S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6343--A
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              April 17, 2023
                                ___________
 
 Introduced  by Sens. GOUNARDES, ADDABBO, CHU, GALLIVAN, MAYER, RHOADS --
   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, in relation to
   the limitation of overtime compensation in final average salary calcu-
   lations
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Section 1203 of the retirement and social security law, as
 added by section 1 of part A of chapter 504 of  the  laws  of  2009,  is
 amended to read as follows:
   §  1203. Overtime. A member's final average salary shall be calculated
 in accordance with such provisions of article eight or article eleven of
 this chapter as govern the member's benefits INCLUDING OVERTIME,  except
 that earnings classified as overtime compensation in an amount in excess
 of [fifteen] THIRTY percent of a member's annual wages not classified as
 overtime compensation shall be excluded from such calculation. "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.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would increase the allowable overtime compensation  included
 in  the  final  average  salary  calculation to 30 percent of a member's
 annual wages for Tier 5 and Tier 6 members in the  New  York  State  and

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08426-04-4
              

 S. 6343--A                          2
 
 Local Police and Fire Retirement System (NYSLPFRS). The current limit is
 15 percent.
   Insofar  as  this bill affects the 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 $493 million.
 
 NYSLPFRS       Increase in present                Increase in required
                  value benefits                     contributions
 Tiers 1-5      $31 million                        $75 million
 Tier 6         $462 million                       $418 million
 Total          $493 million                       $493 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  1.0%  of billable salary, or
 approximately $8.6 million to the State of New  York  and  approximately
 $35 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  February  16,  2024, and intended for use only
 during the  2024  Legislative  Session,  is  Fiscal  Note  No.  2024-42,
 prepared  by  the  Actuary  for  the New York State and Local Retirement
 System.