Assembly Bill A9606

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9606
 
                           I N  A S S E M B L Y
 
                              March 26, 2024
                                ___________
 
 Introduced by M. of A. ANGELINO -- read once and referred to the Commit-
   tee on Governmental Employees
 
 AN  ACT  to amend the retirement and social security law, in relation to
   increasing the retiree public earnings cap
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section  1.  Subdivision 2 of section 212 of the retirement and social
 security law, as amended by chapter 589 of the laws of 2019, is  amended
 to read as follows:
   2.  The earning limitations for retired persons in positions of public
 service under this section shall be in  accordance  with  the  following
 table:
 
         For the year               Earnings limitation
             1996                         $12,500
             1997                         $13,500
             1998                         $14,500
             1999                         $15,500
             2000                         $17,000
             2001                         $18,500
             2002                         $20,000
             2003                         $25,000
             2004                         $27,500
             2005 and 2006                $27,500
             2007 through 2019            $30,000
             2020 [and thereafter]
             THROUGH 2023                 $35,000
             2024 AND THEREAFTER          $100,000
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would allow a retired person of the New York State and Local
 Retirement System who returns to public employment with an annual salary
 of  $100,000  or less to continue to receive their full retirement bene-
 fit.  Currently, the salary limit is $35,000.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD14250-02-4
 A. 9606                             2
 
   Additionally, pursuant to Section 5-b of  the  Legislative  Law,  this
 proposal would increase the outside earnings permitted by members of the
 New York State Legislature.
   Insofar  as  this bill affects the New York State and Local Employees'
 Retirement System (NYSLERS), if this bill were enacted during  the  2024
 Legislative  Session,  the  direct  cost incurred would be the retiree's
 pension benefit paid while post-retirement earnings are between  $35,000
 and $100,000 each calendar year. The pension benefit expected to be paid
 by the NYSLERS during that 6-month period is estimated to be $22,250 per
 person.
   In addition to the direct cost quoted above, there would be additional
 costs  in  the  form  of lost employer contributions due to non-billable
 post-retirement earnings, which is estimated to be $9,750 per person.
   In the NYSLERS, 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
 pay the cost of the provision. For each retiree rehired pursuant to this
 proposal, an annual cost of $32,000 is expected.
   Insofar  as  this bill affects the New York State and Local Police and
 Fire Retirement System (NYSLPFRS), if this bill were enacted during  the
 2024  Legislative  Session,  the  direct  cost  incurred  would  be  the
 retiree's  pension  benefit  paid  while  post-retirement  earnings  are
 between  $35,000  and  $100,000  each calendar year. The pension benefit
 expected to be paid by the NYSLPFRS during that 5-month period is  esti-
 mated to be $32,500 per person.
   In addition to the direct cost quoted above, there would be additional
 costs  in  the  form  of lost employer contributions due to non-billable
 post-retirement earnings, which is estimated to be $19,500 per person.
   In the NYSLPFRS, all costs will be shared by the State of New York and
 all participating employers in the NYSLPFRS and spread over future bill-
 ing cycles. For each retiree rehired pursuant to this proposal, an annu-
 al cost of $52,000 is expected.
   In addition to the direct costs quoted above, insofar as this proposal
 disrupts the usual pattern and timing of employee turnover (that is,  if
 members  retire  earlier than assumed and participating employers hire a
 retiree instead of a new billable member),  shifts  in  member  behavior
 could  generate losses that increase the average billing rate in 20-year
 and 25-year service-based plans from 31.2% to 50.5%. In age-based plans,
 average billing rates could increase from 15.2%  to  20.2%.  The  actual
 increase  in billing rates will depend upon member and employer utiliza-
 tion, with the rates above representing an upper maximum.
   Since this proposal exclusively benefits retirees, the increased costs
 are primarily attributable to retirees from Tiers 1 -  3.  Approximately
 half  the contributions required to fund this proposal will be collected
 on salary reported for current members of Tier 6.
   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.
 A. 9606                             3
 
   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 March 15, 2024, and intended for use only during
 the 2024 Legislative Session, is Fiscal Note No. 2024-122,  prepared  by
 the Actuary for the New York State and Local Retirement System.