A. 5487 2
the effective date of the chapter of the laws of two thousand fifteen
that amended this paragraph) preceding such current plan year as
follows:
(i) members with wages of forty-five thousand dollars per annum or
less shall contribute three per centum of annual wages;
(ii) members with wages greater than forty-five thousand per annum,
but not more than fifty-five thousand per annum shall contribute three
and one-half per centum of annual wages;
(iii) members with wages greater than fifty-five thousand per annum,
but not more than seventy-five thousand per annum shall contribute four
and one-half per centum of annual wages;
(iv) members with wages greater than seventy-five thousand per annum
but not more than one hundred thousand per annum shall contribute five
and three-quarters per centum of annual wages; and
(v) members with wages greater than one hundred thousand per annum
shall contribute six per centum of annual wages].
Notwithstanding the foregoing, during each of the first three plan
years (April first to March thirty-first, except for members of New York
city employees' retirement system, New York city teachers' retirement
system and New York city board of education retirement system, plan year
shall mean January first through December thirty-first commencing with
the January first next succeeding the effective date of chapter five
hundred ten of the laws of two thousand fifteen) in which such member
has established membership in a public retirement system of the state,
such member shall contribute a percentage of annual wages in accordance
with the preceding schedule based upon a projection of annual wages
provided by the employer. Notwithstanding the foregoing, when determin-
ing the rate at which each such member who became a member of the New
York state and local employees' retirement system, New York city employ-
ees' retirement system, New York city teachers' retirement system and
New York city board of education retirement system, on or after April
first, two thousand twelve shall contribute for any plan year (April
first to March thirty-first, except for members of the New York city
employees' retirement system, New York city teachers' retirement system
and New York city board of education retirement system, plan year shall
mean January first through December thirty-first commencing with January
first next succeeding the effective date of chapter five hundred ten of
the laws of two thousand fifteen) between April first, two thousand
twenty-two and April first, two thousand twenty-four, such rate shall be
determined by reference to employees annual base wages of such member in
the second plan year (April first to March thirty-first) preceding such
current plan year. Base wages shall include regular pay, shift differen-
tial pay, location pay, and any increased hiring rate pay, but shall not
include any overtime payments or compensation earned for extracurricular
programs or any other pensionable earnings paid in addition to the annu-
al base wages.
The head of each retirement system shall promulgate such regulations
as may be necessary and appropriate with respect to the deduction of
such contribution from members' wages and for the maintenance of any
special fund or funds with respect to amounts so contributed.
2. A member of the New York city employees' retirement system who is
eligible to be a participant in the twenty-five-year and age fifty-five
retirement program, as defined by paragraph five of subdivision a of
section six hundred four-b of this article shall contribute two percent
of annual wages to such system effective on the starting date of the
elimination of additional member contributions, as defined in an
A. 5487 3
election made pursuant to paragraph ten of subdivision e of section six
hundred four-b of this article[, except that beginning April first, two
thousand thirteen for members who first become members of the New York
city employees' retirement system on or after April first, two thousand
twelve, the rate at which each such member shall contribute in any
current plan year (April first to March thirty-first, provided, however,
that plan year shall mean January first through December thirty-first
commencing with the January first next succeeding the effective date of
the chapter of the laws of two thousand fifteen that amended this para-
graph) shall be determined by reference to the wages of such member in
the second plan year (April first to March thirty-first, provided,
however, that plan year shall mean January first through December thir-
ty-first commencing with the January first next succeeding the effective
date of the chapter of the laws of two thousand fifteen that amended
this paragraph) preceding such current plan year as follows:
(i) members with wages of forty-five thousand dollars per annum or
less shall contribute three per centum of annual wages;
(ii) members with wages greater than forty-five thousand per annum,
but not more than fifty-five thousand per annum shall contribute three
and one-half per centum of annual wages;
(iii) members with wages greater than fifty-five thousand per annum,
but not more than seventy-five thousand per annum shall contribute four
and one-half per centum of annual wages;
(iv) members with wages greater than seventy-five thousand per annum
but not more than one hundred thousand per annum shall contribute five
and three-quarters per centum of annual wages; and
(v) members with wages greater than one hundred thousand per annum
shall contribute six per centum of annual wages].
Notwithstanding the foregoing, during each of the first three plan
years (April first to March thirty-first, provided, however, that plan
year shall mean January first through December thirty-first commencing
with the January first next succeeding the effective date of chapter
five hundred ten of the laws of two thousand fifteen) in which such
member has established membership in the New York city employees'
retirement system, such member shall contribute a percentage of annual
wages in accordance with the preceding schedule based upon a projection
of annual wages provided by the employer. Notwithstanding the foregoing,
when determining the rate at which each such member who became a member
of, New York city employees' retirement system, on or after April first,
two thousand twelve shall contribute for any plan year (April first to
March thirty-first, provided, however, that plan year shall mean January
first through December thirty-first commencing with the January first
next succeeding the effective date of chapter five hundred ten of the
laws of two thousand fifteen) between April first, two thousand twenty-
two and April first, two thousand twenty-four, such rate shall be deter-
mined by reference to employees annual base wages of such member in the
second plan year (April first to March thirty-first) preceding such
current plan year. Base wages shall include regular pay, shift differen-
tial pay, location pay, and any increased hiring rate pay, but shall not
include any overtime payments.
§ 2. Subdivision g of section 613 of the retirement and social securi-
ty law is REPEALED.
§ 3. Subdivision t of section 603 of the retirement and social securi-
ty law, as amended by chapter 18 of the laws of 2012, is amended to read
as follows:
A. 5487 4
t. Members who join the New York state teachers' retirement system on
or after January first, two thousand ten, shall be eligible to retire
without reduction of his or her retirement benefit upon attainment of at
least fifty-seven years of age and completion of thirty or more years of
service. [Members who retire pursuant to the provisions of this subdivi-
sion shall be required to make the member contributions required by
subdivision g of section six hundred thirteen of this article for all
years of credited and creditable service.] The provisions of this subdi-
vision shall not apply to members who first become a member of the New
York state teachers' retirement system on or after April first, two
thousand twelve.
§ 4. Subdivision a of section 517 of the retirement and social securi-
ty law, as amended by chapter 18 of the laws of 2012, the second undes-
ignated paragraph as amended by section 1 of part SS of chapter 56 of
the laws of 2022, is amended to read as follows:
a. Members shall contribute three percent of annual wages to the
retirement system in which they have membership, provided that such
contributions shall not be required for more than thirty years, for
general members, or twenty-five years, for police/fire members[, except
that beginning April first, two thousand thirteen for members who first
become members of the New York state and local employees' retirement
system on or after April first, two thousand twelve, the rate at which
each such member shall contribute in any current plan year (April first
to March thirty-first) shall be determined by reference to the wages of
such member in the second plan year (April first to March thirty-first)
preceding such current plan year as follows:
1. members with wages of forty-five thousand dollars per annum or less
shall contribute three per centum of annual wages;
2. members with wages greater than forty-five thousand per annum, but
not more than fifty-five thousand per annum shall contribute three and
one-half per centum of annual wages;
3. members with wages greater than fifty-five thousand per annum, but
not more than seventy-five thousand per annum shall contribute four and
one-half per centum of annual wages;
4. members with wages greater than seventy-five thousand per annum but
not more than one hundred thousand per annum shall contribute five and
three-quarters per centum of annual wages; and
5. members with wages greater than one hundred thousand per annum
shall contribute six per centum of annual wages].
Notwithstanding the foregoing, during each of the first three plan
years (April first to March thirty-first) in which such member has
established membership in the New York state and local employees'
retirement system, such member shall contribute a percentage of annual
wages in accordance with the preceding schedule based upon a projection
of annual wages provided by the employer. Notwithstanding the foregoing,
when determining the rate at which each such member who became a member
of the New York state and local employees' retirement system on or after
April first, two thousand twelve shall contribute for any plan year
(April first to March thirty-first) between April first, two thousand
twenty-two and April first, two thousand twenty-four, such rate shall be
determined by reference to employees annual base wages of such member in
the second plan year (April first to March thirty-first) preceding such
current plan year. Base wages shall include regular pay, shift differen-
tial pay, location pay, and any increased hiring rate pay, but shall not
include any overtime payments.
A. 5487 5
The head of each retirement system shall promulgate such regulations
as may be necessary and appropriate with respect to the deduction of
such contribution from members' wages and for the maintenance of any
special fund or funds with respect to amounts so contributed.
§ 5. Section 1204 of the retirement and social security law, as
amended by chapter 18 of the laws of 2012, the second undesignated para-
graph as amended by section 3 of part SS of chapter 56 of the laws of
2022, is amended to read as follows:
§ 1204. Member contributions. Members who are subject to the
provisions of this article shall contribute three percent of annual
wages to the retirement system in which they have membership[, except
that beginning April first, two thousand thirteen for members who first
become members of the New York state and local police and fire retire-
ment system on or after April first, two thousand twelve, the rate at
which each such member shall contribute in any current plan year (April
first to March thirty-first) shall be determined by reference to the
wages of such member in the second plan year (April first to March thir-
ty-first) preceding such current plan year as follows:
a. members with wages of forty-five thousand dollars per annum or less
shall contribute three per centum of annual wages;
b. members with wages greater than forty-five thousand per annum, but
not more than fifty-five thousand per annum shall contribute three and
one-half per centum of annual wages;
c. members with wages greater than fifty-five thousand per annum, but
not more than seventy-five thousand per annum shall contribute four and
one-half per centum of annual wages;
d. members with wages greater than seventy-five thousand per annum but
not more than one hundred thousand per annum shall contribute five and
three-quarters per centum of annual wages; and
e. members with wages greater than one hundred thousand per annum
shall contribute six per centum of annual wages].
Notwithstanding the foregoing, during each of the first three plan
years (April first to March thirty-first) in which such member has
established membership in the New York state and local police and fire
retirement system, such member shall contribute a percentage of annual
wages in accordance with the preceding schedule based upon a projection
of annual wages provided by the employer. Notwithstanding the foregoing,
when determining the rate at which each such member who became a member
of the New York state and local police and fire retirement system on or
after April first, two thousand twelve shall contribute for any plan
year (April first to March thirty-first) between April first, two thou-
sand twenty-two and April first, two thousand twenty-four, such rate
shall be determined by reference to employees annual base wages of such
member in the second plan year (April first to March thirty-first)
preceding such current plan year. Base wages shall include regular pay,
shift differential pay, location pay, and any increased hiring rate pay,
but shall not include any overtime payments. Effective April first, two
thousand twelve, all members subject to the provisions of this article
shall not be required to make member contributions on annual wages
excluded from the calculation of final average salary pursuant to
section twelve hundred three of this article. Nothing in this section,
however, shall be construed or deemed to allow members to receive a
refund of any member contributions on such wages paid prior to April
first, two thousand twelve.
Members who are enrolled in a retirement plan that limits the amount
of creditable service a member can accrue shall not be required to make
A. 5487 6
contributions pursuant to this section after accruing the maximum amount
of service credit allowed by the retirement plan in which they are
enrolled. The state comptroller shall promulgate such regulations as may
be necessary and appropriate with respect to the deduction of such
contribution from members' wages and for the maintenance of any special
fund or funds with respect to amounts so contributed. In no way shall
the member contributions made pursuant to this section be used to
provide for pension increases or annuities of any kind.
§ 6. Subdivision 2 of section 182 of the education law, as amended by
chapter 18 of the laws of 2012, is amended to read as follows:
2. Employee contributions. In the case of any electing employee,
contributions at the rate of three per centum of his state salary shall
be deducted by the state comptroller as the employee contribution,
provided however, that such employee contribution shall be made by the
state in accordance with subdivision one of this section during such
period as (a) either section seventy-a of the retirement and social
security law or section five hundred twenty-eight of this title provides
that the contribution of each member of the New York state employees'
retirement system or the New York state teachers' retirement system in
the employ of the state shall be reduced by at least eight per centum of
his compensation, or (b) employee contributions to either such system
are no longer required by reason of such system becoming noncontributory
for state employees.
[Notwithstanding any other law to the contrary, beginning April first,
two thousand thirteen any electing employee appointed on or after April
first, two thousand twelve, the rate at which each such employee shall
contribute in any current plan year (January first to December thirty-
first) shall be determined by reference to the wages of such member in
the second plan year (January first to December thirty-first) preceding
such current plan year as follows:
(a) members with wages of forty-five thousand dollars per annum or
less shall contribute three per centum of annual wages;
(b) members with wages greater than forty-five thousand per annum, but
not more than fifty-five thousand per annum shall contribute three and
one-half per centum of annual wages;
(c) members with wages greater than fifty-five thousand per annum, but
not more than seventy-five thousand per annum shall contribute four and
one-half per centum of annual wages;
(d) members with wages greater than seventy-five thousand per annum
but not more than one hundred thousand per annum shall contribute five
and three-quarters per centum of annual wages; and
(e) members with wages greater than one hundred thousand per annum
shall contribute six per centum of annual wages.
Notwithstanding the foregoing, during each of the first three plan
years (January first to December thirty-first) in which such member has
established membership in the Education Department Optional Retirement
Program, such employee shall contribute a percent of annual wages in
accordance with the preceding schedule based upon a projection of annual
wages provided by the employer.]
§ 7. Subdivision f of section 613 of the retirement and social securi-
ty law, as amended by chapter 18 of the laws of 2012, the second undes-
ignated paragraph as amended by section 2 of part SS of chapter 56 of
the laws of 2022, is amended to read as follows:
f. Anything in subdivision a of this section to the contrary notwith-
standing a member employed as a uniformed court officer or peace officer
in the unified court system who first joins the New York state and local
A. 5487 7
employees' retirement system on or after January first, two thousand ten
shall contribute four percent of annual wages to the New York state and
local employees' retirement system[, except that beginning April first,
two thousand thirteen for members who first become members of the New
York state and local employees' retirement system on or after April
first, two thousand twelve, the rate at which each such member shall
contribute in any current plan year (April first to March thirty-first)
shall be determined by reference to the wages of such member in the
second plan year (April first to March thirty-first) preceding such
current plan year as follows:
1. members with wages of forty-five thousand dollars per annum or less
shall contribute three per centum of annual wages;
2. members with wages greater than forty-five thousand per annum, but
not more than fifty-five thousand per annum shall contribute three and
one-half per centum of annual wages;
3. members with wages greater than fifty-five thousand per annum, but
not more than seventy-five thousand per annum shall contribute four and
one-half per centum of annual wages;
4. members with wages greater than seventy-five thousand per annum but
not more than one hundred thousand per annum shall contribute five and
three-quarters per centum of annual wages; and
5. members with wages greater than one hundred thousand per annum
shall contribute six per centum of annual wages].
Notwithstanding the foregoing, during each of the first three plan
years (April first to March thirty-first) in which such member has
established membership in the New York state and local employees'
retirement system, such member shall contribute a percentage of annual
wages in accordance with the preceding schedule based upon a projection
of annual wages provided by the employer. Notwithstanding the foregoing,
when determining the rate at which each such member who became a member
of the New York state and local employees' retirement system on or after
April first, two thousand twelve shall contribute for any plan year
(April first to March thirty-first) between April first, two thousand
twenty-two and April first, two thousand twenty-four, such rate shall be
determined by reference to employees annual base wages of such member in
the second plan year (April first to March thirty-first) preceding such
current plan year. Base wages shall include regular pay, shift differen-
tial pay, location pay, and any increased hiring rate pay, but shall not
include any overtime payments.
The head of the New York state and local employees' retirement system
shall promulgate such regulations as may be necessary and appropriate
with respect to the deduction of such contribution from members' wages
and for the maintenance of any special fund or funds with respect to
amounts so contributed.
§ 8. Nothing in this act shall be construed or deemed to allow members
to receive a refund of any member contributions made or collected prior
to the effective date of this act.
§ 9. Notwithstanding any other provision of law to the contrary, none
of the provisions of this act shall be subject to section 25 of the
retirement and social security law.
§ 10. This act shall take effect on the sixtieth day after it shall
have become a law.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
As it relates to the New York State Teachers' Retirement System, this
bill would amend Section 613 of the Retirement and Social Security Law
to reduce the required employee contribution rate for Tier 5 and 6
A. 5487 8
members to a flat 3.0% of salary, payable over their career. Currently,
Tier 5 members are required to contribute at a rate of 3.5% of salary,
and Tier 6 members are required to contribute between 3.0% and 6.0% of
salary, according to a salary-based schedule. No contributions made or
collected before the effective date of this bill would be refunded.
The annual cost to the employers of members of the New York State
Teachers' Retirement System for this benefit is estimated to be $136.5
million or 0.74% of payroll if this bill is enacted.
The System's "new entrant rate", a hypothetical employer contribution
rate that would occur if we started a new Retirement System without any
assets, is equal to 5.15% of pay under the current Tier 6 benefit struc-
ture. This can be thought of as the long-term expected employer cost of
Tier 6, based on current actuarial assumptions. For the reduction to the
Tier 6 employee contribution rate proposed under this bill, this new
entrant rate would increase to 6.72% of pay, an increase of 1.57% of
pay.
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 are as reported in the System's financial
statements and can also be found in the System's Annual Report. Actuari-
al assumptions and methods are provided in the System's Actuarial Valu-
ation Report.
The source of this estimate is Fiscal Note 2023-03 dated February 22,
2023 prepared by the Office of the Actuary of the New York State Teach-
ers' Retirement System and is intended for use only during the 2023
Legislative Session. I, Richard A. Young, am the Chief Actuary for the
New York State Teachers' Retirement System. I am a member of the Ameri-
can Academy of Actuaries and I meet the Qualification Standards of the
American Academy of Actuaries to render the actuarial opinion contained
herein.