S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5013--A
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 27, 2023
                                ___________
 
 Introduced  by  M.  of  A.  BYRNES,  PALMESANO, TAGUE, NORRIS, K. BROWN,
   J. M. GIGLIO, LEMONDES, ANGELINO, DeSTEFANO, MAHER, RA, CUNNINGHAM  --
   read  once  and referred to the Committee on Governmental Employees --
   recommitted to the Committee on Governmental Employees  in  accordance
   with  Assembly  Rule  3, sec. 2 -- 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
   providing  state  correction  officers  with a special optional twenty
   year retirement plan
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The retirement and social security law is amended by adding
 a new article 14-C to read as follows:
                               ARTICLE 14-C
          OPTIONAL RETIREMENT PLAN FOR STATE CORRECTION OFFICERS
 SECTION 561. DEFINITIONS.
         562. OPTIONAL  TWENTY  YEAR  RETIREMENT  PLAN  FOR CERTAIN STATE
                CORRECTION OFFICERS.
         563. ADDITIONAL PENSION BENEFIT FOR MEMBERS OF  OPTIONAL  TWENTY
                YEAR RETIREMENT PLAN.
         564. CONSISTENT PROVISIONS.
   § 561. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE:
   (A) "MEMBER" SHALL MEAN A PERSON WHO IS EMPLOYED AS A STATE CORRECTION
 OFFICER  OR  OTHER  STATE EMPLOYEE WHO IS ENGAGED DIRECTLY IN CORRECTION
 OFFICER DUTIES.
   (B) "RETIREMENT SYSTEM" SHALL  MEAN  THE  NEW  YORK  STATE  AND  LOCAL
 EMPLOYEES' RETIREMENT SYSTEM.
   (C)  "CREDITABLE SERVICE" SHALL INCLUDE ANY AND ALL SERVICES PERFORMED
 AS A STATE CORRECTION OFFICER. CREDIT FOR SERVICE AS A MEMBER OR OFFICER
 OF THE STATE POLICE OR AS A PAID FIREFIGHTER, POLICE OFFICER OR  OFFICER
 OF  ANY  ORGANIZED  FIRE DEPARTMENT OR POLICE FORCE OR DEPARTMENT OF ANY

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
 A                                                          LBD03981-05-4
              

 A. 5013--A                          2
 
 COUNTY, CITY, VILLAGE, TOWN, FIRE DISTRICT  OR  POLICE  DISTRICT,  SHALL
 ALSO BE DEEMED TO BE CREDITABLE SERVICE AND SHALL BE INCLUDED IN COMPUT-
 ING  YEARS  OF  TOTAL  SERVICE  FOR RETIREMENT PURSUANT TO THIS SECTION,
 PROVIDED  SUCH SERVICE WAS PERFORMED BY THE MEMBER WHILE CONTRIBUTING TO
 THE RETIREMENT SYSTEM PURSUANT TO THE  PROVISIONS  OF  THIS  ARTICLE  OR
 ARTICLE EIGHT OF THIS CHAPTER.
   §  562.  OPTIONAL  TWENTY  YEAR  RETIREMENT  PLAN  FOR  CERTAIN  STATE
 CORRECTION OFFICERS. (A) ANY MEMBER OF THE RETIREMENT SYSTEM  MAY  ELECT
 TO BECOME A MEMBER PURSUANT TO THE PROVISIONS OF THIS SECTION WITHIN ONE
 YEAR  AFTER  THE EFFECTIVE DATE OF THIS ARTICLE OR WITHIN ONE YEAR AFTER
 HE OR SHE BECOMES A MEMBER.
   (B) ELECTIONS MADE PURSUANT TO THIS SECTION SHALL BE  IN  WRITING  AND
 SHALL  BE  DULY  ACKNOWLEDGED AND FILED WITH THE COMPTROLLER. ANY MEMBER
 WHO FILES SUCH AN ELECTION PURSUANT TO  THIS  SECTION  MAY  WITHDRAW  IT
 AFTER IT HAS BEEN FILED FOR AT LEAST A YEAR. SUCH WITHDRAWAL SHALL BE BY
 WRITTEN NOTICE DULY ACKNOWLEDGED AND FILED WITH THE COMPTROLLER.
   (C) A MEMBER PARTICIPATING ON THE BASIS OF THIS SECTION AT THE TIME OF
 RETIREMENT  SHALL  BE  ENTITLED TO RETIRE AFTER THE COMPLETION OF TWENTY
 YEARS OF TOTAL CREDITABLE SERVICE OR UPON THE ATTAINMENT OF  AGE  SIXTY-
 TWO,  BY  FILING  AN  APPLICATION  THEREFOR  IN A MANNER SIMILAR TO THAT
 PROVIDED IN THIS CHAPTER.
   (I) UPON COMPLETION OF TWENTY YEARS OF SUCH SERVICE AND  UPON  RETIRE-
 MENT, EACH SUCH MEMBER SHALL RECEIVE A PENSION SUFFICIENT TO PROVIDE HIM
 OR  HER  WITH A RETIREMENT ALLOWANCE EQUAL TO ONE-FORTIETH OF HIS OR HER
 FINAL AVERAGE SALARY FOR EACH YEAR OF TOTAL CREDITABLE SERVICE FOR WHICH
 HE OR SHE IS OTHERWISE ENTITLED BUT NOT EXCEEDING IN THE AGGREGATE  ONE-
 HALF OF HIS OR HER FINAL AVERAGE SALARY.
   (II)  UPON  ATTAINMENT  OF  AGE  SIXTY-TWO AND UPON RETIREMENT WITHOUT
 COMPLETION OF TWENTY YEARS OF  SUCH  SERVICE,  EACH  SUCH  MEMBER  SHALL
 RECEIVE  A  PENSION  SUFFICIENT  TO PROVIDE HIM OR HER WITH A RETIREMENT
 ALLOWANCE EQUAL TO ONE-FORTIETH OF HIS OR HER FINAL AVERAGE  SALARY  FOR
 EACH  YEAR  OF CREDITABLE SERVICE. EVERY SUCH MEMBER SHALL ALSO BE ENTI-
 TLED TO AN ADDITIONAL PENSION EQUAL TO THE PENSION FOR ANY OTHER CREDIT-
 ABLE SERVICE RENDERED AS OTHERWISE PROVIDED FOR IN THIS CHAPTER.    THIS
 LATTER  PENSION SHALL NOT INCREASE THE TOTAL ALLOWANCE TO MORE THAN ONE-
 HALF OF HIS OR HER FINAL AVERAGE SALARY.
   (D) THE INCREASED PENSIONS  TO  SUCH  MEMBERS,  AS  PROVIDED  BY  THIS
 SECTION,  SHALL  BE PAID FROM ADDITIONAL CONTRIBUTIONS MADE BY THE STATE
 ON ACCOUNT OF SUCH MEMBERS. THE ACTUARY OF THE RETIREMENT  SYSTEM  SHALL
 COMPUTE  THE ADDITIONAL CONTRIBUTION REQUIRED FOR EACH MEMBER WHO ELECTS
 TO RECEIVE THE SPECIAL BENEFITS PROVIDED UNDER THIS SECTION. SUCH  ADDI-
 TIONAL  CONTRIBUTIONS  SHALL  BE  COMPUTED ON THE BASIS OF CONTRIBUTIONS
 DURING THE PROSPECTIVE SERVICE OF  SUCH  MEMBER  WHICH  WILL  COVER  THE
 LIABILITY  OF  THE  RETIREMENT  SYSTEM  FOR  SUCH  EXTRA  PENSIONS. UPON
 APPROVAL OF THE COMPTROLLER,  SUCH  ADDITIONAL  CONTRIBUTIONS  SHALL  BE
 CERTIFIED  BY  HIM OR HER.   THE AMOUNT THEREOF SHALL BE INCLUDED IN THE
 ANNUAL APPROPRIATION OF THE STATE. SUCH AMOUNT  SHALL  BE  PAID  ON  THE
 WARRANT  OF  THE  COMPTROLLER  TO  THE  PENSION ACCUMULATION FUND OF THE
 RETIREMENT SYSTEM.
   (E) IN COMPUTING THE TWENTY YEARS OF COMPLETED SERVICE  OF  A  MEMBER,
 FULL  CREDIT  SHALL BE GIVEN FOR MILITARY SERVICE AS DEFINED IN SUBDIVI-
 SIONS TWENTY-NINE-A AND THIRTY OF SECTION  THREE  HUNDRED  TWO  OF  THIS
 CHAPTER.
   (F)  EVERY  MEMBER PARTICIPATING ON THE BASIS OF THIS SECTION SHALL BE
 SEPARATED FROM THE SERVICE ON THE LAST DAY OF THE  CALENDAR  MONTH  NEXT
 SUCCEEDING  THE CALENDAR MONTH IN WHICH HE OR SHE ATTAINS AGE SIXTY-TWO,
 A. 5013--A                          3
 
 PROVIDED, HOWEVER, THAT SUCH A MEMBER WHO ATTAINED THE AGE OF  SIXTY-TWO
 BEFORE  THE EFFECTIVE DATE OF THIS ARTICLE, TO BE ELIGIBLE FOR A PENSION
 COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF  THIS  SECTION,  SHALL  BE
 SEPARATED FROM THE SERVICE WITHIN THREE MONTHS OF SUCH EFFECTIVE DATE.
   (G)  THE PROVISIONS OF THIS SECTION SHALL BE CONTROLLING NOTWITHSTAND-
 ING ANY OTHER PROVISION OF THIS ARTICLE TO THE CONTRARY.
   (H) THE BENEFITS PROVIDED BY  THIS  SECTION  SHALL  BE  PAYABLE  TO  A
 MEMBER,  UNLESS AT THE DATE OF RETIREMENT SUCH MEMBER WOULD OTHERWISE BE
 ENTITLED TO A GREATER BENEFIT UNDER OTHER PROVISIONS OF THIS CHAPTER HAD
 HE OR SHE WITHDRAWN FROM THIS SECTION, IN WHICH EVENT SUCH GREATER BENE-
 FITS SHALL BE PAYABLE.
   § 563. ADDITIONAL PENSION BENEFIT FOR MEMBERS OF OPTIONAL TWENTY  YEAR
 RETIREMENT PLAN. (A) THE LEGISLATURE MAY ELECT TO MAKE CONTRIBUTIONS FOR
 THE  PURPOSE OF PROVIDING AN ADDITIONAL PENSION PURSUANT TO THIS SECTION
 FOR MEMBERS IN ITS EMPLOY WHO ARE ENTITLED  TO  A  PENSION  PURSUANT  TO
 SECTION  FIVE  HUNDRED SIXTY-TWO OF THIS ARTICLE.  EVERY MEMBER EMPLOYED
 BY THE STATE MAY ELECT TO BE COVERED BY THE PROVISIONS OF  THIS  SECTION
 BY  FILING  WITH  THE COMPTROLLER, A DULY EXECUTED AND ACKNOWLEDGED FORM
 PREPARED BY THE COMPTROLLER FOR THAT PURPOSE.
   (B) UPON RETIREMENT, EACH SUCH MEMBER SHALL RECEIVE, FOR EACH YEAR  OF
 SERVICE  IN EXCESS OF TWENTY, AN ADDITIONAL PENSION WHICH SHALL BE EQUAL
 TO ONE-SIXTIETH OF HIS OR HER FINAL AVERAGE SALARY;  PROVIDED,  HOWEVER,
 THAT  THE  TOTAL  ALLOWANCE  PAYABLE  PURSUANT TO THIS SECTION SHALL NOT
 EXCEED THREE-QUARTERS OF SUCH MEMBER'S FINAL AVERAGE SALARY.
   § 564. CONSISTENT PROVISIONS. NOTHING CONTAINED IN THIS ARTICLE  SHALL
 BE  CONSTRUED  TO  OTHERWISE AFFECT THE APPLICABILITY OF ARTICLE ELEVEN,
 FOURTEEN OR FIFTEEN OF THIS CHAPTER. ANY OTHER PROVISIONS OF THIS  CHAP-
 TER  RELATING  TO  MANDATORY CONTRIBUTION TO THE RETIREMENT SYSTEM BASED
 UPON A MEMBER'S DATE OF MEMBERSHIP IN SUCH SYSTEM SHALL NOT BE DEEMED TO
 BE AFFECTED BY THE PROVISIONS OF THIS ARTICLE, AND ANY MEMBER WHO ON THE
 EFFECTIVE DATE OF THIS ARTICLE IS NOT REQUIRED TO CONTRIBUTE  SHALL  NOT
 BE  REQUIRED  TO MAKE ANY CONTRIBUTIONS AS A RESULT OF THIS SECTION. FOR
 THOSE MEMBERS REQUIRED TO CONTRIBUTE  TO  THE  RETIREMENT  SYSTEM,  SUCH
 CONTRIBUTION  SHALL  BE TREATED IN THE SAME MANNER AS SPECIFIED FOR SUCH
 MEMBERS IN ARTICLE FOURTEEN OR FIFTEEN OF THIS CHAPTER.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would add Article 14-C to the Retirement and Social Security
 Law, creating optional twenty-year plans covering, upon their  election,
 any  New York State (State) correction officers or other State employees
 engaged directly in correction officer duties.  The  retirement  benefit
 will  be  equal  to  fifty  percent of final average salary after twenty
 years of service. The legislature may further elect to provide for addi-
 tional sixtieths for service in excess  of  twenty  years.  All  service
 rendered as a State correction officer, a member or officer of the State
 Police,  a  paid  firefighter,  a  police  officer, or an officer of any
 organized fire department  or  police  force  will  be  creditable.  The
 retirement  benefit is not to exceed seventy-five percent of final aver-
 age salary.
   If this bill is enacted during the 2024 Legislative Session, we antic-
 ipate that there will be an increase in the annual contributions of  the
 State  of New York of approximately $56 million for the twenty-year plan
 or $75 million for the twenty-year plan with  additional  sixtieths  for
 the fiscal year ending March 31, 2025. In future years, these costs will
 vary  but  are  expected  to  average  3.2% and 4.5% of salary annually,
 respectively.
 A. 5013--A                          4
 
   In addition to the annual contributions discussed above, there will be
 an immediate past service cost of approximately  $735  million  for  the
 twenty-year  plan  or  $1.26 billion for the twenty-year plan with addi-
 tional sixtieths which will be borne by the State of New York as a  one-
 time  payment.  This estimate assumes that payment will be made on March
 1, 2025.
   These estimated costs are based on 16,999 affected members of the  New
 York  State  and  Local  Retirement  System employed by the State of New
 York, with annual salary of approximately $1.6 billion as of  March  31,
 2023.
   Internal  Revenue  Service  (IRS)  plan qualification issues: granting
 certain State employees engaged directly in correction  officer  duties,
 other  than State correction officers, service credit towards retirement
 in a twenty-year plan could jeopardize the governmental plan  status  of
 the  Retirement System ("the System") and its exemption from the Employ-
 ees Retirement Income Security Act. This development could result in the
 loss of qualified status, which would mean the  loss  of  tax  benefits.
 This  result  would  substantially impair the System's value to our more
 than one million participants.
   Prior to the enactment of this legislation, we recommend that a favor-
 able ruling be obtained from the IRS stating that these provisions would
 not harm the qualification status of the System. It  is  estimated  that
 the  costs  to obtain such a ruling would be $38,000 for the services of
 the IRS, and $1,000 per hour for legal consultants.
   Summary of relevant resources:
   Membership data as of March 31, 2023 was used in measuring the  impact
 of the proposed change, the same data used in the April 1, 2023 actuari-
 al  valuation.  Distributions  and  other statistics can be found in the
 2023 Report of the Actuary and the 2023 Annual  Comprehensive  Financial
 Report.
   The  actuarial  assumptions and methods used are described in the 2023
 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, 2023
 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  February  23,  2024, and intended for use only
 during the 2024  Legislative  Session,  is  Fiscal  Note  No.  2024-102,
 prepared  by  the  Actuary  for  the New York State and Local Retirement
 System.