STATE OF NEW YORK ________________________________________________________________________ 5875 2025-2026 Regular Sessions IN ASSEMBLY 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: 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-five. 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 § 2. Subdivision c of section 378-a of the retirement and social secu- 20 rity law, as added by chapter 125 of the laws of 2000, is amended to 21 read as follows: 22 c. Said cost-of-living adjustment shall be computed on a base benefit 23 amount [not to exceed] of eighteen thousand dollars of the annual 24 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 1 however, such base benefit amount shall be increased annually by refer- 2 ence to the consumer price index (all urban consumers, CPI-U, U.S. city 3 average, all items, 1982-84=100), published by the United States 4 bureau of labor statistics, for each applicable calendar year beginning 5 on September first, two thousand twenty-five. The annual percentage 6 increase to the base amount shall equal fifty percent of the annual 7 inflation, as determined from the increase in the consumer price index 8 in the one year period ending on the March thirty-first prior to the 9 cost-of-living adjustment effective on the ensuing September first. 10 Said percentage shall then be rounded up to the next higher one-tenth of 11 one percent and shall not exceed three percent nor be less than one 12 percent. 13 § 3. Subdivision c of section 532-a of the education law, as added by 14 chapter 125 of the laws of 2000, is amended to read as follows: 15 c. Said cost-of-living adjustment shall be computed on a base benefit 16 amount [not to exceed] of eighteen thousand dollars of the annual 17 retirement allowance defined in subdivision b of this section, provided, 18 however, such base benefit amount shall be increased annually by refer- 19 ence to the consumer price index (all urban consumers, CPI-U, U.S. city 20 average, all items, 1982-84=100), published by the United States 21 bureau of labor statistics, for each applicable calendar year beginning 22 on September first, two thousand twenty-five. The annual percentage 23 increase to the base amount shall equal fifty percent of the annual 24 inflation, as determined from the increase in the consumer price index 25 in the one year period ending on the March thirty-first prior to the 26 cost-of-living adjustment effective on the ensuing September first. 27 Said percentage shall then be rounded up to the next higher one-tenth of 28 one percent and shall not exceed three percent nor be less than one 29 percent. 30 § 4. Subdivision c of section 13-696 of the administrative code of the 31 city of New York, as added by chapter 125 of the laws of 2000, is 32 amended to read as follows: 33 c. Said cost-of-living adjustment shall be computed on a base benefit 34 amount [not to exceed] of eighteen thousand dollars of the annual fixed 35 retirement allowance defined in subdivision b of this section, provided, 36 however, such base benefit amount shall be increased annually by refer- 37 ence to the consumer price index (all urban consumers, CPI-U, U.S. city 38 average, all items, 1982-84=100), published by the United States 39 bureau of labor statistics, for each applicable calendar year beginning 40 on September first, two thousand twenty-five. The annual percentage 41 increase to the base amount shall equal fifty percent of the annual 42 inflation, as determined from the increase in the consumer price index 43 in the one year period ending on the March thirty-first prior to the 44 cost-of-living adjustment effective on the ensuing September first. 45 Said percentage shall then be rounded up to the next higher one-tenth of 46 one percent and shall not exceed three percent nor be less than one 47 percent. 48 § 5. Notwithstanding any other provision of law to the contrary, none 49 of the provisions of this act shall be subject to section 25 of the 50 retirement and social security law. 51 § 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 $18,000 by 50% of the increase in
A. 5875 3 the consumer price index (CPI) each year (limited to between 1% and 3%), starting on September 1, 2025. EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS by Fiscal Year for the first 25 years ($ 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
A. 5875 4 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.