S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5875
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 24, 2025
                                ___________
 
 Introduced  by  M.  of A. PHEFFER AMATO -- read once and referred to the
   Committee on Governmental Employees
 
 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 providing cost-of-living adjustments

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Subdivision c 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:
   c. Said cost-of-living adjustment shall be computed on a base  benefit
 amount  [not  to  exceed]  OF  eighteen  thousand  dollars of the annual
 retirement allowance defined in subdivision b of this section, PROVIDED,
 HOWEVER, SUCH BASE BENEFIT AMOUNT SHALL BE INCREASED ANNUALLY BY  REFER-
 ENCE  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 BEGINNING
 ON SEPTEMBER FIRST, TWO  THOUSAND  TWENTY-FIVE.  THE  ANNUAL  PERCENTAGE
 INCREASE  TO  THE  BASE  AMOUNT  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.
   § 2. Subdivision c 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:
   c.  Said cost-of-living adjustment shall be computed on a base benefit
 amount [not to exceed]  OF  eighteen  thousand  dollars  of  the  annual
 retirement allowance defined in subdivision b of this section, PROVIDED,
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08199-02-5
              

 A. 5875                             2
 
 HOWEVER,  SUCH BASE BENEFIT AMOUNT SHALL BE INCREASED ANNUALLY BY REFER-
 ENCE 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 BEGINNING
 ON SEPTEMBER FIRST, TWO  THOUSAND  TWENTY-FIVE.  THE  ANNUAL  PERCENTAGE
 INCREASE  TO  THE  BASE  AMOUNT  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.
   § 3. Subdivision c of section 532-a of the education law, as added  by
 chapter 125 of the laws of 2000, is amended to read as follows:
   c.  Said cost-of-living adjustment shall be computed on a base benefit
 amount [not to exceed]  OF  eighteen  thousand  dollars  of  the  annual
 retirement allowance defined in subdivision b of this section, PROVIDED,
 HOWEVER,  SUCH BASE BENEFIT AMOUNT SHALL BE INCREASED ANNUALLY BY REFER-
 ENCE 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  BEGINNING
 ON  SEPTEMBER  FIRST,  TWO  THOUSAND  TWENTY-FIVE. THE ANNUAL PERCENTAGE
 INCREASE TO THE BASE AMOUNT 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.
   § 4. Subdivision c of section 13-696 of the administrative code of the
 city  of  New  York,  as  added  by  chapter 125 of the laws of 2000, is
 amended to read as follows:
   c. Said cost-of-living adjustment shall be computed on a base  benefit
 amount  [not to exceed] OF eighteen thousand dollars of the annual fixed
 retirement allowance defined in subdivision b of this section, PROVIDED,
 HOWEVER, SUCH BASE BENEFIT AMOUNT SHALL BE INCREASED ANNUALLY BY  REFER-
 ENCE  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 BEGINNING
 ON SEPTEMBER FIRST, TWO  THOUSAND  TWENTY-FIVE.  THE  ANNUAL  PERCENTAGE
 INCREASE  TO  THE  BASE  AMOUNT  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.
   § 5. 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.
   § 6.  This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY: This proposed legislation, as it relates to the New York City
 Retirement Systems and Pension Funds (NYCRS) would increase the Cost-of-
 Living Adjustment (COLA) base limit of $18,000 by 50% of the increase in
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 the consumer price index (CPI) each year (limited to between 1% and 3%),
 starting on September 1, 2025.
 
          EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
           by Fiscal Year for the first 25 years ($ in Millions)
 Year         NYCERS      TRS       BERS      POLICE  FIRE   TOTAL
 2026         369.1       217.8     19.0      209.4   56.1   871.4
 2027         43.8        35.4      4.0       11.0    4.3    98.5
 2028         44.7        35.9      4.1       11.1    4.4    100.2
 2029         45.6        36.4      4.1       11.1    4.5    101.7
 2030         46.6        36.9      4.2       11.1    4.6    103.4
 2031         47.5        37.4      4.3       11.2    4.7    105.1
 2032         48.5        38.0      4.4       11.3    4.7    106.9
 2033         49.6        38.5      4.5       11.3    4.8    108.7
 2034         50.6        39.1      4.6       11.5    4.9    110.7
 2035         51.7        39.7      4.7       11.6    5.0    112.7
 2036         52.9        40.3      4.8       11.7    5.1    114.8
 2037         54.0        40.9      2.4       11.9    5.2    114.4
 2038         28.3        41.6      2.6       6.0     5.4    83.9
 2039         29.6        42.2      2.7       6.2     3.2    83.9
 2040         30.9        20.4      2.8       6.5     3.3    63.9
 2041         32.4        21.1      3.0       6.8     3.4    66.7
 2042         33.8        21.9      3.1       7.0     3.6    69.4
 2043         35.4        22.6      3.2       7.4     3.7    72.3
 2044         37.0        23.4      3.4       7.7     3.9    75.4
 2045         38.7        24.3      3.6       8.0     4.0    78.6
 2046         40.5        25.2      3.7       8.4     4.2    82.0
 2047         42.4        26.1      3.9       8.7     4.4    85.5
 2048         44.3        27.0      4.1       9.1     4.5    89.0
 2049         46.4        28.0      4.3       9.5     4.7    92.9
 2050         48.5        29.1      4.5       9.9     4.9    96.9
 
   Projected contributions include future new hires that may be impacted.
 For Fiscal Year 2051 and beyond, the expected increase in normal cost as
 a  level percent of pay for impacted new entrants is approximately 0.16%
 for NYCERS, 0.13% for TRS, 0.18% for BERS, 0.11% for POLICE,  and  0.16%
 for FIRE.
   The  initial increase in employer contributions of $871.4 is estimated
 to be $708.0 million for New York City and $163.4 million for the  other
 obligors of NYCRS.
   PRESENT  VALUE  OF  BENEFITS:  The  Present  Value  of Benefits is the
 discounted expected value of benefits paid to  current  members  if  all
 assumptions are met, including future service accrual and pay increases.
 Future new hires are not included in this present value.
 
          INITIAL INCREASE (DECREASE) IN ACTUARIAL PRESENT VALUES
                    as of June 30, 2024 ($ in Millions)
 Present Value (PV)                 NYCERS TRS    BERS  POLICE  FIRE
 (1) PV of Employer Contributions:  661.7  497.6  45.8  271.2   87.2
 (2) PV of Employee Contributions:  0.0    0.0    0.0   0.0     0.0
 Total PV of Benefits (1) + (2):    661.7  497.6  45.8  271.2   87.2
 
   UNFUNDED  ACCRUED  LIABILITY  (UAL): Actuarial Accrued Liabilities are
 the portion of the Present Value of Benefits allocated to past  service.
 Changes  in  UAL  for  active  members  were amortized over the expected
 remaining  working  lifetime  of  those  impacted  using  level   dollar
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 payments.    UAL  attributable to inactive members was recognized in the
 first year.
 
                AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
                               NYCERS    TRS     BERS   POLICE   FIRE
 Increase (Decrease) in UAL:   501.6 M   356.3 M 32.0 M 226.0 M  65.5 M
 Number of Payments:           12        14      11     12       13
 Amortization Payment:         26.9 M    22.6 M  2.5 M  6.1 M    2.3 M
 Additional One-time Payment:  326.2 M   182.8 M 15.1 M 198.5 M  51.9 M
 
   CENSUS  DATA:  The estimates presented herein are based on preliminary
 census data collected as of June 30,  2024.  The  census  data  for  the
 impacted population is summarized below.
 
                          NYCERS    TRS       BERS    POLICE   FIRE
 Active Members
 - Number Count:          184,126   126,251   24,120  33,803   10,691
 - Average Age:           47.7      44.5      51.5    37.5     40.7
 - Average Service:       11.6      12.4      9.8     11.1     13.7
 - Average Salary:        92,300    103,500   60,800  134,900  143,400
 Term. Vested Members
 - Number Count:          30,162    22,423    3,501   1,543    55
 - Average Age:           51.7      47.2      51.7    38.6     43.3
 Receiving Members
 - Number Count:          167,714   93,673    21,125  54,295   16,231
 - Average Age:           72.5      75.1      74.4    63.4     67.6
 
   IMPACT  ON  MEMBER  BENEFITS:  Currently,  the COLA provides an annual
 increase equal to a percentage of the maximum annual  retirement  allow-
 ance but limited to the first $18,000 of retirement allowance.
   The  costs  in the tables above are based on providing for an increase
 in the $18,000 limit starting on September 1, 2025 and each year  there-
 after.  This  increase would be equal to the increase in CPI in the one-
 year period ending on the prior March 31st, rounded to the  next  higher
 one-tenth of one percent, but not more than 3% nor less than 1%.
   IMPORTANT  NOTE:  An  alternate  interpretation of the proposed legis-
 lation could use the increasing $18,000 as the base for all retirees for
 calculating COLA rather than as the limit of  the  retirement  allowance
 subject  to  the COLA increase. To the extent that implementation of the
 proposed legislation follows this alternate  interpretation,  the  costs
 for  this  proposed  legislation  may  be as much as 75% higher than the
 costs disclosed above (i.e., a $2.7 billion total initial increase in PV
 of Benefits).
   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:
       * New entrants were assumed to replace  exiting  members  so  that
     total  payroll  increases  by  3% each year for impacted groups. New
     entrant demographics were developed based on  data  for  recent  new
     hires and actuarial 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
 A. 5875                             5
 
 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). This Fiscal Note does not reflect any chapter
 laws that may have been enacted during the current legislative session.
   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 2025-12 dated February
 11, 2025 was prepared by the Chief Actuary for the New York City Retire-
 ment Systems and Pension Funds and is intended for use only  during  the
 2025 Legislative Session.