S T A T E O F N E W Y O R K
________________________________________________________________________
9373
I N S E N A T E
May 14, 2024
___________
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
the definition of overtime ceiling
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivision l of section 601 of the retirement and social
security law, as amended by chapter 368 of the laws of 2017, is amended
to read as follows:
l. (a) "Wages" shall mean regular compensation earned by and paid to a
member by a public employer, except that for members who first join the
New York state and local employees' retirement system or the New York
state teachers' retirement system on or after January first, two thou-
sand ten, overtime compensation paid in any year in excess of the over-
time ceiling, as defined by this subdivision, shall not be included in
the definition of wages.
(b) "Overtime compensation" shall mean, for purposes of this section,
compensation paid under any law or policy under which employees are paid
at a rate greater than their standard rate for additional hours worked
beyond those required, including compensation paid under section one
hundred thirty-four of the civil service law and section ninety of the
general municipal law.
(c) The "overtime ceiling" shall mean fifteen thousand dollars per
annum on January first, two thousand ten, and shall be increased by
three per cent each year thereafter, provided, however, that:
(i) for members who first become members of a public retirement system
of the state on or after April first, two thousand twelve, OTHER THAN A
PENSION AUTHORIZED UNDER SECTION SIX HUNDRED FOUR-B OF THIS ARTICLE,
"overtime ceiling" shall mean fifteen thousand dollars per annum on
April first, two thousand twelve, and shall be increased each year ther-
eafter by a percentage to be determined annually by reference to the
consumer price index (all urban consumers, CPI-U, U.S. city average, all
items, 1982-84=100), published by the United States bureau of labor
statistics, for each applicable calendar year. Said percentage shall
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08432-02-4
S. 9373 2
equal the annual inflation as determined from the increase in the
consumer price index in the one year period ending on the December thir-
ty-first preceding the overtime ceiling adjustment effective on the
ensuing April first.
(ii) Commencing January first, two thousand eighteen, and each year
thereafter, the overtime ceiling percentage shall be increased by an
amount equal to the annual inflation as determined from the increase in
the consumer price index in the one year period ending on the September
thirtieth prior to the overtime ceiling adjustment effective on the
ensuing January first.
(d) For members who first join a public retirement system of the state
on or after April first, two thousand twelve, the following items shall
not be included in the definition of wages: 1. wages in excess of the
annual salary paid to the governor pursuant to section three of article
four of the state constitution, 2. lump sum payments for deferred
compensation, sick leave, accumulated vacation or other credits for time
not worked, 3. any form of termination pay, 4. any additional compen-
sation paid in anticipation of retirement, and 5. in the case of employ-
ees who receive wages from three or more employers in a twelve month
period, the wages paid by the third and each additional employer.
§ 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY: This proposed legislation would remove the Overtime Ceiling
for Tier 6 New York City Transit Authority (NYCTA) members subject to
the 25-Year and Age 55 Retirement Program (the 55/25 NYCTA Plan) for
wages used to calculate member contributions and pension benefits.
EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
by Fiscal Year for the first 25 years ($ in Millions)
Year NYCERS
2025 15.1
2026 15.9
2027 16.7
2028 17.6
2029 18.5
2030 19.4
2031 20.3
2032 21.2
2033 22.1
2034 23.1
2035 24.1
2036 25.0
2037 26.0
2038 27.0
2039 28.0
2040 29.1
2041 22.2
2042 23.2
2043 24.2
2044 25.1
2045 26.1
2046 27.1
2047 28.1
2048 29.1
2049 30.0
S. 9373 3
Employer Contribution impact beyond Fiscal Year 2049 is not shown.
Projected contributions include future new hires that may be impacted.
The increase in employer contributions will be allocated to the NYC
Transit Authority.
INITIAL INCREASE (DECREASE) IN ACTUARIAL LIABILITIES
as of June 30, 2023 ($ in Millions)
Present Value (PV) NYCERS
PV of Benefits: 237.5
PV of Employee Contributions: 71.2
PV of Employer Contributions: 166.3
Unfunded Accrued Liabilities: 71.9
AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
NYCERS
Number of Payments: 16
Fiscal Year of Last Payment: 2040
Amortization Payment: 7.9 M
Unfunded Accrued Liability increases were amortized over the expected
remaining working lifetime of those impacted by the benefit changes
using level dollar payments.
CENSUS DATA: The estimates presented herein are based on preliminary
census data collected as of June 30, 2023. The census data for the
impacted population is summarized below.
NYCERS
Active Members
- Number Count: 19,953
- Average Age: 42.9
- Average Service: 5.0
- Average Salary: 82,600
IMPACT ON MEMBER BENEFITS AND CONTRIBUTIONS: Under the proposed legis-
lation, the Overtime Ceiling would become inapplicable to participants
in the Tier 6 55/25 NYCTA Plan. As a result, overtime earnings exceeding
the Overtime Ceiling would be included in determining member contrib-
ution rates and annual contributions to be paid by the member. Partic-
ipants may be entitled to a higher annual pension benefit if such earn-
ings increase their Final Average Salary.
ASSUMPTIONS AND METHODS: The estimates presented herein have been
calculated based on the Revised 2021 Actuarial Assumptions and Methods
of the impacted retirement systems. In addition:
* Future overtime earnings exceeding the Overtime Ceiling were assumed
to remain level based on reported overtime for the last three fiscal
years.
* New entrants were assumed to replace exiting members so that total
payroll increases by 3% each year for NYC Transit members. New entrant
S. 9373 4
demographics were developed based on data for recent new hires and actu-
arial judgement.
RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend
highly on the actuarial assumptions, methods, and models used, demo-
graphics of the impacted population and other factors such as invest-
ment, contribution, and other risks. If actual experience deviates from
actuarial assumptions, the actual costs could differ from those
presented herein. Quantifying these risks is beyond the scope of this
Fiscal Note.
This Fiscal Note is intended to measure pension-related impacts and
does not include other potential costs (e.g., administrative and Other
Postemployment Benefits).
STATEMENT OF ACTUARIAL OPINION: Marek Tyszkiewicz and Gregory Zelikov-
sky are members of the Society of Actuaries and the American Academy of
Actuaries. We are members of NYCERS but do not believe it impairs our
objectivity and we meet the Qualification Standards of the American
Academy of Actuaries to render the actuarial opinion contained herein.
To the best of our knowledge, the results contained herein have been
prepared in accordance with generally accepted actuarial principles and
procedures and with the Actuarial Standards of Practice issued by the
Actuarial Standards Board.
FISCAL NOTE IDENTIFICATION: This Fiscal Note 2024-39 dated April 1,
2024 was prepared by the Chief Actuary for the New York City Retirement
Systems and Pension Funds. This estimate is intended for use only during
the 2024 Legislative Session.
