S T A T E O F N E W Y O R K
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8401
I N S E N A T E
February 23, 2022
___________
Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
printed to be committed to the Committee on Civil Service and Pensions
AN ACT to amend the retirement and social security law, in relation to
the calculation of final average salary for certain members of the New
York state and local police and fire retirement system
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 1209 of the retirement and social security law, as
added by chapter 18 of the laws of 2012, is amended to read as follows:
§ 1209. Final average salary. A. For members who first become members
of the New York state and local police and fire retirement system on or
after April first, two thousand twelve, a member's final average salary
shall be equal to one-fifth of the highest total wages earned by such
member during any continuous period of employment for which the member
was credited with five years of service credit; provided, however, if
the wages earned during any year of credited service included in the
period used to determine final average salary exceeds the average of the
wages of the previous four years of credited service by more than ten
percent, the amount in excess of ten percent shall be excluded from the
computation of final average salary. Wages in excess of the annual sala-
ry paid to the governor pursuant to section three of article four of the
state constitution shall be excluded from the computation of final aver-
age salary for members who first become members of the New York state
and local police and fire retirement system on or after April first, two
thousand twelve.
B. NOTWITHSTANDING SUBDIVISION A OF THIS SECTION, MEMBERS WHO FIRST
BECOME MEMBERS OF THE NEW YORK STATE AND LOCAL POLICE AND FIRE RETIRE-
MENT SYSTEM ON OR AFTER APRIL FIRST, TWO THOUSAND TWELVE, AND WHO RETIRE
FROM AN EMPLOYER WHICH, PRIOR TO APRIL FIRST, TWO THOUSAND TWELVE,
ELECTED BY THE ADOPTION, FILING AND APPROVAL OF A RESOLUTION IN THE
MANNER PROVIDED BY SECTION THREE HUNDRED THIRTY OF THIS CHAPTER TO
PROVIDE THAT FINAL AVERAGE SALARY SHALL MEAN THE REGULAR COMPENSATION
EARNED FROM SUCH PARTICIPATING EMPLOYER BY A MEMBER DURING THE TWELVE
MONTHS OF ACTUAL SERVICE IMMEDIATELY PRECEDING THE DATE OF SUCH MEMBER'S
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14134-02-2
S. 8401 2
RETIREMENT PURSUANT TO SUBDIVISION F OF SECTION FOUR HUNDRED FORTY-THREE
OF THIS CHAPTER, SHALL CONTINUE TO HAVE HIS OR HER FINAL AVERAGE SALARY
COMPUTED WITH SUCH TWELVE MONTH FINAL AVERAGE SALARY UNLESS SUCH MEMBER
WOULD OTHERWISE BE ENTITLED TO A GREATER BENEFIT UNDER SUBDIVISION A OF
THIS SECTION, IN WHICH CASE SUCH GREATER BENEFIT SHALL BE PAYABLE.
§ 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would change the calculation of final average salary (FAS)
for Tier 6 members of the New York State and Local Police and Fire
Retirement System (NYSLPFRS), provided the employer previously elected
to provide the one-year FAS benefit to members of tiers 2 and 5 under
Retirement and Social Security Law Section 443-f. Currently, a Tier 6
member's FAS is defined as the average wages earned over five consec-
utive years, with wages earned during any year limited to the average of
the prior four years, wages increased by 10%. If this bill is enacted, a
Tier 6 member's FAS will be defined as the earnings reported over the 12
months preceding the date of retirement. Wages exceeding the annual
salary paid to the governor will continue to be excluded.
If this bill is enacted during the 2022 legislative session, we antic-
ipate that there will be an increase of approximately $3.1 million in
the annual contributions of the affected employers for the fiscal year
ending March 31, 2023. In future years, this cost will vary as the bill-
ing rates and salary of the affected members change. As a percentage of
payroll, we anticipate that the annual contributions of the affected
employers for the fiscal year ending March 31, 2023 will increase as
follows:
Plan Rate Increase
Age-55 1.50%
25-Year 1.80%
25-Year w/ Additional 60ths 2.00%
20-Year 2.20%
20-Year w/ Additional 60ths 2.30%
In addition to the annual contributions discussed above, there will be
an immediate past service cost of approximately $15.2 million, which
would be shared by the State of New York and all the participating
employers in the NYSLPFRS, including those participating employers whose
employees do not benefit from this proposal. This estimate is based on
the assumption that payment will be made on February 1, 2023.
These estimated costs are based on 1,532 affected members employed by
various participating employers in NYSLPFRS, with annual salary of
approximately $122 million as of March 31, 2021.
Summary of relevant resources:
Membership data as of March 31, 2021 was used in measuring the impact
of the proposed change, the same data used in the April 1, 2021 actuari-
al valuation. Distributions and other statistics can be found in the
2021 Report of the Actuary and the 2021 Comprehensive Annual Financial
Report.
The actuarial assumptions and methods used are described in the 2020
and 2021 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, 2021
New York State and Local Retirement System Financial Statements and
Supplementary Information.
S. 8401 3
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 18, 2022, and intended for use only
during the 2022 Legislative Session, is Fiscal Note No. 2022-54,
prepared by the Actuary for the New York State and Local Retirement
System.
