New York City Retirement Systems, Part II Experience Study Report – NYCERS

January 29, 2025

Table of Contents

Executive Summary

This report summarizes the Part II 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 Section I for NYCERS and is separated into five different subsections:

General Employees
Correction Officers
Sanitation Employees
Bridges and Tunnels (TBTA) and Transit Employees
Postretirement Mortality

For General employees, experience is reviewed separately for Basic Plan group members and Specialty Plan group members for certain assumptions. These groupings are explained in the General Plan Code Groupings.

The primary purpose of the Part II Experience Study Report is to provide proposed actuarial assumptions based on 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
This report provides information on key salary-related actuarial assumptions – rates of salary increase and overtime (not applicable for TRS and BERS).
This report provides information on the pre-retirement and postretirement mortality assumptions used in the actuarial valuations performed by the OA.
This report is supplemented by Excel files containing full age service tables detailing the proposed assumptions.

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.

The following is a summary of the proposed assumptions and the potential impact on plan liabilities for each of the groups of NYCERS. Milliman was not engaged to perform a replication nor determine the cost impact of the proposed assumptions. Therefore, the comments reflect our thoughts on the potential impact, but will ultimately depend on the current active membership based on analysis to be conducted by OA.

General

Summary of General Proposed Assumptions
Decrement	Proposed Assumption	Potential Impact
Salary	Lower rates of salary increase for longer service members.	Reducing salary increases will result in lower plan liabilities.
Overtime	Higher overtime percentages, especially for members in physically taxing titles.	Higher overtime will result in higher plan liabilities.
Withdrawal	Lower rates of terminations for longer service members, although higher rates are proposed for shorter service members, especially Specialty Group members.	Reducing withdrawal rates results in higher plan liabilities. Actual impact to be determined by OA.
Retirement	Higher rates of retirement proposed at 20 or more years of service, especially for members in physically taxing titles, whereas lower rates are proposed for shorter service periods increasing the number of members to receive the 2% formula benefit.	Higher rates for longer service members will result in higher plan liabilities but actual impact to be determined by OA.
Ordinary Disability	Higher ordinary disability rates for members not eligible for the 2% benefit formula and unreduced retirement, especially for members in physically taxing titles, plus elimination of the assumption for those eligible.	Higher rates of ordinary disability result in higher plan liabilities plus eliminating retirement eligible members will result in higher plan liabilities.
Accidental Disability	Higher accidental disability rates, especially for members in physically taxing titles.	Increasing accidental disability rates results in higher plan liabilities.
Ordinary Death	Lower mortality rates.	Decreasing rates of mortality results in higher plan liabilities.
Accidental Death	No change in the assumption.	No impact on plan liabilities.
Post Retirement Mortality
Service Retirees	Proposing adjustments to current custom table. Higher projected annuity factors for ages until late 60s and lower for older ages. For Housing and Transit Police, proposed assumption consistent with industry standards, decreasing projected life expectancy.	Anticipating higher liability for active members but potentially lower liability for retirees. Actual impact to be determined by OA.
Disabled Retirees	Proposed assumption consistent with industry standards, decreasing projected life expectancy.	Lower life expectancies are anticipated to decrease plan liabilities.
Contingent Beneficiaries	Proposed assumption consistent with industry standards, decreasing projected life expectancy.	Lower life expectancies are anticipated to decrease plan liabilities.

Overall, we believe the changes in overtime, withdrawal, retirement, ordinary disability, accidental disability, ordinary death and postretirement mortality that are anticipated to increase plan

liabilities will exceed the impact of the changes in rates of salary increase and postretirement mortality for retirees that are anticipated to decrease plan liabilities. The net effect is likely an increase in plan liabilities.

Correction

Summary of Correction Proposed Assumptions
Decrement	Proposed Assumption	Potential Impact
Salary	Lower rates of salary increase.	Reducing salary increases will result in lower plan liabilities.
Overtime	Higher overtime percentages.	Higher overtime will result in higher plan liabilities.
Withdrawal	Slightly higher rates of terminations.	Increasing withdrawal rates results in lower plan
Retirement	Higher rates of retirement.	Higher rates of retirement result in higher plan liabilities.
Ordinary Disability	Lower ordinary disability rates under 20 years of service and elimination of the assumption for retirement eligible members.	Reducing rates of ordinary disability results in lower plan liabilities but eliminating retirement eligible members will result in higher plan liabilities. Actual impact to be determined by OA.
Accidental Disability	Higher accidental disability rates, especially for male members.	Increasing accidental disability rates results in higher plan liabilities.
Ordinary Death	Higher mortality rates.	Increasing rates of mortality results in lower plan liabilities.
Accidental Death	No change in the assumption.	No impact on plan liabilities.
Post Retirement Mortality
Service Retirees	Proposed assumption consistent with industry standards adjusted for experience. Higher projected annuity factors for ages until age 60 and lower for older ages.	Anticipating higher liability for active members but potentially lower liability for retirees. Actual impact to be determined by OA.
Disabled Retirees	Proposed assumption consistent with industry standards, increasing projected life expectancy.	Higher life expectancies are anticipated to increase plan liabilities.
Contingent Beneficiaries	Proposed assumption consistent with industry standards, decreasing projected life expectancy.	Lower life expectancies are anticipated to decrease plan liabilities.

Overall, we believe the changes in overtime, retirement, accidental disability and postretirement mortality that are anticipated to increase plan liabilities will exceed the impact of the changes in rates of salary increase, withdrawal, ordinary disability, ordinary death and postretirement mortality for retirees that are anticipated to decrease plan liabilities. The net effect is likely an increase in plan liabilities.

Sanitation

Summary of Sanitation Proposed Assumptions
Decrement	Proposed Assumption	Potential Impact
Salary	Lower rates of salary increase.	Reducing salary increases will result in lower plan liabilities.
Overtime	Higher overtime percentages.	Higher overtime will result in higher plan liabilities.
Withdrawal	No change in the assumption.	No impact on plan liabilities.
Retirement	Higher rates of retirement for mandated members.	Higher rates of retirement result in higher plan liabilities.
Ordinary Disability	Lower ordinary disability rates.	Reducing rates of ordinary disability would result in lower plan liabilities.
Accidental Disability	Higher accidental disability rates, especially for male members.	Increasing accidental disability rates results in higher plan liabilities.
Ordinary Death	Lower mortality rates.	Decreasing rates of mortality results in higher plan liabilities.
Accidental Death	No change in the assumption.	No impact on plan liabilities.
Post Retirement Mortality
Service Retirees	Proposing adjustments to current custom table. Higher projected annuity factors for ages until late 60s and lower for older ages.	Anticipating higher liability for active members but potentially lower liability for retirees. Actual impact to be determined by OA.
Disabled Retirees	Proposed assumption consistent with industry standards, decreasing projected life expectancy.	Lower life expectancies are anticipated to decrease plan liabilities.
Contingent Beneficiaries	Proposed assumption consistent with industry standards, decreasing projected life expectancy.	Lower life expectancies are anticipated to decrease plan liabilities.

Overall, we believe the changes in overtime, retirement, accidental disability, ordinary death, and postretirement mortality that are anticipated to increase plan liabilities will exceed the impact of the changes in rates of salary increase, ordinary disability, and postretirement mortality for retirees that are anticipated to decrease plan liabilities. The net effect is likely an increase in plan liabilities.

TBTA / Transit

The following is a summary of our observations regarding the experience of TBTA and Transit members.

Summary of TBTA/Transit Proposed Assumptions
Decrement	Proposed Assumption	Potential Impact
Salary	Lower rates of salary increase.	Reducing salary increases will result in lower plan liabilities.
Overtime	Higher overtime percentages.	Higher overtime will result in higher plan liabilities.
Withdrawal	Higher rates of terminations for female members but lower rates of termination for male members.	Higher withdrawal rates result in lower plan liabilities. Actual impact to be determined by OA.
Retirement	Higher rates of retirement proposed at 20 or more years of service whereas lower rates are proposed for shorter service periods increasing the number of members to receive the 2% formula benefit.	Higher rates for longer service members will result in higher plan liabilities but actual impact to be determined by OA.
Ordinary Disability	Lower ordinary disability rates for members not eligible for the 2% benefit formula and unreduced retirement, but elimination of the assumption for those eligible.	Reducing rates of ordinary disability results in lower plan liabilities but eliminating retirement eligible members will result in higher plan liabilities. Actual impact to be determined by OA.
Accidental Disability	Lower accidental disability rates.	Reducing accidental disability rates results in lower plan liabilities.
Ordinary Death	Lower mortality rates.	Decreasing rates of mortality results in higher plan liabilities.
Accidental Death	No change in the assumption.	No impact on plan liabilities.
Post Retirement Mortality
Service Retirees	Proposing adjustments to current custom table. Higher projected annuity factors for ages until late 60s and lower for older ages.	Anticipating higher liability for active members but potentially lower liability for retirees. Actual impact to be determined by OA.
Disabled Retirees	Proposed assumption consistent with industry standards, decreasing projected life expectancy.	Lower life expectancies are anticipated to decrease plan liabilities.
Contingent Beneficiaries	Proposed assumption consistent with industry standards, decreasing projected life expectancy.	Lower life expectancies are anticipated to decrease plan liabilities.

Overall, it is uncertain if the changes in overtime, retirement, and ordinary death that are anticipated to increase plan liabilities will exceed the impact of the changes in rates of salary increase, withdrawal, ordinary disability, and accidental disability that are anticipated to decrease plan liabilities. Changes to postretirement mortality tables will lead to higher costs for active members, but lower costs for retirees. The net effect is likely an increase in plan liabilities, but the actual impact will be determined by OA.