S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6030
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                              March 30, 2021
                                ___________
 
 Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
   printed to be committed to the Committee on Civil Service and Pensions
 
 AN  ACT  to  amend the retirement and social security law, the education
   law and the administrative code of the city of New York,  in  relation
   to providing cost-of-living adjustments

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision d of section 78-a of the retirement and  social
 security law, as added by chapter 125 of the laws of 2000, is amended to
 read as follows:
   d.  The  percentage  referred  to  in this section shall be determined
 annually by reference to the consumer price index (all urban  consumers,
 CPI-U,  U.S.  city  average,  all  items, 1982-84=100), published by the
 United States bureau of labor statistics, for each  applicable  calendar
 year. Said percentage shall equal fifty percent of the annual inflation,
 as  determined  from the increase in the consumer price index in the one
 year period ending on the March thirty-first prior to the cost-of-living
 adjustment effective on the ensuing  September  first.  Said  percentage
 shall then be rounded up to the next higher one-tenth of one percent and
 shall  not  exceed three percent nor be less than one percent AND EFFEC-
 TIVE THE FIRST DAY OF SEPTEMBER,  TWO  THOUSAND  TWENTY-ONE,  SHALL  NOT
 EXCEED FIVE PERCENT NOR BE LESS THAN ONE PERCENT.
   § 2. Subdivision d of section 378-a of the retirement and social secu-
 rity  law,  as  added  by chapter 125 of the laws of 2000, is amended to
 read as follows:
   d. The percentage referred to in  this  section  shall  be  determined
 annually  by reference to the consumer price index (all urban consumers,
 CPI-U, U.S. city average, all  items,  1982-84=100),  published  by  the
 United  States  bureau of labor statistics, for each applicable calendar
 year. Said percentage shall equal fifty percent of the annual inflation,
 as determined from the increase in the consumer price index in  the  one
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD10498-02-1

 S. 6030                             2
 
 year period ending on the March thirty-first prior to the cost-of-living
 adjustment  effective  on  the  ensuing September first. Said percentage
 shall then be rounded up to the next higher one-tenth of one percent and
 shall  not  exceed three percent nor be less than one percent AND EFFEC-
 TIVE THE FIRST DAY OF SEPTEMBER,  TWO  THOUSAND  TWENTY-ONE,  SHALL  NOT
 EXCEED FIVE PERCENT NOR BE LESS THAN ONE PERCENT.
   §  3. Subdivision d of section 532-a of the education law, as added by
 chapter 125 of the laws of 2000, is amended to read as follows:
   d. The percentage referred to in  this  section  shall  be  determined
 annually  by reference to the consumer price index (all urban consumers,
 CPI-U, U.S. city average, all  items,  1982-84=100),  published  by  the
 United  States  bureau of labor statistics, for each applicable calendar
 year. Said percentage shall equal fifty percent of the annual inflation,
 as determined from the increase in the consumer price index in  the  one
 year period ending on the March thirty-first prior to the cost-of-living
 adjustment  effective  on  the  ensuing September first. Said percentage
 shall then be rounded up to the next higher one-tenth of one percent and
 shall not exceed three percent nor be less than one percent  AND  EFFEC-
 TIVE  THE  FIRST  DAY  OF  SEPTEMBER, TWO THOUSAND TWENTY-ONE, SHALL NOT
 EXCEED FIVE PERCENT NOR BE LESS THAN ONE PERCENT.
   § 4. Subdivision d of section 13-696 of the administrative code of the
 city of New York, as added by chapter  125  of  the  laws  of  2000,  is
 amended to read as follows:
   d.  The  percentage  referred  to  in this section shall be determined
 annually by reference to the consumer price index (all urban  consumers,
 CPI-U,  U.S.  city  average,  all  items, 1982-84=100), published by the
 United States bureau of labor statistics, for each  applicable  calendar
 year. Said percentage shall equal fifty percent of the annual inflation,
 as  determined  from the increase in the consumer price index in the one
 year period ending on the March thirty-first prior to the cost-of-living
 adjustment effective on the ensuing  September  first.  Said  percentage
 shall then be rounded up to the next higher one-tenth of one percent and
 shall  not  exceed three percent nor be less than one percent AND EFFEC-
 TIVE THE FIRST DAY OF SEPTEMBER,  TWO  THOUSAND  TWENTY-ONE,  SHALL  NOT
 EXCEED FIVE PERCENT NOR BE LESS THAN ONE PERCENT.
   § 5. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This  bill  would  provide an increase in the defined benefit cost-of-
 living adjustment (COLA) for New York public retirement systems.  Start-
 ing  with  a payment in September 2021 the maximum percentage calculated
 for the annual cost of living increase shall  increase  from  three  (3)
 percent to five (5) percent.
   Insofar  as  this bill affects the New York State and Local Employees'
 Retirement System, if this bill is enacted, pursuant to  Section  25  of
 the  Retirement  and  Social  Security Law, the increased costs would be
 borne entirely by the State of New York and would  require  an  itemized
 appropriation  sufficient  to  pay  the  cost  of the provision. Such an
 appropriation would be required only when the annual  inflation  exceeds
 6%.
   Insofar  as  this bill affects the New York State and Local Police and
 Fire Retirement System (PFRS), if this bill is  enacted,  the  increased
 costs  would  be  shared by the State of New York and all of the partic-
 ipating employers in the PFRS. Additional employer  contributions  would
 be required only when the annual inflation exceeds 6%.
   Summary of relevant resources:

 S. 6030                             3

   Membership  data as of March 31, 2020 was used in measuring the impact
 of the proposed change, the same data used in the April 1, 2020 actuari-
 al valuation. Distributions and other statistics can  be  found  in  the
 2020  Report  of the Actuary and the 2020 Comprehensive Annual Financial
 Report.
   The  actuarial  assumptions and methods used are described in the 2020
 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, 2020
 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 26, 2021, and intended for use only during
 the 2021 Legislative Session, is Fiscal Note No. 2021-110,  prepared  by
 the Actuary for the New York State and Local Retirement System.

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6030--A
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                              March 30, 2021
                                ___________
 
 Introduced by Sen. GOUNARDES -- 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
 
 AN ACT to amend the retirement and social security  law,  the  education
   law  and  the administrative code of the city of New York, in relation
   to providing cost-of-living adjustments
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Subdivision d of section 78-a of the retirement and social
 security law, as added by chapter 125 of the laws of 2000, is amended to
 read as follows:
   d. The percentage referred to in  this  section  shall  be  determined
 annually  by reference to the consumer price index (all urban consumers,
 CPI-U, U.S. city average, all  items,  1982-84=100),  published  by  the
 United  States  bureau of labor statistics, for each applicable calendar
 year. Said percentage shall equal fifty percent of the annual inflation,
 as determined from the increase in the consumer price index in  the  one
 year period ending on the March thirty-first prior to the cost-of-living
 adjustment  effective  on  the  ensuing September first. Said percentage
 shall then be rounded up to the next higher one-tenth of one percent and
 shall not exceed three percent nor be less than one percent  AND  EFFEC-
 TIVE  THE  FIRST  DAY  OF  SEPTEMBER, TWO THOUSAND TWENTY-ONE, SHALL NOT
 EXCEED FIVE PERCENT NOR BE LESS THAN ONE PERCENT.
   § 2. Subdivision d of section 378-a of the retirement and social secu-
 rity law, as added by chapter 125 of the laws of  2000,  is  amended  to
 read as follows:
   d.  The  percentage  referred  to  in this section shall be determined
 annually by reference to the consumer price index (all urban  consumers,
 CPI-U,  U.S.  city  average,  all  items, 1982-84=100), published by the
 United States bureau of labor statistics, for each  applicable  calendar
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD10498-03-1

 S. 6030--A                          2
 
 year. Said percentage shall equal fifty percent of the annual inflation,
 as  determined  from the increase in the consumer price index in the one
 year period ending on the March thirty-first prior to the cost-of-living
 adjustment  effective  on  the  ensuing September first. Said percentage
 shall then be rounded up to the next higher one-tenth of one percent and
 shall not exceed three percent nor be less than one percent  AND  EFFEC-
 TIVE  THE  FIRST  DAY  OF  SEPTEMBER, TWO THOUSAND TWENTY-ONE, SHALL NOT
 EXCEED FIVE PERCENT NOR BE LESS THAN ONE PERCENT.
   § 3. Subdivision d of section 532-a of the education law, as added  by
 chapter 125 of the laws of 2000, is amended to read as follows:
   d.  The  percentage  referred  to  in this section shall be determined
 annually by reference to the consumer price index (all urban  consumers,
 CPI-U,  U.S.  city  average,  all  items, 1982-84=100), published by the
 United States bureau of labor statistics, for each  applicable  calendar
 year. Said percentage shall equal fifty percent of the annual inflation,
 as  determined  from the increase in the consumer price index in the one
 year period ending on the March thirty-first prior to the cost-of-living
 adjustment effective on the ensuing  September  first.  Said  percentage
 shall then be rounded up to the next higher one-tenth of one percent and
 shall  not  exceed three percent nor be less than one percent AND EFFEC-
 TIVE THE FIRST DAY OF SEPTEMBER,  TWO  THOUSAND  TWENTY-ONE,  SHALL  NOT
 EXCEED FIVE PERCENT NOR BE LESS THAN ONE PERCENT.
   § 4. Subdivision d of section 13-696 of the administrative code of the
 city  of  New  York,  as  added  by  chapter 125 of the laws of 2000, is
 amended to read as follows:
   d. The percentage referred to in  this  section  shall  be  determined
 annually  by reference to the consumer price index (all urban consumers,
 CPI-U, U.S. city average, all  items,  1982-84=100),  published  by  the
 United  States  bureau of labor statistics, for each applicable calendar
 year. Said percentage shall equal fifty percent of the annual inflation,
 as determined from the increase in the consumer price index in  the  one
 year period ending on the March thirty-first prior to the cost-of-living
 adjustment  effective  on  the  ensuing September first. Said percentage
 shall then be rounded up to the next higher one-tenth of one percent and
 shall not exceed three percent nor be less than one percent  AND  EFFEC-
 TIVE  THE  FIRST  DAY  OF  SEPTEMBER, TWO THOUSAND TWENTY-ONE, SHALL NOT
 EXCEED FIVE PERCENT NOR BE LESS THAN ONE PERCENT.
   § 5. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would provide an increase in the  defined  benefit  cost-of-
 living  adjustment (COLA) for New York public retirement systems. Start-
 ing with a payment in September 2021 the maximum  percentage  calculated
 for  the  annual  cost  of living increase shall increase from three (3)
 percent to five (5) percent.
   Insofar as this bill affects the New York State and  Local  Employees'
 Retirement  System,  if  this bill is enacted, pursuant to Section 25 of
 the Retirement and Social Security Law, the  increased  costs  would  be
 borne  entirely  by  the State of New York and would require an itemized
 appropriation sufficient to pay the  cost  of  the  provision.  Such  an
 appropriation  would  be required only when the annual inflation exceeds
 6%.
   Insofar as this bill affects the New York State and Local  Police  and
 Fire  Retirement  System  (PFRS), if this bill is enacted, the increased
 costs would be shared by the State of New York and all  of  the  partic-
 ipating  employers  in the PFRS. Additional employer contributions would
 be required only when the annual inflation exceeds 6%.

 S. 6030--A                          3
 
   Summary of relevant resources:
   Membership  data as of March 31, 2020 was used in measuring the impact
 of the proposed change, the same data used in the April 1, 2020 actuari-
 al valuation. Distributions and other statistics can  be  found  in  the
 2020  Report  of the Actuary and the 2020 Comprehensive Annual Financial
 Report.
   The actuarial assumptions and methods used are described in  the  2020
 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, 2020
 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 26, 2021, and intended for use only  during
 the  2021  Legislative Session, is Fiscal Note No. 2021-110, prepared by
 the Actuary for the New York State and Local Retirement System.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   In as much as this bill impacts members of the New York  State  Teach-
 ers'  Retirement  System  (NYSTRS),  this  bill  (legislative bill draft
 10498-01-1) would amend subdivision d of Section 532-a of the  Education
 Law  to  increase  the  maximum  upper  limit  on the percentage used to
 compute  the  cost-of-living  adjustment  (COLA)  for  eligible  retired
 members.
   The  annual  COLA percentage is equal to fifty percent of the increase
 in the annual Consumer Price Index (CPI). The  upper-limit  cap  on  the
 annual  COLA  percentage  would  be increased from three percent to five
 percent. This benefit improvement would be  effective  in  September  of
 2021.
   This  bill  would  generate  a  cost if the increase in the annual CPI
 exceeded 6.0% in a given year. The CPI last exceeded 6.0% in 1982. Peri-
 ods of high inflation are possible, although it appears unlikely in  the
 near-term.  However,  in  the  long  term,  this  bill  would  result in
 increases to  the  employer  contribution  rate  if  a  period  of  high
 inflation  returns  and the COLA rate increases beyond the current maxi-
 mum.
   Member data is from  the  System's  most  recent  actuarial  valuation
 files,  consisting  of  data provided by the employers to the Retirement
 System. Data distributions and statistics can be found in  the  System's
 Annual  Report.  System  assets and GASB disclosures are reported in the
 System's financial statements and can also  be  found  in  the  System's
 Annual  Report.  Actuarial  assumptions  and methods are provided in the
 System's Actuarial Valuation Report.
   The source of this estimate is Fiscal Note 2021-37 dated May  5,  2021
 prepared  by  the  Actuary  of  the  New York State Teachers' Retirement
 System and is intended for use only during the 2021 Legislative Session.
 I, Richard A. Young, am the Actuary for the  New  York  State  Teachers'
 Retirement  System.  I  am a member of the American Academy of Actuaries
 and I meet the Qualification Standards of the American Academy of  Actu-
 aries to render the actuarial opinion contained herein.

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6030--B
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                              March 30, 2021
                                ___________
 
 Introduced by Sen. GOUNARDES -- 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  --  committee  discharged,  bill
   amended,  ordered reprinted as amended and recommitted to said commit-
   tee
 
 AN ACT to amend the retirement and social security  law,  the  education
   law  and  the administrative code of the city of New York, in relation
   to providing cost-of-living adjustments
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Subdivision d of section 78-a of the retirement and social
 security law, as added by chapter 125 of the laws of 2000, is amended to
 read as follows:
   d. The percentage referred to in  this  section  shall  be  determined
 annually  by reference to the consumer price index (all urban consumers,
 CPI-U, U.S. city average, all  items,  1982-84=100),  published  by  the
 United  States  bureau of labor statistics, for each applicable calendar
 year. Said percentage shall equal fifty percent of the annual inflation,
 as determined from the increase in the consumer price index in  the  one
 year period ending on the March thirty-first prior to the cost-of-living
 adjustment  effective  on  the  ensuing September first. Said percentage
 shall then be rounded up to the next higher one-tenth of one percent and
 shall not exceed three percent nor be less than one percent  AND  EFFEC-
 TIVE  THE  FIRST  DAY  OF  SEPTEMBER, TWO THOUSAND TWENTY-ONE, SHALL NOT
 EXCEED FIVE PERCENT NOR BE LESS THAN ONE PERCENT.
   § 2. Subdivision d of section 378-a of the retirement and social secu-
 rity law, as added by chapter 125 of the laws of  2000,  is  amended  to
 read as follows:
   d.  The  percentage  referred  to  in this section shall be determined
 annually by reference to the consumer price index (all urban  consumers,

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD10498-04-1

 S. 6030--B                          2
 
 CPI-U,  U.S.  city  average,  all  items, 1982-84=100), published by the
 United States bureau of labor statistics, for each  applicable  calendar
 year. Said percentage shall equal fifty percent of the annual inflation,
 as  determined  from the increase in the consumer price index in the one
 year period ending on the March thirty-first prior to the cost-of-living
 adjustment effective on the ensuing  September  first.  Said  percentage
 shall then be rounded up to the next higher one-tenth of one percent and
 shall  not  exceed three percent nor be less than one percent AND EFFEC-
 TIVE THE FIRST DAY OF SEPTEMBER,  TWO  THOUSAND  TWENTY-ONE,  SHALL  NOT
 EXCEED FIVE PERCENT NOR BE LESS THAN ONE PERCENT.
   §  3. Subdivision d of section 532-a of the education law, as added by
 chapter 125 of the laws of 2000, is amended to read as follows:
   d. The percentage referred to in  this  section  shall  be  determined
 annually  by reference to the consumer price index (all urban consumers,
 CPI-U, U.S. city average, all  items,  1982-84=100),  published  by  the
 United  States  bureau of labor statistics, for each applicable calendar
 year. Said percentage shall equal fifty percent of the annual inflation,
 as determined from the increase in the consumer price index in  the  one
 year period ending on the March thirty-first prior to the cost-of-living
 adjustment  effective  on  the  ensuing September first. Said percentage
 shall then be rounded up to the next higher one-tenth of one percent and
 shall not exceed three percent nor be less than one percent  AND  EFFEC-
 TIVE  THE  FIRST  DAY  OF  SEPTEMBER, TWO THOUSAND TWENTY-ONE, SHALL NOT
 EXCEED FIVE PERCENT NOR BE LESS THAN ONE PERCENT.
   § 4. Subdivision d of section 13-696 of the administrative code of the
 city of New York, as added by chapter  125  of  the  laws  of  2000,  is
 amended to read as follows:
   d.  The  percentage  referred  to  in this section shall be determined
 annually by reference to the consumer price index (all urban  consumers,
 CPI-U,  U.S.  city  average,  all  items, 1982-84=100), published by the
 United States bureau of labor statistics, for each  applicable  calendar
 year. Said percentage shall equal fifty percent of the annual inflation,
 as  determined  from the increase in the consumer price index in the one
 year period ending on the March thirty-first prior to the cost-of-living
 adjustment effective on the ensuing  September  first.  Said  percentage
 shall then be rounded up to the next higher one-tenth of one percent and
 shall  not  exceed three percent nor be less than one percent AND EFFEC-
 TIVE THE FIRST DAY OF SEPTEMBER,  TWO  THOUSAND  TWENTY-ONE,  SHALL  NOT
 EXCEED FIVE PERCENT NOR BE LESS THAN ONE PERCENT.
   § 5. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This  bill  would  provide an increase in the defined benefit cost-of-
 living adjustment (COLA) for New York public retirement systems.  Start-
 ing  with  a payment in September 2021 the maximum percentage calculated
 for the annual cost of living increase shall  increase  from  three  (3)
 percent to five (5) percent.
   Insofar  as  this bill affects the New York State and Local Employees'
 Retirement System, if this bill is enacted, pursuant to  Section  25  of
 the  Retirement  and  Social  Security Law, the increased costs would be
 borne entirely by the State of New York and would  require  an  itemized
 appropriation  sufficient  to  pay  the  cost  of the provision. Such an
 appropriation would be required only when the annual  inflation  exceeds
 6%.
   Insofar  as  this bill affects the New York State and Local Police and
 Fire Retirement System (PFRS), if this bill is  enacted,  the  increased
 costs  would  be  shared by the State of New York and all of the partic-

 S. 6030--B                          3

 ipating employers in the PFRS. Additional employer  contributions  would
 be required only when the annual inflation exceeds 6%.
   Summary of relevant resources:
   Membership  data as of March 31, 2020 was used in measuring the impact
 of the proposed change, the same data used in the April 1, 2020 actuari-
 al valuation. Distributions and other statistics can  be  found  in  the
 2020  Report  of the Actuary and the 2020 Comprehensive Annual Financial
 Report.
   The actuarial assumptions and methods used are described in  the  2020
 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, 2020
 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 26, 2021, and intended for use only  during
 the  2021  Legislative Session, is Fiscal Note No. 2021-110, prepared by
 the Actuary for the New York State and Local Retirement System.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   In as much as this bill impacts members of the New York  State  Teach-
 ers'  Retirement  System  (NYSTRS),  this  bill  (legislative bill draft
 10498-01-1) would amend subdivision d of Section 532-a of the  Education
 Law  to  increase  the  maximum  upper  limit  on the percentage used to
 compute  the  cost-of-living  adjustment  (COLA)  for  eligible  retired
 members.
   The  annual  COLA percentage is equal to fifty percent of the increase
 in the annual Consumer Price Index (CPI). The  upper-limit  cap  on  the
 annual  COLA  percentage  would  be increased from three percent to five
 percent. This benefit improvement would be  effective  in  September  of
 2021.
   This  bill  would  generate  a  cost if the increase in the annual CPI
 exceeded 6.0% in a given year. The CPI last exceeded 6.0% in 1982. Peri-
 ods of high inflation are possible, although it appears unlikely in  the
 near-term.  However,  in  the  long  term,  this  bill  would  result in
 increases to  the  employer  contribution  rate  if  a  period  of  high
 inflation  returns  and the COLA rate increases beyond the current maxi-
 mum.
   Member data is from  the  System's  most  recent  actuarial  valuation
 files,  consisting  of  data provided by the employers to the Retirement
 System. Data distributions and statistics can be found in  the  System's
 Annual  Report.  System  assets and GASB disclosures are reported in the
 System's financial statements and can also  be  found  in  the  System's
 Annual  Report.  Actuarial  assumptions  and methods are provided in the
 System's Actuarial Valuation Report.
   The source of this estimate is Fiscal Note 2021-37 dated May  5,  2021
 prepared  by  the  Actuary  of  the  New York State Teachers' Retirement
 System and is intended for use only during the 2021 Legislative Session.
 I, Richard A. Young, am the Actuary for the  New  York  State  Teachers'
 Retirement  System.  I  am a member of the American Academy of Actuaries
 and I meet the Qualification Standards of the American Academy of  Actu-
 aries to render the actuarial opinion contained herein.

 S. 6030--B                          4
 
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY  OF BILL: This proposed legislation, as it relates to the City
 of New York, would amend the Cost of Living Adjustment (COLA)  provision
 contained  in  the  Administrative  Code of the City of New York (ACCNY)
 Section 13-696(d) to increase the maximum COLA from 3% to 5% for  eligi-
 ble  retirees  and beneficiaries of the New York City Employees' Retire-
 ment System (NYCERS), the New  York  City  Teachers'  Retirement  System
 (TRS),  the  New  York City Board of Education Retirement System (BERS),
 the New York City Police Pension Fund (POLICE), and the  New  York  City
 Fire  Pension  Fund  (FIRE),  collectively  known  as  the New York City
 Retirement Systems and Pension Funds (NYCRS).
   Effective Date: Upon enactment and applicable to  the  September  2021
 COLA.
   IMPACT  ON  BENEFITS:  Certain  NYCRS  retirees  and beneficiaries are
 eligible to receive a COLA after retirement (i.e. age 62 and retired for
 five years; age 55 and retired for 10 years; disabled retirees  who  are
 retired for five years; and accidental death benefit recipients who have
 been receiving the benefit for five years).
   Currently,  COLA  is 50% of the Consumer Price Index (CPI), rounded to
 the next higher 0.1%, but not to exceed 3% and not to be less  than  1%,
 applied  to  the  first  $18,000  of the maximum retirement allowance as
 adjusted with prior COLAs.
   Spouses paid under a lifetime optional benefit receive 50% of the COLA
 that would have been payable to the retiree.
   Under the proposed legislation, if enacted, the maximum COLA would  be
 raised  from  3%  to  5%  of the first $18,000 of the maximum retirement
 allowance.
   FINANCIAL IMPACT - OVERVIEW: Based on the current economic assumptions
 and the fact that CPI has not exceeded 6% since the early  1980's,  COLA
 is  assumed  to  be 1.5%, which is below the current 3% maximum COLA. To
 illustrate the potential cost of this proposed legislation,  the  Office
 of  the Actuary has estimated the financial increase to the NYCRS if the
 realized CPI was 8% for the period March 31,  2020  to  March  31,  2021
 which  would  result  in  a  COLA increase as of September 1, 2021 of 4%
 under proposed legislation rather than 3% under current law.
   FINANCIAL IMPACT - SUMMARY: The estimated financial impact of increas-
 ing the COLA maximum as described above is an increase  in  the  Present
 Value of Future Benefits (PVFB) of $341.8 million and an increase in the
 annual  employer  contributions  of  $40.4  million.  A breakdown of the
 financial impact by NYCRS is shown in the table below.
                  Additional                          Estimated
 NYCRS     Present Value of Future Benefits   Annual Employer Contributions
                 ($ Millions)                       ($ Millions)
 
 NYCERS            $146.1                             $17.3
 NYCTRS             103.2                              12.2
 BERS                11.4                               1.3
 POLICE              59.0                               7.0
 FIRE                22.1                               2.6
   Total           $341.8                             $40.4

   Enactment  of  this  proposed  legislation  would  increase   employer
 contributions  when  COLA exceeds the current limit. For the purposes of
 this Fiscal Note, changes in employer contributions have been  estimated
 assuming  that  the increase in the new Unfunded Accrued Liability (UAL)
 will be financed over the same time period used for actuarial losses  in

 S. 6030--B                          5
 
 accordance with Section 13-638.2(k-2) of the ACCNY. Using this approach,
 the  additional  UAL would be amortized over a closed 15-year period (14
 payments under the One-Year Lag Methodology (OYLM)).
   CONTRIBUTION  TIMING: For purposes of this Fiscal Note, changes in the
 PVFB and annual employer contributions would only be recognized  in  the
 future  if  the  CPI increases above 6% resulting in a COLA increase not
 currently provided under 3% COLA maximum. In accordance  with  the  OYLM
 used  to  determine  employer  contributions,  the  increase in employer
 contributions would first be reflected in the second fiscal year follow-
 ing the additional increase in COLA benefits.
   CENSUS DATA: The estimates presented herein are based  on  the  census
 data  used in the June 30, 2020 (Lag) actuarial valuations of NYCRS used
 to determine the Preliminary Fiscal Year 2022 employer contributions.
   ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the PVFB 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 contributions of each respective NYCRS.
   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 NYCRS 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 initial, additional  adminis-
 trative costs to implement the proposed legislation.
   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 2021-55  dated  July  16,
 2021  was prepared by the Chief Actuary for the New York City Employees'
 Retirement System, the New York City Teachers'  Retirement  System,  the
 New  York  City  Board of Education Retirement System, the New York City
 Police Pension Fund, and the New York City Fire Pension Fund. This esti-
 mate is intended for use only during the 2021 Legislative Session.