NY State Senate Bill 2009-S66026

Senate Bill S66026

Signed By Governor

2009-2010 Legislative Session

Provides retirement benefits for new entrants to certain public retirement systems

download bill text pdf

Archive: Last Bill Status Via A40026 - Signed by Governor

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

Please enter your contact information

First Name

Last Name

Email Address

A valid email address is required.

Home address is used to determine the senate district in which you reside. Your support or opposition to this bill is then shared immediately with the senator who represents you.

Optional services from the NY State Senate:

Create an account. An account allows you to officially support or oppose key legislation, sign petitions with a single click, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Include a custom message for your Senator? (Optional)

Enter a message to your senator. Many New Yorkers use this to share the reasoning behind their support or opposition to the bill. Others might share a personal anecdote about how the bill would affect them or people they care about.

Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Dec 10, 2009	signed chap.504
Dec 02, 2009	delivered to governor returned to assembly passed senate message of necessity - 3 day message 3rd reading cal.14 substituted for s66026
Dec 02, 2009	substituted by a40026 ordered to third reading cal.14 referred to rules

Votes

- Dec 2, 2009 - Floor Vote
  A40026
  
  61
  
  Aye
  
  1
  
  Nay
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: Dec 2, 2009
      
      aye (61)
      
      Adams
      
      Addabbo Jr.
      
      Alesi
      
      Aubertine
      
      Bonacic
      
      Breslin
      
      DeFrancisco
      
      Diaz
      
      Dilan
      
      Duane
      
      Espada
      
      Farley
      
      Flanagan
      
      Foley
      
      Fuschillo
      
      Golden
      
      Griffo
      
      Hannon
      
      Hassell-Thompson
      
      Huntley
      
      Johnson
      
      Johnson
      
      Klein
      
      Krueger
      
      Kruger
      
      LaValle
      
      Lanza
      
      Larkin
      
      Leibell
      
      Libous
      
      Little
      
      Marcellino
      
      Maziarz
      
      McDonald
      
      Monserrate
      
      Montgomery
      
      Morahan
      
      Nozzolio
      
      Onorato
      
      Oppenheimer
      
      Padavan
      
      Parker
      
      Perkins
      
      Ranzenhofer
      
      Robach
      
      Saland
      
      Sampson
      
      Savino
      
      Schneiderman
      
      Serrano
      
      Seward
      
      Skelos
      
      Smith
      
      Squadron
      
      Stachowski
      
      Stavisky
      
      Stewart-Cousins
      
      Valesky
      
      Volker
      
      Winner
      
      Young
      
      nay (1)
      
      Thompson
  Dec 2, 2009 - Rules Committee Vote
  S66026
  
  21
  
  Aye
  
  0
  
  Nay
  
  3
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Rules Committee Vote: Dec 2, 2009
      
      aye (21)
      
      Dilan
      
      Duane
      
      Espada
      
      Farley
      
      Hannon
      
      Hassell-Thompson
      
      Johnson
      
      Klein
      
      Krueger
      
      LaValle
      
      Larkin
      
      Monserrate
      
      Montgomery
      
      Serrano
      
      Seward
      
      Skelos
      
      Smith
      
      Stachowski
      
      Stewart-Cousins
      
      Valesky
      
      Volker
      
      aye wr (3)
      
      Padavan
      
      Parker
      
      Saland

2009-S66026 (ACTIVE) - Details

See Assembly Version of this Bill:: A40026
Law Section:: Retirement and Social Security Law
Laws Affected:: Amd R & SS L, generally; amd §6, Chap 625 of 1975; amd §209, Civ Serv L; amd §90, Gen Muni L; amd §1, Chap 729 of 1994; amd §13-582, NYC Ad Cd; amd §2575, Ed L

2009-S66026 (ACTIVE) - Summary

Provides retirement benefits for new entrants to certain public retirement systems; makes the coordinated-escalator retirement plan and coordinated retirement plan permanent; extends the expiration of public arbitration of disputes between public employers and employee organizations.

2009-S66026 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S66026

 TITLE OF BILL :

An act to amend the retirement and social security law, in relation to
establishing police and fire retirement provisions; to amend the
retirement and social security law and chapter 625 of the laws of
1975, amending the retirement and social security law relating to the
extension of temporary rights and benefits, in relation to making the
coordinated-escalator retirement plan and the coordinated retirement
plan permanent; to amend the civil service law, in relation to
extending the expiration of public arbitration of disputes between
public employers and employee organizations (Part A); to amend the
retirement and social security law and the general municipal law, in
relation to persons joining a public retirement system on or after
January 1, 2010; and to amend chapter 729 of the laws of 1994 relating
to affecting the health insurance benefits and contributions of
retired employees of school districts and certain boards, in relation
to eliminating the expiration of the provisions thereof (Part B); and
to amend the retirement and social security law, the administrative
code of the city of New York and the education law, in relation to new
entrants to the New York city teachers' retirement system and the New
York city board of education retirement system (Part C)


 PURPOSE :

The purpose of Part A of the bill is to establish a new pension
benefit for newly hired employees participating in the New York State
and Local Police and Fire Retirement System ("PFRS").

The purpose of Part B of the bill is to establish a new pension
benefit for newly hired State and local government employees, which
would affect future members of the New York State and Local Employees'
Retirement System ("ERS") and the New York State Teachers' Retirement
System ("TRS").

The purpose of Part C of the bill is to implement the terms of an
agreement on pension benefits between the New York City and the United
Federation of Teachers.

 SUMMARY OF PROVISIONS :

PART A

Section 1 of Part A of the bill would add a new Article 22 to the
Retirement and Social Security Law ("RSSL"), to establish a new Tier 5
in the New York State Police and Fire Retirement System ("PFRS"), and
do the following:

* create a new RSSL § 1200 to set forth definitions for new RSSL
Article 22.

* create a new RSSL § 1201 to provide that the provisions of RSSL
Article 22 would be applicable to all employees who first joined PFRS
on or after January 1, 2010.

* create a new RSSL § 1202 to require that members have a minimum of
10 years of creditable service in order to qualify for the service
retirement benefit provided by RSSL Article 22.

* create a new RSSL § 1203 to provide that a member's final average
salary would be calculated in accordance with RSSL Article 8 or
Article 11, except that earnings classified as overtime pay in an
amount in excess of 15% of such member's annual wages (that are not

classified as overtime) would be excluded from the calculation of
final average salary.

* create a new RSSL § 1204 to require members who are subject to the
provisions of RSSL Article 22 to contribute 3% of annual wages to the
retirement system in which they have membership. A member who is
enrolled in a retirement plan that limits the amount of creditable
service he or she can accrue would not be required to make the 3 %
contribution after he or she has accrued the maximum amount of service
credit allowed by his or her retirement plan.

* Create a new RSSL § 1205 to provide that any member who has joined
the retirement system pursuant to RSSL Article 14 on or after July 1,
2009 may choose to have his or her retirement benefits calculated
under RSSL Article 22 by filing a request with the state comptroller
within 120 days of the effective date of Part A of the bill.

* Create a new RSSL § 1206 to provide that the provisions of RSSL
Article 11, including any plan that has been elected by an employer or
is otherwise applicable under RSSL Article 8, would govern the
retirement benefits provided under RSSL Article 22, except as provided
in Article 22. In the event of a conflict, Article 22 will govern.

Sections 2 through 7 of Part A of the bill would extend permanently
all temporary rights, privileges and benefits conferred by any
general, special or local law with respect to certain members of a
public retirement system; extend permanently the prohibition on
negotiation of pension benefits, right of,public employers and
employees to negotiate for retirement benefits (other than those not
requiring approval of the Legislature); and extend permanently the
applicability of RSSL Articles 14 and 15 to new public retirement
system members.

Section 8 of Part A of the bill would provide that members of an
employee organization that are eligible to join a special retirement
plan pursuant to a collectively negotiated agreement with any state or
local government employer, would be able to continue to enroll in that
special plan after the enactment of this bill, until the date on which
such agreement terminates.

Section 9 of Part A of the bill would amend Civil Service Law §
209(4)(d) to extend for 4 years the authorization of the public
employment relations board to refer certain disputes, in the event an
impasse exists in collective negotiations, to a public arbitration
panel.

Section 9-a of Part A of the bill would amend RSSL § 500(c) to provide
that members who join PFRS after January 1, 2010 would not be subject
to the calculation performed by the State Comptroller to determine
whether the provisions of RSSL Article 14 or RSSL Article 11 would
govern their benefits.

Section 10 of Part A of the bill would make it effective 30 days after
becoming law.

PART B

Section 1 of Part B of the bill would amend RSSL § 501(24) to provide,
with respect to members who first join ERS on or after January 1,
2010, that overtime compensation paid in any year in excess of the
overtime ceiling, as defined by this section, would not be included in
the definition of wages. For purposes of this section "overtime
compensation" would mean 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. The
"overtime ceiling" means $15,000 per year on January 1, 2010, which
would be increased by 3 % each year thereafter.

Section 2 of Part B of the bill would amend RSSL §§ 502(a) and (b) to
provide that members who join ERS after January 1, 2010 will not be
eligible for service retirement benefits until they have completed 10
years of credited service.

Section 3 of Part B of the bill would amend RSSL §§ 504(c) to provide
that members who first join ERS on or after July 1, 2010 and retire
prior to age 62 but after age 55, will have their pension benefit
reduced by 1/15 for the first two years by which the early retirement
precedes age 62, and 1/20 for each year that the early retirement
precedes age 60.

Section 4 of Part B of the bill would amend RSSL §§ 516( a) to provide
that members who first join ERS on or after January 1, 2010 and have
10 or more years of credited service will be entitled to a deferred
vested benefit as provided in that section.

Section 5 of Part B of the bill would amend RSSL § 601(1) to provide
that with respect to members who first join ERS or TRS on or after
January 1,2010, overtime compensation paid in any year in excess of
the overtime ceiling would not be included in the definition of wages.
For purposes of this section "overtime compensation" would mean
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.  "Overtime ceiling" would mean
$15,000 per year on January 1, 2010, which would be increased by 3%
each year thereafter.

Section 6 of Part B of the bill would amend RSSL §§602(a) and (b) to
provide that members who join ERS or TRS after January 10, 2010 would
not be eligible for service retirement benefits until they have
completed 10 years of credited service.

Section 7 of Part B of the bill would amend RSSL § 603(a) to provide
that a uniformed court officer or peace officer employed by the
unified court system who first joins ERS on or after January 1, 2010
may retires without reduction of his or her retirement benefit upon
attainment of at least 55 years of age and completion of 30 or more
years of service provided such individual shall be required to make
member contributions provided for by RSSL 613(f) for all years of
credited and creditable service.

Section 8 of Part B of the bill would amend RSSL § 603(i) to provide
that members who join the ERS or TRS on or after January 1, 2010 would
be eligible to retire prior to age 62 beginning at age 55 with a
maximum penalty of 38.33%.

Section 8-a of Part B of the bill would amend RSSL . 603 to add a new
subdivision (t) to provide that members who join TRF on or after
January 1, 2010 would be eligible to retire without reduction in
retirement benefits upon attainment of at least 57 years of age and
completion of 30 or more years of service, provided that such members
would have to make member contributions required by RSSL 613(g) for
all years of credited and creditable service.

Section 8-b of Part B of the bill would amend RSSL §§ 604(a) and (b)
to provide that the service retirement benefit at normal retirement
age for a member who joined TRS on or after January 1, 2010 would be:


(a) with less than 27 years of credited service: a retirement
allowance equal to 1/60 of final average salary times years of
credited service; and
(b) with 27 or more years of credited service:  a retirement allowance
equal to 1/50 of final average salary times years of credited service
not in excess of thirty years.

Section 8-c of Part B of the bill would amend RSSL § 609(b)(2) to
provide that to obtain credit for previous service, members who join
TRS after January 1, 2010, shall pay three and one-half percent of
wages earned for service which predates the date of entry into TRS,
with 5% interest.

Section 9 of Part B of the bill would amend RSSL § 612(a) to provide
that a member who first joins ERS or TRS on or after January 1, 2010
and reaches normal retirement age with 10 or more years of credited
service will be entitled to a deferred vested benefit pursuant to RSSL
§ 604.

Section 9-a of Part B of the bill would amend RSSL § 613 to add new
subdivisions (f) and (g), to provide that a member employed as a
uniformed court officer or peace officer in the unified court system
who first joins ERS on or after January 1, 2010 would be required to
contribute 4% of annual wages to ERS, and members who first join TRS
on or after January 1, 2010 would be required to contribute 3.4% of
annual wages to TRS.

Section 10 of Part B of the bill would amend RSSL § 902(b)(1) to
provide that employees that members who join the ERS or TRS on or
after January 1, 2010 and are not explicitly affected by Section 9-a
would be required to contribute 3% of annual wages to ERS for the
duration of their employment.

Sections 11 and 12 of Part B of the bill are intentionally omitted.

Section 13 of Part B of the bill would amend General Municipal Law §
90 to provide that the amounts received as overtime compensation under
this section shall be regarded as salary or compensation for any of
the purposes of any pension or retirement system of which the officer
or employee receiving the same is a member, except as provided in RSSL
§§ 501, 601 and 1203.

Section 14 of Part B of the bill would amend Chapter 729 of the Laws
of 1994, to make permanent the prohibition on diminution by a school
district, board of cooperative educational services, or vocational
education and extension board of the health insurance benefits
provided to retirees and their dependents, or the contributions such
board or district makes for such health insurance coverage, below the
level of such benefits or contributions made on behalf of such
retirees and their dependents by such district or board unless a
corresponding diminution of benefits or contributions is effected from
the present level during this period by such district or board from
the corresponding group of active employees for such retirees.

Section 15 of Part B of the bill would express the intent of the
legislature to enact legislation, in conjunction with the Executive,
which would offer a three-month period during calendar year 2010,
during which members of the New York State United Teachers (NYSUT) in
TRS and ERS who have reached fifty-five years of age and have
accumulated twenty-five years of service as a member of such
retirement systems, may retire early without penalty

Section 14 of Part B of the bill would make Part B effective on
January 1, 2010, provided, however, that the amendments to RSSL §
603(a) made by § 7 of Part B of this bill would not affect the

expiration of such subdivision and would be deemed to expire
therewith.

PART C

Sections 1 and 2 of Part C of the bill would make technical amendments
to RSSL §§ 602(a) and (b), and add a new subdivision (b-l),
respectively, to require new members of the New York City Teachers'
Retirement System (NYCTRS) and the New York City Board of Education
Retirement System (BERS) who hold positions represented by the
recognized teacher organization for collective bargaining purposes to
have a minimum of 10 years of credited service to be eligible for
pension benefits.

Sections 3 and 4 of Part C of the bill would make a technical
amendment to RSSL § 612(a) and add a new subdivision (a-1) to that
section, respectively, to provide that new members of the NYCTRS and
BERS who hold positions represented by the recognized teacher
organization for collective bargaining purposes who have 10 or more
years of credited service would be entitled to a deferred vested
benefit at normal retirement age computed in accordance with RSSL §
604.

Sections 5 and 6 of Part C of the bill would make a technical
amendment to RSSL § 911(b)(1) and add a new paragraph (1-a) of that
section, respectively, to require new members of TRS or BERS in
certain pedagogically-related titles, to contribute to the retirement
system 3% of salary for the first 27 years of credited service,
instead of for 10 years as provided by current law.

Section 7 of Part C of the bill would amend RSSL § 604-i(e)(2) to
require participants in the TRS and BERS special plans permitting
retirement with an unreduced benefit at age 55 with 27 years of
service, who become members after enactment, to contribute to the
retirement system, in addition to their required 3% of salary regular
member contributions, an additional 1.85% of salary for all credited
service, instead of for 27 years of credited service as provided by
current law.

Sections 8, 9 and 10 of Part C of the bill would amend provisions of
the New York City Administrative Code and the Education Law which
govern the tax-deferred annuity (TDA) programs administered in
accordance with Internal Revenue Code § 403(b) by TRS and BERS for
their members. One of the investment vehicles available to TRS and
BERS TDA participants, who make voluntary, non-pension contributions
to the TDA program, is a fixed investment program which currently
requires the City of New York to guarantee a statutory investment
return of 8 1/4% per year. Sections 8, 9 and 10 would reduce the
guaranteed rate of interest on TRS and BERS TDA fixed accounts from 8
1/4% per year to 7% per year.

Section 11 of Part C of the bill would make Part C effective
immediately.

Section 2 of the bill provides a severability provision.

Section 3 of the bill would make it effective immediately, provided,
however, that the applicable effective date of Parts A through C of
the bill would be as specifically set forth in the last section of
such Parts.

 EXISTING LAW :

At present, police officers and firefighters who join PFRS after
January 1, 2009 may be subject either to the provisions of Article 11

or Article 14 of the RSSL, depending on a calculation performed by the
Comptroller.

Employees who join presently join ERS or TRS are governed by the
provisions of Article Fifteen of the RSSL, which allow vested
employees may retire with a pension benefit after reaching age 62 or
older or age 55 or older with at least 30 years of service.
Retirement with permanent reductions in a retiree's pension allowance
is also currently permitted between the ages of 55 and 62 with less
than 30 years of service. Employees currently joining ERS or TRS are
required to make contributions equal to 3% of salary for their first
10 years of service. No employee contributions are required after
achieving this threshold. All current employees become vested after 5
years of service. Finally, overtime is currently included in the final
average salary calculation that is used to determine a retiree's
pension allowance; it would be excluded from the final average salary
calculation under this proposal.

Employees who presently join ERS or TRS may retire with at least 20
years of service and receive a pension allowance equal to their final
average salary multiplied by their years of service multiplied by a
pension multiplier of 2%. For employees with less than 20 years of
service this pension multiplier is 1.67%. This proposal would increase
this pension multiplier threshold from 20 years to 27 years for TRS
members.

 PRIOR LEGISLATIVE HISTORY :

Portions of PART B of the bill were included as Part CC of the 2009-10
Executive Budget (S.56-A/A.156-A), but not included in the active
budget. Proposals containing aspects of Parts A and B were included in
Governor's Program Bill
 32, which was submitted to the Legislature on May 27, 2009 but not
introduced.

 STATEMENT IN SUPPORT :

The State presently faces a fiscal crisis unprecedented in its
history. To address this crisis, it is essential that the State
control its long term cost drivers, including pension benefits
provided to new employees. This bill would continue to provide
employees with a generous pension package, while effectuating
significant savings by extending the vesting period, requiring
lifetime contributions, limiting overtime and enacting other reforms
for most new State employees.

The State and local governments have little flexibility when trying to
reduce their overall pension obligation. The cost of these benefits
poses a growing burden on local governments, who are forced to reduce
or limit other services or increase property taxes to meet these
obligations. This bill would create a new tier of pension benefits
(Tier 5) for most newly hired State and local government employees,
which would remove pension enhancements added in recent years to Tier
4 that have led to exorbitant pension costs for public employers. Many
of these Tier 4 benefits were enacted at a time when the State and
local governments faced a more optimistic financial outlook. These
benefits are now unaffordable; the bleak current economic situation
necessitates a dramatic increase in pension contribution rates by
public employers in order to pay them. This bill would help mitigate
the impact of future increases in employer contribution rates and,
because the proposed reforms would apply only to new employees, it
fully complies with the New York State Constitution.

The new tier would, for example, require employees to continue
contributing a percentage of their salaries to their pensions for
their entire careers rather than only for the first 10 years; and
restore the minimum years of service required to draw a pension from 5
years to10.  In addition, this bill would cap overtime compensation
for purposes of calculating pension benefits to prevent "salary
spiking" in an employees' final years of service, which inflates both
their ultimate pension award and costs to taxpayers.

In the short term, state and local governments would immediately
realize savings from this bill because their required contributions to
their respective pension funds for new employee hires subject to Tier
V would be lower than that for current employees. Over time, as
greater numbers of new Tier V employees are hired and current
employees leave the workforce, taxpayer savings will grow
exponentially.

 BUDGET IMPLICATIONS :

PART A

The majority of newly hired police officers and firefighters are
subject to the provisions of Article 14 of Retirement and Social
Security Law. The average long term contribution rate for this
retirement plan is 19.2% of payroll. The Office of the State
Comptroller estimates the reduction in the average long term
contribution rate stemming from the enactment of this bill will range
from 0.6% to 3.0% of payroll.

PART B

Part B of this bill is expected to yield $5 million in savings to the
State in 2010-11 and $20 million in 2011-12. Local governments and
other public employers outside New York City estimated that will also
realize immediate savings equal to at least 1.5% of payroll subject to
this legislation's provisions, growing over time to annual savings of
2.1% of payroll subject to the pension plan created by this
legislation. Over time, school districts will realize savings equal to
3.1% of payroll subject to this legislation's provisions.

PART C

According to a fiscal note prepared by the Chief Actuary of the City
of New York City estimated that enactment of this Part of the bill
would reduce employer contributions by $19.1 million in 2010, with
such savings growing to $64.1 million in 2019.

 EFFECTIVE DATE :
This bill would take effect immediately, provided, however, that the
applicable effective date of Parts A through C of the bill would be as
specifically set forth in the last section of such Parts.

2009-S66026 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

    S. 26                                                      A. 26

                     Twentieth Extraordinary Session

                      S E N A T E - A S S E M B L Y

                            December 2, 2009
                               ___________

IN  SENATE  --  Introduced  by  COMMITTEE ON RULES -- (at request of the
  Governor) -- read twice and ordered printed, and when  printed  to  be
  committed to the Committee on Rules

IN  ASSEMBLY -- Introduced by COMMITTEE ON RULES -- (at request of M. of
  A. Silver, Abbate, Arroyo, Clark, Destito, Englebright, Fields, Galef,
  Hooper, Kellner, Morelle,  Paulin,  Peoples-Stokes,  Sweeney,  Thiele,
  Zebrowski)  --  (at request of the Governor) -- read once and referred
  to the Committee on Ways and Means

AN ACT to amend the retirement and social security law, in  relation  to
  establishing  police  and  fire  retirement  provisions;  to amend the
  retirement and social security law and chapter  625  of  the  laws  of
  1975,  amending the retirement and social security law relating to the
  extension of temporary rights and benefits, in relation to making  the
  coordinated-escalator  retirement  plan and the coordinated retirement
  plan permanent; to amend the civil service law, in relation to extend-
  ing the expiration of public arbitration of  disputes  between  public
  employers and employee organizations (Part A); to amend the retirement
  and  social security law and the general municipal law, in relation to
  persons joining a public retirement system  on  or  after  January  1,
  2010; and to amend chapter 729 of the laws of 1994 relating to affect-
  ing the health insurance benefits and contributions of retired employ-
  ees of school districts and certain boards, in relation to eliminating
  the  expiration  of  the provisions thereof (Part B); and to amend the
  retirement and social security law, the  administrative  code  of  the
  city of New York and the education law, in relation to new entrants to
  the  New  York  city teachers' retirement system and the New York city
  board of education retirement system (Part C)

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD12149-15-9

S. 26                               2                              A. 26

  Section 1. This act enacts into law legislation relating to retirement
for  newly  hired employees. Each component is wholly contained within a
Part identified as Parts A  through  C.  The  effective  date  for  each
particular provision contained within such Part is set forth in the last
section  of  such  Part. Any provision in any section contained within a
Part, including the effective date of the Part, which makes reference to
a section "of this act", when used in connection  with  that  particular
component,  shall  be  deemed  to  mean  and  refer to the corresponding
section of the Part in which it is found.   Section three  of  this  act
sets forth the general effective date of this act.

                                 PART A

  Section 1. The retirement and social security law is amended by adding
a new article 22 to read as follows:
                               ARTICLE 22
                  POLICE AND FIRE RETIREMENT PROVISIONS
SECTION 1200. DEFINITIONS.
        1201. APPLICABILITY.
        1202. VESTING.
        1203. OVERTIME.
        1204. MEMBER CONTRIBUTIONS.
        1205. RECALCULATION OF BENEFITS.
        1206. CONFLICTING PROVISIONS.
  S 1200. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE THE TERMS:
  A. "MEMBER" SHALL MEAN A PERSON WHO IS EMPLOYED AS A POLICE OFFICER OR
FIREFIGHTER  BY ANY EMPLOYER WHO FIRST JOINS THE RETIREMENT SYSTEM ON OR
AFTER JANUARY FIRST, TWO THOUSAND TEN.
  B. "RETIREMENT SYSTEM" SHALL MEAN THE NEW YORK STATE AND LOCAL  POLICE
AND FIRE RETIREMENT SYSTEM.
  S  1201.  APPLICABILITY.   NOTWITHSTANDING ANY PROVISION OF LAW TO THE
CONTRARY, THE PROVISIONS OF THIS ARTICLE  SHALL  BE  APPLICABLE  TO  ALL
EMPLOYEES  IN  THE  RETIREMENT SYSTEM WHO FIRST JOINED SUCH SYSTEM ON OR
AFTER JANUARY FIRST, TWO THOUSAND TEN.
  S 1202. VESTING. A. IN ORDER TO QUALIFY FOR A SERVICE RETIREMENT BENE-
FIT, MEMBERS SUBJECT TO THE PROVISIONS OF THIS ARTICLE MUST HAVE A MINI-
MUM OF TEN YEARS OF CREDITABLE SERVICE.
  B. IN COMPUTING THE YEARS OF TOTAL CREDITABLE  SERVICE  OF  A  MEMBER,
FULL  CREDIT  SHALL BE GIVEN FOR MILITARY SERVICE AS DEFINED IN SUBDIVI-
SIONS TWENTY-NINE-A AND THIRTY OF SECTION  THREE  HUNDRED  TWO  OF  THIS
CHAPTER.
  S  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, EXCEPT THAT EARNINGS CLAS-
SIFIED AS OVERTIME COMPENSATION  IN  AN  AMOUNT  IN  EXCESS  OF  FIFTEEN
PERCENT  OF  A  MEMBER'S ANNUAL WAGES NOT CLASSIFIED AS OVERTIME COMPEN-
SATION 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.
  S   1204.  MEMBER  CONTRIBUTIONS.  MEMBERS  WHO  ARE  SUBJECT  TO  THE
PROVISIONS OF THIS ARTICLE SHALL  CONTRIBUTE  THREE  PERCENT  OF  ANNUAL
WAGES  TO  THE  RETIREMENT SYSTEM IN WHICH THEY HAVE MEMBERSHIP. MEMBERS
WHO ARE ENROLLED IN A RETIREMENT PLAN THAT LIMITS THE AMOUNT OF CREDITA-

S. 26                               3                              A. 26

BLE SERVICE A MEMBER CAN ACCRUE SHALL NOT BE REQUIRED TO  MAKE  CONTRIB-
UTIONS  PURSUANT  TO  THIS  SECTION AFTER ACCRUING THE MAXIMUM AMOUNT OF
SERVICE CREDIT  ALLOWED  BY  THE  RETIREMENT  PLAN  IN  WHICH  THEY  ARE
ENROLLED. THE STATE COMPTROLLER SHALL PROMULGATE SUCH REGULATIONS AS MAY
BE  NECESSARY  AND  APPROPRIATE  WITH  RESPECT  TO THE DEDUCTION OF SUCH
CONTRIBUTION FROM MEMBERS' WAGES AND FOR THE MAINTENANCE OF ANY  SPECIAL
FUND  OR  FUNDS WITH RESPECT TO AMOUNTS SO CONTRIBUTED.  IN NO WAY SHALL
THE MEMBER CONTRIBUTIONS MADE  PURSUANT  TO  THIS  SECTION  BE  USED  TO
PROVIDE FOR PENSION INCREASES OR ANNUITIES OF ANY KIND.
  S 1205. RECALCULATION OF BENEFITS. NOTWITHSTANDING ANY OTHER PROVISION
OF  LAW, ANY MEMBER WHO HAS JOINED THE RETIREMENT SYSTEM PURSUANT TO THE
PROVISIONS OF ARTICLE FOURTEEN OF THIS CHAPTER ON OR AFTER  JULY  FIRST,
TWO  THOUSAND  NINE  MAY  ELECT  TO  HAVE HIS OR HER RETIREMENT BENEFITS
CALCULATED PURSUANT TO THIS ARTICLE BY FILING WITHIN ONE HUNDRED  TWENTY
DAYS  OF  THE  EFFECTIVE  DATE OF THIS SECTION A REQUEST FOR SUCH CALCU-
LATION WITH THE RETIREMENT SYSTEM IN THE FORM AND MANNER  PRESCRIBED  BY
THE STATE COMPTROLLER.
  S  1206.  CONFLICTING PROVISIONS. EXCEPT AS OTHERWISE PROVIDED IN THIS
ARTICLE, OR IN CONFLICT THEREWITH, THE PROVISIONS OF ARTICLE  ELEVEN  OF
THIS  CHAPTER,  INCLUDING ANY PLAN THAT HAS BEEN ELECTED BY THE EMPLOYER
OR IS OTHERWISE APPLICABLE UNDER ARTICLE EIGHT  OF  THIS  CHAPTER  SHALL
GOVERN THE RETIREMENT BENEFITS PROVIDED UNDER THIS ARTICLE. IN THE EVENT
OF  ANY  CONFLICT  BETWEEN  THE PROVISIONS OF THIS ARTICLE AND ANY OTHER
PROVISION OF LAW, THIS ARTICLE SHALL GOVERN.
  S 2. Subdivision c of section 440 of the retirement and social securi-
ty law, as amended by chapter 63 of the laws of 2007, is amended to read
as follows:
  c. Notwithstanding any other provision  of  law,  the  provisions  and
limitations  of  this article shall apply, as may be appropriate, to all
police officers and firefighters who last  joined  a  public  retirement
system  of  the state or a municipality thereof, on or after July first,
nineteen hundred seventy-six, but prior  to  July  first,  two  thousand
nine,  AND ALL EMPLOYEES SUBJECT TO THE PROVISIONS OF ARTICLE TWENTY-TWO
OF THIS CHAPTER; PROVIDED, HOWEVER, THAT  IN  THE  CASE  OF  A  CONFLICT
BETWEEN  THE  PROVISIONS  OF THIS ARTICLE AND ARTICLE TWENTY-TWO OF THIS
CHAPTER, THE PROVISIONS OF ARTICLE TWENTY-TWO SHALL BE CONTROLLING.
  S 3. Intentionally omitted.
  S 4. Section 470 of the retirement and social security law, as amended
by chapter 79 of the laws of 2009, is amended to read as follows:
  S 470. Temporary suspension of retirement  negotiations.  [Until  July
first,  two  thousand  eleven,  changes]  CHANGES negotiated between any
public employer and public  employee,  as  such  terms  are  defined  in
section  two  hundred  one of the civil service law, with respect to any
benefit provided by or to be provided by a public retirement system,  or
payments  to  a  fund  or  insurer  to provide an income for retirees or
payment to retirees or their beneficiaries, shall be prohibited.  [Ther-
eafter, such changes shall be made only pursuant to negotiations between
public employers and public employees conducted  on  a  coalition  basis
pursuant  to the provisions of this article; provided, however, any such
changes not requiring approval by act of the legislature may  be  imple-
mented  prior  to  July  first,  two thousand eleven, if negotiated as a
result of collective bargaining authorized by section six of chapter six
hundred twenty-five of the laws of nineteen hundred seventy-five.]
  S 5. Section 480 of the retirement and social security law, as amended
by chapter 79 of the laws of 2009, is amended to read as follows:

S. 26                               4                              A. 26

  S 480. Extension of temporary benefits and  supplementation  programs.
a.    Every  temporary right, privilege or benefit conferred pursuant to
the provisions of a general, special or local law (other  than  pursuant
to  articles  fourteen  and fifteen of this chapter) for any member of a
public  retirement  system or pension plan funded by the state or one of
its political subdivisions, which is scheduled to expire or terminate at
any time during nineteen hundred seventy-four, nineteen  hundred  seven-
ty-five,  nineteen  hundred seventy-six, nineteen hundred seventy-seven,
nineteen hundred seventy-eight, nineteen hundred seventy-nine,  nineteen
hundred  eighty,  nineteen  hundred eighty-one, nineteen hundred eighty-
two, nineteen hundred eighty-three, nineteen hundred eighty-four,  nine-
teen  hundred eighty-five, nineteen hundred eighty-six, nineteen hundred
eighty-seven, nineteen hundred eighty-eight,  nineteen  hundred  eighty-
nine,  nineteen  hundred  ninety,  nineteen hundred ninety-one, nineteen
hundred ninety-two,  nineteen  hundred  ninety-three,  nineteen  hundred
ninety-four,  nineteen hundred ninety-five, nineteen hundred ninety-six,
nineteen hundred ninety-seven, nineteen hundred  ninety-eight,  nineteen
hundred  ninety-nine,  two thousand, two thousand one, two thousand two,
two thousand three, two thousand four, two thousand five,  two  thousand
six,  two  thousand  seven,  two  thousand eight, two thousand nine, two
thousand ten or two thousand eleven,  is  hereby  extended  [until  July
first,  two  thousand  eleven],  notwithstanding  the provisions of such
general, special or local law.  Notwithstanding the  foregoing,  nothing
in  this  section shall be construed to extend the provisions of article
eighteen of this chapter or to affect any statutory  deadlines  provided
in such article.
  b.  (i)  Any  program  under  which an employer in a public retirement
system funded by the state or one of its political subdivisions  assumes
all  or  part  of  the contribution which would otherwise be made by its
employees toward retirement, which expires or terminates during nineteen
hundred seventy-four, is hereby extended [until July first, two thousand
eleven], notwithstanding the provisions of any other general, special or
local law, except that commencing with the payroll period the first  day
of which is nearest to January first, nineteen hundred seventy-six[, and
until  July  first,  two thousand eleven], the rate of such contribution
assumed by an employer in any of the public  retirement  systems  funded
and  maintained  by  a city, shall be one-half the rate of such contrib-
ution assumed by such employer for  the  immediately  preceding  payroll
period except as provided in paragraph (ii) of this subdivision.
  (ii)  Commencing  with the first payroll period the first day of which
is subsequent to October first, two thousand [and until July first,  two
thousand  eleven],  the rate of such contribution assumed by an employer
in the New York city police pension fund and in the New York  city  fire
department pension fund shall be equal to the rate of such contributions
assumed by such employer for the payroll period preceding January first,
nineteen hundred seventy-six.
  c.  All  supplemental  retirement  allowances or supplemental pensions
paid to pensioners or beneficiaries of any retirement  system  supported
in  whole  or  in  part by the state or a political subdivision thereof,
which are scheduled to expire at any time during nineteen hundred seven-
ty-five, nineteen hundred seventy-six, nineteen  hundred  seventy-seven,
nineteen  hundred seventy-eight, nineteen hundred seventy-nine, nineteen
hundred eighty, nineteen hundred eighty-one,  nineteen  hundred  eighty-
two,  nineteen hundred eighty-three, nineteen hundred eighty-four, nine-
teen hundred eighty-five, nineteen hundred eighty-six, nineteen  hundred
eighty-seven,  nineteen  hundred  eighty-eight, nineteen hundred eighty-

S. 26                               5                              A. 26

nine, nineteen hundred ninety,  nineteen  hundred  ninety-one,  nineteen
hundred  ninety-two,  nineteen  hundred  ninety-three,  nineteen hundred
ninety-four, nineteen hundred ninety-five, nineteen hundred  ninety-six,
nineteen  hundred  ninety-seven, nineteen hundred ninety-eight, nineteen
hundred ninety-nine, two thousand one, two thousand  two,  two  thousand
three, two thousand four, two thousand five, two thousand six, two thou-
sand  seven,  two thousand eight, two thousand nine, two thousand ten or
two thousand  eleven,  shall  be  continued  [for  an  additional  year]
notwithstanding any other provision of any general, special or local law
provided,  however,  that all such supplemental retirement allowances or
supplemental pensions which are scheduled to expire at any  time  during
two thousand nine shall be continued [for two additional years] notwith-
standing any other provisions of any general, special or local law.
  S 6. Section 615 of the retirement and social security law, as amended
by chapter 79 of the laws of 2009, is amended to read as follows:
  S  615. Duration. Notwithstanding any other provisions of this chapter
or of any other law, the provisions of article fourteen of this  chapter
shall  [expire  on  June  thirtieth,  two thousand eleven, but shall] no
longer apply to members to whom this article applies on the date article
fifteen of this chapter becomes effective, provided, however, any member
who has retired pursuant to the provisions of article fourteen  of  this
chapter  before the effective date of this article or any beneficiary of
such a member or a beneficiary of a member who dies before the effective
date of this article and who is entitled to a death benefit pursuant  to
article fourteen of this chapter shall receive such benefits pursuant to
the  provisions  of article fourteen of this chapter, except as provided
pursuant to the provisions of section  six  hundred  seventeen  of  this
article.  [All  benefits  provided  by a public retirement system of the
state shall continue with respect to members to which  this  article  is
applicable only until June thirtieth, two thousand eleven.]
  S  7.  Section  6  of  chapter  625  of the laws of 1975, amending the
retirement and social security law relating to the extension  of  tempo-
rary  rights and benefits, as amended by chapter 79 of the laws of 2009,
is amended to read as follows:
  S 6. Notwithstanding any inconsistent provisions of this act or of any
general, special or local law, on and after July 1, 1975 [and up to  and
including  June  30, 2011]: (a) a participating employer in the New York
state and local employees' retirement system or the New York  state  and
local police and fire retirement system and its employees shall continue
to  have  the right to negotiate with respect to any benefit provided by
or to be provided by such employer to such employees as members of  such
system  and  not requiring approval by act of the legislature; and (b) a
public authority or public benefit corporation which is  not  a  partic-
ipating  employer  in the New York state and local employees' retirement
system or the New York city employees' retirement system shall  continue
to  have the right to negotiate with its employees with respect to bene-
fits to be provided by such employer to such employees  upon  retirement
and not requiring approval by act of the legislature.
  S  8. Notwithstanding any provision of law to the contrary, nothing in
this act shall limit the eligibility of any member of an employee organ-
ization to join a special retirement plan open to him or her pursuant to
a collectively negotiated agreement with any state or  local  government
employer,  where  such  agreement  is in effect on the effective date of
this act and so long as such agreement  remains  in  effect  thereafter;
provided, however, that any such eligibility shall not apply upon termi-
nation  of  such  agreement  for  employees  otherwise  subject  to  the

S. 26                               6                              A. 26

provisions of article twenty-two of the retirement and  social  security
law.
  S  9.  Paragraph  (d)  of  subdivision  4  of section 209 of the civil
service law, as amended by chapter 28 of the laws of 2009, is amended to
read as follows:
  (d) The provisions of  this  subdivision  shall  expire  [thirty-four]
THIRTY-SIX  years  from  July first, nineteen hundred seventy-seven, AND
HEREAFTER MAY BE RENEWED EVERY FOUR YEARS.
  S 9-a. Subdivision c of section 500 of the retirement and social secu-
rity law, as added by chapter 890 of the laws of  1976,  is  amended  to
read as follows:
  c.  If the comptroller certifies that the contribution rate under this
article for any participating  employer  who  is  participating  on  the
effective date hereof would be at least one percent higher than the rate
which  would  be  applicable  to  such  employer  for an employee who is
subject to article eleven of this chapter and who  was  hired  prior  to
July first, nineteen hundred seventy-six, the provisions of this article
shall  not  apply with respect to such participating employer, PROVIDED,
HOWEVER THAT MEMBERS WHO FIRST JOIN THE NEW YORK STATE AND LOCAL  POLICE
AND  FIRE  RETIREMENT SYSTEM ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN
SHALL NOT BE SUBJECT TO THE PROVISIONS OF THIS ARTICLE. In  such  event,
the  provisions of article eleven AND ARTICLE TWENTY-TWO OF THIS CHAPTER
shall continue to be applicable to such participating employer  and  its
employees,  as  provided in section four hundred fifty-one of this chap-
ter. If, as a result of actuarial experience, such  employer's  contrib-
ution  rate  should  increase  to the extent that it is not at least one
percent lower than the contribution rate under this article, then,  upon
certification  of  such  fact by the comptroller, the provisions of this
subdivision shall no longer apply with respect to the employees of  such
employer who thereafter first join or rejoin a public retirement system.
  S  10.  This act shall take effect on the thirtieth day after it shall
have become a law.

                                 PART B

  Section 1. Subdivision 24 of section 501 of the retirement and  social
security  law, as amended by chapter 891 of the laws of 1976, is amended
to read as follows:
  24. "Wages" shall mean regular compensation earned by and  paid  to  a
member  by a public employer, EXCEPT THAT FOR MEMBERS WHO FIRST JOIN THE
STATE AND LOCAL EMPLOYEES' RETIREMENT SYSTEM ON OR AFTER JANUARY  FIRST,
TWO  THOUSAND  TEN,  OVERTIME COMPENSATION PAID IN ANY YEAR IN EXCESS OF
THE OVERTIME CEILING, AS DEFINED  BY  THIS  SUBDIVISION,  SHALL  NOT  BE
INCLUDED  IN  THE  DEFINITION  OF WAGES.   "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 STAN-
DARD  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.  THE "OVER-
TIME  CEILING"  SHALL MEAN FIFTEEN THOUSAND DOLLARS PER ANNUM ON JANUARY
FIRST, TWO THOUSAND TEN, AND SHALL BE INCREASED BY  THREE  PERCENT  EACH
YEAR  THEREAFTER.  For  the  purpose  of  calculation a member's primary
federal social security retirement or disability benefit,  wages  shall,
in  any  calendar  year, be limited to the portion of the member's wages
which would be subject to tax under section three thousand  one  hundred
twenty-one  of the internal revenue code of nineteen hundred fifty-four,

S. 26                               7                              A. 26

or any predecessor or successor  provision  relating  thereto,  if  such
member was employed by a private employer.
  S  2. Subdivisions a and b of section 502 of the retirement and social
security law, as amended by chapter 389 of the laws of 1998, are amended
to read as follows:
  a. A member who first joins a public retirement system of  this  state
on  or  after  June thirtieth, nineteen hundred seventy-six shall not be
eligible for service retirement benefits hereunder until such member has
rendered a minimum of five years of creditable service after July first,
nineteen hundred seventy-three, EXCEPT THAT A MEMBER WHO FIRST JOINS THE
NEW YORK STATE AND LOCAL EMPLOYEES' RETIREMENT SYSTEM ON OR AFTER  JANU-
ARY FIRST, TWO THOUSAND TEN SHALL NOT BE ELIGIBLE FOR SERVICE RETIREMENT
BENEFITS PURSUANT TO THIS ARTICLE UNTIL SUCH MEMBER HAS RENDERED A MINI-
MUM OF TEN YEARS OF CREDITED SERVICE.
  b.  A member who previously was a member of a public retirement system
of this state shall not be  eligible  for  service  retirement  benefits
hereunder  until  such  member  has  rendered a minimum of five years of
service which is creditable pursuant to section five hundred thirteen of
this article. A MEMBER WHO FIRST JOINS THE  NEW  YORK  STATE  AND  LOCAL
EMPLOYEES' RETIREMENT SYSTEM ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN
SHALL  NOT  BE ELIGIBLE FOR SERVICE RETIREMENT BENEFITS PURSUANT TO THIS
ARTICLE UNTIL SUCH MEMBER HAS RENDERED A MINIMUM OF TEN YEARS OF CREDIT-
ED SERVICE.
  S 3. Subdivision c of section 504 of the retirement and social securi-
ty law, as amended by chapter 174 of the laws of  1989,  is  amended  to
read as follows:
  c.  The  early  service retirement benefit for general members, except
for general members whose  early  retirement  benefit  is  specified  in
subdivision  d  of this section, shall be the service retirement benefit
specified in subdivision a or b of this section, as  the  case  may  be,
without social security offset, reduced by one-fifteenth for each of the
first two years by which early retirement precedes age sixty-two, plus a
further  reduction  of:  (1)  one-thirtieth;  OR  (2)  ONE-TWENTIETH FOR
MEMBERS WHO FIRST JOIN THE NEW YORK STATE AND LOCAL  EMPLOYEES'  RETIRE-
MENT  SYSTEM  ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN, for each year
by which early retirement precedes age  sixty.  At  age  sixty-two,  the
benefit shall be reduced by fifty percent of the primary social security
retirement  benefit,  as provided in section five hundred eleven of this
article.
  S 4. Subdivision a of section 516 of the retirement and social securi-
ty law, as amended by chapter 389 of the laws of  1998,  is  amended  to
read as follows:
  a.  A  member who has five or more years of credited service OR TEN OR
MORE YEARS OF CREDITED SERVICE FOR MEMBERS WHO FIRST JOIN THE  NEW  YORK
STATE  AND LOCAL EMPLOYEES' RETIREMENT SYSTEM ON OR AFTER JANUARY FIRST,
TWO THOUSAND TEN upon termination of employment shall be entitled  to  a
deferred vested benefit as provided herein.
  S 5. Subdivision l of section 601 of the retirement and social securi-
ty  law, as added by chapter 414 of the laws of 1983, is amended to read
as follows:
  l. "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

S. 26                               8                              A. 26

THE DEFINITION OF  WAGES.    "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.  THE "OVER-
TIME  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.
  S  6. Subdivisions a and b of section 602 of the retirement and social
security law, as amended by chapter 389 of the laws of 1998, are amended
to read as follows:
  a. A member who first joins a public retirement system of  this  state
on or after July first, nineteen hundred seventy-six shall not be eligi-
ble  for  service  retirement  benefits  hereunder until such member has
rendered a minimum of five years of  credited  service,  EXCEPT  THAT  A
MEMBER  WHO  FIRST JOINS THE NEW YORK STATE AND LOCAL EMPLOYEES' RETIRE-
MENT SYSTEM OR THE NEW YORK STATE  TEACHERS'  RETIREMENT  SYSTEM  ON  OR
AFTER  JANUARY FIRST, TWO THOUSAND TEN SHALL NOT BE ELIGIBLE FOR SERVICE
RETIREMENT BENEFITS PURSUANT TO  THIS  ARTICLE  UNTIL  SUCH  MEMBER  HAS
RENDERED A MINIMUM OF TEN YEARS OF CREDITED SERVICE.
  b.  A member who previously was a member of a public retirement system
of this state shall not be  eligible  for  service  retirement  benefits
hereunder  until  such  member  has  rendered a minimum of five years of
service which is credited pursuant to section six hundred nine  of  this
article.   A MEMBER WHO FIRST JOINS THE NEW YORK STATE AND LOCAL EMPLOY-
EES' RETIREMENT SYSTEM OR THE NEW YORK STATE TEACHERS' RETIREMENT SYSTEM
ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN SHALL NOT  BE  ELIGIBLE  FOR
SERVICE  RETIREMENT  BENEFITS PURSUANT TO THIS ARTICLE UNTIL SUCH MEMBER
HAS RENDERED A MINIMUM OF TEN YEARS OF CREDITED SERVICE.
  S 7. Subdivision a of section 603 of the retirement and social securi-
ty law, as amended by section 3 of chapter 19 of the laws  of  2008,  is
amended to read as follows:
  a.  The  service  retirement  benefit specified in section six hundred
four of this article shall be payable to members who have met the  mini-
mum  service  requirements  upon retirement and attainment of age sixty-
two, other than members who are eligible for  early  service  retirement
pursuant to subdivision c of section six hundred four-b of this article,
subdivision c of section six hundred four-c of this article, subdivision
d  of  section  six  hundred  four-d  of  this article, subdivision c of
section six hundred four-e of this article, subdivision c of section six
hundred four-f of this article, subdivision c  of  section  six  hundred
four-g  of  this article, subdivision c of section six hundred four-h of
this article or subdivision c of section  six  hundred  four-i  of  this
article, provided, however, [a member who is a peace officer employed by
the  unified  court system or] a member of a teachers' retirement system
or the New York state and local employees' retirement system  WHO  FIRST
JOINS SUCH SYSTEM BEFORE JANUARY FIRST, TWO THOUSAND TEN OR A MEMBER WHO
IS  A  UNIFORMED  COURT OFFICER OR PEACE OFFICER EMPLOYED BY THE UNIFIED
COURT SYSTEM may retire without reduction of his or her retirement bene-
fit upon attainment of at least fifty-five years of age  and  completion
of  thirty or more years of service, PROVIDED, HOWEVER, THAT A UNIFORMED
COURT OFFICER OR PEACE OFFICER EMPLOYED BY THE UNIFIED COURT SYSTEM  WHO
FIRST  BECOMES  A  MEMBER  OF  THE  NEW  YORK STATE AND LOCAL EMPLOYEES'
RETIREMENT SYSTEM ON OR  AFTER  JANUARY  FIRST,  TWO  THOUSAND  TEN  AND
RETIRES  WITHOUT REDUCTION OF HIS OR HER RETIREMENT BENEFIT UPON ATTAIN-

S. 26                               9                              A. 26

MENT OF AT LEAST FIFTY-FIVE YEARS OF AGE AND  COMPLETION  OF  THIRTY  OR
MORE YEARS OF SERVICE PURSUANT TO THIS SECTION SHALL BE REQUIRED TO MAKE
THE  MEMBER  CONTRIBUTIONS  REQUIRED  BY  SUBDIVISION  F  OF SECTION SIX
HUNDRED  THIRTEEN OF THIS ARTICLE FOR ALL YEARS OF CREDITED AND CREDITA-
BLE SERVICE.
  S 8. Subdivision i of section 603 of the retirement and social securi-
ty law, as amended by chapter 19 of the laws of 2008, is amended to read
as follows:
  i. 1. A member of a teachers' retirement system or the New York  state
and  local  employees' retirement system who has met the minimum service
requirements but who has less than thirty years of credited service OR A
MEMBER WHO FIRST JOINS THE NEW YORK STATE AND LOCAL  EMPLOYEES'  RETIRE-
MENT  SYSTEM  OR  THE  NEW  YORK STATE TEACHERS' RETIREMENT SYSTEM ON OR
AFTER JANUARY FIRST, TWO THOUSAND TEN may retire prior to normal retire-
ment age, but no earlier than attainment of  age  fifty-five,  in  which
event,  unless  such  person  is a member of the New York city teachers'
retirement system who is otherwise eligible for early service retirement
pursuant to subdivision c of section six hundred four-i of this article,
the amount of his or her retirement benefit otherwise  computed  without
optional  modification shall be reduced in accordance with the following
schedule:
  (i) for each of the first  twenty-four  full  months  that  retirement
predates  age sixty-two, one-half of one per centum per month; PROVIDED,
HOWEVER, 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 THOUSAND TEN, SUCH  AMOUNTS  SHALL
BE EQUAL TO ONE-FIFTEENTH PER YEAR; and
  (ii) for each full month that retirement predates age sixty, one-quar-
ter of one per centum per month; PROVIDED, HOWEVER, 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  THOUSAND  TEN, SUCH AMOUNTS SHALL BE EQUAL TO ONE-TWENTIETH
PER YEAR, but in no event shall retirement be permitted prior to attain-
ment of age fifty-five.
  2. A member of the New York city employees' retirement system  or  the
board of education retirement system of the city of New York who has met
the minimum service requirement, but who is not (a) a participant in the
twenty-five-year  early  retirement program, as defined in paragraph ten
of subdivision a of section six hundred four-c of this article (as added
by chapter ninety-six of the laws of nineteen hundred  ninety-five),  or
(b)  a participant in the age fifty-seven retirement program, as defined
in paragraph three of subdivision b of section  six  hundred  four-d  of
this  article,  or  (c)  a  New  York  city transit authority member, as
defined in paragraph one of subdivision a of section six hundred  four-b
of  this  article,  may  retire  prior  to normal retirement age, but no
earlier than attainment of age fifty-five, in which event,  unless  such
person  is  a member of the board of education retirement system of such
city who is otherwise eligible for early service retirement pursuant  to
subdivision  c of section six hundred four-i of this article, the amount
of his or her retirement benefit computed without optional  modification
shall be reduced in accordance with the following schedule:
  (i)  for  each  of  the  first twenty-four full months that retirement
predates age sixty-two, one-half of one per centum per month; and
  (ii) for each full month that retirement predates age sixty, one-quar-
ter of one per centum per month, but in no  event  shall  retirement  be
permitted prior to attainment of age fifty-five.

S. 26                              10                              A. 26

  S  8-a.  Section  603  of  the  retirement  and social security law is
amended by adding a new subdivision t to read as follows:
  T.  MEMBERS WHO JOIN THE NEW YORK STATE TEACHERS' RETIREMENT SYSTEM ON
OR AFTER JANUARY FIRST, TWO THOUSAND TEN, SHALL BE  ELIGIBLE  TO  RETIRE
WITHOUT REDUCTION OF HIS OR HER RETIREMENT BENEFIT UPON ATTAINMENT OF AT
LEAST FIFTY-SEVEN YEARS OF AGE AND COMPLETION OF THIRTY OR MORE YEARS OF
SERVICE.  MEMBERS WHO RETIRE PURSUANT TO THE PROVISIONS OF THIS SUBDIVI-
SION SHALL BE REQUIRED TO MAKE  THE  MEMBER  CONTRIBUTIONS  REQUIRED  BY
SUBDIVISION  G  OF  SECTION SIX HUNDRED THIRTEEN OF THIS ARTICLE FOR ALL
YEARS OF CREDITED AND CREDITABLE SERVICE.
  S 8-b. Subdivisions a and b of  section  604  of  the  retirement  and
social  security law, as amended by chapter 266 of the laws of 1998, are
amended to read as follows:
  a. The service retirement benefit  at  normal  retirement  age  for  a
member  with  less  than  twenty years of credited service, OR LESS THAN
TWENTY-FIVE YEARS CREDITED SERVICE FOR A MEMBER WHO JOINS THE  NEW  YORK
STATE  TEACHERS'  RETIREMENT SYSTEM ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TEN, shall be a retirement allowance equal to one-sixtieth of final
average salary times years of credited service.
  b. The service retirement benefit  at  normal  retirement  age  for  a
member   with  twenty  years  or  more  of  credited  service,  OR  WITH
TWENTY-FIVE OR MORE YEARS CREDITED SERVICE FOR A MEMBER WHO FIRST  JOINS
THE  NEW  YORK  STATE  TEACHERS'  RETIREMENT  SYSTEM ON OR AFTER JANUARY
FIRST, TWO THOUSAND TEN, shall be a retirement allowance equal  to  one-
fiftieth  of final average salary times years of credited service not in
excess of thirty years.
  S 8-c. Paragraph 2 of subdivision b of section 609 of  the  retirement
and social security law, as added by chapter 414 of the laws of 1983, is
amended to read as follows:
  2.  Previous  service  credit  shall not be granted unless such member
applies therefor and repays the amount refunded by a  public  retirement
system  of  the  state  for  service rendered after July first, nineteen
hundred seventy-six together with interest through the date of repayment
at the rate of five percent per  annum  compounded  annually  and  three
percent of the wages earned for service prior to that date together with
interest  from July first, nineteen hundred seventy-six through the date
of payment at the rate of five percent per annum compounded annually and
three percent of the wages earned for service which predates the date of
entry into the retirement system together with interest at the  rate  of
five percent per annum compounded annually from the date of such service
until  the  date  of payment. ANYTHING IN THIS PARAGRAPH TO THE CONTRARY
NOTWITHSTANDING, IN ORDER TO OBTAIN CREDIT FOR PREVIOUS SERVICE, MEMBERS
WHO FIRST JOIN THE NEW YORK STATE  TEACHERS'  RETIREMENT  SYSTEM  ON  OR
AFTER  JANUARY  FIRST,  TWO  THOUSAND  TEN  SHALL PAY THREE AND ONE-HALF
PERCENT OF WAGES EARNED FOR SERVICE WHICH PREDATES  THE  DATE  OF  ENTRY
INTO  THE  RETIREMENT  SYSTEM TOGETHER WITH INTEREST AT THE RATE OF FIVE
PERCENT PER ANNUM COMPOUNDED ANNUALLY FROM  THE  DATE  OF  SUCH  SERVICE
UNTIL THE DATE OF PAYMENT.
  S 9. Subdivision a of section 612 of the retirement and social securi-
ty  law,  as  amended  by chapter 659 of the laws of 1999, is amended to
read as follows:
  a. A member who has five or more years of credited service, OR TEN  OR
MORE  YEARS  OF  CREDITED  SERVICE FOR A MEMBER WHO FIRST JOINED THE NEW
YORK STATE AND LOCAL EMPLOYEES' RETIREMENT SYSTEM OR THE NEW YORK  STATE
TEACHERS' RETIREMENT SYSTEM ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN,
upon termination of employment, other than a member who is entitled to a

S. 26                              11                              A. 26

deferred vested benefit pursuant to any other provision of this article,
shall  be entitled to a deferred vested benefit at normal retirement age
computed in accordance with the provisions of section six  hundred  four
of  this  article.  A member of a teachers' retirement system or the New
York state and local employees' retirement system who has five  or  more
years  of credited service, OR TEN OR MORE YEARS OF CREDITED SERVICE FOR
A MEMBER WHO FIRST BECOMES A MEMBER OF THE  NEW  YORK  STATE  AND  LOCAL
EMPLOYEES'  RETIREMENT SYSTEM OR THE NEW YORK STATE TEACHERS' RETIREMENT
SYSTEM ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN, upon termination  of
employment  shall  be  entitled  to  a  deferred vested benefit prior to
normal retirement age, but no earlier than age fifty-five,  computed  in
accordance  with  the provisions of subdivision i of section six hundred
three of this article.
  S 9-a. Section 613 of  the  retirement  and  social  security  law  is
amended by adding two new subdivisions f and g to read as follows:
  F.  ANYTHING IN SUBDIVISION A OF THIS SECTION TO THE CONTRARY NOTWITH-
STANDING A MEMBER EMPLOYED AS A UNIFORMED COURT OFFICER OR PEACE OFFICER
IN THE UNIFIED COURT SYSTEM WHO FIRST JOINS THE NEW YORK STATE AND LOCAL
EMPLOYEES' RETIREMENT SYSTEM ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN
SHALL  CONTRIBUTE FOUR PERCENT OF ANNUAL WAGES TO THE NEW YORK STATE AND
LOCAL EMPLOYEES' RETIREMENT SYSTEM. THE HEAD OF THE NEW YORK  STATE  AND
LOCAL  EMPLOYEES' RETIREMENT SYSTEM SHALL PROMULGATE SUCH REGULATIONS AS
MAY BE NECESSARY AND APPROPRIATE WITH RESPECT TO THE DEDUCTION  OF  SUCH
CONTRIBUTION  FROM MEMBERS' WAGES AND FOR THE MAINTENANCE OF ANY SPECIAL
FUND OR FUNDS WITH RESPECT TO AMOUNTS SO CONTRIBUTED.
  G.  MEMBERS WHO FIRST JOIN THE NEW  YORK  STATE  TEACHERS'  RETIREMENT
SYSTEM  ON  OR  AFTER  JANUARY  FIRST, TWO THOUSAND TEN SHALL CONTRIBUTE
THREE AND ONE-HALF PERCENT OF ANNUAL WAGES TO THE NEW YORK STATE  TEACH-
ERS' RETIREMENT SYSTEM. THE HEAD OF THE NEW YORK STATE TEACHERS' RETIRE-
MENT  SYSTEM  SHALL  PROMULGATE SUCH REGULATIONS AS MAY BE NECESSARY AND
APPROPRIATE WITH RESPECT TO THE  DEDUCTION  OF  SUCH  CONTRIBUTION  FROM
MEMBERS' WAGES AND FOR THE MAINTENANCE OF ANY SPECIAL FUND OR FUNDS WITH
RESPECT TO AMOUNTS SO CONTRIBUTED.
  S  10.  Paragraph  1 of subdivision b of section 902 of the retirement
and social security law, as amended by chapter 110 of the laws of  2000,
is amended to read as follows:
  1.  An eligible employee (i) with a date of membership in a retirement
system on or after July twenty-seventh, nineteen hundred seventy-six AND
BEFORE JANUARY FIRST, TWO THOUSAND TEN, and (ii) who  has  ten  or  more
years  of  membership  or  ten  or more years of credited service with a
retirement system under the provisions of article fourteen or fifteen of
this chapter shall not be required to contribute to a retirement  system
pursuant  to  section  five hundred seventeen or six hundred thirteen of
this chapter as of the cessation date.
  S 11. Intentionally omitted.
  S 12. Intentionally omitted.
  S 13. Section 90 of the general municipal law, as amended  by  chapter
576 of the laws of 1964, is amended to read as follows:
  S  90.  Payment of overtime compensation to public officers or employ-
ees.  The governing board of each municipal corporation or  other  civil
division  or  political  subdivision of the state, or in the city of New
York, the mayor, by ordinance, local law, resolution, order or rule, may
provide for the payment of overtime compensation to any  or  all  public
officers  except elective officers and those officers otherwise excluded
by law and to any or all public employees under  their  jurisdiction  at
the  regular  basic  pay rate of such officers or employees for all time

S. 26                              12                              A. 26

such officers or employees are required to work in excess of their regu-
larly established hours of employment or at  such  other  rate  as  such
governing  board,  or in the city of New York, the mayor, may authorize.
The  amounts  received as overtime compensation under this section shall
be regarded as salary or compensation for any of  the  purposes  of  any
pension  or retirement system of which the officer or employee receiving
the same is a member, EXCEPT AS SET FORTH IN SECTIONS FIVE HUNDRED  ONE,
SIX  HUNDRED  ONE, AND TWELVE HUNDRED THREE OF THE RETIREMENT AND SOCIAL
SECURITY LAW.  Such overtime compensation shall not be regarded as sala-
ry or compensation for the purpose  of  determining  the  right  to  any
increase  of  salary  or  any  salary  increment on account of length of
service or otherwise. No such overtime compensation shall  be  construed
to constitute a promotion.
  S 14. Section 1 of chapter 729 of the laws of 1994 relating to affect-
ing the health insurance benefits and contributions of retired employees
of  school districts and certain boards, as amended by chapter 30 of the
laws of 2009, is amended to read as follows:
  Section 1. From on and after June 30, 1994 [until  May  15,  2010,]  a
school  district,  board of cooperative educational services, vocational
education and extension board or a  school  district  as  enumerated  in
section  1  of  chapter  566  of  the laws of 1967, as amended, shall be
prohibited from diminishing the health insurance  benefits  provided  to
retirees  and  their  dependents  or  the  contributions  such  board or
district makes for such health insurance coverage  below  the  level  of
such benefits or contributions made on behalf of such retirees and their
dependents  by  such district or board unless a corresponding diminution
of benefits or contributions is effected from the present  level  during
this  period  by  such district or board from the corresponding group of
active employees for such retirees.
  S 15. Legislative intent. The legislature hereby  finds  and  declares
its  intent,  in addition to the retirement benefit changes provided for
in this act, to enact legislation, in conjunction  with  the  executive,
which would offer a three-month period during calendar year 2010, during
which  members  of  the collective bargaining unit of the New York State
United Teachers ("NYSUT") within the New York state teachers  retirement
system and the New York state and local employees' retirement system who
have  reached  fifty-five  years of age and have accumulated twenty-five
years of service as a member  of  either  such  retirement  system,  may
retire early without penalty.
  S  16.  This act shall take effect January 1, 2010; provided, however,
that the amendments to subdivision a of section 603  of  the  retirement
and  social  security  law  made by section seven of this act, shall not
affect the expiration of such subdivision and shall be deemed to  expire
therewith.

                                 PART C

  Section  1.  Subdivisions a and b of section 602 of the retirement and
social security law, as amended by chapter 389 of the laws of 1998,  are
amended to read as follows:
  a. [A] EXCEPT AS PROVIDED IN SUBDIVISION B-1 OF THIS SECTION, A member
who  first  joins  a  public retirement system of this state on or after
July first, nineteen hundred  seventy-six  shall  not  be  eligible  for
service  retirement  benefits hereunder until such member has rendered a
minimum of five years of credited service.

S. 26                              13                              A. 26

  b. [A] EXCEPT AS PROVIDED IN SUBDIVISION B-1 OF THIS SECTION, A member
who previously was a member of a public retirement system of this  state
shall  not  be  eligible for service retirement benefits hereunder until
such member has rendered a minimum of five years  of  service  which  is
credited pursuant to section six hundred nine of this article.
  S  2. Section 602 of the retirement and social security law is amended
by adding a new subdivision b-1 to read as follows:
  B-1. NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION  A  OR  B  OF  THIS
SECTION  OR  ANY OTHER PROVISION OF LAW TO THE CONTRARY, (I) A MEMBER OF
THE NEW YORK CITY TEACHERS'  RETIREMENT  SYSTEM  WHO  HOLDS  A  POSITION
REPRESENTED  BY  THE  RECOGNIZED  TEACHER  ORGANIZATION  FOR  COLLECTIVE
BARGAINING PURPOSES, AND WHO BECAME SUBJECT TO THE  PROVISIONS  OF  THIS
ARTICLE  AFTER  THE EFFECTIVE DATE OF THIS SUBDIVISION, OR (II) A MEMBER
OF THE NEW YORK CITY BOARD OF EDUCATION RETIREMENT SYSTEM  WHO  HOLDS  A
POSITION  REPRESENTED BY THE RECOGNIZED TEACHER ORGANIZATION FOR COLLEC-
TIVE BARGAINING PURPOSES, AND WHO BECAME SUBJECT TO  THE  PROVISIONS  OF
THIS  ARTICLE AFTER THE EFFECTIVE DATE OF THIS SUBDIVISION, SHALL NOT BE
ELIGIBLE FOR SERVICE RETIREMENT BENEFITS HEREUNDER UNTIL SUCH MEMBER HAS
RENDERED A MINIMUM OF TEN YEARS OF CREDITED SERVICE.
  S 3. Subdivision a of section 612 of the retirement and social securi-
ty law, as amended by chapter 659 of the laws of  1999,  is  amended  to
read follows:
  a. [A] EXCEPT AS PROVIDED IN SUBDIVISION A-1 OF THIS SECTION, A member
who  has  five  or  more  years  of credited service upon termination of
employment, other than a member who is entitled  to  a  deferred  vested
benefit  pursuant to any other provision of this article, shall be enti-
tled to a deferred vested benefit at normal retirement age  computed  in
accordance with the provisions of section six hundred four of this arti-
cle. [A] EXCEPT AS PROVIDED IN SUBDIVISION A-1 OF THIS SECTION, A member
of a teachers' retirement system or the New York state and local employ-
ees'  retirement  system  who has five or more years of credited service
upon termination of employment shall be entitled to  a  deferred  vested
benefit  prior  to normal retirement age, but no earlier than age fifty-
five, computed in accordance with the provisions  of  subdivision  i  of
section six hundred three of this article.
  S  4. Section 612 of the retirement and social security law is amended
by adding a new subdivision a-1 to read as follows:
  A-1. NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION A OF  THIS  SECTION
OR  ANY  OTHER PROVISION OF LAW TO THE CONTRARY, (I) A MEMBER OF THE NEW
YORK CITY TEACHERS' RETIREMENT SYSTEM WHO HOLDS A  POSITION  REPRESENTED
BY   THE  RECOGNIZED  TEACHER  ORGANIZATION  FOR  COLLECTIVE  BARGAINING
PURPOSES, WHO BECAME SUBJECT TO THE PROVISIONS OF THIS ARTICLE AFTER THE
EFFECTIVE DATE OF THIS SUBDIVISION, AND WHO HAS TEN  OR  MORE  YEARS  OF
CREDITED  SERVICE, OR (II) A MEMBER OF THE NEW YORK CITY BOARD OF EDUCA-
TION RETIREMENT SYSTEM WHO HOLDS A POSITION REPRESENTED  BY  THE  RECOG-
NIZED  TEACHER  ORGANIZATION  FOR  COLLECTIVE  BARGAINING  PURPOSES, WHO
BECAME SUBJECT TO THE PROVISIONS OF THIS  ARTICLE  AFTER  THE  EFFECTIVE
DATE  OF  THIS  SUBDIVISION,  AND  WHO HAS TEN OR MORE YEARS OF CREDITED
SERVICE, OTHER THAN SUCH A MEMBER OF EITHER OF SUCH  RETIREMENT  SYSTEMS
WHO  IS  ENTITLED  TO  A  DEFERRED  VESTED BENEFIT PURSUANT TO ANY OTHER
PROVISION OF THIS ARTICLE, SHALL, UPON  TERMINATION  OF  EMPLOYMENT,  BE
ENTITLED  TO A DEFERRED VESTED BENEFIT AT NORMAL RETIREMENT AGE COMPUTED
IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED  FOUR  OF  THIS
ARTICLE.    NOTWITHSTANDING  THE  PROVISIONS  OF  SUBDIVISION  A OF THIS
SECTION OR ANY OTHER PROVISION OF LAW TO THE CONTRARY, A MEMBER  OF  THE
NEW  YORK  CITY TEACHERS' RETIREMENT SYSTEM WHO HOLDS A POSITION REPRES-

S. 26                              14                              A. 26

ENTED BY THE RECOGNIZED TEACHER ORGANIZATION FOR  COLLECTIVE  BARGAINING
PURPOSES, WHO BECAME SUBJECT TO THE PROVISIONS OF THIS ARTICLE AFTER THE
EFFECTIVE  DATE  OF  THIS  SUBDIVISION, AND WHO HAS TEN OR MORE YEARS OF
CREDITED  SERVICE, SHALL, UPON TERMINATION OF EMPLOYMENT, BE ENTITLED TO
A DEFERRED VESTED BENEFIT PRIOR TO NORMAL RETIREMENT AGE, BUT NO EARLIER
THAN AGE FIFTY-FIVE, COMPUTED  IN  ACCORDANCE  WITH  THE  PROVISIONS  OF
SUBDIVISION I OF SECTION SIX HUNDRED THREE OF THIS ARTICLE.
  S 5. Paragraph 1 of subdivision b of section 911 of the retirement and
social  security  law, as amended by chapter 110 of the laws of 2000, is
amended to read as follows:
  1. [An] SUBJECT TO THE PROVISIONS OF PARAGRAPH ONE-A OF THIS  SUBDIVI-
SION,  AN  eligible member (i) with a date of membership in a retirement
system on or after July twenty-seventh, nineteen hundred seventy-six and
(ii) who has ten or more years of membership or ten  or  more  years  of
credited  service with a retirement system under the provisions of arti-
cle fourteen or fifteen  of  this  chapter  shall  not  be  required  to
contribute  to  a  retirement  system  pursuant  to section five hundred
seventeen or six hundred thirteen of this chapter as  of  the  cessation
date.
  S 6. Subdivision b of section 911 of the retirement and social securi-
ty law is amended by adding a new paragraph 1-a to read as follows:
  1-A.  NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH ONE OF THIS SUBDIVI-
SION  OR ANY OTHER PROVISION OF LAW TO THE CONTRARY, A MEMBER OF THE NEW
YORK CITY TEACHERS' RETIREMENT SYSTEM OR THE  NEW  YORK  CITY  BOARD  OF
EDUCATION RETIREMENT SYSTEM:
  (I)  WHO  IS  A  TWENTY-SEVEN  YEAR  PARTICIPANT IN THE AGE FIFTY-FIVE
RETIREMENT PROGRAM (AS DEFINED IN PARAGRAPH TWELVE OF SUBDIVISION  A  OF
SECTION SIX HUNDRED FOUR-I OF THIS CHAPTER), AND
  (II)  WHO BECOMES SUBJECT TO THE PROVISIONS OF ARTICLE FIFTEEN OF THIS
CHAPTER AFTER THE EFFECTIVE DATE OF THIS PARAGRAPH, SHALL CONTRIBUTE  TO
A  RETIREMENT  SYSTEM  PURSUANT  TO SECTION SIX HUNDRED THIRTEEN OF THIS
CHAPTER UNTIL HE OR SHE HAS COMPLETED  TWENTY-SEVEN  YEARS  OF  CREDITED
SERVICE.
  S  7.  Paragraph 2 of subdivision e of section 604-i of the retirement
and social security law, as added by chapter 19 of the laws of 2008,  is
amended to read as follows:
  2.  A  twenty-five-year  participant  in the age fifty-five retirement
program (as defined  in  paragraph  eleven  of  subdivision  a  of  this
section)  shall  contribute  additional  member  contributions until the
later of (i) June twenty-ninth, two thousand eight, or (ii) the date  on
which  he  or she has completed twenty-five years of credited service. A
twenty-seven-year participant in the age fifty-five  retirement  program
shall  contribute  additional  member contributions only until he or she
has completed twenty-seven years of credited service; PROVIDED, HOWEVER,
THAT A TWENTY-SEVEN-YEAR PARTICIPANT IN THE  AGE  FIFTY-FIVE  RETIREMENT
PROGRAM  WHO BECOMES SUBJECT TO THE PROVISIONS OF THIS ARTICLE AFTER THE
EFFECTIVE DATE OF THE CHAPTER OF THE LAWS  OF  TWO  THOUSAND  NINE  THAT
AMENDED  THIS PARAGRAPH SHALL CONTRIBUTE ADDITIONAL MEMBER CONTRIBUTIONS
FOR ALL YEARS OF CREDITED SERVICE AS PROVIDED IN  SUBPARAGRAPH  (II)  OF
PARAGRAPH ONE OF THIS SUBDIVISION.
  S 8. Subdivision d of section 13-582 of the administrative code of the
city of New York is amended to read as follows:
  d.  [Interest]  1.  SUBJECT TO THE PROVISIONS OF PARAGRAPH TWO OF THIS
SUBDIVISION, INTEREST shall be allowed on the participant's tax-deferred
account in the annuity savings fund at the same rate and  in  accordance

S. 26                              15                              A. 26

with  the  same  rules  and  procedures applicable to any account in the
annuity savings fund, as provided in this chapter.
  2.  NOTWITHSTANDING  THE  PROVISIONS OF PARAGRAPH ONE OF THIS SUBDIVI-
SION, OR ANY OTHER PROVISION OF LAW, OR ANY RETIREMENT BOARD RULE, REGU-
LATION OR RESOLUTION TO THE CONTRARY, ON OR AFTER THE FIRST BUSINESS DAY
IMMEDIATELY FOLLOWING THE EFFECTIVE DATE  OF  THIS  PARAGRAPH,  INTEREST
SHALL  BE  ALLOWED  AT  THE  RATE OF SEVEN PERCENT PER ANNUM, COMPOUNDED
ANNUALLY, ON THE TAX-DEFERRED ACCOUNT IN THE  ANNUITY  SAVINGS  FUND  OF
PARTICIPANTS  (I)  WHO  HOLD  A  POSITION  REPRESENTED BY THE RECOGNIZED
TEACHER ORGANIZATION FOR COLLECTIVE BARGAINING  PURPOSES,  OR  (II)  WHO
HELD  SUCH  A  POSITION AT THE TIME THEY RETIRED OR DISCONTINUED SERVICE
WITH VESTED RIGHTS TO  A  RETIREMENT  ALLOWANCE  AND  ELECTED  TO  DEFER
COMMENCEMENT  OF  DISTRIBUTION OF THEIR TAX-DEFERRED ACCOUNTS IN ACCORD-
ANCE WITH SUBDIVISION G OF THIS SECTION.
  S 9. Section 13-582 of the administrative code of the city of New York
is amended by adding two new subdivisions n and o to read as follows:
  N. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, OR ANY RETIREMENT BOARD
RULE, REGULATION OR RESOLUTION TO THE CONTRARY, THE AMENDMENT TO  SUBDI-
VISION D OF THIS SECTION ENACTED BY THE CHAPTER OF THE LAWS OF TWO THOU-
SAND  NINE  WHICH  ADDED  THIS  SUBDIVISION SHALL NOT AFFECT THE RATE OF
INTEREST BEING CHARGED  ON  NEW  LOANS  FROM  THE  TAX-DEFERRED  ANNUITY
PROGRAM,  AND  THE RATE OF INTEREST THAT WAS BEING CHARGED ON SUCH LOANS
IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF  THIS  SUBDIVISION  SHALL  BE
USED  FOR  NEW  LOANS  FROM  THE TAX-DEFERRED ANNUITY PROGRAM MADE ON OR
AFTER THE EFFECTIVE DATE OF  THIS  SUBDIVISION,  UNLESS  THE  RETIREMENT
BOARD,  IN  ACCORDANCE  WITH  ITS AUTHORITY PURSUANT TO PARAGRAPH TWO OF
SUBDIVISION L OF THIS SECTION, AS ADDED BY CHAPTER FIVE  HUNDRED  SEVEN-
TEEN OF THE LAWS OF NINETEEN HUNDRED NINETY-THREE, SHALL AMEND ITS RULES
AND REGULATIONS GOVERNING LOANS FROM THE TAX-DEFERRED ANNUITY PROGRAM TO
ESTABLISH A DIFFERENT RATE OF INTEREST APPLICABLE TO SUCH LOANS.
  O. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, OR ANY RETIREMENT BOARD
RULE,  REGULATION  OR RESOLUTION TO THE CONTRARY, WHERE A PARTICIPANT IN
THE TAX-DEFERRED ANNUITY PROGRAM  HAS  ELECTED  TO  TRANSFER  ALL  OR  A
PORTION OF THE AMOUNT CREDITED TO HIS OR HER TAX-DEFERRED ACCOUNT IN THE
ANNUITY  SAVINGS  FUND TO A TAX-DEFERRED ACCOUNT IN THE VARIABLE ANNUITY
SAVINGS FUND, THE RETIREMENT SYSTEM SHALL EFFECTUATE  SUCH  TRANSFER  AS
EXPEDITIOUSLY AS IS ADMINISTRATIVELY FEASIBLE.
  S 10. Subdivision 20 of section 2575 of the education law, as added by
chapter  509  of  the laws of 1993, is amended by adding a new paragraph
(e) to read as follows:
  (E) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, OR ANY RULE  OR  REGU-
LATION,  OR  THE  PROVISIONS  OF  ANY RETIREMENT BOARD RESOLUTION TO THE
CONTRARY:
  (1) ON OR AFTER THE  FIRST  BUSINESS  DAY  IMMEDIATELY  FOLLOWING  THE
EFFECTIVE  DATE OF THIS PARAGRAPH, INTEREST SHALL BE ALLOWED AT THE RATE
OF SEVEN PERCENT PER ANNUM, COMPOUNDED  ANNUALLY,  ON  THE  TAX-DEFERRED
ACCOUNTS  IN  THE  ANNUITY  SAVINGS  FUND OF PARTICIPANTS (I) WHO HOLD A
POSITION REPRESENTED BY THE RECOGNIZED TEACHER ORGANIZATION FOR  COLLEC-
TIVE  BARGAINING  PURPOSES, OR (II) WHO HELD SUCH A POSITION AT THE TIME
THEY RETIRED OR DISCONTINUED SERVICE WITH VESTED RIGHTS TO A  RETIREMENT
ALLOWANCE  AND  ELECTED  TO  DEFER COMMENCEMENT OF DISTRIBUTION OF THEIR
TAX-DEFERRED ACCOUNTS IN ACCORDANCE WITH PARAGRAPH (C) OF THIS  SUBDIVI-
SION; AND
  (2)  THE  PROVISIONS  OF  SUBPARAGRAPH ONE OF THIS PARAGRAPH SHALL NOT
AFFECT THE RATE OF INTEREST BEING CHARGED ON NEW LOANS FROM THE  TAX-DE-
FERRED  ANNUITY PROGRAM, AND THE RATE OF INTEREST THAT WAS BEING CHARGED

S. 26                              16                              A. 26

ON SUCH LOANS IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF THIS  PARAGRAPH
SHALL  BE  USED FOR NEW LOANS FROM THE TAX-DEFERRED ANNUITY PROGRAM MADE
ON OR AFTER THE EFFECTIVE DATE OF THIS PARAGRAPH, UNLESS THE  RULES  AND
REGULATIONS  GOVERNING  LOANS  FROM THE TAX-DEFERRED ANNUITY PROGRAM ARE
AMENDED PURSUANT TO PARAGRAPH (D) OF THIS  SUBDIVISION  TO  ESTABLISH  A
DIFFERENT RATE OF INTEREST APPLICABLE TO SUCH LOANS; AND
  (3)  WHERE  A  PARTICIPANT  IN  THE  TAX-DEFERRED  ANNUITY PROGRAM HAS
ELECTED TO TRANSFER ALL OR A PORTION OF THE AMOUNT CREDITED  TO  HIS  OR
HER  TAX-DEFERRED  ACCOUNT IN THE ANNUITY SAVINGS FUND TO A TAX-DEFERRED
ACCOUNT IN THE VARIABLE ANNUITY  SAVINGS  FUND,  THE  RETIREMENT  SYSTEM
SHALL  EFFECTUATE  SUCH TRANSFER AS EXPEDITIOUSLY AS IS ADMINISTRATIVELY
FEASIBLE.
  S 11. This act shall take effect immediately.
  S 2. Severability clause. If any clause, sentence, paragraph, subdivi-
sion, section or part of this act shall be  adjudged  by  any  court  of
competent  jurisdiction  to  be invalid, such judgment shall not affect,
impair, or invalidate the remainder thereof, but shall  be  confined  in
its  operation  to the clause, sentence, paragraph, subdivision, section
or part thereof directly involved in the controversy in which such judg-
ment shall have been rendered. It is hereby declared to be the intent of
the legislature that this act would  have  been  enacted  even  if  such
invalid provisions had not been included herein.
  S  3.  This  act shall take effect immediately provided, however, that
the applicable effective date of Parts A through C of this act shall  be
as specifically set forth in the last section of such Parts.
  FISCAL NOTE.--PROVISIONS OF PART C OF THE PROPOSED LEGISLATION - OVER-
VIEW:  With  respect  to the New York City Retirement Systems ("NYCRS"),
Part C of this proposed legislation would amend New York  State  Retire-
ment  and  Social  Security  Law  ("RSSL")  Sections 602, 604-i, 612 and
911.b, Administrative Code of the City  of  New  York  ("ACNY")  Section
13-582  and  Education Law ("Ed Law") Section 2575 to provide changes in
the service eligibility requirements for certain members for Vested  and
Service  Retirement  benefits,  to revise the duration of payability for
member contributions for certain Tier IV members hired on and after  the
Effective  Date,  and  to provide a change to the rate of interest to be
credited on Fixed Fund account balances of certain participants  in  the
Tax  Deferred  Annuity  ("TDA")  Programs of the New York City Teachers'
Retirement System ("NYCTRS") and the New York City  Board  of  Education
Retirement System ("BERS").
  The  Effective  Date  of the proposed legislation would be the date of
enactment.
  IMPACT ON SECTIONS OF LAW: The proposed legislation  would  amend  the
following  provisions  of law for certain new NYCRS members hired on and
after the Effective Date ("New Members") and also impact certain  exist-
ing   members  on  the  Effective  Date  with  respect  to  certain  TDA
provisions.
SECTION OF LAW                               PROVISIONS BEING AMENDED
                          TIER I-IV PROVISIONS
ACNY 13-582.d                                Provisions relating to
                                             NYCTRS TDA.
ACNY 12-582.n.o                              Provisions relating to
                                             NYCTRS TDA loans.
                           TIER IV PROVISIONS
RSSL Sec. 602.a,b                            Service Retirement ("SR")
                                             eligibility.
RSSL Sec. 604-i                              Additional Member

S. 26                              17                              A. 26

                                             Contributions ("AMC").
RSSL Sec. 612.a                              Eligibility for Vested
                                             benefits.
RSSL Sec. 911.b                              Limitations on Basic Member
                                             Contributions
                  TDA PROVISIONS AND TDA LOANS FOR BERS
Ed Law Sec. 2575                             TDA provisions and TDA
                                             loans for BERS.
  IMPACT  ON  NYCRS RETIREMENT PLANS - NON-TDA PROVISIONS: Part C of the
proposed legislation would cover certain Tier IV New Members  of  NYCTRS
and BERS and impact provisions of the following Plans:
  * Basic Tier IV Plan Provisions ("Basic 62/5 Plan") and
  *  Optional Age Fifty-five Retirement Program for New York City Teach-
ers and certain other members ("Age 55 Program").
  IMPACT ON ELIGIBILITY  PROVISIONS  -  NON-TDA  PROVISIONS:  Under  the
proposed  legislation, certain New Members hired on and after the Effec-
tive Date would become subject to the following revised Service  Retire-
ment and Vesting eligibility requirements:
  SERVICE RETIREMENT
  Under  the  proposed  legislation,  the minimum service required for a
Service Retirement benefit in the Basic 62/5 Plan would be increased  to
10 years from 5 years of credited service.
  VESTING
  Under  the  proposed  legislation,  the minimum service required for a
Vested benefit in the Basic 62/5 Plan would be  increased  to  10  years
from 5 years of credited service.
  While such New Members would participate in the Age 55 Program, in the
event a participant terminated employment prior to meeting the eligibil-
ity requirements of the Age 55 Program for Service Retirement, the bene-
fits  payable  upon  vesting,  retirement,  disability or death would be
based on the provisions of the Basic 62/5 Plan.
  IMPACT ON MEMBER CONTRIBUTIONS - NON-TDA PROVISIONS: Currently,  Basic
Member  Contributions  ("BMC") of 3.0% of salary for Tier IV members are
required (per Chapter 126 of the Laws of 2000) for  only  the  first  10
years of membership or the first 10 years of credited service, whichever
occurs earliest.
  Under  the proposed legislation, certain New Members would be required
to pay BMC for all years of credited service  up  to  a  maximum  of  27
years.
  Currently,  under the existing Age 55 Program, only those participants
subject to the 27-year provisions are  required  to  contribute  AMC  of
1.85% of salary to a maximum of 27 years of credited service.
  Under  Part  C of the proposed legislation, New Member 27-year partic-
ipants in the Age 55 Program after the Effective Date would be  required
to contribute AMC for all years of credited service.
  FINANCIAL IMPACT - OVERVIEW: If enacted into law, the ultimate employ-
er  cost  of  this  proposed  legislation would be determined by the net
change in benefits paid, offset by  any  increases  in  member  contrib-
utions, and by the reduced amount of interest credited to TDA Fixed Fund
account balances.
  FINANCIAL  IMPACT  -  NON-TDA  PROVISIONS - ACTUARIAL PRESENT VALUES -
CURRENT MEMBERS: Based on the census data and the actuarial  assumptions
and  methods  currently in effect, the enactment of this proposed legis-
lation would not change the APV of benefits, the APV of member  contrib-
utions  or the APV of future salary of current members of NYCTRS or BERS
as of June 30, 2008.

S. 26                              18                              A. 26

  IMPACT ON NYCRS RETIREMENT PLANS  -  TDA  PROVISIONS:    The  proposed
legislation  changes  to  the  TDA  provisions would cover both existing
members and New Members of NYCTRS and BERS in Tier I, Tier II, Tier  III
and Tier IV whose job titles are represented in collective bargaining by
the United Federation of Teachers ("UFT") ("Covered Members").
  These  TDA  changes  would  impact  all  such  NYCTRS and BERS members
regardless of the Plan in which they participate.
  BACKGROUND - EARNINGS ON TDA ACCOUNTS - CURRENT LAW:    Under  current
law,  eligible  members  of  NYCTRS  who elect to participate in the TDA
Program select from among the following  funds  to  allocate  their  TDA
account balances (100.0% in one Fund or proportions (delineated in mini-
mum 5.0% increments)) within the following six alternative funds:
  *  A  Fixed  Fund  that provides a guaranteed annual rate of return of
8.25% per annum (for periods on and after July 1, 1988), or
  * Five separate Variable Funds (i.e., Diversified Equity Fund,  Stable
Value  Fund,  International  Equity  Fund,  Inflation Protection Fund or
Socially Responsive Equity Fund) that  provide  alternative  risk/reward
characteristics.
  Eligible  BERS  members who participate in the TDA Program select only
from the Fixed Fund and the Diversified Equity Fund.
  At retirement after age 59 1/2, TDA participants may receive their TDA
account balances payable as a lump sum, as a monthly  annuity  based  on
annuitization  factors used by the NYCTRS or BERS Qualified Pension Plan
("QPP") Programs, respectively, or in other amounts they  elect  subject
to  the  Internal  Revenue  Code  ("IRC")  Minimum Required Distribution
("MRD") rules for those age 70 1/2 or greater.
  BACKGROUND - EARNINGS ON  TDA  ACCOUNTS  -  PROPOSED  LAW:  Under  the
proposed  legislation,  the interest crediting rate for TDA participants
in the Fixed Fund for Covered Members would be  decreased  (i.e.,  8.25%
per annum would decrease to 7.0% per annum).
  FINANCIAL  IMPACT  - TDA FIXED FUND ASSETS - OVERVIEW: If enacted into
law, the ultimate change in employer cost of this  proposed  legislation
would  equal  the  change in benefits payable by NYCTRS and BERS arising
from revised TDA provisions.
  Simplistically, this change in employer cost would equal  the  cumula-
tive reduction in obligations between crediting 8.25% per annum and 7.0%
per annum on TDA Fixed Fund account balances for Covered Members.
  However, financing this change in obligations is not simplistic.
  Under current law, TDA Fixed Fund assets of NYCTRS and BERS are co-in-
vested with NYCTRS QPP assets.
  The  Investment  Policy  for  NYCTRS QPP assets reflects a broad asset
allocation of 70% equity-like securities and 30% bond-like securities.
  The actuarial assumptions currently in  effect  include  an  Actuarial
Interest  Rate  ("AIR")  assumption of 8.0% per annum that is consistent
with an assumption that the NYCTRS QPP assets are expected  to  earn  an
average  of 8.0% per year. To the extent that TDA Fixed Fund assets earn
more than 8.25% per year (i.e., the crediting rate  on  TDA  Fixed  Fund
account  balances),  actuarial gains occur. To the extent that TDA Fixed
Fund assets earn less than 8.25% per year, actuarial losses occur.
  To the extent TDA Fixed Fund account balances are shifted to  Variable
Funds or vice versa, there are also impacts on the potential cost of the
TDA Programs.
  Under  the proposed legislation, access to and earnings payable on the
Variable Funds would not change.
  Under current actuarial practice,  the  Actuary  spreads  through  the
Actuarial  Asset  Valuation Method ("AAVM") over six years and then over

S. 26                              19                              A. 26

the expected future working lifetimes of NYCTRS QPP and BERS QPP  active
members  the  investment gains/losses attributable to the TDA Fixed Fund
earnings equaling more/less than the 8.25%  per  annum  TDA  Fixed  Fund
Interest Crediting Rate.
  In  particular,  the  Actuary  includes in the NYCTRS QPP and BERS QPP
actuarial valuations a modest load to the  Actuarial  Present  Value  of
Benefits  ("APVB")  equal  to approximately 2.3% of their respective TDA
Fixed Fund assets. This amount is intended to represent a portion of the
anticipated difference between the expected earnings on TDA  Fixed  Fund
assets and the TDA Fixed Fund Interest Crediting Rate. These obligations
are  financed  over  the expected future working lifetimes of NYCTRS QPP
and BERS QPP active members.
  FINANCIAL IMPACT - TDA FIXED FUND ASSETS -  RISK  ADJUSTED:  As  noted
earlier, the expected long-term actuarial loss on TDA Fixed Fund assets,
under  the  current  actuarial  assumptions,  is  .25% of TDA Fixed Fund
assets, per year.
  However, on a risk-adjusted basis, the economic implications are  more
significant.  Specifically, TDA Fixed Fund account balances are credited
with interest at a rate of 8.25% per annum, not subject to any  risk  to
the TDA participants.
  To  earn the AIR assumption of 8.0% per annum, (or the 8.25% per annum
crediting rate), TDA Fixed  Fund  assets  are  subject  to  considerable
investment risk.
  Were  NYCTRS  to set aside TDA Fixed Fund assets whose characteristics
had a comparable level of certainty of payment, it would have to  invest
in some form of risk-free asset class such as U.S. Treasury securities.
  Although  a  TDA participant may move, following a modest notification
period, his or her TDA account balance between the Fixed  Fund  and  the
Variable  Funds, the Actuary has assumed an average TDA Fixed Fund hold-
ing period of 10 years. Comparing the expected  yield  on  10-year  U.S.
Treasury securities would then be a reasonable, risk-adjusted benchmark.
  Over  time, intermediate-term U.S. Treasury securities may be expected
to earn a real rate of return of approximately 2.5% per  year.  Combined
with a long-term assumption for inflation of 2.5% per year, a total rate
of return for intermediate-term Treasury securities would equal approxi-
mately 5.0% per year.
  Comparing the current risk-free TDA Fixed Fund interest crediting rate
of  8.25%  per  annum with a long-term expected, market place, risk-free
yield of 5.0% per year on  intermediate-term  U.S.  Treasury  securities
indicates  that TDA account balances are being credited with an expected
3.25% per year greater rate of return on a risk-adjusted basis than  the
expected earnings on the supporting TDA Fixed Fund assets.
  Thus, on an economically robust, risk-adjusted basis, the crediting of
TDA  account balances with interest at either 7.0% or 8.25% per annum is
more expensive than reported on a non-risk-adjusted basis.
  FINANCIAL IMPACT - TDA VARIABLE ANNUITY CONVERSIONS: In addition,  the
Actuary  holds as obligations of the NYCTRS QPP and BERS QPP, amounts to
reflect the actuarial losses anticipated upon the conversion of some TDA
account balances into Variable Annuities.  This reflects the  fact  that
the annuity factors used for such conversion, by law, are not actuarial-
ly equivalent to what the Actuary assumes in the actuarial valuations.
  Under the proposed legislation, TDA participants would be permitted to
transfer  their  TDA  Fixed  Fund account balances to one or more of the
Variable Funds as soon as feasible  under  the  direction  of  the  Plan
administrators of each NYCTRS and BERS.

S. 26                              20                              A. 26

  However, it is not expected that enactment of the proposed legislation
would  result  in  substantial  numbers of TDA participants transferring
their TDA Fixed Fund account balances to TDA Variable Funds.
  FINANCIAL IMPACT - TDA FIXED FUND - SUMMARY: Annual investment returns
on  the  TDA  Fixed Fund assets that exceed the guaranteed amounts to be
credited to the TDA Fixed Fund accounts produce actuarial gains.
  Conversely, annual investment returns less than the guaranteed amounts
to be credited to the TDA Fixed Fund accounts produce actuarial losses.
  Under the current AIR assumption of 8.0% per annum, an aggregate long-
term net actuarial loss of .25% on TDA Fixed Fund  account  balances  is
expected.  This loss ultimately increases employer costs.
  The  Actuary  anticipates  that  enactment of the proposed legislation
with respect to the decrease to 7.0% per annum from 8.25% per  annum  of
the Interest Crediting Rate on TDA Fixed Fund account balances in NYCTRS
and BERS would become effective in the Fiscal Year containing the Effec-
tive Date.
  If  enacted  before  June  30,  2010,  the Actuary would likely reduce
Fiscal Year 2010 employer contributions to reflect that there  would  be
fewer  TDA  Fixed Fund account balances expected to be credited at 8.25%
per annum.
  As of June 30, 2008, TDA Fixed Fund account balances equaled  approxi-
mately $8.970 billion for NYCTRS and $456.8 million for BERS.
  Assuming  a  portion  of  the TDA Fixed Fund account balances would be
transferred to the  TDA  Variable  Funds  following  enactment  of  this
proposed  legislation,  the  Actuary would likely apply the 2.3% load to
only non-UFT TDA account balances.
  If the proposed legislation were enacted on or before June  30,  2010,
the  impact  of  reducing expected TDA Fixed Fund actuarial losses would
result in decreases  in  Fiscal  Year  2010  employer  contributions  of
approximately $18.7 million for NYCTRS and $.4 million for BERS.
  It  is  anticipated  that  the annualized expected reduction in Fiscal
Year 2010 employer contributions to NYCTRS and BERS would  continue  for
future years.
  PROJECTED  CHANGES  IN  EMPLOYER  CONTRIBUTIONS  -  CURRENT  ACTUARIAL
ASSUMPTIONS AND METHODS: If the proposed legislation  were  enacted  and
effective  for certain New Members on or after the Effective Date, these
New Members would first join the NYCRS during Fiscal Year 2010 and first
be included in the June 30, 2010 actuarial valuations of the NYCRS  used
to determine Fiscal Year 2012 employer contributions.
  However,  since  most  New Members of NYCTRS and BERS impacted by this
proposed legislation would likely not be hired until September 2010  and
would first be included in the June 30, 2011 actuarial valuations of the
NYCRS,  the  first  significant  impact of the proposed legislation with
respect to non-TDA provisions would likely be on the  Fiscal  Year  2013
employer contributions.
  The  proposed  changes  to  the  TDA provisions would first impact the
Fiscal Year 2010 employer contributions.
  The following Table 1 presents an estimate of the reduction in employ-
er contributions that would occur based on current actuarial assumptions
and methods:

                                 Table 1

             Estimated Reductions in Employer Contributions
           If Proposed Legislation is Enacted to be Effective
                       On or Before June 30, 2010*

S. 26                              21                              A. 26

             Under Current Actuarial Assumptions and Methods

                              ($ Millions)

Fiscal Year         NYCTRS         BERS        Total
2010                18.7           0.4         19.1
2011                17.6           0.4         18.0
2012                16.6           0.3         16.9
2013                23.2           0.5         23.7
2014                29.5           0.7         30.2
2015                35.9           0.8         36.7
2016                42.5           1.0         43.5
2017                49.0           1.2         50.2
2018                55.6           1.4         57.0
2019                62.6           1.5         64.1

  *  Based  on projection assumptions set forth in Actuarial Assumptions
and Methods Section and as noted herein. Includes both impact of non-TDA
provisions with first significant impact in Fiscal  Year  2013  and  TDA
provisions with impact in Fiscal Year 2010 and later.
  The  estimated  reductions  in employer contributions shown in Table 1
are based upon the following projection assumptions:
  * Level workforce (i.e., new employees are hired to replace those  who
leave active status).
  *  Projected salary increase consistent with those used in projections
presented  to  the  New  York  City  Office  of  Management  and  Budget
("NYCOMB") on February 20, 2009 ("February Projections").
  *  New  entrant  salaries  consistent  with those used in the February
Projections.
  These "open group" projections include future new entrants  introduced
into the census data models to project the future workforces.
  As of each future actuarial valuation date, the current "closed group"
actuarial assumptions and valuation methodology are used.
  Under  this  methodology  only  Plan Participants as of each actuarial
valuation date are  utilized  to  determine  Actuarial  Present  Values,
employer costs and employer contributions.
  To  the  extent  Plan  designs  do not change markedly over time, such
closed group actuarial methodology is well suited to funding  a  Retire-
ment System.
  FINANCIAL  IMPACT  - ACTUARIAL PRESENT VALUES - POTENTIAL METHODOLOGY:
The impact of enactment of the proposed  legislation  provided  in  this
Fiscal Note has been based on the continued use of the current actuarial
assumptions and methods.
  However,  the  current actuarial assumptions and methods do not repre-
sent the only possible approach for funding the NYCRS.
  Historically, actuarial assumptions and methods have been reviewed  on
average  every  five  years  in  connection with an actuarial experience
study mandated by New York City Charter Section 96.
  Following this review, the Actuary generally proposes changes in actu-
arial assumptions and methods that he believes appropriate  and  reason-
ably related to such experience period and future expectations.
  The next such review is anticipated during Fiscal Year 2011 or 2012.
  If  enacted,  the  proposed legislation would increase the duration of
member contributions of  New  Members  of  the  NYCTRS  and  BERS.  This
increase  may possibly impact the timing of their election to retire for
service and hence, their future working lifetimes.  As such, the Actuary

S. 26                              22                              A. 26

will be considering  alternative  actuarial  methodologies  that  could,
directly  or  indirectly,  reflect  the impact of future new entrants as
early as the Fiscal Year of enactment.
  The  Actuary  may  also consider revising the amortization periods for
financing certain costs in order to reflect the expected change  in  the
average  working  lifetimes of New Members hired after enactment of this
proposed legislation.
  Note: The Actuary has not committed to any particular methodology  for
determining employer costs and employer contributions in connection with
the  upcoming,  experience  review of actuarial assumptions and methods.
However, the Actuary intends to consider seriously the potential  impli-
cations for financing the NYCRS that could arise should the benefits and
the  expected  future working lifetimes of certain New Members after the
Effective Date differ from those of current new entrants.
  FINANCIAL IMPACT - ENTRY AGE NORMAL COSTS: Entry Age Normal Costs  can
provide  a  useful  basis  to  compare  the value of alternative benefit
programs.  For each member who enters a NYCRS, there  is  a  theoretical
net  annual  employer  cost to be paid for such member while such member
remains actively employed (i.e., the Entry Age Normal Cost ("EANC")).
  In addition, such EANC may be expressed  as  a  percentage  of  salary
earned  over  a working lifetime and referred to as the Entry Age Normal
Rate ("EANR").
  Under the proposed legislation and based on the actuarial  assumptions
noted  herein,  the  EANC and EANR of New Members would be less than the
EANC and EANR for comparable new members entering at the  same  attained
age and gender under the current NYCRS provisions.
  A  summary  of the change in EANC by NYCRS for entry age 25, 30 and 35
follows:

                                 Table 2
      Comparison of Representative Employer Entry Age Normal Rates*
           To Implement Proposed Legislation Impacting Certain
                     New Members of NYCTRS and BERS

                     EANR Under Proposed Legislation

Retirement          Entry Age 25     Entry Age 30          Entry Age 35
System
                  Male   Female     Male      Female      Male      Female

NYCTRS            5.68%  5.99%      6.39%     6.79%       6.99%     7.53%

BERS              3.72%  4.19%      4.21%     4.80%       4.47%     5.21%

                        EANR Under Current Law**

NYCTRS            7.08%  7.40%      7.79%     8.21%       8.46%     9.02%

BERS              5.07%  5.58%      5.55%     6.18%       5.80%     6.61%

              Reduction in EANR Due to Proposed Legislation

NYCTRS            1.40%  1.41%      1.40%     1.42%       1.47%     1.49%

BERS              1.35%  1.39%      1.34%     1.38%       1.33%     1.40%

S. 26                              23                              A. 26

  * Based on salaries paid over entire working lifetime.
  **  EANR  were  determined as of June 30, 2008 and do not vary signif-
icantly over time, absent benefit and/or actuarial assumption changes.
  FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS FISCAL YEARS 2010, 2011  and
2012  - CURRENT METHODOLOGY:  Based on the census data and the actuarial
assumptions and methods currently in effect, and assuming  enactment  to
be  effective on or before June 30, 2010, the enactment of this proposed
legislation would, with respect to the changes in TDA provisions, result
in changes in employer contributions to NYCTRS and BERS for Fiscal Years
2010, 2011 and 2012.
  FINANCIAL IMPACT - EMPLOYER CONTRIBUTIONS FISCAL YEAR 2013 AND  BEYOND
-  CURRENT METHODOLOGY: If enacted to be effective on or before June 30,
2010, the first significant number of New Members would join NYCTRS  and
BERS  during  September  2010 and be included in the June 30, 2011 (Lag)
actuarial valuations of those NYCRS. Based on the actuarial  assumptions
and  methods  currently  in  effect, those provisions under the proposed
legislation that affect New Members  would  first  significantly  impact
employer contributions to NYCTRS and BERS for Fiscal Year 2013.
  OTHER  COSTS:  Not  measured in this Fiscal Note is the impact of this
proposed legislation on Other Post-Employment  Benefit  ("OPEB")  costs.
Also  not measured are the initial and ongoing additional administrative
costs of NYCTRS and BERS and their participating employers to  implement
the proposed legislation.
  CENSUS  DATA:  The  starting  census  data  used  for the calculations
presented herein are the census data used in the  June  30,  2008  (Lag)
actuarial valuations of NYCTRS and BERS.
  The census data used for the estimates of additional APVB and employer
contributions  presented  herein of the non-TDA portions of the proposed
legislation are based on average salaries of new entrants  in  the  June
30, 2008 (Lag) actuarial valuations of NYCTRS and BERS.
  The metrics for new members of NYCTRS were approximately 25% male, age
34 and 75% female, age 34 and a combined average salary of $48,239.
  The  metrics  for new members of BERS were approximately 25% male, age
41 and 75% female, age 44 and a combined average salary of $33,774.
  The census data used for estimates of the impact on employer  contrib-
utions  of  the TDA portion of the proposed legislation presented herein
are those active participants included in the June 30, 2008 (Lag)  actu-
arial valuations of the NYCTRS and BERS.
  For  NYCTRS,  this consisted of 2,401 Tier I, 1,224 Tier II and 69,273
Tier IV TDA participants included in the June 30, 2008  (Lag)  actuarial
valuation of NYCTRS.
  For  BERS, this consisted of 108 Tier I, 58 Tier II and 11,799 Tier IV
TDA participants included in the June 30, 2008 (Lag) actuarial valuation
of BERS.
  ACTUARIAL ASSUMPTIONS AND  METHODS:  The  additional  APVB,  EANR  and
employer  contributions  under current methodology presented herein have
been calculated based on the actuarial assumptions and methods in effect
for the June 30, 2008 (Lag) actuarial valuations of NYCTRS and BERS.
  Employer contributions under current methodology have  been  estimated
assuming  the  additional  APVB  would be financed through future normal
contributions.
  Projections of salaries, reflecting the impact of estimated contractu-
al wage increases, include information provided  by  NYCOMB.  These  and
other  projection assumptions (such as projected expenses) are set forth
in the February Projections.

S. 26                              24                              A. 26

  New entrants were projected to replace the NYCRS members  expected  to
leave the active population to maintain a steady-state population.
  The  following  Table  3 presents the total number of active employees
used in the projections, assuming a level work force, and the net number
of New Members as of each June 30 from 2009 to 2017.
                                  Table 3

             Active* and Net New Members of NYCTRS and BERS*
                   Used in the Projections for Table 1
                      NYCTRS                        BERS
June 30                       Net New                       Net New
               Actives        Members        Actives        Members
2009           112,472             0         22,702             0
2010           112,472             0         22,702             0
2011           112,472         6,330         22,702         1,582
2012           112,472        12,213         22,702         3,096
2013           112,472        17,705         22,702         4,553
2014           112,472        22,846         22,702         5,940
2015           112,472        27,652         22,702         7,241
2016           112,472        32,181         22,702         8,457
2017           112,472        36,461         22,702         9,595

  * Active members included in the projections assume a level work force
based on the June 30, 2008 (Lag) actuarial valuation  census  data.  For
simplification,  all  New  Members  in TRS and 15% of the New Members in
BERS are assumed to be UFT Members.
  The changes in employer contributions and costs  have  been  estimated
assuming that changes in the Actuarial Present Values of Future Employer
Costs would be financed through future normal contributions.
  Information  on  TDA Fixed Fund and TDA Variable Fund account balances
used to estimate the impact on employer costs of the TDA portion of  the
legislation presented herein also reflect financial information provided
by the accountants of NYCTRS and BERS.
  STATEMENT  OF ACTUARIAL OPINION: I, Robert C. North, Jr., am the Chief
Actuary for the New York City Retirement Systems. I am a Fellow  of  the
Society  of Actuaries and a Member of the American Academy of Actuaries.
I meet the Qualification Standards of the American Academy of  Actuaries
to render the actuarial opinion contained herein.
  FISCAL  NOTE  IDENTIFICATION:  This  estimate is intended for use only
during the 2009 Legislative Session. It is Fiscal  Note  2009-17,  dated
November  17,  2009,  prepared by the Chief Actuary of the New York City
Teachers' Retirement System and the New York  City  Board  of  Education
Retirement System.
  FISCAL  NOTE.--This bill would (1) create new benefits for new members
who first join the  New  York  State  and  Local  Employees'  Retirement
System,  the  New  York  State Teachers' Retirement System, the New York
City Teachers' Retirement System, the New York City  Employees'  Retire-
ment System or the New York City Board of Education Retirement System on
or after January 1, 2010 (2) create a new plan in the New York State and
Local Police and Fire Retirement System.
  Insofar as this bill would affect the New York State and Local Employ-
ees'  Retirement  System  (ERS), the significant plan design changes for
members who join on or after January 1, 2010 include:
  1. Employee contributions of 3% of  pay  for  all  years  of  service,
except

S. 26                              25                              A. 26

  -  State correction officer contributions would be limited to 30 years
of service, &
  -  uniformed  court  officers/peace  officers  employed by the Unified
Court System would contribute 4% of pay for all years of service.
  2. Ten year vesting,
  3. Larger early retirement reductions would be in  place  for  members
retiring  prior  to  age  62,  and the waiver of reduction with 30 years
would be eliminated except for uniformed court  officers/peace  officers
employed by the Unified Court System,
  4.  Annual  overtime pay in excess of $15,000 would not be included in
the definition of wages and final  average  salary.  This  overtime  pay
limitation would increase by 3% annually.
  If  this bill is enacted, we will calculate new plan rates for all ERS
members who first enter on or after  January  1,  2010.  The  long  term
expected  annual employer contribution rate for new general members will
be approximately 8.9% as compared to  the  current  expected  long  term
annual employer contribution rate for Tier 4 general members of approxi-
mately  11.0%  of  payroll. For fiscal year ending March 31, 2010, since
the average Tier 4 employer contribution rate is approximately  7%,  the
new plan rate would be approximately 5.7%.
  For  ERS  members in 20 or 25 year retirement plans that allow retire-
ment without regard to age, the long term reductions would vary by  plan
and  be  less  than  2% of salary, with the fiscal year ending March 31,
2010 reductions averaging approximately 1%.
  Insofar as this bill would affect the New York State and Local  Police
and  Fire  Retirement System (PFRS), the significant plan design changes
for members who join on or after January 1, 2010 include:
  1. An employee contribution of 3% of pay  will  be  required  for  all
years  of  service,  except that a member who is enrolled in a plan that
limits the amount of creditable service which may be accrued will not be
required to contribute after accruing the maximum amount  of  creditable
service under such plan,
  2.  Overtime  pay  in  an amount in excess of 15% of a member's annual
wages not classified as overtime pay shall be excluded from  a  member's
final average salary,
  3. Ten year vesting.
  If this bill is enacted, we will calculate new plan rates for all PFRS
members  who  first  enter  on  or  after January 1, 2010. The long term
expected annual employer contribution rate would change as follows:
  -1.8% for municipal 20 year plans with additional 60ths (benefits  for
members hired on or after 7/1/2009 are now computed under Article 14),
  -0.6%  for  the state 20 year plan with additional 60ths (benefits for
members hired on or after 7/1/2009 are now computed under Article 14),
  -2.6% for 20 year plans  (benefits  for  members  hired  on  or  after
7/1/2009 are now computed under Article 14),
  -3.0%  for  25  year  plans  with additional 60ths, 25 year plans, and
regular plans previously non-contributory.
  This estimate, dated November 16, 2009,  and  intended  for  use  only
during  the  2009  Legislative  Session,  is  Fiscal  Note No. 2009-297,
prepared by the Actuary for the ERS and PFRS.
  FISCAL NOTE.--This bill would amend various sections of the  Education
Law  and  the  Retirement  and  Social  Security  Law to implement a new
retirement benefit structure (Tier 5)  for  members  who  first  join  a
public  retirement  system  of  the state (or New York City) on or after
January 1, 2010. The following provisions are with respect to members of
the New York State Teachers' Retirement System. Members would be  eligi-

S. 26                              26                              A. 26

ble  for  a  service retirement benefit after rendering a minimum of ten
years of credited service and attainment of age 55. The service  retire-
ment  benefit  formula  for a member with less than twenty-five years of
service would be equal to one-sixtieth of final average salary times the
years  of  service.  The service retirement benefit formula for a member
with twenty-five or more years of service would be equal to one-fiftieth
of final average salary times the years of service  (not  in  excess  of
thirty).  Years  of  service  in excess of thirty shall provide an addi-
tional retirement benefit equal to three two-hundredths of final average
salary. Members retiring prior to age 62  would  have  their  retirement
benefit  reduced  by  one-fifteenth  per  year for each of the first two
years retirement predates age 62 and by one-twentieth per year for  each
year  retirement  predates age 60. However, members who are at least age
57 with 30 or more years of  credited  service  would  be  permitted  to
retire without reduction.  Members would be required to contribute three
and one-half percent of annual salary for ALL years of service.
  The current required employer contribution rate for the New York State
Teachers'  Retirement  System  is  6.19%  of pay, applicable to 7/1/09 -
6/30/10 member salaries and to be collected in the fall  of  2010.  This
rate  is  applicable to the salaries of all members, regardless of tier.
In that this proposed benefit structure is only  applicable  to  members
joining  on  or after January 1, 2010, it will be at least several years
before it has a noticeable impact on the employer contribution rate. The
cost savings impact of this change will  become  more  significant  with
time  as  the number of post-1/1/10 members grows as a percentage of the
total membership.
  Our "new entrant rate", a hypothetical employer contribution rate that
would occur if we started a new Retirement System without any assets, is
equal to 11.8% of pay under the current benefit structure. This  can  be
thought  of as the cost of the benefit structure for new entrants, based
on current actuarial assumptions. Under the proposed benefit  structure,
this new entrant rate would be equal to 8.7% of pay.
  The  source of this estimate is Fiscal Note 2009-92 dated November 16,
2009 prepared by the Actuary of the New York State Teachers'  Retirement
System and is intended for use only during the 2009 Legislative Session.

Comments

Open Legislation is a forum for New York State legislation. All comments are subject to review and community moderation is encouraged.

Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity, hate or toxic speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Attempts to intimidate and silence contributors or deliberately deceive the public, including excessive or extraneous posting/posts, or coordinated activity, are prohibited and may result in the temporary or permanent banning of the user. Comment moderation is generally performed Monday through Friday. By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Create an account. An account allows you to sign petitions with a single click, officially support or oppose key legislation, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.