S T A T E O F N E W Y O R K
________________________________________________________________________
6799
2023-2024 Regular Sessions
I N S E N A T E
May 10, 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, the education
law and the administrative code of the city of New York, in relation
to cost of living adjustments for certain retirees
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivision a 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:
a. A cost-of-living adjustment shall be payable on the basis provided
for in this section to: (i) all pensioners who have attained age sixty-
two and have been retired for [five] TWO years; (ii) all pensioners who
have attained age fifty-five and have been retired for [ten] FIVE years;
(iii) all disability pensioners regardless of age who have been retired
for [five] TWO years; and (iv) all recipients of an accidental death
benefit regardless of age who have been receiving such benefit for
[five] TWO years.
§ 2. Subdivision a 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:
a. A cost-of-living adjustment shall be payable on the basis provided
for in this section to: (i) all pensioners who have attained age sixty-
two and have been retired for [five] TWO years; (ii) all pensioners who
have attained age fifty-five and have been retired for [ten] FIVE years;
and (iii) all disability pensioners regardless of age who have been
retired for [five] TWO years.
§ 3. Subdivision a of section 532-a of the education law, as added by
chapter 125 of the laws of 2000, is amended to read as follows:
a. A cost-of-living adjustment shall be payable on the basis provided
for in this section to: (i) all pensioners who have attained age sixty-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01794-05-3
S. 6799 2
two and have been retired for [five] TWO years; (ii) all pensioners who
have attained age fifty-five and have been retired for [ten] FIVE years;
(iii) all disability pensioners regardless of age who have been retired
for [five] TWO years; and (iv) all recipients of an accidental death
benefit regardless of age who have been receiving such benefit for
[five] TWO years.
§ 4. Subdivision a of section 13-696 of the administrative code of the
city of New York, as amended by chapter 288 of the laws of 2001, is
amended to read as follows:
a. A cost-of-living adjustment shall be payable to retired members of
the New York city employees' retirement system, the New York city teach-
ers' retirement system, the New York city police pension fund, the New
York city fire department pension fund, the New York city board of
education retirement system or the relief and pension fund of the
department of street cleaning provided for in subchapter one of this
chapter on the basis provided for in this section to: (i) all retired
members who have attained age sixty-two and have been retired for [five]
TWO years; (ii) all retired members who have attained age fifty-five and
have been retired for [ten] FIVE years; (iii) all members who retired
for disability regardless of age who have been retired for [five] TWO
years; and (iv) all recipients of an accidental death benefit regardless
of age who have been receiving such benefit for [five] TWO years.
§ 5. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would expand eligibility for the defined benefit cost-of-
living adjustment (COLA) for the New York State and Local Retirement
System. Effective immediately, COLA will be payable to
1. Service pensioners aged sixty-two years and retired two years,
2. Service pensioners aged fifty-five years and retired five years,
3. Disability pensioners regardless of age once retired two years, and
4. Accidental death beneficiaries after receiving a benefit for two
years.
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 $1.8 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 $1.62 billion as of March 1, 2024.
(2) To fund prospective costs, the annual contribution required of all
participating employers in the NYSLERS is 0.12% of billable salary, or
approximately $15 million to the State of New York and approximately $22
million to local participating employers in the fiscal year ending March
31, 2025. 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 2023 legislative session,
S. 6799 3
the increase in the present value of benefits would be approximately
$162 million.
NYSLPFRS Increase in present Increase in future
value benefits contributions
Tiers 1-5 $140 million $86 million
Tier 6 $22 million $76 million
Total $162 million $162 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
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. 2023-18 Revised,
prepared by the Actuary for the New York State and Local Retirement
System.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
As it relates to the New York State TeachersÆ Retirement System, this
bill would amend subdivision a of Section 532-a of the Education Law to
change the eligibility for the cost-of-living adjustment (COLA) for all
current and future retirees. Retirees retired for service would be
eligible for the COLA upon attainment of age sixty-two with two years of
retirement or age fifty-five with five years of retirement. The current
COLA eligibility requirement is attainment of age sixty-two with five
years of retirement or age fifty-five with ten years of retirement.
Disability retirees would be eligible for the COLA regardless of age
with two years of retirement instead of the five years currently
required. Recipients of an accidental death benefit would be eligible
for the COLA regardless of age after receiving such benefit for two
years instead of the five years currently required.
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The annual cost to the employers of members of the New York State
Teachers' Retirement System for this benefit is estimated to be $67.8
million or 0.37% 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-
al assumptions and methods are provided in the System's Actuarial Valu-
ation Report.
The source of this estimate is Fiscal Note 2023-8 dated February 7,
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:
SUMMARY OF BILL: This proposed legislation, as it relates to the New
York City Retirement Systems and Pension Funds (NYCRS), would amend
Section 13-696 of the Administrative Code of the City of New York
(ACCNY) to accelerate eligibility for the Cost-of-Living Adjustment
(COLA) for service, vested, and disabled retirees and accidental death
recipients of the New York City Employees' Retirement System (NYCERS),
the New York City Teachers' Retirement System (NYCTRS), the New York
City Board of Education Retirement System (BERS), the New York City
Police Pension Fund (POLICE), and the New York City Fire Pension Fund
(FIRE).
Effective Date: Upon enactment.
IMPACT ON BENEFITS: Under this proposed legislation, the time periods
for COLA eligibility would be reduced as follows:
* From age 62 and retired for five years to age 62 and retired for two
years
* From age 55 and retired for 10 years to age 55 and retired for five
years
* From disabled retirees who are retired for five years to those
retired for two years
* From accidental death benefit recipients who have been receiving the
benefit for five years to those receiving the benefit for two years
FINANCIAL IMPACT: The estimated financial impact to NYCRS is an
increase in Present Value of Future Benefits of approximately $1.3
billion and an increase in Fiscal Year 2024 annual employer contrib-
utions of approximately $666.0 million.
The increase in Fiscal Year 2024 annual employer contributions of
$666.0 million is estimated to be $491.5 million for New York City and
$174.5 million for the other obligors of NYCRS. A breakdown of the
financial impact by System is shown in the table below.
NYCRS Additional Present Estimated First Year
Value of Future Benefits Annual Employer
($ Millions) Contributions*
($ Millions)
NYCERS $664.4 $363.3
NYCTRS 359.6 168.6
BERS 73.6 35.5
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POLICE 117.5 74.2
FIRE 49.9 24.4
Total $1,265.0 $666.0
* Total employer contributions are reduced by $572 million after the
first year due to the 1-year amortization of the UAL attributable to
current retirees.
New Unfunded Accrued Liability (UAL) attributable to benefit changes
are generally amortized over the remaining working lifetime of those
impacted by the benefit changes. For purposes of this Fiscal Note, it
has been assumed that increases in UAL attributable to current retirees
would be recognized immediately and that increases in UAL attributable
to active members would be amortized over periods ranging from 12 to 15
years depending on the System (11 to 14 payments under One-Year Lag
Methodology) using level dollar payments.
CENSUS DATA: The estimates presented herein are based on the census
data used in the June 30, 2022 actuarial valuation of NYCRS to determine
the Preliminary Fiscal Year 2024 employer contributions.
ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
been calculated based on the actuarial assumptions and methods to be
used for the Preliminary Fiscal Year 2024 employer contributions of
NYCRS.
For the purposes of this Fiscal Note, it is assumed that the changes
would be reflected for the first time in the June 30, 2022 actuarial
valuations of NYCRS used to determine employer contributions for Fiscal
Year 2024.
RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend
highly on the realization of the actuarial assumptions used, demograph-
ics of the impacted population and other factors such as investment,
contribution, and other risks. If actual experience deviates from actu-
arial assumptions, the actual costs could differ from those presented
herein.
Costs are also dependent on the actuarial methods used, and therefore
different actuarial methods could produce different results. Quantifying
these risks is beyond the scope of this Fiscal Note.
Not measured in this Fiscal Note are the following:
* The initial additional administrative costs to implement the
proposed legislation.
STATEMENT OF ACTUARIAL OPINION: I, Marek Tyszkiewicz, am the Chief
Actuary for, and independent of, the New York City Retirement Systems
and Pension Funds. I am an Associate of the Society of Actuaries and a
Member of the American Academy of Actuaries. I am a member of NYCERS but
do not believe it impairs my objectivity and I meet the Qualification
Standards of the American Academy of Actuaries to render the actuarial
opinion contained herein. To the best of my 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 2023-25 dated April 11,
2023 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 2023 Legislative Session.
