New York City Fire Pension Funds - City of New York

1 New york city Fire Pension Funds Annual Comprehensive Financial ReportA Fiduciary Fund of The city of New YorkFor The Fisca l Years EndedJune 30, 2021 and June 30, 2020 New york city Fire Pension Funds One Battery Park Plaza, 9th Floor, New york , N. Y. 10004 (929) 436 - 0099 Annual Comprehensive Financial Report A Fiduciary Fund of The city of New york For Fiscal Years Ended June 30, 2021 and June 30, 2020 Prepared under the Direction of:Patrick M. DunnExecutive Director Prepared By:Maureen V. DaleChief Accountant Yingyu Lin Deputy Chief AccountantActuary:Sherry S. ChanChief Actuary255 GREENWICH ST, 9th FLOOR NEW york , NY 10007 custodian of the Funds :Scott StringerComptroller of The city of New York1 CENTRE STREET NEW york , NY 10007[THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY] TABLE OF CONTENTS INTRODUCTORY SECTION-Part I Page Certificate of Achievement for Excellence in Financial Letter of Administrative Members of the Board of Summary Funds and Options Benefits Tiers I and Summary Funds Benefits Tier FINANCIAL SECTION-Part II Independent Auditors Management's Discussion and Analysis (Unaudited).

2 Financial Statements Combining Statements of Fiduciary Net Position Combining Statements of Fiduciary Net Position Combining Statements of Changes in Fiduciary Net Position Combining Statements of Changes in Fiduciary Net Position Notes to Combining Financial Statements Years Ended 2021 and Required Supplementary Information (Unaudited): Schedule - 1 Schedules of Changes in the Employer s Net Pension Liability and Related Schedule - 2 Schedules of Employer Schedule - 3 Schedule of Investment Additional Supplementary Information: Schedule - 4 Schedule of Investment Schedule - 5 Schedule of Administrative Schedule - 6 Schedule of Payments to 9 11 17 19 23 39 45 48 55 56 57 58 59 90 98 103 104 105 106 3 (Continued) INVESTMENT SECTION-Part III Page Investment Graphic Representation of Asset Mix to Policy Summary of Investment Results for Fiscal Year 2021 .. Asset Allocation QPP for Fiscal Year 2021.

3 Asset Allocation FFVSF and FOVSF for Fiscal Year Investment Results: Graphic Representation of Total Multi-Year Investments at Market Graphic Representation of Total Multi-Year Investment Schedule of Portfolio Returns QPP Schedule Schedule of Portfolio Returns FFVSF Schedule Schedule of Portfolio Returns FOVSF Schedule Schedule of Largest Bond Holdings Schedule Schedule of Largest Stock Holdings Schedule Schedule of Management Fees and Expenses QPP Schedule of Broker s Commissions Schedule Investment Summary Schedule ACTUARIAL SECTION-Part IV Actuary s Certification Summary of Actuarial Assumptions and Table 1 - Probabilities of Service Retirement.. Table 2 - Probabilities of Early Service Table 3 - Probabilities of Table 4 - Probabilities of Disability Table 5 - Probabilities of Active Member Table 6a - Probabilities of Mortality for Service Table 6b - Probabilities of Mortality for Disabled Table 6c - Probabilities of Beneficiary Table 7 - Annual Rates of Merit and Salary Salary Scale Table 8 - Overtime Table 9 - Active Member Valuation Table 10 - Summary of Plan Table 11 - Retirees and Beneficiaries Added to and Removed from Table 12 Actuarial And Statutory Contribution Table 13 - Funded Status Based on Entry Age Normal Cost Table 14 - Solvency Solvency Test Table 15 - Average Annual Benefit Payment 109 110 111 113 114 115 116 117 118 118 119 120 121 137 144 147 151 155 156 157 158 159 160 161 162 163 164 165 166

4 167 168 169 170 171 172 173 174 4 (Continued) STATISTICAL SECTION-Part V Page Statistical Section Table of Benefit Expenses by Type .. Table of Retired Members and Beneficiaries by Type of Benefit .. Table of Retired Members and Beneficiaries by Type of Option Selected .. Exhibit 4 Retired Members by Type of Benefit .. Exhibit 5 Average Benefit Exhibit 6 Benefit and Refund Deductions from Net Position by Schedule of Average Annual Benefit Payment Schedule of Changes in Net Position QPP .. Schedule of Changes in Net Position FFVSF .. Schedule of Changes in Net Position .. Schedule of Revenues by Schedule of Expenses by Exhibit 7 Graphic Representation of Total Current Investments at Market Exhibit 8 Graphic Representation of Sources of Current Investment Table of Compensation to Administrative Officials and Commissions and Payments to Brokers and Appendix A Census Data for Active Appendix B Census Data for 177 178 179 180 181 182 183 184 185186 187 188 189 190 191 192 193 199 5[THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY] 66 New york city Fire Pension Funds Annual Comprehensive Financial Report A Fiduciary Fund of The city of New york Introductory Section Part I Fiscal Year Ended June 30, 2021 7[THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]

5 8 Government Finance Officers AssociationCertificate of Achievementfor Excellencein Financial ReportingPresented toNew york Fire Department Pension FundsFor its Comprehensive AnnualFinancial ReportFor the Fiscal Year EndedJune 30, 2020 Executive Director/CEO9[THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY] 10 NEW york city FIRE Pension FUND ONE BATTERY PARK PLAZA, 9TH FLOOR NEW york , NY 10004 (929) 436-0099 Patrick M. Dunn Executive Director December 20, 2021 TO: The Board of Trustees New york city Fire Pension Funds I am pleased to present the Annual Comprehensive Financial Report ( ACFR ) of the New york city Fire Pension Funds ("Fire" or the " Funds ") for the Fiscal Year ended June 30, 2021. Our ACFR contains combined financial statements and disclosures for the New york city Fire Pension Fund qualified Pension plan ( QPP ) and two additional Funds administered by Fire: the New york city Firefighters Variable Supplements Fund ( FFVSF ) and the New york city Fire Officers Variable Supplements Fund ( FOVSF ).

6 Management is responsible for the preparation, accuracy and completeness of this presentation. We believe that the data in this report is a fair representation of the financial position and results of operations of the Funds , and to the best of our knowledge the information is accurate and includes all required disclosures. Our report is organized into the Introductory, Financial, Investment, Actuarial and Statistical sections. Users of the financial statements are encouraged to review the Management Discussion and Analysis (MD&A) presented in the financial section. Profile of the Funds The New york city Fire Pension Fund, formerly known as the New york Fire Department Subchapter Two Pension Fund (formerly Article 1-B), was established pursuant to Local Law No. 53, enacted July 14, 1941. On that date, all participants covered under Article 1-A and subsequent appointees to the Fire Department were granted the option of membership in either Article 1-A or Subchapter Two, in accordance with the legislation.

7 At that time, all members of the Article 1-A Fund became participants in the Fund established under Subchapter Two and, with one exception, all new appointees elected membership in the Subchapter Two Pension Fund. Effective July 1, 1980, the Article 1-A Fund was terminated, and its assets transferred to the Subchapter Two Pension Fund. Prior to July 1, 1980, each member contributed by salary deduction an amount determined to provide approximately 25% of the cost of their benefits, while the city contributed the remaining 75%. The total contributions under this arrangement proved inadequate to finance benefits, and the Pension Fund became actuarially unsound. 11 Introductory Section New york city Fire Pension Funds Effective July 1, 1980, July 1, 1981, and July 1, 1982, new state laws amended the benefit provisions of the Fund by establishing a new Plan known as the Improved Benefits Plan ( IBP ). The IBP provides increased benefits supported by higher member and city contributions.

8 The Original Plan ( OP ) was closed to new entrants on July 1, 1981, and membership in the IBP became mandatory for employees hired on or after that date. Members of the OP have the option, during specified periods each year, to transfer to the IBP. The new laws were expected to correct previous under-funding of the Pension Fund. The provisions of these laws increased city contributions annually to provide an amount deemed sufficient to cover benefits, excluding annuities and refunds from member contribution accounts. These contributions cover the normal costs of operation each year. The Firefighters Variable Supplements Fund ( FFVSF ) and the Fire Officers Variable Supplements Fund ( FOVSF ) (collectively the VSFs ) operate pursuant to the provisions of Title 13, Chapter 3 of the New york city Administrative Code and provide supplemental benefits to retired Firefighters, Fire Marshals, Marine Titles, Fire Officers and Supervising Fire Marshals, respectively.

9 To receive benefits from the VSFs, eligible participants must retire on or after October 1, 1968, and be receiving a service retirement benefit from the QPP. The VSFs are not considered Pension plans; they provide defined supplemental payments other than Pension or retirement system benefits. Effective September 8, 2016, the New york city Fire Pension Fund, formerly known as the New york Fire Department Pension Fund, was granted corpus funding pursuant to Chapter 298 of the Laws of 2016. Under the new law, the Pension Fund ceased to be part of the Fire Department and became a separate agency. The law mandates budgetary approval by the offices of the Mayor and Comptroller, and a majority of the Board of Trustees. This authorizes the Fund to pay for operational expenses from Fund assets. The city later reimburses the Fund for expenses incurred. Current Initiatives & Events All activities of the New york city Fire Pension Fund and the Subchapter II (1B) Medical Board have been consolidated in a bifurcated setting at our headquarters located at One Battery Park Plaza, 9th Floor, New york , NY 10004.

10 The consolidation was completed on July 1, 2019 and has resulted in streamlined operations and improved member services . The COVID pandemic continues to adversely impact communities and economies worldwide. The city of New york has seen reasonable improvement in this public health crisis, reporting a steady rise in vaccinated levels and fall in hospitalization and deaths rates from COVID. However, new variants continue to cause concern. Lockdowns and other measures to control the spread of the virus imposed by the city of New york in March of 2020 have been partially lifted and many business establishments have reopened, with restrictions. In October, Fund staff returned to the office full-time, with necessary COVID safety precautions in place. Management s primary goal is to deliver the highest level of services to members and their beneficiaries. Our intent is to ensure accurate and timely payment of benefits to retirees and beneficiaries, and to provide members with the best information available, so that they may plan for a secure retirement.