S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7273
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              April 18, 2019
                                ___________
 
 Introduced by M. of A. ABBATE -- read once and referred to the Committee
   on Governmental Employees
 
 AN ACT to amend the retirement and social security law and the education
   law, in relation to increasing the base benefit amount for computation
   of pension cost-of-living adjustments

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision c of section 78-a of the retirement and  social
 security law, as added by chapter 125 of the laws of 2000, is amended to
 read as follows:
   c.  Said cost-of-living adjustment shall be computed on a base benefit
 amount not to exceed eighteen thousand dollars of the annual  retirement
 allowance  defined  in  subdivision  b of this section. EFFECTIVE ON THE
 FIRST DAY OF SEPTEMBER,  TWO  THOUSAND  TWENTY-ONE,  THE  COST-OF-LIVING
 ADJUSTMENT  SHALL  BE  COMPUTED  ON  A BASE BENEFIT AMOUNT NOT TO EXCEED
 TWENTY-ONE THOUSAND DOLLARS OF THE ANNUAL RETIREMENT  ALLOWANCE  DEFINED
 IN  SUBDIVISION B OF THIS SECTION. EFFECTIVE ON THE FIRST DAY OF SEPTEM-
 BER, TWO THOUSAND TWENTY-TWO, AND ANNUALLY THEREAFTER, THE BASE  BENEFIT
 AMOUNT SHALL BE INCREASED ANNUALLY BY A PERCENTAGE AS DETERMINED ANNUAL-
 LY BY REFERENCE TO THE CONSUMER PRICE INDEX (ALL URBAN CONSUMERS, CPI-U,
 U.S.  CITY  AVERAGE,  ALL  ITEMS,  1982-84=100), PUBLISHED BY THE UNITED
 STATES BUREAU OF LABOR STATISTICS, FOR EACH  APPLICABLE  CALENDAR  YEAR.
 SAID  PERCENTAGE  INCREASE  SHALL  EQUAL  FIFTY  PERCENT  OF  THE ANNUAL
 INFLATION, AS DETERMINED FROM THE INCREASE IN THE CONSUMER  PRICE  INDEX
 IN  THE  ONE  YEAR  PERIOD ENDING ON THE MARCH THIRTY-FIRST PRIOR TO THE
 BASE BENEFIT AMOUNT INCREASE EFFECTIVE ON THE ENSUING  SEPTEMBER  FIRST.
 SAID PERCENTAGE SHALL THEN BE ROUNDED UP TO THE NEXT HIGHER ONE-TENTH OF
 ONE  PERCENT  AND  SHALL  NOT  EXCEED THREE PERCENT NOR BE LESS THAN ONE
 PERCENT.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09712-02-9

              

 A. 7273                             2
 
   § 2. Subdivision c of section 378-a of the retirement and social secu-
 rity law, as added by chapter 125 of the laws of  2000,  is  amended  to
 read as follows:
   c.  Said cost-of-living adjustment shall be computed on a base benefit
 amount not to exceed eighteen thousand dollars of the annual  retirement
 allowance  defined  in  subdivision  b of this section. EFFECTIVE ON THE
 FIRST DAY OF SEPTEMBER,  TWO  THOUSAND  TWENTY-ONE,  THE  COST-OF-LIVING
 ADJUSTMENT  SHALL  BE  COMPUTED  ON  A BASE BENEFIT AMOUNT NOT TO EXCEED
 TWENTY-ONE THOUSAND DOLLARS OF THE ANNUAL RETIREMENT  ALLOWANCE  DEFINED
 IN  SUBDIVISION B OF THIS SECTION. EFFECTIVE ON THE FIRST DAY OF SEPTEM-
 BER, TWO THOUSAND TWENTY-TWO, AND ANNUALLY THEREAFTER, THE BASE  BENEFIT
 AMOUNT SHALL BE INCREASED ANNUALLY BY A PERCENTAGE AS DETERMINED ANNUAL-
 LY BY REFERENCE TO THE CONSUMER PRICE INDEX (ALL URBAN CONSUMERS, CPI-U,
 U.S.  CITY  AVERAGE,  ALL  ITEMS,  1982-84=100), PUBLISHED BY THE UNITED
 STATES BUREAU OF LABOR STATISTICS, FOR EACH  APPLICABLE  CALENDAR  YEAR.
 SAID  PERCENTAGE  INCREASE  SHALL  EQUAL  FIFTY  PERCENT  OF  THE ANNUAL
 INFLATION, AS DETERMINED FROM THE INCREASE IN THE CONSUMER  PRICE  INDEX
 IN  THE  ONE  YEAR  PERIOD ENDING ON THE MARCH THIRTY-FIRST PRIOR TO THE
 BASE BENEFIT AMOUNT INCREASE EFFECTIVE ON THE ENSUING  SEPTEMBER  FIRST.
 SAID PERCENTAGE SHALL THEN BE ROUNDED UP TO THE NEXT HIGHER ONE-TENTH OF
 ONE  PERCENT  AND  SHALL  NOT  EXCEED THREE PERCENT NOR BE LESS THAN ONE
 PERCENT.
   § 3. Subdivision c of section 532-a of the education law, as added  by
 chapter 125 of the laws of 2000, is amended to read as follows:
   c.  Said cost-of-living adjustment shall be computed on a base benefit
 amount not to exceed eighteen thousand dollars of the annual  retirement
 allowance  defined  in  subdivision  b of this section. EFFECTIVE ON THE
 FIRST DAY OF SEPTEMBER,  TWO  THOUSAND  TWENTY-ONE,  THE  COST-OF-LIVING
 ADJUSTMENT  SHALL  BE  COMPUTED  ON  A BASE BENEFIT AMOUNT NOT TO EXCEED
 TWENTY-ONE THOUSAND DOLLARS OF THE ANNUAL RETIREMENT  ALLOWANCE  DEFINED
 IN  SUBDIVISION B OF THIS SECTION. EFFECTIVE ON THE FIRST DAY OF SEPTEM-
 BER, TWO THOUSAND TWENTY-TWO, AND ANNUALLY THEREAFTER, THE BASE  BENEFIT
 AMOUNT SHALL BE INCREASED ANNUALLY BY A PERCENTAGE AS DETERMINED ANNUAL-
 LY BY REFERENCE TO THE CONSUMER PRICE INDEX (ALL URBAN CONSUMERS, CPI-U,
 U.S.  CITY  AVERAGE,  ALL  ITEMS,  1982-84=100), PUBLISHED BY THE UNITED
 STATES BUREAU OF LABOR STATISTICS, FOR EACH  APPLICABLE  CALENDAR  YEAR.
 SAID  PERCENTAGE  INCREASE  SHALL  EQUAL  FIFTY  PERCENT  OF  THE ANNUAL
 INFLATION, AS DETERMINED FROM THE INCREASE IN THE CONSUMER  PRICE  INDEX
 IN  THE  ONE  YEAR  PERIOD ENDING ON THE MARCH THIRTY-FIRST PRIOR TO THE
 BASE BENEFIT AMOUNT INCREASE EFFECTIVE ON THE ENSUING  SEPTEMBER  FIRST.
 SAID PERCENTAGE SHALL THEN BE ROUNDED UP TO THE NEXT HIGHER ONE-TENTH OF
 ONE  PERCENT  AND  SHALL  NOT  EXCEED THREE PERCENT NOR BE LESS THAN ONE
 PERCENT.
   § 4. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would provide an increase in the  defined  benefit  cost-of-
 living  adjustment (COLA) for New York public retirement systems. Start-
 ing with the payment in  September  2021,  the  annual  cost  of  living
 adjustment  will  be  computed  on  a  base benefit amount not to exceed
 $21,000. Starting with the payment in September 2022, the  base  benefit
 will  be  increased  annually  by 50% of the annual consumer price index
 rate of inflation not to exceed 3% or be less than 1%.
   Insofar as this bill affects the New York State and  Local  Employees'
 Retirement  System,  pursuant to Section 25 of the Retirement and Social
 Security Law, the increased costs would be borne entirely by  the  State
 of  New  York  and would require an itemized appropriation sufficient to

 A. 7273                             3
 
 pay the cost of the provision. If this bill were enacted,  the  increase
 in the present value of benefits would be approximately $1.82 billion.
   Insofar  as  this bill affects the New York State and Local Police and
 Fire Retirement System (PFRS), the increased costs would  be  shared  by
 the  State  of  New York and the participating employers in the PFRS. If
 this bill were enacted, the increase in the present  value  of  benefits
 would be approximately $251 million. The estimated first year cost would
 be approximately $6.1 million to the State of New York and approximately
 $24.0 million to the participating employers in the PFRS.
   Summary of relevant resources:
   The  membership  data  used  in  measuring  the impact of the proposed
 change was the same as that used in the March 31, 2018  actuarial  valu-
 ation.    Distributions  and  other  statistics can be found in the 2018
 Report of the  Actuary  and  the  2018  Comprehensive  Annual  Financial
 Report.
   The  actuarial assumptions and methods used are described in the 2015,
 2016, 2017 and 2018  Annual  Report  to  the  Comptroller  on  Actuarial
 Assumptions,  and  the  Codes  Rules and Regulations of the State of New
 York: Audit and Control.
   The Market Assets and GASB Disclosures are found in the March 31, 2018
 New York State and Local  Retirement  System  Financial  Statements  and
 Supplementary Information.
   I am a member of the American Academy of Actuaries and meet the Quali-
 fication Standards to render the actuarial opinion contained herein.
   This  fiscal note does not constitute a legal opinion on the viability
 of the proposed change nor is it intended to serve as a  substitute  for
 the professional judgment of an attorney.
   This  estimate,  dated  February  21,  2019, and intended for use only
 during the  2019  Legislative  Session,  is  Fiscal  Note  No.  2019-72,
 prepared  by  the  Actuary  for  the New York State and Local Retirement
 System.