S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6639
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              April 25, 2023
                                ___________
 
 Introduced  by  M.  of A. PHEFFER AMATO -- read once and referred to the
   Committee on Governmental Employees
 
 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 g 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:
   g. Notwithstanding any other provision of law, EFFECTIVE THE FIRST DAY
 OF SEPTEMBER, TWO  THOUSAND  TWENTY-FOUR,  the  surviving  spouse  of  a
 deceased  retired member who retired under an option which provides that
 benefits are to be continued for life to the surviving spouse after  the
 death  of  the  retired  member,  shall  be entitled to receive benefits
 pursuant to this section. Said benefits shall  be  [fifty]  ONE  HUNDRED
 percent  of  the monthly benefits which the pensioner would be receiving
 pursuant to this section if  living,  and  shall  commence  (i)  with  a
 payment  for  the  month of September, two thousand TWENTY-FOUR, or (ii)
 the month following the death of the deceased retired member,  whichever
 is later.
   § 2. Subdivision g 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:
   g. Notwithstanding any other provision of law, EFFECTIVE THE FIRST DAY
 OF SEPTEMBER, TWO  THOUSAND  TWENTY-FOUR,  the  surviving  spouse  of  a
 deceased  retired member who retired under an option which provides that
 benefits are to be continued for life to the surviving spouse after  the
 death  of  the  retired  member,  shall  be entitled to receive benefits
 pursuant to this section. Said benefits shall  be  [fifty]  ONE  HUNDRED
 percent  of  the monthly benefits which the pensioner would be receiving
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08560-04-3
              

 A. 6639                             2
 
 pursuant to this section if  living,  and  shall  commence  (i)  with  a
 payment  for  the  month of September, two thousand TWENTY-FOUR, or (ii)
 the month following the death of the deceased retired member,  whichever
 is later.
   §  3. Subdivision g of section 532-a of the education law, as added by
 chapter 125 of the laws of 2000, is amended to read as follows:
   g. Notwithstanding any other provision of law, EFFECTIVE THE FIRST DAY
 OF SEPTEMBER, TWO  THOUSAND  TWENTY-FOUR,  the  surviving  spouse  of  a
 deceased  retired member who retired under an option which provides that
 benefits are to be continued for life to the surviving spouse after  the
 death  of  the  retired  member,  shall  be entitled to receive benefits
 pursuant to this section. Said benefits shall  be  [fifty]  ONE  HUNDRED
 percent  of  the monthly benefits which the pensioner would be receiving
 pursuant to this section if  living,  and  shall  commence  (i)  with  a
 payment  for  the  month of September, two thousand TWENTY-FOUR, or (ii)
 the month following the death of the deceased retired member,  whichever
 is later.
   § 4. Subdivision g 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:
   g. Notwithstanding any other provision of law, EFFECTIVE THE FIRST DAY
 OF SEPTEMBER, TWO  THOUSAND  TWENTY-FOUR,  the  surviving  spouse  of  a
 deceased  retired  member  of  the  New  York city employees' retirement
 system, the New York city teachers' retirement system, the New York city
 police pension fund, the New York city fire department pension  fund  or
 the New York city board of education retirement system who retired under
 an  option  which provides that benefits are to be continued for life to
 the surviving spouse after the death of the member, shall be entitled to
 receive a benefit pursuant  to  this  section.  Said  benefit  shall  be
 [fifty]  ONE  HUNDRED percent of the monthly benefit which the pensioner
 would be receiving if living, and shall commence (i) with a payment  for
 the  month  of  September,  two  thousand TWENTY-FOUR, or (ii) the month
 following the death of the deceased retired member, whichever is later.
   § 5. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   As it relates to the New York State Teachers' Retirement System,  this
 bill  would amend subdivision g of Section 532-a of the Education Law to
 increase the  cost-of-living  adjustment  (COLA)  benefit  to  surviving
 spouse  beneficiaries  of  deceased retirees who elected an option which
 provides a lifetime benefit to their surviving spouse.  The COLA  survi-
 vor  benefit  would  be  equal  to 100% of the monthly benefit which the
 retiree would be receiving if alive. The current COLA  survivor  benefit
 is  equal to 50% of the benefit the retiree would be receiving if alive.
 This increase in spousal survivor benefit would also  be  applicable  to
 the  "catch-up" supplementation provided under subdivision f to eligible
 retirees who retired before January 1, 1997.  This  benefit  improvement
 would be effective in September of 2024.
   The annual cost to the employers of members of NYSTRS for this benefit
 is  estimated  to  be  $39.3 million or 0.21% of payroll if this bill is
 enacted.
   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-
 A. 6639                             3
 
 al assumptions and methods are provided in the System's Actuarial  Valu-
 ation Report.
   The  source  of  this  estimate is Fiscal Note 2023-20 dated March 13,
 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.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would bill would provide an increase in the defined  benefit
 cost-of-living adjustment (COLA) for New York public retirement systems.
 Starting  with  a  payment in September 2024, the cost-of-living benefit
 payable to a surviving spouse who is eligible for COLA will be increased
 from fifty percent to one  hundred  percent  of  the  benefit  that  the
 pensioner would have received.
   Insofar  as  this bill affects the New York State and Local Employees'
 Retirement System (NYSLERS), 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 suffi-
 cient to pay the cost of the provision. If this bill were enacted during
 the 2023 legislative session, the increase in the present value of bene-
 fits would be approximately $1.5 billion.
   In the NYSLERS, this benefit improvement will be funded by (1) billing
 a past service cost to cover retrospective  benefit  increases  and  (2)
 increasing the billing rates charged annually to cover prospective bene-
 fit increases, as follows:
   (1)  To  fund  retrospective  costs,  the  State  of  New York will be
 required to pay $1.60 billion (including interest) as of March 1, 2024.
   (2) To fund prospective costs, the annual contribution required of all
 participating employers in the NYSLERS is 0.04% of billable  salary,  or
 approximately  $4.5  million  to the State of New York and approximately
 $6.5 million to local participating employers in the fiscal year  ending
 March 31, 2025. This PERMANENT ANNUAL COST will vary in subsequent bill-
 ing  cycles  with changes in the billing rate and salary of the affected
 members.
   Insofar as this bill affects the New York State and Local  Police  and
 Fire  Retirement  System (NYSLPFRS), the increased costs would be shared
 by the State of New York and the local participating  employers  in  the
 NYSLPFRS. If this bill were enacted during the 2023 legislative session,
 the  increase  in  the  present value of benefits would be approximately
 $158 million.
 
      NYSLPFRS            Increase in present    Increase in future
                            value benefits         contributions
      Tiers 1-5             $152 million            $85 million
      Tier 6                  $6 million            $73 million
      Total                 $158 million           $158 million
 
   In the NYSLPFRS, this benefit improvement will be funded by increasing
 the billing rates charged  annually  to  cover  both  retrospective  and
 prospective  benefit  increases. The annual contribution required of all
 participating employers in NYSLPFRS  is  0.4%  of  billable  salary,  or
 approximately  $3.4  million  to the State of New York and approximately
 $14 million to the local participating  employers  in  the  fiscal  year
 A. 6639                             4
 
 ending  March  31,  2025. This PERMANENT ANNUAL COST will vary in subse-
 quent billing cycles with changes in the billing rate and salary of  the
 affected members.
   Summary of relevant resources:
   Membership  data as of March 31, 2022 was used in measuring the impact
 of the proposed change, the same data used in the April 1, 2022 actuari-
 al valuation. Distributions and other statistics can  be  found  in  the
 2022  Report  of the Actuary and the 2022 Annual Comprehensive Financial
 Report.
   The actuarial assumptions and methods used are described in the  2020,
 2021,  and  2022  Annual  Report to the Comptroller on Actuarial Assump-
 tions, 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, 2022
 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 30, 2023, and intended for use only  during
 the  2023  Legislative  Session, is Fiscal Note No. 2023-79, prepared by
 the Actuary for the New York State and Local Retirement System.