S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6639
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                              March 19, 2025
                                ___________
 
 Introduced  by  Sens.  GOUNARDES,  ADDABBO,  GALLIVAN,  JACKSON,  MAYER,
   RHOADS, WEBB -- 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 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
 Local Police and Fire Retirement System (NYSLPFRS). The current limit is
 15 percent.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08189-02-5
 S. 6639                             2
              

 
   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 2025 Legislative
 Session, the increase in the present value of benefits would be approxi-
 mately $611 million.
 
  NYSLPFRS                     Increase in present   Increase in required
                               value of benefits        contributions
  Actives Tiers 1-5 (Closed)        $  35 mn              $  84 mn
  Actives Tier 6 (Open)             $ 576 mn              $ 527 mn
  Total                             $ 611 mn              $ 611 mn

   In NYSLPFRS, this benefit improvement will be funded by increasing the
 billing  rates charged annually to cover both retrospective and prospec-
 tive benefit increases. The annual contribution required of all  partic-
 ipating  employers in NYSLPFRS is expected to increase by 1.2% of billa-
 ble salary, or approximately $10 million to the State of  New  York  and
 $45 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.
   Summary of relevant resources:
   Membership data as of March 31, 2024 was used in measuring the  impact
 of the proposed change, the same data used in the April 1, 2024 actuari-
 al  valuation.  Distributions  and  other statistics can be found in the
 2024 Report of the Actuary and the 2024 Annual  Comprehensive  Financial
 Report.  The actuarial assumptions and methods used are described in the
 2024  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, 2024 New York State and Local Retirement System Financial Statements
 and Supplementary Information.
   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 14, 2025, and intended for use only  during
 the 2025 Legislative Session, is Fiscal Note No. 2025-66. As Chief Actu-
 ary of the New York State and Local Retirement System, I, Aaron Schottin
 Young,  hereby certify that this analysis complies with applicable Actu-
 arial Standards of Practice as well as the Code of Professional  Conduct
 and Qualification Standards for Actuaries Issuing Statements of Actuari-
 al Opinion of the American Academy of Actuaries, of which I am a member.