S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9925
 
                           I N  A S S E M B L Y
 
                              April 26, 2024
                                ___________
 
 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, in  relation  to
   the definition of overtime ceiling
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Subdivision l of section 601 of the retirement  and  social
 security  law, as amended by chapter 368 of the laws of 2017, is amended
 to read as follows:
   l. (a) "Wages" shall mean regular compensation earned by and paid to a
 member by a public employer, except that for members who first join  the
 New  York  state  and local employees' retirement system or the New York
 state teachers' retirement system on or after January first,  two  thou-
 sand  ten, overtime compensation paid in any year in excess of the over-
 time ceiling, as defined by this subdivision, shall not be  included  in
 the definition of wages.
   (b)  "Overtime compensation" shall mean, for purposes of this section,
 compensation paid under any law or policy under which employees are paid
 at a rate greater than their standard rate for additional  hours  worked
 beyond  those  required,  including  compensation paid under section one
 hundred thirty-four of the civil service law and section ninety  of  the
 general municipal law.
   (c)  The  "overtime  ceiling"  shall mean fifteen thousand dollars per
 annum on January first, two thousand ten,  and  shall  be  increased  by
 three per cent each year thereafter, provided, however, that:
   (i) for members who first become members of a public retirement system
 of  the state on or after April first, two thousand twelve, OTHER THAN A
 PENSION AUTHORIZED UNDER SECTION SIX HUNDRED  FOUR-B  OF  THIS  ARTICLE,
 "overtime  ceiling"  shall  mean  fifteen  thousand dollars per annum on
 April first, two thousand twelve, and shall be increased each year ther-
 eafter by a percentage to 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD08432-02-4
 A. 9925                             2
 
 equal  the  annual  inflation  as  determined  from  the increase in the
 consumer price index in the one year period ending on the December thir-
 ty-first preceding the overtime  ceiling  adjustment  effective  on  the
 ensuing April first.
   (ii)  Commencing  January  first, two thousand eighteen, and each year
 thereafter, the overtime ceiling percentage shall  be  increased  by  an
 amount  equal to the annual inflation as determined from the increase in
 the consumer price index in the one year period ending on the  September
 thirtieth  prior  to  the  overtime  ceiling adjustment effective on the
 ensuing January first.
   (d) For members who first join a public retirement system of the state
 on or after April first, two thousand twelve, the following items  shall
 not  be  included  in the definition of wages: 1. wages in excess of the
 annual salary paid to the governor pursuant to section three of  article
 four  of  the  state  constitution,  2.  lump  sum payments for deferred
 compensation, sick leave, accumulated vacation or other credits for time
 not worked, 3. any form of termination pay, 4.  any  additional  compen-
 sation paid in anticipation of retirement, and 5. in the case of employ-
 ees  who  receive  wages  from three or more employers in a twelve month
 period, the wages paid by the third and each additional employer.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY: This proposed legislation would remove the  Overtime  Ceiling
 for  Tier  6  New York City Transit Authority (NYCTA) members subject to
 the 25-Year and Age 55 Retirement Program (the  55/25  NYCTA  Plan)  for
 wages used to calculate member contributions and pension benefits.
 
          EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
           by Fiscal Year for the first 25 years ($ in Millions)
 
                             Year  NYCERS
                             2025  15.1
                             2026  15.9
                             2027  16.7
                             2028  17.6
                             2029  18.5
                             2030  19.4
                             2031  20.3
                             2032  21.2
                             2033  22.1
                             2034  23.1
                             2035  24.1
                             2036  25.0
                             2037  26.0
                             2038  27.0
                             2039  28.0
                             2040  29.1
                             2041  22.2
                             2042  23.2
                             2043  24.2
                             2044  25.1
                             2045  26.1
                             2046  27.1
                             2047  28.1
                             2048  29.1
                             2049  30.0
 A. 9925                             3
 
    Employer Contribution impact beyond Fiscal Year 2049 is not shown.
  Projected contributions include future new hires that may be impacted.
 
   The  increase  in  employer contributions will be allocated to the NYC
 Transit Authority.
 
           INITIAL INCREASE (DECREASE) IN ACTUARIAL LIABILITIES
                    as of June 30, 2023 ($ in Millions)
 
           Present Value (PV)                 NYCERS
           PV of Benefits:                    237.5
           PV of Employee Contributions:      71.2
           PV of Employer Contributions:      166.3
           Unfunded Accrued Liabilities:      71.9
 
                AMORTIZATION OF UNFUNDED ACCRUED LIABILITY

                                              NYCERS
           Number of Payments:                16
           Fiscal Year of Last Payment:       2040
           Amortization Payment:              7.9 M
 
   Unfunded Accrued Liability increases were amortized over the  expected
 remaining  working  lifetime  of  those  impacted by the benefit changes
 using level dollar payments.
 
   CENSUS DATA: The estimates presented herein are based  on  preliminary
 census  data  collected  as  of  June  30, 2023. The census data for the
 impacted population is summarized below.
 
                                              NYCERS
           Active Members
           - Number Count:                    19,953
           - Average Age:                     42.9
           - Average Service:                 5.0
           - Average Salary:                  82,600

   IMPACT ON MEMBER BENEFITS AND CONTRIBUTIONS: Under the proposed legis-
 lation, the Overtime Ceiling would become inapplicable  to  participants
 in the Tier 6 55/25 NYCTA Plan. As a result, overtime earnings exceeding
 the  Overtime  Ceiling  would be included in determining member contrib-
 ution rates and annual contributions to be paid by the  member.  Partic-
 ipants  may be entitled to a higher annual pension benefit if such earn-
 ings increase their Final Average Salary.
 
   ASSUMPTIONS AND METHODS: The  estimates  presented  herein  have  been
 calculated  based  on the Revised 2021 Actuarial Assumptions and Methods
 of the impacted retirement systems. In addition:
 
 * Future overtime earnings exceeding the Overtime Ceiling  were  assumed
 to  remain  level  based  on reported overtime for the last three fiscal
 years.

 * New entrants were assumed to replace exiting  members  so  that  total
 payroll  increases  by 3% each year for NYC Transit members. New entrant
 A. 9925                             4
 
 demographics were developed based on data for recent new hires and actu-
 arial judgement.
   RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
 highly on the actuarial assumptions, methods,  and  models  used,  demo-
 graphics  of  the  impacted population and other factors such as invest-
 ment, contribution, and other risks. If actual experience deviates  from
 actuarial   assumptions,  the  actual  costs  could  differ  from  those
 presented herein. Quantifying these risks is beyond the  scope  of  this
 Fiscal Note.
   This  Fiscal  Note  is intended to measure pension-related impacts and
 does not include other potential costs (e.g., administrative  and  Other
 Postemployment Benefits).
   STATEMENT OF ACTUARIAL OPINION: Marek Tyszkiewicz and Gregory Zelikov-
 sky  are members of the Society of Actuaries and the American Academy of
 Actuaries. We are members of NYCERS but do not believe  it  impairs  our
 objectivity  and  we  meet  the  Qualification Standards of the American
 Academy of Actuaries to render the actuarial opinion  contained  herein.
 To  the  best  of  our 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 2024-39  dated  April  1,
 2024  was prepared by the Chief Actuary for the New York City Retirement
 Systems and Pension Funds. This estimate is intended for use only during
 the 2024 Legislative Session.