits, rather than final-year earnings alone.
New York City Fire Pension Fund
The fund would have to apply the same salary-base calculation to eligible newer Tier 2 members as it uses for members hired before July 1, 2000.
New York City budget officials
The fiscal note estimates the change would increase annual employer pension contributions by approximately $350,000.
Headline styles
Equalize Firefighter Pension Calculations
Plain English, a few words. Used as the page title.
Sponsors
History
- Print number 5585b
- Amend and recommit to civil service and pensions
- Referred to civil service and pensions
- Print number 5585a
- Amend and recommit to civil service and pensions
- Referred to civil service and pensions
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Equalize Fire Pension Salary Base
In Assembly Committee · Governmental Employees · Sponsor Peter Abbate
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5585--B
2019-2020 Regular Sessions
IN SENATE
May 8, 2019
Introduced by Sens. GOUNARDES, ADDABBO, BIAGGI, HARCKHAM, HOYLMAN, SANDERS, SAVINO, SKOUFIS, STAVISKY -- 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 -- recommitted to the Committee on Civil Service and Pensions in accordance with Senate Rule
6, sec. 8 -- 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 determination of salary base for members of the city of New York fire department pension fund
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 443 of the retirement and social security law is amended by adding a new subdivision h to read as follows:
h. Notwithstanding any general, special or local law, charter, administrative code, agreement, resolution or rule or regulation to the contrary, the salary base for members of the city of New York fire department pension fund whose employment with the fire department of the city of New York commenced on or after the first of July, two thousand to whom this article otherwise applies shall be determined in the same manner as the salary base for members of the city of New York fire department pension fund whose employment with the fire department of the city of New York commenced before the first of July, two thousand.
§ 2. This act shall take effect immediately and shall apply to members of the city of New York fire department pension fund who retire on and after such effective date.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: This proposed legislation would amend Section 443 of
the Retirement and Social Security Law (RSSL) to change the salary base
for Tier 2 members of the New York City Fire Pension Fund (FIRE) who are
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11504-05-0
S. 5585--B 2
hired on or after July 1, 2000 to a salary base used for such members
who joined prior to July 1, 2000.
Effective Date: Upon enactment.
IMPACT ON BENEFITS: Currently, Tier 2 FIRE plan benefits are primarily
derived from a salary base. For Tier 2 FIRE members hired prior to July
1, 2000 (original Tier 2 members), the salary base is equal to the
greater of
(1) the pensionable earnings in the final 12 months of service, or
(2) the average pensionable earnings earned in any consecutive three
years of service.
Pensionable earnings in the final 12 months of service may not exceed
120% of the previous 12 months' pensionable earnings. If the salary base
is based on the highest three consecutive years, no single year's
pensionable earnings may exceed 120% of the average of the two previous
years' pensionable earnings.
For Tier 2 Fire members hired on or after July 1, 2000 (new Tier 2
members), the salary base is equal to the pensionable earnings earned in
the final 12 months of service only.
Under the proposed legislation, if enacted, the salary base shall be
determined the same for Tier 2 Fire members hired on or after July 1,
2000 as it is for Tier 2 members hired prior to July 1, 2000.
FINANCIAL IMPACT - PRESENT VALUES: Based on the actuarial assumptions
and methods described herein, the enactment of this proposed legislation
would increase the Present Value of Future Benefits (PVFB) and the Pres-
ent Value of future employer contributions by approximately $3.0
million.
Under the Entry Age Normal cost method used to determine the employer
contributions to FIRE, there would be an increase in the Unfunded
Accrued Liability (UAL) of approximately $0.1 million and an increase in
the Present Value of future employer Normal Cost of $2.9 million.
FINANCIAL IMPACT - ANNUAL EMPLOYER CONTRIBUTIONS: In accordance with
Section 13-638.2(k-2) of the Administrative Code of the City of New York
(ACCNY), new UAL attributable to benefit changes are to be amortized as
determined by the Actuary, but are generally amortized over the remain-
ing working lifetime of those impacted by the benefit changes. As of
June 30, 2019, the remaining working lifetime of the Tier 2 members
hired on or after July 1, 2000 is approximately 13 years.
For the purposes of this Fiscal Note, the increase in UAL was amor-
tized over a 13-year period (12 payments under the One-Year Lag Method-
ology (OYLM)) using level dollar payments. This payment plus the
increase in the Normal Cost results in an increase in annual employer
contributions of approximately $350,000 each year.
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, 2019 actuarial valuation of FIRE. In
accordance with the OYLM used to determine employer contributions, the
increase in employer contributions would first be reflected in Fiscal
Year 2021.
CENSUS DATA: The estimates presented herein are based on the census
data used in the Preliminary June 30, 2019 (Lag) actuarial valuation of
FIRE to determine the Preliminary Fiscal Year 2021 employer contrib-
utions.
There are 5,278 active Tier 2 Fire members hired on or after July 1,
2000 as of June 30, 2019 and they have an average age of approximately
S. 5585--B 3
41.3 years, average service of approximately 15.4 years, and an average
salary of approximately $132,800.
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, 2019 (Lag) actuarial valuations
used to determine the Preliminary Fiscal Year 2021 employer contrib-
utions of FIRE.
RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend
highly on the realization of the actuarial assumptions used, as well as
certain demographic characteristics of FIRE and other exogenous factors
such as investment, contribution, and other risks. If actual experience
deviates from actuarial assumptions, the actual costs could differ from
those presented herein. Costs are also dependent on the actuarial meth-
ods 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:
* The initial, additional administrative costs of FIRE and other New
York City agencies to implement the proposed legislation.
* Pension costs for Tier 2 members of New York City Police Pension
Fund hired on or after July 1, 2000 who currently have the same benefit
formula as the FIRE Tier 2 members hired on or after July 1, 2000 and
who may obtain the same benefit improvement through parity via collec-
tive bargaining or similar legislation.
* The impact of this proposed legislation on Other Postemployment
Benefit (OPEB) costs.
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 2020-17 dated March 20,
2020 was prepared by the Chief Actuary for the New York City Fire
Pension Fund. This estimate is intended for use only during the 2020
Legislative Session.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the retirement and social security law, in relation to determination of salary base for members of the city of New York fire department pension fund
Purpose or general idea of bill
To provide parity amongst all of the Tier 2 members of the New York City Fire Department Pension Fund in the calculation of their salary bases
Summary of provisions
Section 1 amends section 443 of the retirement and social security law by adding a new subdivision h to provide that the salary base for members of the New York City fire department pension fund hired on or after July 1st, 2000 covered under this article of law shall be calcu- lated in the same manner as those members hired prior to July 1st, 2000.
Section 2 provides that this act shall take effect immediately.
Justification
The New York City Fire Department Pension Fund system breaks its members into different tiers that are subject to different benefits and service requirements based on the date of the member's hire. For all Tier 1 and Tier 2 members, pensions are equal to 50% of their final average salary (FAS) when they go to retire after a certain amount of years of service.
Within Tier 2, which encompasses hires from July 1st, 1973 until June 30th, 2009, there is a single and significant disparity in member bene- fits: those who commenced service before July 1st, 2000 (the "original" Tier 2 members) have their final average salary based on their most recent 12 months or a 3-year average from their highest-earning years, whichever is higher, while those who commenced service after July 1st, 2000 (the "new" Tier 2 members) base their FAS on the most recent 12 months of service, with no opportunity to look at averages over a longer period of time.
This is a small but important distinction, as the amount of overtime a firefighter will work varies greatly year to year, and basing final salary on only the 12 months prior to retirement often denies these members the ability to have their pension reflect the strenuous and lengthy hours of their peak years.
This disparity does a disservice to the strongest and most dedicated of this class of civil servants who put in long and demanding hours to save lives, only to see these hours severely discounted for the purposes of calculating a pension. This bill will correct this historical wrong by clarifying that all members of Tier 2 of the New York City Fire Depart- ment Pension Fund should be subject to the same FAS calculation.
Prior legislative history
New bill
Fiscal implications
See bill.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.