S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6343
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              April 17, 2023
                                ___________
 
 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 limitation of overtime compensation in final average salary calcu-
   lations

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Section 1203 of the retirement and social security law, as
 added by section 1 of part A of chapter 504 of  the  laws  of  2009,  is
 amended to read as follows:
   §  1203. Overtime. A member's final average salary shall be calculated
 in accordance with such provisions of article eight or article eleven of
 this chapter as govern the member's benefits INCLUDING OVERTIME,  except
 that earnings classified as overtime compensation in an amount in excess
 of [fifteen] THIRTY percent of a member's annual wages not classified as
 overtime compensation shall be excluded from such calculation. "Overtime
 compensation"  shall  mean,  for  purposes of this section, compensation
 paid under any law or policy under which employees are paid  at  a  rate
 greater  than  their  standard  rate  for additional hours worked beyond
 those required, including compensation paid under  section  one  hundred
 thirty-four  of  the civil service law and section ninety of the general
 municipal law.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would increase the allowable overtime compensation  included
 in  the  final  average  salary  calculation to 30 percent of a member's
 annual wages for Tier 5 and Tier 6 members in the  New  York  State  and
 Local  Police  and  Fire  Retirement  System.  The  current  limit is 15
 percent.
   Insofar as this bill affects the New York State and Local  Police  and
 Fire  Retirement  System  (NYSLPFRS), increased costs would be shared by

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08426-02-3
              

 S. 6343                             2
 
 the State of New York and all participating employers in  the  NYSLPFRS.
 If  this bill is enacted during the 2023 legislative session, there will
 be an increase in the present value of future benefits of  approximately
 $414 million.
 
 NYSLPFRS            Increase in present      Increase in future
                     value benefits           contributions
 
 Tiers 1 - 5         $30 million              $68 million
 Tier 6              $384 million             $346 million
 Total               $414 million             $414 million

   In the NYSLPFRS, this benefit improvement will be funded by increasing
 the  billing rates charged annually. The annual contribution required of
 all participating employers in the NYSLPFRS  is  approximately  0.9%  of
 billable  salary, or approximately $7.7 million to the State of New York
 and $30 million to the local participating employers in the fiscal  year
 ending  March  31,  2025. This PERMANENT ANNUAL COST will vary in subse-
 quent billing cycles with changes in the billing rate and salary of  the
 affected members.
   Summary of relevant resources:
   Membership  data as of March 31, 2022 was used in measuring the impact
 of the proposed change, the same data used in the April 1, 2022 actuari-
 al valuation. Distributions and other statistics can  be  found  in  the
 2022  Report  of the Actuary and the 2022 Annual Comprehensive Financial
 Report.
   The actuarial assumptions and methods used are described in the  2020,
 2021,  and  2022  Annual  Report to the Comptroller on Actuarial Assump-
 tions, 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, 2022
 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 April 3, 2023, and intended for use  only  during
 the  2023  Legislative Session, is Fiscal Note No. 2023-100, prepared by
 the Actuary for the New York State and Local Retirement System.