New York City Retirement Systems Part I Experience Study Report – POLICE and FIRE

November 29, 2023

Table of Contents

    Executive Summary

    This report summarizes the Part I Experience Study performed by Milliman of the five New York City Retirement Systems (“NYCRS”):

    • Section I – New York City Employees’ Retirement System (NYCERS)
    • Section II – Teachers’ Retirement System of the City of New York (TRS)
    • Section III – Board of Education Retirement System of the City of New York (BERS)
    • Section IV – New York City Police Pension Fund (POLICE)
    • Section V – New York City Fire Pension Fund (FIRE)

    This report includes Sections IV and V for POLICE and FIRE.

    The primary purposes of the Part I Experience Study Report are to provide high-level observations of the experience for the indicated systems:

    • This report provides information on key preretirement demographic assumptions – withdrawal, retirement and disability – used in the actuarial valuations performed by the OA.
    • This report provides information on the pre-retirement and postretirement mortality assumptions used in the actuarial valuations performed by the OA.

    The Part II Experience Study report will incorporate recommendations for changes to the actuarial assumptions reviewed.

    The experience study includes information for the 10-year period ending June 30, 2021 as provided by the OA.  This includes data from 2012 – 2017 contained in the historical database along with updates for the 4-year period ending June 30, 2021 completed by Milliman.

    POLICE

    The following is a summary of our observations regarding the experience of POLICE.

    Summary of Police Observations
    Decrement Observation Potential Impact
    Withdrawal Fewer withdrawals than expected after 5 years of service. Reducing withdrawal rates generally results in higher liabilities.
    Retirement Fewer retirements than expected overall, although more retirements than expected for those not eligible for WTC benefits. How should retirement rates and disability rates be adjusted to account for impact of WTC benefits?
    Ordinary Disability Eligibility for retirement impacts rates of disability;  nearly none occurred for members with at least 20 years of service, but greater than expected for those with less than 20 years. Modifying rates of disability based on eligibility for retirement generally results in higher liabilities.
    Accidental Disability If eligible for WTC benefits, fewer accidental disability retirements occurred than expected. If not eligible for WTC benefits, experience was similar to expectations. How should retirement rates and disability rates be adjusted to account for impact of WTC benefits?
    Ordinary Death Fewer deaths than expected but not enough data for experience to be considered fully credible. Reductions in rates of mortality generally results in higher liabilities.
    Accidental Death Actual deaths were less than half that expected. Reductions in rates of accidental death would generally result in lower liabilities.
    Post Retirement Mortality
    Service Retirees Actual number of deaths was similar to expectations. Further review required to compare experience to the most recent published mortality tables.
    Disabled Retirees Actual number of deaths was relatively similar to expectations but will need to review amount-weighting factor.
    Contingent Beneficiaries Not enough data for experience to be considered credible.

    FIRE

    The following is a summary of our observations regarding the experience of FIRE.

    Summary of Fire Observations
    Decrement Observation Potential Impact
    Withdrawal Fewer withdrawals than expected after 1 year of service. Unsure of impact hiring freeze from 2017 – 2013 on experience. Reducing withdrawal rates generally results in higher liabilities.
    Retirement Fewer retirements than expected overall, although more retirements than expected for those not eligible for WTC benefits. How should retirement rates and disability rates be adjusted to account for impact of WTC benefits?
    Ordinary Disability Eligibility for retirement impacts rates of disability;  nearly none occurred for members with at least 20 years of service or age 55 and older, but greater than expected for those with less than 20 years. Modifying rates of disability based on eligibility for retirement would generally results in higher liabilities.
    Accidental Disability Greater number of accidental disability retirements than expected, although less at ages 55 and older. Increasing accidental disability rates generally results in higher liabilities.
    Ordinary Death Less deaths than expected but data is not fully credible. Reductions in rates of mortality generally results in higher liabilities.
    Accidental Death Actual deaths were less than expected. Reductions in rates of accidental death would generally result in lower liabilities.
    Post Retirement Mortality
    Service Retirees Actual number of deaths was greater than expected. Further review required to compare experience to the most recent published mortality tables.
    Disabled Retirees Actual number of deaths was relatively similar to expectations.
    Contingent Beneficiaries Not enough data for experience to be considered credible.
    $242 billion
    Aug
    2022