STATE OF NEW YORK ________________________________________________________________________ 6636--A 2023-2024 Regular Sessions IN ASSEMBLY April 25, 2023 ___________ Introduced by M. of A. PHEFFER AMATO, McDONALD, COLTON, SILLITTI, BUTTENSCHON, LUNSFORD -- read once and referred to the Committee on Governmental Employees -- recommitted to the Committee on Governmental Employees in accordance with Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee 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: 1 Section 1. Subdivision c of section 78-a of the retirement and social 2 security law, as added by chapter 125 of the laws of 2000, is amended to 3 read as follows: 4 c. Said cost-of-living adjustment shall be computed on a base benefit 5 amount [not to exceed] of eighteen thousand dollars of the annual 6 retirement allowance defined in subdivision b of this section, provided, 7 however, such base benefit amount shall be increased annually by refer- 8 ence to the consumer price index (all urban consumers, CPI-U, U.S. city 9 average, all items, 1982-84=100), published by the United States 10 bureau of labor statistics, for each applicable calendar year beginning 11 on September first, two thousand twenty-four. The annual percentage 12 increase to the base amount shall equal fifty percent of the annual 13 inflation, as determined from the increase in the consumer price index 14 in the one year period ending on the March thirty-first prior to the 15 cost-of-living adjustment effective on the ensuing September first. 16 Said percentage shall then be rounded up to the next higher one-tenth of 17 one percent and shall not exceed three percent nor be less than one 18 percent. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD03457-05-4
A. 6636--A 2 1 § 2. Subdivision c of section 378-a of the retirement and social secu- 2 rity law, as added by chapter 125 of the laws of 2000, is amended to 3 read as follows: 4 c. Said cost-of-living adjustment shall be computed on a base benefit 5 amount [not to exceed] of eighteen thousand dollars of the annual 6 retirement allowance defined in subdivision b of this section, provided, 7 however, such base benefit amount shall be increased annually by refer- 8 ence to the consumer price index (all urban consumers, CPI-U, U.S. city 9 average, all items, 1982-84=100), published by the United States 10 bureau of labor statistics, for each applicable calendar year beginning 11 on September first, two thousand twenty-four. The annual percentage 12 increase to the base amount shall equal fifty percent of the annual 13 inflation, as determined from the increase in the consumer price index 14 in the one year period ending on the March thirty-first prior to the 15 cost-of-living adjustment effective on the ensuing September first. 16 Said percentage shall then be rounded up to the next higher one-tenth of 17 one percent and shall not exceed three percent nor be less than one 18 percent. 19 § 3. Subdivision c of section 532-a of the education law, as added by 20 chapter 125 of the laws of 2000, is amended to read as follows: 21 c. Said cost-of-living adjustment shall be computed on a base benefit 22 amount [not to exceed] of eighteen thousand dollars of the annual 23 retirement allowance defined in subdivision b of this section, provided, 24 however, such base benefit amount shall be increased annually by refer- 25 ence to the consumer price index (all urban consumers, CPI-U, U.S. city 26 average, all items, 1982-84=100), published by the United States 27 bureau of labor statistics, for each applicable calendar year beginning 28 on September first, two thousand twenty-four. The annual percentage 29 increase to the base amount shall equal fifty percent of the annual 30 inflation, as determined from the increase in the consumer price index 31 in the one year period ending on the March thirty-first prior to the 32 cost-of-living adjustment effective on the ensuing September first. 33 Said percentage shall then be rounded up to the next higher one-tenth of 34 one percent and shall not exceed three percent nor be less than one 35 percent. 36 § 4. Subdivision c of section 13-696 of the administrative code of the 37 city of New York, as added by chapter 125 of the laws of 2000, is 38 amended to read as follows: 39 c. Said cost-of-living adjustment shall be computed on a base benefit 40 amount [not to exceed] of eighteen thousand dollars of the annual fixed 41 retirement allowance defined in subdivision b of this section, provided, 42 however, such base benefit amount shall be increased annually by refer- 43 ence to the consumer price index (all urban consumers, CPI-U, U.S. city 44 average, all items, 1982-84=100), published by the United States 45 bureau of labor statistics, for each applicable calendar year beginning 46 on September first, two thousand twenty-four. The annual percentage 47 increase to the base amount shall equal fifty percent of the annual 48 inflation, as determined from the increase in the consumer price index 49 in the one year period ending on the March thirty-first prior to the 50 cost-of-living adjustment effective on the ensuing September first. 51 Said percentage shall then be rounded up to the next higher one-tenth of 52 one percent and shall not exceed three percent nor be less than one 53 percent. 54 § 5. Notwithstanding any other provision of law to the contrary, none 55 of the provisions of this act shall be subject to section 25 of the 56 retirement and social security law.
A. 6636--A 3 1 § 6. This act shall take effect immediately. FISCAL NOTE.-- Pursuant to Legislative Law, Section 50: This bill would provide an increase in the defined benefit cost-of- living adjustment (COLA) for New York public retirement systems. Start- ing with the payment in September 2024, the base benefit for computation of the annual COLA, currently $18,000, will be increased annually by 50% of the annual inflation rate not to exceed 3% or be less than 1%. The provisions of Section 25 of the Retirement and Social Security Law shall not apply. This proposal primarily benefits current and former members of Tiers 1 - 5. The cost of this benefit improvement will disproportionately be borne by current and future members of Tier 6. Insofar as this bill affects the New York State and Local Employees' Retirement System (NYSLERS), the increased costs would be shared by the State of New York and the local participating employers in the NYSLERS. If this bill were enacted during the 2024 Legislative Session, the increase in the present value of benefits would be approximately $1.30 billion. NYSLERS Increase in present Increase in required value benefits contributions Tiers 1 - 5 $1.03 billion $634 million Tier 6 $0.27 billion $663 million Total $1.30 billion $1.30 billion In the NYSLERS, 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 NYSLERS is 0.4% of billable salary, or approximately $51 million to the State of New York and approximately $76 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. 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 2024 Legislative Session, the increase in the present value of benefits would be approximately $189 million. NYSLPFRS Increase in present Increase in required value benefits contributions Tiers 1 - 5 $150 million $80 million Tier 6 $39 million $109 million Total $189 million $189 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. This permanent annual cost will vary in subsequent billing cycles with changes in the billing rate and salary of the affected members. We anticipate some administrative costs to implement the provisions of this legislation.
A. 6636--A 4 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 March 8, 2024, and intended for use only during the 2024 Legislative Session, is Fiscal Note No. 2024-87, prepared by the Actuary for the New York State and Local Retirement System.