NY State Senate Bill 2023-S6307A

Senate Bill S6307A

2023-2024 Legislative Session

Relates to increasing the base benefit amount for computation of pension cost-of-living adjustments

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Current Bill Status - In Senate Committee Civil Service And Pensions Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Mar 04, 2024	print number 6307a
Mar 04, 2024	amend and recommit to civil service and pensions
Jan 03, 2024	referred to civil service and pensions
Apr 12, 2023	referred to civil service and pensions

Bill Amendments

Original

A (Active)

co-Sponsors

2023-S6307 - Details

See Assembly Version of this Bill:: A7023
Current Committee:: Senate Civil Service And Pensions
Law Section:: Retirement and Social Security Law
Laws Affected:: Amd §§78-a & 378-a, R & SS L; amd §532-a, Ed L
Versions Introduced in 2021-2022 Legislative Session:: S6835

2023-S6307 - Summary

Increases the base benefit amount for computation of pension cost-of-living adjustments.

2023-S6307 - Sponsor Memo

                                 
BILL NUMBER: S6307

SPONSOR: JACKSON
 
TITLE OF BILL:

An act to amend the retirement and social security law and the education
law, in relation to increasing the base benefit amount for computation
of pension cost-of-living adjustments

 
PURPOSE:

To provide a cost-of-living adjustment for members of retirement systems
by increasing the base benefit amount for computation to $21,000. The
bill also eliminates the 50% of the allowed rate of inflation require-
ment for prior cost-of-living payments, while maintaining the overall 3%
inflation cap.

 
SUMMARY OF PROVISIONS:

Section 1 amends subdivisions c and d of Section 78-A of the Retirement
and Social Security Law to provide that the cost-of-living adjustment
shall be computed on a base benefit amount not to exceed $21,000 of the

annual retirement allowance. Additionally, the cost-of-living adjustment
for years 2001 through 2021 shall equal 100% of the rate of inflation,
as determined from the CPI increase in the one-year period ending on the
prior March 31st, rather than 50% of the rate, not to exceed 3%.

Section 2 amends subdivisions c and d of Section 378-A of the Retirement
and Social Security Law to provide that the cost-of-living adjustment
shall be computed on a base benefit amount not to exceed $21,000 of the
annual retirement allowance. Additionally, the cost-of-living adjustment
for years 2001 through 2021 shall equal 100% of the rate of inflation,
as determined from the CPI increase in the one-year period ending on the
prior March 31st, rather than 50% of the rate, not to exceed 3%.

Section 3 amends subdivisions c and d of Section 532-A of the Education
Law to provide that the cost of living adjustment shall be computed on a
base benefit amount not to exceed $21,000 of the annual retirement
allowance. Additionally, the cost of living adjustment for years 2001
through 2021 shall equal 100% of the rate of inflation, as determined
from the CPI increase in the one year period ending on the prior March
31st, rather than 50% of the rate, not to exceed 3%.

Section 4 states that none of the provisions of this act shall be
subject to Section 25 of the Retirement and Social Security Law.

Section 5 is the effective date.

 
JUSTIFICATION:

Various provisions of the Retirement and Social Security Law and Educa-
tion Law provide for a cost-of-living adjustment for retirement plans
applicable to members of public retirement systems. A cost-of-living
adjustment is payable to all pensioners who have attained age 62 and
have been retired for five years, all pensioners who have attained age
55 and have been retired for ten years, all disability pensioners
regardless of age who have been retired for five years, and all recipi-
ents of an accidental death benefit regardless of age who have been
receiving such benefit for five years. The cost-of-living adjustment is
currently computed on a base benefit amount not to exceed $18,000 of the
annual retirement allowance. This legislation would increase the base
benefit amount to $21,000 from the current annual retirement allowance
of $18,000.

When the pension Cost of Living Adjustment (COLA) was enacted 23 years
ago, it was never a true COLA. The legislation authorized only a 50%
COLA, never to be less than 1%, nor higher than 3%. As inflation rose by
more than 50% over the past two decades, the purchasing power of the
COLA fell further and further behind. Only one time in 22 years did the
COLA actually reach 3%. That was just last year, when the rate of
inflation rose to 9%. Now is the time to address this inequity.

This bill raises the maximum pension amount the COLA is applied against,
going from $18,000 to $21,000 for current and future retirees. This is a
modest increase to the amount that was authorized 23 years ago ($18,000
in 2000 is the equivalent of nearly $32,000 today). It was never envi-
sioned when the COLA was enacted, that the dollar threshold cited in the
bill would remain in perpetuity. The 50% of the rate of inflation factor
remains in effect going forward, to further safeguard the financial
well-being of the respective funds.

Additionally, the bill includes a one-time "catch up" payment (the
difference between 50% COLA and the 3% cap) to current COLA eligible
retirees to better reflect the actual rate of inflation since the enact-
ment of the COLA. The 3% annual cap and the five-year waiting period
remain in place, in order to protect the integrity of the respective
funds. The "catch up" applies to prior years only. The major benefici-
aries of this bill would be older retirees with smaller pensions, due to
the fact that salaries were much lower 20 -30 years ago. It is important
to note that 24% of retirees in the State and Local Retirement System
receive a pension under $10,000, and 43% have a pension under $20,000.

The enactment of this legislation will provide a modest increase to
current and future retirees. The rigid parameters of the current COLA
formula prevent retirees, especially older retirees with smaller
pensions, from attaining the financial stability needed in the current
economic environment. Twenty-three years is a long time to wait for a
raise. That time has come.

 
LEGISLATIVE HISTORY:

2021-2022: S.6835-C - Amend and Recommit to Civil Service and Pensions

 
STATE AND LOCAL FISCAL IMPLICATIONS:

See fiscal note.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2023-S6307 - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6307
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              April 12, 2023
                                ___________
 
 Introduced  by  Sen. JACKSON -- 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 and the education
   law, in relation to increasing the base benefit amount for computation
   of pension cost-of-living adjustments

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Subdivisions c and d of section 78-a of the retirement and
 social security law, as added by chapter 125 of the laws  of  2000,  are
 amended to read as follows:
   c.  Said cost-of-living adjustment shall be computed on a base benefit
 amount not to exceed eighteen thousand dollars of the annual  retirement
 allowance  defined  in subdivision b of this section, EXCEPT THAT EFFEC-
 TIVE ON THE FIRST DAY OF SEPTEMBER, TWO THOUSAND TWENTY-FOUR, THE  COST-
 OF-LIVING  ADJUSTMENT  SHALL BE COMPUTED ON A BASE BENEFIT AMOUNT NOT TO
 EXCEED TWENTY-ONE THOUSAND DOLLARS OF THE  ANNUAL  RETIREMENT  ALLOWANCE
 DEFINED IN SUBDIVISION B OF THIS SECTION.
   d.  The  percentage  referred  to  in this section shall 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 equal fifty percent of the annual inflation,
 as  determined  from the increase in the consumer price index in the one
 year period ending on the March thirty-first prior to the cost-of-living
 adjustment effective on the ensuing  September  first.  Said  percentage
 shall then be rounded up to the next higher one-tenth of one percent and
 shall  not  exceed  three  percent  nor be less than one percent, EXCEPT
 THAT, COMMENCING THE FIRST DAY OF SEPTEMBER, TWO  THOUSAND  TWENTY-FOUR,
 THE  COST-OF-LIVING ADJUSTMENTS PAID BETWEEN THE FIRST DAY OF SEPTEMBER,
 TWO THOUSAND TWO AND THE FIRST DAY OF SEPTEMBER, TWO THOUSAND TWENTY-TWO
 SHALL EQUAL ONE HUNDRED PERCENT OF THE ANNUAL INFLATION,  AS  DETERMINED
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09889-02-3

 S. 6307                             2
 
 FROM  THE  INCREASE  IN  THE CONSUMER PRICE INDEX IN THE ONE YEAR PERIOD
 ENDING ON THE MARCH THIRTY-FIRST PRIOR TO THE COST-OF-LIVING  ADJUSTMENT
 EFFECTIVE  ON THE ENSUING SEPTEMBER FIRST. SAID PERCENTAGE SHALL THEN BE
 ROUNDED  UP  TO  THE  NEXT HIGHER ONE-TENTH OF ONE PERCENT AND SHALL NOT
 EXCEED THREE PERCENT NOR BE LESS THAN ONE PERCENT.
   § 2. Subdivisions c and d of  section  378-a  of  the  retirement  and
 social  security  law,  as added by chapter 125 of the laws of 2000, are
 amended to read as follows:
   c. Said cost-of-living adjustment shall be computed on a base  benefit
 amount  not to exceed eighteen thousand dollars of the annual retirement
 allowance defined in subdivision b of this section, EXCEPT THAT,  EFFEC-
 TIVE  ON THE FIRST DAY OF SEPTEMBER, TWO THOUSAND TWENTY-FOUR, THE COST-
 OF-LIVING ADJUSTMENT SHALL BE COMPUTED ON A BASE BENEFIT AMOUNT  NOT  TO
 EXCEED  TWENTY-ONE  THOUSAND  DOLLARS OF THE ANNUAL RETIREMENT ALLOWANCE
 DEFINED IN SUBDIVISION B OF THIS SECTION.
   d. The percentage referred to in  this  section  shall  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 equal fifty percent of the annual inflation,
 as determined from the increase in the consumer price index in  the  one
 year period ending on the March thirty-first prior to the cost-of-living
 adjustment  effective  on  the  ensuing September first. Said percentage
 shall then be rounded up to the next higher one-tenth of one percent and
 shall not exceed three percent nor be  less  than  one  percent,  EXCEPT
 THAT,  COMMENCING  THE FIRST DAY OF SEPTEMBER, TWO THOUSAND TWENTY-FOUR,
 THE COST-OF-LIVING ADJUSTMENTS PAID BETWEEN THE FIRST DAY OF  SEPTEMBER,
 TWO THOUSAND TWO AND THE FIRST DAY OF SEPTEMBER, TWO THOUSAND TWENTY-TWO
 SHALL  EQUAL  ONE HUNDRED PERCENT OF THE ANNUAL INFLATION, AS DETERMINED
 FROM THE INCREASE IN THE CONSUMER PRICE INDEX IN  THE  ONE  YEAR  PERIOD
 ENDING  ON THE MARCH THIRTY-FIRST PRIOR TO THE COST-OF-LIVING ADJUSTMENT
 EFFECTIVE ON THE ENSUING SEPTEMBER FIRST. SAID PERCENTAGE SHALL THEN  BE
 ROUNDED  UP  TO  THE  NEXT HIGHER ONE-TENTH OF ONE PERCENT AND SHALL NOT
 EXCEED THREE PERCENT NOR BE LESS THAN ONE PERCENT.
   § 3. Subdivisions c and d of section 532-a of the  education  law,  as
 added  by  chapter  125  of  the  laws  of  2000, are amended to read as
 follows:
   c. Said cost-of-living adjustment shall be computed on a base  benefit
 amount  not to exceed eighteen thousand dollars of the annual retirement
 allowance defined in subdivision b of this section, EXCEPT  THAT  EFFEC-
 TIVE  ON THE FIRST DAY OF SEPTEMBER, TWO THOUSAND TWENTY-FOUR, THE COST-
 OF-LIVING ADJUSTMENT SHALL BE COMPUTED ON A BASE BENEFIT AMOUNT  NOT  TO
 EXCEED  TWENTY-ONE  THOUSAND  DOLLARS OF THE ANNUAL RETIREMENT ALLOWANCE
 DEFINED IN SUBDIVISION B OF THIS SECTION.
   d. The percentage referred to in  this  section  shall  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 equal fifty percent of the annual inflation,
 as determined from the increase in the consumer price index in  the  one
 year period ending on the March thirty-first prior to the cost-of-living
 adjustment  effective  on  the  ensuing September first. Said percentage
 shall then be rounded up to the next higher one-tenth of one percent and
 shall not exceed three percent nor be  less  than  one  percent,  EXCEPT
 THAT,  COMMENCING  THE FIRST DAY OF SEPTEMBER, TWO THOUSAND TWENTY-FOUR,
 THE COST-OF-LIVING ADJUSTMENTS PAID BETWEEN THE FIRST DAY OF  SEPTEMBER,
 S. 6307                             3
 
 TWO THOUSAND TWO AND THE FIRST DAY OF SEPTEMBER, TWO THOUSAND TWENTY-TWO
 SHALL  EQUAL  ONE HUNDRED PERCENT OF THE ANNUAL INFLATION, AS DETERMINED
 FROM THE INCREASE IN THE CONSUMER PRICE INDEX IN  THE  ONE  YEAR  PERIOD
 ENDING  ON THE MARCH THIRTY-FIRST PRIOR TO THE COST-OF-LIVING ADJUSTMENT
 EFFECTIVE ON THE ENSUING SEPTEMBER FIRST. SAID PERCENTAGE SHALL THEN  BE
 ROUNDED  UP  TO  THE  NEXT HIGHER ONE-TENTH OF ONE PERCENT AND SHALL NOT
 EXCEED THREE PERCENT NOR BE LESS THAN ONE PERCENT.
   § 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 provide an increase in the  defined  benefit  cost-of-
 living  adjustment  (COLA)  for  the New York State and Local Retirement
 System and the New York State Teachers'  Retirement  System.    Starting
 with  a payment in September 2024, the annual COLA will be computed on a
 base benefit amount  not  to  exceed  $21,000.  Additionally,  the  COLA
 payments  made from 2002 to 2022 will be recomputed based on one hundred
 percent of the annual inflation. Currently, the calculation uses a  base
 benefit  not  to  exceed  $18,000  and  annual  increases based on fifty
 percent of the annual inflation.
   Insofar as this bill affects the New York State and  Local  Employees'
 Retirement System (NYSLERS), the increased costs would be borne entirely
 by  the  State  of New York and the local participating employers in the
 NYSLERS. If this bill were enacted during the 2023 legislative  session,
 the  increase  in  the  present value of benefits would be approximately
 $14.2 billion.
      NYSLERS        Increase in present      Increase in future
                     value benefits            contributions
      Tiers 1 - 5     $14.1 billion            $8.4 billion
      Tier 6          $0.1 billion             $5.8 billion
      Total           $14.2 billion            $14.2 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  the NYSLERS is 5.2% of billable salary, or
 approximately $639 million to the State of New  York  and  approximately
 $928  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.
   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
 $1.1 billion.
      NYSLPFRS       Increase in present      Increase in future
                     value benefits           contributions
      Tiers 1 - 5    $1.1 billion             $0.6 billion
      Tier 6         $0.02 billion            $0.5 billion
      Total          $1.1 billion             $1.1 billion
 
   In the NYSLPFRS, this benefit improvement will be funded by increasing
 the billing rates charged  annually  to  cover  both  retrospective  and
 S. 6307                             4
 
 prospective  benefit  increases. The annual contribution required of all
 participating employers in the NYSLPFRS is 2.6% of billable  salary,  or
 approximately $22 million to the State of New York and approximately $88
 million  to  the 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.
   Further,  we  anticipate significant administrative costs to implement
 the provisions of this legislation.
   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 April 11, 2023, and intended for use only during
 the 2023 Legislative Session, is Fiscal Note No. 2023-122,  prepared  by
 the Actuary for the New York State and Local Retirement System.

co-Sponsors

2023-S6307A (ACTIVE) - Details

See Assembly Version of this Bill:: A7023
Current Committee:: Senate Civil Service And Pensions
Law Section:: Retirement and Social Security Law
Laws Affected:: Amd §§78-a & 378-a, R & SS L; amd §532-a, Ed L
Versions Introduced in 2021-2022 Legislative Session:: S6835

2023-S6307A (ACTIVE) - Summary

Increases the base benefit amount for computation of pension cost-of-living adjustments.

2023-S6307A (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6307--A
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              April 12, 2023
                                ___________
 
 Introduced  by  Sens.  JACKSON, PALUMBO, WEBER -- read twice and ordered
   printed, and when printed to be committed to the  Committee  on  Civil
   Service  and Pensions -- 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 and the education
   law, in relation to increasing the base benefit amount for computation
   of pension cost-of-living adjustments
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivisions c and d of section 78-a of the retirement  and
 social  security  law,  as added by chapter 125 of the laws of 2000, are
 amended to read as follows:
   c. [Said] (I) IN CALENDAR YEARS TWO THOUSAND TWO THROUGH TWO  THOUSAND
 TWENTY-FOUR,  SAID cost-of-living adjustment shall be computed on a base
 benefit amount not to exceed eighteen thousand  dollars  of  the  annual
 retirement allowance defined in subdivision b of this section.
   (II)  IN  CALENDAR  YEAR TWO THOUSAND TWENTY-FIVE AND THEREAFTER, SAID
 COST-OF-LIVING ADJUSTMENT SHALL BE COMPUTED ON A BASE BENEFIT AMOUNT NOT
 TO EXCEED TWENTY-ONE THOUSAND DOLLARS OF THE ANNUAL RETIREMENT ALLOWANCE
 DEFINED IN SUBDIVISION B OF THIS SECTION, EXCEPT THAT EFFECTIVE  ON  THE
 FIRST  DAY  OF  SEPTEMBER,  TWO THOUSAND TWENTY-FIVE, THE COST-OF-LIVING
 ADJUSTMENT SHALL BE COMPUTED ON A BASE  BENEFIT  AMOUNT  NOT  TO  EXCEED
 TWENTY-ONE  THOUSAND  DOLLARS OF THE ANNUAL RETIREMENT ALLOWANCE DEFINED
 IN SUBDIVISION B OF THIS SECTION.
   d. The percentage referred to in  this  section  shall  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 equal fifty percent of the annual inflation,
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09889-06-4

 S. 6307--A                          2
 
 as determined from the increase in the consumer price index in  the  one
 year period ending on the March thirty-first prior to the cost-of-living
 adjustment  effective  on  the  ensuing  September  first. [Said] (I) IN
 CALENDAR  YEARS TWO THOUSAND TWO THROUGH TWO THOUSAND TWENTY-THREE, SAID
 PERCENTAGE SHALL EQUAL ONE HUNDRED PERCENT OF THE ANNUAL  INFLATION,  AS
 DETERMINED FROM THE INCREASE IN THE CONSUMER PRICE INDEX IN THE ONE-YEAR
 PERIOD  ENDING  ON  THE  MARCH  THIRTY-FIRST PRIOR TO THE COST-OF-LIVING
 ADJUSTMENT EFFECTIVE ON THE NEXT SUCCEEDING SEPTEMBER FIRST.
   (II) IN CALENDAR YEAR TWO THOUSAND TWENTY-FOUR  AND  THEREAFTER,  SAID
 percentage  shall then be rounded up to the next higher one-tenth of one
 percent and shall not exceed three percent nor be less than one percent,
 EXCEPT THAT, COMMENCING THE FIRST DAY OF SEPTEMBER, TWO  THOUSAND  TWEN-
 TY-FIVE,  THE  COST-OF-LIVING  ADJUSTMENTS PAID BETWEEN THE FIRST DAY OF
 SEPTEMBER, TWO THOUSAND TWO AND THE FIRST DAY OF SEPTEMBER, TWO THOUSAND
 TWENTY-THREE SHALL EQUAL ONE HUNDRED PERCENT OF THE ANNUAL INFLATION, AS
 DETERMINED FROM THE INCREASE IN THE CONSUMER PRICE INDEX IN THE ONE YEAR
 PERIOD ENDING ON THE MARCH  THIRTY-FIRST  PRIOR  TO  THE  COST-OF-LIVING
 ADJUSTMENT  EFFECTIVE  ON  THE  ENSUING SEPTEMBER FIRST. SAID PERCENTAGE
 SHALL THEN BE ROUNDED UP TO THE NEXT HIGHER ONE-TENTH OF ONE PERCENT AND
 SHALL NOT EXCEED THREE PERCENT NOR BE LESS THAN ONE PERCENT.
   § 2. Subdivisions c and d of  section  378-a  of  the  retirement  and
 social  security  law,  as added by chapter 125 of the laws of 2000, are
 amended to read as follows:
   c. Said cost-of-living adjustment shall be computed on a base  benefit
 amount  not to exceed eighteen thousand dollars of the annual retirement
 allowance defined in subdivision b of this section, EXCEPT THAT,  EFFEC-
 TIVE  ON THE FIRST DAY OF SEPTEMBER, TWO THOUSAND TWENTY-FIVE, THE COST-
 OF-LIVING ADJUSTMENT SHALL BE COMPUTED ON A BASE BENEFIT AMOUNT  NOT  TO
 EXCEED  TWENTY-ONE  THOUSAND  DOLLARS OF THE ANNUAL RETIREMENT ALLOWANCE
 DEFINED IN SUBDIVISION B OF THIS SECTION.
   d. The percentage referred to in  this  section  shall  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 equal fifty percent of the annual inflation,
 as determined from the increase in the consumer price index in  the  one
 year period ending on the March thirty-first prior to the cost-of-living
 adjustment  effective  on  the  ensuing September first. Said percentage
 shall then be rounded up to the next higher one-tenth of one percent and
 shall not exceed three percent nor be  less  than  one  percent,  EXCEPT
 THAT,  COMMENCING  THE FIRST DAY OF SEPTEMBER, TWO THOUSAND TWENTY-FIVE,
 THE COST-OF-LIVING ADJUSTMENTS PAID BETWEEN THE FIRST DAY OF  SEPTEMBER,
 TWO THOUSAND TWO AND THE FIRST DAY OF SEPTEMBER, TWO THOUSAND TWENTY-TWO
 SHALL  EQUAL  ONE HUNDRED PERCENT OF THE ANNUAL INFLATION, AS DETERMINED
 FROM THE INCREASE IN THE CONSUMER PRICE INDEX IN  THE  ONE  YEAR  PERIOD
 ENDING  ON THE MARCH THIRTY-FIRST PRIOR TO THE COST-OF-LIVING ADJUSTMENT
 EFFECTIVE ON THE ENSUING SEPTEMBER FIRST. SAID PERCENTAGE SHALL THEN  BE
 ROUNDED  UP  TO  THE  NEXT HIGHER ONE-TENTH OF ONE PERCENT AND SHALL NOT
 EXCEED THREE PERCENT NOR BE LESS THAN ONE PERCENT.
   § 3. Subdivisions c and d of section 532-a of the  education  law,  as
 added  by  chapter  125  of  the  laws  of  2000, are amended to read as
 follows:
   c. Said cost-of-living adjustment shall be computed on a base  benefit
 amount  not to exceed eighteen thousand dollars of the annual retirement
 allowance defined in subdivision b of this section, EXCEPT  THAT  EFFEC-
 TIVE  ON THE FIRST DAY OF SEPTEMBER, TWO THOUSAND TWENTY-FIVE, THE COST-
 S. 6307--A                          3
 
 OF-LIVING ADJUSTMENT SHALL BE COMPUTED ON A BASE BENEFIT AMOUNT  NOT  TO
 EXCEED  TWENTY-ONE  THOUSAND  DOLLARS OF THE ANNUAL RETIREMENT ALLOWANCE
 DEFINED IN SUBDIVISION B OF THIS SECTION.
   d.  The  percentage  referred  to  in this section shall 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 equal fifty percent of the annual inflation,
 as  determined  from the increase in the consumer price index in the one
 year period ending on the March thirty-first prior to the cost-of-living
 adjustment effective on the ensuing  September  first.  Said  percentage
 shall then be rounded up to the next higher one-tenth of one percent and
 shall  not  exceed  three  percent  nor be less than one percent, EXCEPT
 THAT, COMMENCING THE FIRST DAY OF SEPTEMBER, TWO  THOUSAND  TWENTY-FIVE,
 THE  COST-OF-LIVING ADJUSTMENTS PAID BETWEEN THE FIRST DAY OF SEPTEMBER,
 TWO THOUSAND TWO AND THE FIRST DAY OF SEPTEMBER,  TWO  THOUSAND  TWENTY-
 THREE SHALL EQUAL ONE HUNDRED PERCENT OF THE ANNUAL INFLATION, AS DETER-
 MINED  FROM  THE  INCREASE  IN  THE CONSUMER PRICE INDEX IN THE ONE YEAR
 PERIOD ENDING ON THE MARCH  THIRTY-FIRST  PRIOR  TO  THE  COST-OF-LIVING
 ADJUSTMENT  EFFECTIVE  ON  THE  ENSUING SEPTEMBER FIRST. SAID PERCENTAGE
 SHALL THEN BE ROUNDED UP TO THE NEXT HIGHER ONE-TENTH OF ONE PERCENT AND
 SHALL NOT EXCEED THREE PERCENT NOR BE LESS THAN ONE PERCENT.
   § 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 September 1, 2025; provided,  however,
 that  no  benefits payable prior to the first day of September two thou-
 sand twenty-five shall be affected by this act.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would provide an increase in the  defined  benefit  cost-of-
 living  adjustment  (COLA)  for  the New York State and Local Retirement
 System.  Starting with payments in September 2025, the annual COLA  will
 be  computed  on a base benefit amount not to exceed $21,000. Currently,
 the base benefit amount does not exceed $18,000. Additionally, the  COLA
 increment  from  2002  to  2023  will be recomputed based on one hundred
 percent of annual inflation without retroactive  payments.  Future  COLA
 increments will be based on fifty percent of annual inflation.
   This proposal primarily benefits current and former members of Tiers 1
 -  5.  The  cost  of this benefit improvement will primarily be borne by
 current and future members of Tier 6.
   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
 increase in the present value of benefits would be  approximately  $5.43
 billion.
 
      NYSLERS        Increase in present      Increase in required
                       value benefits             contributions
      Tiers 1 - 5      $5.29 billion              $2.92 billion
      Tier 6           $0.14 billion              $2.51 billion
      Total            $5.43 billion              $5.43 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
 S. 6307--A                          4
 
 participating employers in  NYSLERS  is  1.9%  of  billable  salary,  or
 approximately  $240  million  to the State of New York and approximately
 $360 million to the local participating employers. This PERMANENT ANNUAL
 COST  will vary in subsequent billing 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 2024 Legislative
 Session, the increase in the present value of benefits would be approxi-
 mately $626 million.
 
      NYSLPFRS       Increase in present      Increase in required
                       value benefits             contributions
      Tiers 1 - 5      $604 million               $299 million
      Tier 6           $22 million                $327 million
      Total            $626 million               $626 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  1.3%  of billable salary, or
 approximately $11 million to the State of New York and approximately $46
 million to the local participating employers. This PERMANENT ANNUAL COST
 will vary in subsequent billing cycles with changes in the billing  rate
 and salary of the affected members.
   Further,  we  anticipate significant administrative costs to implement
 the provisions of this legislation.
   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 March 1, 2024, and intended for use only during
 the 2024 Legislative Session, is Fiscal Note No.  2024-47,  prepared  by
 the Actuary for the New York State and Local Retirement System.

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Senate Bill S6307A

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Sponsored By

Robert Jackson

Current Bill Status - In Senate Committee Civil Service And Pensions Committee

Bill Amendments

co-Sponsors

Anthony H. Palumbo

Bill Weber

2023-S6307 - Details

2023-S6307 - Summary

2023-S6307 - Sponsor Memo

2023-S6307 - Bill Text download pdf

co-Sponsors

Anthony H. Palumbo

Bill Weber

2023-S6307A (ACTIVE) - Details

2023-S6307A (ACTIVE) - Summary

2023-S6307A (ACTIVE) - Bill Text download pdf

Comments