S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6174
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              March 31, 2023
                                ___________
 
 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, in relation to
   calculating certain pensions
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subdivision a of section 504 of the retirement and social
 security law, as amended by chapter 18 of the laws of 2012,  is  amended
 to read as follows:
   a.  The  service  retirement  benefit  for  general  members at normal
 retirement age with twenty or more years of credited service shall be  a
 pension  equal  to  one-fiftieth  of final average salary times years of
 credited service, not in excess of thirty years, less fifty  percent  of
 the  primary  social  security retirement benefit as provided in section
 five hundred eleven of this article. The service retirement benefit  for
 general  members  at  normal retirement age with twenty or more years of
 service who first become members of the New York state and local employ-
 ees' retirement system on or after April first, two thousand  twelve  at
 normal  retirement  age  shall be a pension equal to the sum of [thirty-
 five] FORTY per centum and one-fiftieth of final average salary for each
 year of service in excess of twenty, but not in excess of thirty,  times
 final average salary times years of credited service.
   §  2.  Subdivisions  a, b and b-1 of section 604 of the retirement and
 social security law, subdivision a as amended  and  subdivision  b-1  as
 added  by  chapter  18  of the laws of 2012, subdivision b as amended by
 chapter 266 of the laws of 1998 and the opening paragraph of subdivision
 b as amended by section 8-b of part B of chapter  504  of  the  laws  of
 2009, are amended to read as follows:
   a.  The  service  retirement  benefit  at  normal retirement age for a
 member with less than twenty years of credited service[,  or  less  than
 twenty-five  years  credited service for a member who joins the New York

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06271-03-3
              

 S. 6174                             2

 state teachers' retirement system on or after January first,  two  thou-
 sand  ten,]  shall  be  a  retirement allowance equal to one-sixtieth of
 final average salary times years of credited service. Normal  retirement
 age  for  members who first become members of a public retirement system
 of the state on or after April first, two thousand twelve shall  be  age
 sixty-three.
   b.  The  service  retirement  benefit  at  normal retirement age for a
 member with twenty years or more of credited service[, or  with  twenty-
 five or more years credited service for a member who first joins the New
 York  state  teachers'  retirement system on or after January first, two
 thousand ten,] shall be a retirement allowance equal to one-fiftieth  of
 final  average  salary  times years of credited service not in excess of
 thirty years.
   Credited service in excess of thirty years shall provide an additional
 retirement allowance equal to three-two hundredths of the final  average
 salary for each year of credited service in excess of thirty years.
   b-1.  Notwithstanding  any other provision of law to the contrary, the
 service retirement benefit for members with  twenty  or  more  years  of
 credit  service  who first become a member of a public retirement system
 of the state on or after April first, two thousand twelve at age  sixty-
 three  shall  be  a  pension equal to the sum of [thirty-five] FORTY per
 centum and one-fiftieth of final average salary for each year of service
 in excess of twenty times final average salary times years  of  credited
 service.  In  no  event  shall  any  retirement  benefit payable without
 optional modification be less than the actuarially equivalent annuitized
 value of the member's contributions accumulated with  interest  at  five
 percent per annum compounded annually to the date of retirement.
   §  3. Section 1312 of the retirement and social security law, as added
 by chapter 18 of the laws of 2012, is amended to read as follows:
   § 1312. Benefit enhancements. Notwithstanding any  other  law  to  the
 contrary,  eligible  employees  shall  be  permitted  to retire, without
 penalty, upon reaching age fifty-seven and completing  at  least  thirty
 years  of  credited service. Employees retiring pursuant to this section
 shall receive a pension allowance equal  to  the  sum  of  [thirty-five]
 FORTY  per centum and one-fiftieth of final average salary for each year
 of service in excess of twenty times final average salary times years of
 credited service.
   § 4. 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.
   § 5. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would change the benefit fraction for a Tier  6  Article  15
 member  for service greater than 20 years to 40% of FAS plus 2% per year
 of service greater than 20. Currently the benefit  for  service  greater
 than 20 years is 35% of FAS plus 2% per year of service greater than 20.
   Insofar  as  this bill affects the New York State and Local Employees'
 Retirement System (NYSLERS), increased costs  would  be  shared  by  the
 State  of  New  York  and all participating employers in the NYSLERS. If
 this bill is enacted during the 2023 legislative session, there will  be
 an  increase in the present value of future costs of approximately $1.41
 billion.
 
      NYSLERS        Increase in present        Increase in future
                       value benefits             contributions
 Tiers 1 - 5                  $0                     $280 million
 S. 6174                             3
 
      Tier 6              $1.41 billion              $1.13 billion
       Total              $1.41 billion              $1.41 billion
 
   In  the NYSLERS, this benefit improvement will be funded by increasing
 the billing rates charged annually. The annual contribution required  of
 all  participating  employers  in  the  NYSLERS is approximately 0.5% of
 billable salary, or approximately $61 million to the State of  New  York
 and  $89 million to the local participating employers in the fiscal year
 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 31, 2023, and intended for use only during
 the 2023 Legislative Session, is Fiscal Note No.  2023-42,  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
 ________________________________________________________________________
 
                                  6174--A
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              March 31, 2023
                                ___________
 
 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, in  relation  to
   calculating certain pensions
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision a of section 504 of the retirement  and  social
 security  law,  as amended by chapter 18 of the laws of 2012, is amended
 to read as follows:
   a. The service  retirement  benefit  for  general  members  at  normal
 retirement  age with twenty or more years of credited service shall be a
 pension equal to one-fiftieth of final average  salary  times  years  of
 credited  service,  not in excess of thirty years, less fifty percent of
 the primary social security retirement benefit as  provided  in  section
 five  hundred eleven of this article. The service retirement benefit for
 general members at normal retirement age with twenty or  more  years  of
 service who first become members of the New York state and local employ-
 ees'  retirement  system on or after April first, two thousand twelve at
 normal retirement age shall be a pension equal to the  sum  of  [thirty-
 five] FORTY per centum and one-fiftieth of final average salary for each
 year  of service in excess of twenty, but not in excess of thirty, times
 final average salary times years of credited service.
   § 2. Subdivisions a, b and b-1 of section 604 of  the  retirement  and
 social  security  law,  subdivision  a as amended and subdivision b-1 as
 added by chapter 18 of the laws of 2012, subdivision  b  as  amended  by
 chapter 266 of the laws of 1998 and the opening paragraph of subdivision
 b  as  amended  by  section  8-b of part B of chapter 504 of the laws of
 2009, are amended to read as follows:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06271-04-3
 S. 6174--A                          2
              

 
   a. The service retirement benefit  at  normal  retirement  age  for  a
 member  with  less  than twenty years of credited service[, or less than
 twenty-five years credited service for a member who joins the  New  York
 state  teachers'  retirement system on or after January first, two thou-
 sand  ten,]  shall  be  a  retirement allowance equal to one-sixtieth of
 final average salary times years of credited service. Normal  retirement
 age  for  members who first become members of a public retirement system
 of the state on or after April first, two thousand twelve shall  be  age
 sixty-three.
   b.  The  service  retirement  benefit  at  normal retirement age for a
 member with twenty years or more of credited service[, or  with  twenty-
 five or more years credited service for a member who first joins the New
 York  state  teachers'  retirement system on or after January first, two
 thousand ten,] shall be a retirement allowance equal to one-fiftieth  of
 final  average  salary  times years of credited service not in excess of
 thirty years.
   Credited service in excess of thirty years shall provide an additional
 retirement allowance equal to three-two hundredths of the final  average
 salary for each year of credited service in excess of thirty years.
   b-1.  Notwithstanding  any other provision of law to the contrary, the
 service retirement benefit for members with  twenty  or  more  years  of
 credit  service  who first become a member of a public retirement system
 of the state on or after April first, two thousand twelve at age  sixty-
 three  shall  be  a  pension equal to the sum of [thirty-five] FORTY per
 centum and one-fiftieth of final average salary for each year of service
 in excess of twenty times final average salary times years  of  credited
 service.  In  no  event  shall  any  retirement  benefit payable without
 optional modification be less than the actuarially equivalent annuitized
 value of the member's contributions accumulated with  interest  at  five
 percent per annum compounded annually to the date of retirement.
   §  3. Section 1312 of the retirement and social security law, as added
 by chapter 18 of the laws of 2012, is amended to read as follows:
   § 1312. Benefit enhancements. Notwithstanding any  other  law  to  the
 contrary,  eligible  employees  shall  be  permitted  to retire, without
 penalty, upon reaching age fifty-seven and completing  at  least  thirty
 years  of  credited service. Employees retiring pursuant to this section
 shall receive a pension allowance equal  to  the  sum  of  [thirty-five]
 FORTY  per centum and one-fiftieth of final average salary for each year
 of service in excess of twenty times final average salary times years of
 credited service.
   § 4. 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.
   § 5. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would change the benefit fraction for a Tier  6  Article  15
 member  for service greater than 20 years to 40% of FAS plus 2% per year
 of service greater than 20. Currently the benefit  for  service  greater
 than 20 years is 35% of FAS plus 2% per year of service greater than 20.
   Insofar  as  this bill affects the New York State and Local Employees'
 Retirement System (NYSLERS), increased costs  would  be  shared  by  the
 State  of  New  York  and all participating employers in the NYSLERS. If
 this bill is enacted during the 2023 legislative session, there will  be
 an  increase in the present value of future costs of approximately $1.41
 billion.
 S. 6174--A                          3
 
      NYSLERS        Increase in present        Increase in future
                       value benefits             contributions
 Tiers 1 - 5                  $0                     $280 million
      Tier 6              $1.41 billion              $1.13 billion
       Total              $1.41 billion              $1.41 billion
 
   In  the NYSLERS, this benefit improvement will be funded by increasing
 the billing rates charged annually. The annual contribution required  of
 all  participating  employers  in  the  NYSLERS is approximately 0.5% of
 billable salary, or approximately $61 million to the State of  New  York
 and  $89 million to the local participating employers in the fiscal year
 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 31, 2023, and intended for use only during
 the 2023 Legislative Session, is Fiscal Note No.  2023-42,  prepared  by
 the Actuary for the New York State and Local Retirement System.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would amend Section 604 of the Retirement and Social Securi-
 ty  Law  to  improve  the  retirement  benefit formula for Tiers 5 and 6
 members of the New York State Teachers' Retirement System.  The  Tier  5
 benefit  formula would match the Tier 4 formula with eligibility for the
 2.0% multiplier at 20 years of service instead of  25  years  as  it  is
 currently.  The retirement benefit formula for Tier 6 members with 20 or
 more  years  of service would be 40% of final average salary plus 2% for
 each year of service in excess  of  20  years.  Currently,  the  benefit
 formula  for  Tier  6 members with 20 or more years of service is 35% of
 final average salary plus 2% for each year of service in  excess  of  20
 years.
   The  annual  cost  to  the  employers of members of the New York State
 Teachers' Retirement System for this benefit is estimated  to  be  $60.3
 million or 0.33% 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 the current actuarial  assumptions.  For  the  proposed
 change to the Tier 6 benefit structure under this bill, this new entrant
 S. 6174--A                          4

 rate  is  estimated to increase to 5.84% of pay, an increase of 0.69% 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 2023-31 dated May 17,  2023
 prepared  by  the  Office of the Actuary of the New York State Teachers'
 Retirement System and is intended for use only during the 2023  Legisla-
 tive Session. I, Richard A. Young, am the Chief 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 Actuaries to render the actuarial opinion contained herein.

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6174--B
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              March 31, 2023
                                ___________
 
 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 -- recommitted to the  Committee  on
   Civil Service and Pensions in accordance with Senate Rule 6, sec. 8 --
   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
   calculating certain pensions
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision a of section 504 of the retirement  and  social
 security  law,  as amended by chapter 18 of the laws of 2012, is amended
 to read as follows:
   a. The service  retirement  benefit  for  general  members  at  normal
 retirement  age with twenty or more years of credited service shall be a
 pension equal to one-fiftieth of final average  salary  times  years  of
 credited  service,  not in excess of thirty years, less fifty percent of
 the primary social security retirement benefit as  provided  in  section
 five  hundred eleven of this article. The service retirement benefit for
 general members at normal retirement age with twenty or  more  years  of
 service who first become members of the New York state and local employ-
 ees'  retirement  system on or after April first, two thousand twelve at
 normal retirement age shall be a pension equal to the  sum  of  [thirty-
 five] FORTY per centum and one-fiftieth of final average salary for each
 year  of service in excess of twenty, but not in excess of thirty, times
 final average salary times years of credited service.
   § 2. Subdivisions a, b and b-1 of section 604 of  the  retirement  and
 social  security  law,  subdivision  a as amended and subdivision b-1 as
 added by chapter 18 of the laws of 2012, subdivision  b  as  amended  by
 chapter 266 of the laws of 1998 and the opening paragraph of subdivision
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06271-07-4
              

 S. 6174--B                          2
 
 b  as  amended  by  section  8-b of part B of chapter 504 of the laws of
 2009, are amended to read as follows:
   a.  The  service  retirement  benefit  at  normal retirement age for a
 member with less than twenty years of credited service[,  or  less  than
 twenty-five  years  credited service for a member who joins the New York
 state teachers' retirement system on or after January first,  two  thou-
 sand  ten,]  shall  be  a  retirement allowance equal to one-sixtieth of
 final average salary times years of credited service. Normal  retirement
 age  for  members who first become members of a public retirement system
 of the state on or after April first, two thousand twelve shall  be  age
 sixty-three.
   b.  The  service  retirement  benefit  at  normal retirement age for a
 member with twenty years or more of credited service[, or  with  twenty-
 five or more years credited service for a member who first joins the New
 York  state  teachers'  retirement system on or after January first, two
 thousand ten,] shall be a retirement allowance equal to one-fiftieth  of
 final  average  salary  times years of credited service not in excess of
 thirty years.
   Credited service in excess of thirty years shall provide an additional
 retirement allowance equal to three-two hundredths of the final  average
 salary for each year of credited service in excess of thirty years.
   b-1.  Notwithstanding  any other provision of law to the contrary, the
 service retirement benefit for members with  twenty  or  more  years  of
 credit  service  who first become a member of a public retirement system
 of the state on or after April first, two thousand twelve at age  sixty-
 three  shall  be  a  pension equal to the sum of [thirty-five] FORTY per
 centum and one-fiftieth of final average salary for each year of service
 in excess of twenty times final average salary times years  of  credited
 service.  In  no  event  shall  any  retirement  benefit payable without
 optional modification be less than the actuarially equivalent annuitized
 value of the member's contributions accumulated with  interest  at  five
 percent per annum compounded annually to the date of retirement.
   §  3. Section 1312 of the retirement and social security law, as added
 by chapter 18 of the laws of 2012, is amended to read as follows:
   § 1312. Benefit enhancements. Notwithstanding any  other  law  to  the
 contrary,  eligible  employees  shall  be  permitted  to retire, without
 penalty, upon reaching age fifty-seven and completing  at  least  thirty
 years  of  credited service. Employees retiring pursuant to this section
 shall receive a pension allowance equal  to  the  sum  of  [thirty-five]
 FORTY  per centum and one-fiftieth of final average salary for each year
 of service in excess of twenty times final average salary times years of
 credited service.
   § 4. 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.
   § 5. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would change the benefit fraction for a Tier  6  Article  15
 member  for service greater than 20 years to 40% of FAS plus 2% per year
 of service greater than 20. Currently the benefit  for  service  greater
 than 20 years is 35% of FAS plus 2% per year of service greater than 20.
   Insofar  as  this bill affects the New York State and Local Employees'
 Retirement System (NYSLERS), the increased costs would be shared by  the
 State  of New York and the local participating employers in the NYSLERS.
 If this bill were enacted  during  the  2024  Legislative  Session,  the
 S. 6174--B                          3
 
 increase  in  the present value of benefits would be approximately $1.74
 billion.
      NYSLERS        Increase in present      Increase in required
                     value benefits           contributions
      Tiers 1 - 5    $0                       $332 million
      Tier 6         $1.74 billion            $1.41 billion
      Total          $1.74 billion            $1.74 billion
 
   In  the NYSLERS, 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  NYSLERS  is  0.6%  of  billable  salary,  or
 approximately  $76  million  to  the State of New York and approximately
 $110 million to the local participating employers. This PERMANENT ANNUAL
 COST WILL INCREASE as Tier 6 salary grows  and  will  vary  by  employer
 based upon the plan coverage and salary reported in Tier 6.
   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 January 25,  2024,  and  intended  for  use  only
 during  the  2024  Legislative  Session,  is  Fiscal  Note  No. 2024-43,
 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
 ________________________________________________________________________
 
                                  6174--C
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              March 31, 2023
                                ___________
 
 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 -- recommitted to the  Committee  on
   Civil Service and Pensions in accordance with Senate Rule 6, sec. 8 --
   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 committee
 
 AN  ACT  to amend the retirement and social security law, in relation to
   calculating certain pensions
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subdivision a of section 504 of the retirement and social
 security law, as amended by chapter 18 of the laws of 2012,  is  amended
 to read as follows:
   a.  The  service  retirement  benefit  for  general  members at normal
 retirement age with twenty or more years of credited service shall be  a
 pension  equal  to  one-fiftieth  of final average salary times years of
 credited service, not in excess of thirty years, less fifty  percent  of
 the  primary  social  security retirement benefit as provided in section
 five hundred eleven of this article. The service retirement benefit  for
 general  members  at  normal retirement age with twenty or more years of
 service who first become members of the New York state and local employ-
 ees' retirement system on or after April first, two thousand  twelve  at
 normal  retirement  age  shall be a pension equal to the sum of [thirty-
 five] FORTY per centum and one-fiftieth of final average salary for each
 year of service in excess of twenty, but not in excess of thirty,  times
 final average salary times years of credited service.
   §  2.  Subdivisions  a, b and b-1 of section 604 of the retirement and
 social security law, subdivision a as amended  and  subdivision  b-1  as
 added  by  chapter  18  of the laws of 2012, subdivision b as amended by
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06271-08-4
              

 S. 6174--C                          2
 
 chapter 266 of the laws of 1998 and the opening paragraph of subdivision
 b as amended by section 8-b of part B of chapter  504  of  the  laws  of
 2009, are amended to read as follows:
   a.  The  service  retirement  benefit  at  normal retirement age for a
 member with less than twenty years of credited service[,  or  less  than
 twenty-five  years  credited service for a member who joins the New York
 state teachers' retirement system on or after January first,  two  thou-
 sand  ten,]  shall  be  a  retirement allowance equal to one-sixtieth of
 final average salary times years of credited service. Normal  retirement
 age  for  members who first become members of a public retirement system
 of the state on or after April first, two thousand twelve shall  be  age
 sixty-three.
   b.  The  service  retirement  benefit  at  normal retirement age for a
 member with twenty years or more of credited service[, or  with  twenty-
 five or more years credited service for a member who first joins the New
 York  state  teachers'  retirement system on or after January first, two
 thousand ten,] shall be a retirement allowance equal to one-fiftieth  of
 final  average  salary  times years of credited service not in excess of
 thirty years.
   Credited service in excess of thirty years shall provide an additional
 retirement allowance equal to three-two hundredths of the final  average
 salary for each year of credited service in excess of thirty years.
   b-1.  Notwithstanding  any other provision of law to the contrary, the
 service retirement benefit for members with  twenty  or  more  years  of
 credit  service  who first become a member of a public retirement system
 of the state on or after April first, two thousand twelve at age  sixty-
 three  shall  be  a  pension equal to the sum of [thirty-five] FORTY per
 centum and one-fiftieth of final average salary for each year of service
 in excess of twenty times final average salary times years  of  credited
 service.  In  no  event  shall  any  retirement  benefit payable without
 optional modification be less than the actuarially equivalent annuitized
 value of the member's contributions accumulated with  interest  at  five
 percent per annum compounded annually to the date of retirement.
   §  3. Section 1312 of the retirement and social security law, as added
 by chapter 18 of the laws of 2012, is amended to read as follows:
   § 1312. Benefit enhancements. Notwithstanding any  other  law  to  the
 contrary,  eligible  employees  shall  be  permitted  to retire, without
 penalty, upon reaching age fifty-seven and completing  at  least  thirty
 years  of  credited service. Employees retiring pursuant to this section
 shall receive a pension allowance equal  to  the  sum  of  [thirty-five]
 FORTY  per centum and one-fiftieth of final average salary for each year
 of service in excess of twenty times final average salary times years of
 credited service.
   § 4. 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.
   § 5. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would change the benefit fraction for a Tier  6  Article  15
 member  for service greater than 20 years to 40% of FAS plus 2% per year
 of service greater than 20. Currently the benefit  for  service  greater
 than 20 years is 35% of FAS plus 2% per year of service greater than 20.
   Insofar  as  this bill affects the New York State and Local Employees'
 Retirement System (NYSLERS), the increased costs would be shared by  the
 State  of New York and the local participating employers in the NYSLERS.
 If this bill were enacted  during  the  2024  Legislative  Session,  the
 S. 6174--C                          3
 
 increase  in  the present value of benefits would be approximately $1.74
 billion.
      NYSLERS        Increase in present      Increase in required
                     value benefits           contributions
      Tiers 1 - 5    $0                       $332 million
      Tier 6         $1.74 billion            $1.41 billion
      Total          $1.74 billion            $1.74 billion
 
   In  the NYSLERS, 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  NYSLERS  is  0.6%  of  billable  salary,  or
 approximately  $76  million  to  the State of New York and approximately
 $110 million to the local participating employers. This PERMANENT ANNUAL
 COST WILL INCREASE as Tier 6 salary grows  and  will  vary  by  employer
 based upon the plan coverage and salary reported in Tier 6.
   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 January 25,  2024,  and  intended  for  use  only
 during  the  2024  Legislative  Session,  is  Fiscal  Note  No. 2024-43,
 prepared by the Actuary for the New  York  State  and  Local  Retirement
 System.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would amend Section 604 of the Retirement and Social Securi-
 ty  Law  to  improve  the  retirement  benefit formula for Tiers 5 and 6
 members of the New York State Teachers' Retirement System.  The  Tier  5
 benefit  formula would match the Tier 4 formula with eligibility for the
 2.0% multiplier at 20 years of service instead of  25  years  as  it  is
 currently.  The retirement benefit formula for Tier 6 members with 20 or
 more  years  of service would be 40% of final average salary plus 2% for
 each year of service in excess  of  20  years.  Currently,  the  benefit
 formula  for  Tier  6 members with 20 or more years of service is 35% of
 final average salary plus 2% for each year of service in  excess  of  20
 years.
   The  annual  cost  to  the  employers of members of the New York State
 Teachers' Retirement System for this benefit is estimated  to  be  $75.3
 million or 0.39% 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 5.31% of pay under the current Tier 6 benefit struc-
 S. 6174--C                          4
 
 ture.  This can be thought of as the long-term expected employer cost of
 Tier 6, based on the current actuarial  assumptions.  For  the  proposed
 change to the Tier 6 benefit structure under this bill, this new entrant
 rate  is  estimated to increase to 5.99% of pay, an increase of 0.68% of
 pay.
   Member data is from the System's most recent actuarial valuation files
 as of June 30, 2023, consisting of data provided by the employers to the
 Retirement System. The most recent data distributions and statistics can
 be found in the System's Annual Report for fiscal year  ended  June  30,
 2023. System assets are as reported in the System's financial statements
 and  can  also be found in the System's Annual Report. Actuarial assump-
 tions and methods are  provided  in  the  System's  Actuarial  Valuation
 Report as of June 30, 2023.
   The  source  of  this estimate is Fiscal Note 2024-6 dated February 2,
 2024 prepared by the Office of the Actuary of the New York State  Teach-
 ers'  Retirement  System  and  is  intended for use only during the 2024
 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.