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 --
read once and referred to the Committee on Governmental 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
OF ANY ORGANIZED FIRE DEPARTMENT OR POLICE FORCE OR DEPARTMENT OF ANY
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
A LBD03981-05-4
A. 5013--A 2
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
SUCCEEDING THE CALENDAR MONTH IN WHICH HE OR SHE ATTAINS AGE SIXTY-TWO,
A. 5013--A 3
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
vary but are expected to average 3.2% and 4.5% of salary annually,
respectively.
A. 5013--A 4
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.