S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5013--A
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 27, 2023
                                ___________
 
 Introduced  by  M.  of  A.  BYRNES,  PALMESANO, TAGUE, NORRIS, K. BROWN,
   J. M. GIGLIO, LEMONDES, ANGELINO, DeSTEFANO,  MAHER,  RA,  CUNNINGHAM,
   SANTABARBARA  --  read  once  and referred to the Committee on Govern-
   mental Employees --  recommitted  to  the  Committee  on  Governmental
   Employees  in  accordance  with  Assembly  Rule 3, sec. 2 -- committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to said committee
 
 AN ACT to amend the retirement and social security law, in  relation  to
   providing  state  correction  officers  with a special optional twenty
   year retirement plan
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The retirement and social security law is amended by adding
 a new article 14-C to read as follows:
                               ARTICLE 14-C
          OPTIONAL RETIREMENT PLAN FOR STATE CORRECTION OFFICERS
 SECTION 561. DEFINITIONS.
         562. OPTIONAL  TWENTY  YEAR  RETIREMENT  PLAN  FOR CERTAIN STATE
                CORRECTION OFFICERS.
         563. ADDITIONAL PENSION BENEFIT FOR MEMBERS OF  OPTIONAL  TWENTY
                YEAR RETIREMENT PLAN.
         564. CONSISTENT PROVISIONS.
   § 561. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE:
   (A) "MEMBER" SHALL MEAN A PERSON WHO IS EMPLOYED AS A STATE CORRECTION
 OFFICER  OR  OTHER  STATE EMPLOYEE WHO IS ENGAGED DIRECTLY IN CORRECTION
 OFFICER DUTIES.
   (B) "RETIREMENT SYSTEM" SHALL  MEAN  THE  NEW  YORK  STATE  AND  LOCAL
 EMPLOYEES' RETIREMENT SYSTEM.
   (C)  "CREDITABLE SERVICE" SHALL INCLUDE ANY AND ALL SERVICES PERFORMED
 AS A STATE CORRECTION OFFICER. CREDIT FOR SERVICE AS A MEMBER OR OFFICER
 OF THE STATE POLICE OR AS A PAID FIREFIGHTER, POLICE OFFICER OR  OFFICER

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD03981-05-4
              

 A. 5013--A                          2
 
 OF  ANY  ORGANIZED  FIRE DEPARTMENT OR POLICE FORCE OR DEPARTMENT OF ANY
 COUNTY, CITY, VILLAGE, TOWN, FIRE DISTRICT  OR  POLICE  DISTRICT,  SHALL
 ALSO BE DEEMED TO BE CREDITABLE SERVICE AND SHALL BE INCLUDED IN COMPUT-
 ING  YEARS  OF  TOTAL  SERVICE  FOR RETIREMENT PURSUANT TO THIS SECTION,
 PROVIDED SUCH SERVICE WAS PERFORMED BY THE MEMBER WHILE CONTRIBUTING  TO
 THE  RETIREMENT  SYSTEM  PURSUANT  TO  THE PROVISIONS OF THIS ARTICLE OR
 ARTICLE EIGHT OF THIS CHAPTER.
   §  562.  OPTIONAL  TWENTY  YEAR  RETIREMENT  PLAN  FOR  CERTAIN  STATE
 CORRECTION  OFFICERS.  (A) ANY MEMBER OF THE RETIREMENT SYSTEM MAY ELECT
 TO BECOME A MEMBER PURSUANT TO THE PROVISIONS OF THIS SECTION WITHIN ONE
 YEAR AFTER THE EFFECTIVE DATE OF THIS ARTICLE OR WITHIN ONE  YEAR  AFTER
 HE OR SHE BECOMES A MEMBER.
   (B)  ELECTIONS  MADE  PURSUANT TO THIS SECTION SHALL BE IN WRITING AND
 SHALL BE DULY ACKNOWLEDGED AND FILED WITH THE  COMPTROLLER.  ANY  MEMBER
 WHO  FILES  SUCH  AN  ELECTION  PURSUANT TO THIS SECTION MAY WITHDRAW IT
 AFTER IT HAS BEEN FILED FOR AT LEAST A YEAR. SUCH WITHDRAWAL SHALL BE BY
 WRITTEN NOTICE DULY ACKNOWLEDGED AND FILED WITH THE COMPTROLLER.
   (C) A MEMBER PARTICIPATING ON THE BASIS OF THIS SECTION AT THE TIME OF
 RETIREMENT SHALL BE ENTITLED TO RETIRE AFTER THE  COMPLETION  OF  TWENTY
 YEARS  OF  TOTAL CREDITABLE SERVICE OR UPON THE ATTAINMENT OF AGE SIXTY-
 TWO, BY FILING AN APPLICATION THEREFOR  IN  A  MANNER  SIMILAR  TO  THAT
 PROVIDED IN THIS CHAPTER.
   (I)  UPON  COMPLETION OF TWENTY YEARS OF SUCH SERVICE AND UPON RETIRE-
 MENT, EACH SUCH MEMBER SHALL RECEIVE A PENSION SUFFICIENT TO PROVIDE HIM
 OR HER WITH A RETIREMENT ALLOWANCE EQUAL TO ONE-FORTIETH OF HIS  OR  HER
 FINAL AVERAGE SALARY FOR EACH YEAR OF TOTAL CREDITABLE SERVICE FOR WHICH
 HE  OR SHE IS OTHERWISE ENTITLED BUT NOT EXCEEDING IN THE AGGREGATE ONE-
 HALF OF HIS OR HER FINAL AVERAGE SALARY.
   (II) UPON ATTAINMENT OF AGE  SIXTY-TWO  AND  UPON  RETIREMENT  WITHOUT
 COMPLETION  OF  TWENTY  YEARS  OF  SUCH  SERVICE, EACH SUCH MEMBER SHALL
 RECEIVE A PENSION SUFFICIENT TO PROVIDE HIM OR  HER  WITH  A  RETIREMENT
 ALLOWANCE  EQUAL  TO ONE-FORTIETH OF HIS OR HER FINAL AVERAGE SALARY FOR
 EACH YEAR OF CREDITABLE SERVICE. EVERY SUCH MEMBER SHALL ALSO  BE  ENTI-
 TLED TO AN ADDITIONAL PENSION EQUAL TO THE PENSION FOR ANY OTHER CREDIT-
 ABLE  SERVICE  RENDERED AS OTHERWISE PROVIDED FOR IN THIS CHAPTER.  THIS
 LATTER PENSION SHALL NOT INCREASE THE TOTAL ALLOWANCE TO MORE THAN  ONE-
 HALF OF HIS OR HER FINAL AVERAGE SALARY.
   (D)  THE  INCREASED  PENSIONS  TO  SUCH  MEMBERS,  AS PROVIDED BY THIS
 SECTION, SHALL BE PAID FROM ADDITIONAL CONTRIBUTIONS MADE BY  THE  STATE
 ON  ACCOUNT  OF SUCH MEMBERS. THE ACTUARY OF THE RETIREMENT SYSTEM SHALL
 COMPUTE THE ADDITIONAL CONTRIBUTION REQUIRED FOR EACH MEMBER WHO  ELECTS
 TO  RECEIVE THE SPECIAL BENEFITS PROVIDED UNDER THIS SECTION. SUCH ADDI-
 TIONAL CONTRIBUTIONS SHALL BE COMPUTED ON  THE  BASIS  OF  CONTRIBUTIONS
 DURING  THE  PROSPECTIVE  SERVICE  OF  SUCH  MEMBER WHICH WILL COVER THE
 LIABILITY OF  THE  RETIREMENT  SYSTEM  FOR  SUCH  EXTRA  PENSIONS.  UPON
 APPROVAL  OF  THE  COMPTROLLER,  SUCH  ADDITIONAL CONTRIBUTIONS SHALL BE
 CERTIFIED BY HIM OR HER.  THE AMOUNT THEREOF SHALL BE  INCLUDED  IN  THE
 ANNUAL  APPROPRIATION  OF  THE  STATE.  SUCH AMOUNT SHALL BE PAID ON THE
 WARRANT OF THE COMPTROLLER TO  THE  PENSION  ACCUMULATION  FUND  OF  THE
 RETIREMENT SYSTEM.
   (E)  IN  COMPUTING  THE TWENTY YEARS OF COMPLETED 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.
   (F) EVERY MEMBER PARTICIPATING ON THE BASIS OF THIS SECTION  SHALL  BE
 SEPARATED  FROM  THE  SERVICE ON THE LAST DAY OF THE CALENDAR MONTH NEXT
 A. 5013--A                          3
 
 SUCCEEDING THE CALENDAR MONTH IN WHICH HE OR SHE ATTAINS AGE  SIXTY-TWO,
 PROVIDED,  HOWEVER, THAT SUCH A MEMBER WHO ATTAINED THE AGE OF SIXTY-TWO
 BEFORE THE EFFECTIVE DATE OF THIS ARTICLE, TO BE ELIGIBLE FOR A  PENSION
 COMPUTED  IN  ACCORDANCE  WITH  THE PROVISIONS OF THIS SECTION, SHALL BE
 SEPARATED FROM THE SERVICE WITHIN THREE MONTHS OF SUCH EFFECTIVE DATE.
   (G) THE PROVISIONS OF THIS SECTION SHALL BE CONTROLLING  NOTWITHSTAND-
 ING ANY OTHER PROVISION OF THIS ARTICLE TO THE CONTRARY.
   (H)  THE  BENEFITS  PROVIDED  BY  THIS  SECTION  SHALL BE PAYABLE TO A
 MEMBER, UNLESS AT THE DATE OF RETIREMENT SUCH MEMBER WOULD OTHERWISE  BE
 ENTITLED TO A GREATER BENEFIT UNDER OTHER PROVISIONS OF THIS CHAPTER HAD
 HE OR SHE WITHDRAWN FROM THIS SECTION, IN WHICH EVENT SUCH GREATER BENE-
 FITS SHALL BE PAYABLE.
   §  563. ADDITIONAL PENSION BENEFIT FOR MEMBERS OF OPTIONAL TWENTY YEAR
 RETIREMENT PLAN. (A) THE LEGISLATURE MAY ELECT TO MAKE CONTRIBUTIONS FOR
 THE PURPOSE OF PROVIDING AN ADDITIONAL PENSION PURSUANT TO THIS  SECTION
 FOR  MEMBERS  IN  ITS  EMPLOY  WHO ARE ENTITLED TO A PENSION PURSUANT TO
 SECTION FIVE HUNDRED SIXTY-TWO OF THIS ARTICLE.   EVERY MEMBER  EMPLOYED
 BY  THE  STATE MAY ELECT TO BE COVERED BY THE PROVISIONS OF THIS SECTION
 BY FILING WITH THE COMPTROLLER, A DULY EXECUTED  AND  ACKNOWLEDGED  FORM
 PREPARED BY THE COMPTROLLER FOR THAT PURPOSE.
   (B)  UPON RETIREMENT, EACH SUCH MEMBER SHALL RECEIVE, FOR EACH YEAR OF
 SERVICE IN EXCESS OF TWENTY, AN ADDITIONAL PENSION WHICH SHALL BE  EQUAL
 TO  ONE-SIXTIETH  OF HIS OR HER FINAL AVERAGE SALARY; PROVIDED, HOWEVER,
 THAT THE TOTAL ALLOWANCE PAYABLE PURSUANT  TO  THIS  SECTION  SHALL  NOT
 EXCEED THREE-QUARTERS OF SUCH MEMBER'S FINAL AVERAGE SALARY.
   §  564. CONSISTENT PROVISIONS. NOTHING CONTAINED IN THIS ARTICLE SHALL
 BE CONSTRUED TO OTHERWISE AFFECT THE APPLICABILITY  OF  ARTICLE  ELEVEN,
 FOURTEEN  OR FIFTEEN OF THIS CHAPTER. ANY OTHER PROVISIONS OF THIS CHAP-
 TER RELATING TO MANDATORY CONTRIBUTION TO THE  RETIREMENT  SYSTEM  BASED
 UPON A MEMBER'S DATE OF MEMBERSHIP IN SUCH SYSTEM SHALL NOT BE DEEMED TO
 BE AFFECTED BY THE PROVISIONS OF THIS ARTICLE, AND ANY MEMBER WHO ON THE
 EFFECTIVE  DATE  OF THIS ARTICLE IS NOT REQUIRED TO CONTRIBUTE SHALL NOT
 BE REQUIRED TO MAKE ANY CONTRIBUTIONS AS A RESULT OF THIS  SECTION.  FOR
 THOSE  MEMBERS  REQUIRED  TO  CONTRIBUTE  TO THE RETIREMENT SYSTEM, SUCH
 CONTRIBUTION SHALL BE TREATED IN THE SAME MANNER AS SPECIFIED  FOR  SUCH
 MEMBERS IN ARTICLE FOURTEEN OR FIFTEEN OF THIS CHAPTER.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would add Article 14-C to the Retirement and Social Security
 Law,  creating optional twenty-year plans covering, upon their election,
 any New York State (State) correction officers or other State  employees
 engaged  directly  in  correction officer duties. The retirement benefit
 will be equal to fifty percent of  final  average  salary  after  twenty
 years of service. The legislature may further elect to provide for addi-
 tional  sixtieths  for  service  in  excess of twenty years. All service
 rendered as a State correction officer, a member or officer of the State
 Police, a paid firefighter, a police  officer,  or  an  officer  of  any
 organized  fire  department  or  police  force  will  be creditable. The
 retirement benefit is not to exceed seventy-five percent of final  aver-
 age salary.
   If this bill is enacted during the 2024 Legislative Session, we antic-
 ipate  that there will be an increase in the annual contributions of the
 State of New York of approximately $56 million for the twenty-year  plan
 or  $75  million  for the twenty-year plan with additional sixtieths for
 the fiscal year ending March 31, 2025. In future years, these costs will
 A. 5013--A                          4
 
 vary but are expected to average  3.2%  and  4.5%  of  salary  annually,
 respectively.
   In addition to the annual contributions discussed above, there will be
 an  immediate  past  service  cost of approximately $735 million for the
 twenty-year plan or $1.26 billion for the twenty-year  plan  with  addi-
 tional  sixtieths which will be borne by the State of New York as a one-
 time payment. This estimate assumes that payment will be made  on  March
 1, 2025.
   These  estimated costs are based on 16,999 affected members of the New
 York State and Local Retirement System employed  by  the  State  of  New
 York,  with  annual salary of approximately $1.6 billion as of March 31,
 2023.
   Internal Revenue Service (IRS)  plan  qualification  issues:  granting
 certain  State  employees engaged directly in correction officer duties,
 other than State correction officers, service credit towards  retirement
 in  a  twenty-year plan could jeopardize the governmental plan status of
 the Retirement System ("the System") and its exemption from the  Employ-
 ees Retirement Income Security Act. This development could result in the
 loss  of  qualified  status,  which would mean the loss of tax benefits.
 This result would substantially impair the System's value  to  our  more
 than one million participants.
   Prior to the enactment of this legislation, we recommend that a favor-
 able ruling be obtained from the IRS stating that these provisions would
 not  harm  the  qualification status of the System. It is estimated that
 the costs to obtain such a ruling would be $38,000 for the  services  of
 the IRS, and $1,000 per hour for legal consultants.
   Summary of relevant resources:
   Membership  data as of March 31, 2023 was used in measuring the impact
 of the proposed change, the same data used in the April 1, 2023 actuari-
 al valuation. Distributions and other statistics can  be  found  in  the
 2023  Report  of the Actuary and the 2023 Annual Comprehensive Financial
 Report.
   The actuarial assumptions and methods used are described in  the  2023
 Annual  Report  to  the  Comptroller  on  Actuarial Assumptions, and the
 Codes, Rules and Regulations  of  the  State  of  New  York:  Audit  and
 Control.
   The Market Assets and GASB Disclosures are found in the March 31, 2023
 New  York  State  and  Local  Retirement System Financial Statements and
 Supplementary Information.
   I am a member of the American Academy of Actuaries and meet the Quali-
 fication Standards to render the actuarial opinion contained herein.
   This fiscal note does not constitute a legal opinion on the  viability
 of  the  proposed change nor is it intended to serve as a substitute for
 the professional judgment of an attorney.
   This estimate, dated February 23, 2024,  and  intended  for  use  only
 during  the  2024  Legislative  Session,  is  Fiscal  Note No. 2024-102,
 prepared by the Actuary for the New  York  State  and  Local  Retirement
 System.