S T A T E O F N E W Y O R K
________________________________________________________________________
6152
2023-2024 Regular Sessions
I N S E N A T E
March 31, 2023
___________
Introduced by Sen. JACKSON -- 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, the education
law and the administrative code of the city of New York, in relation
to providing cost-of-living adjustments
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivision c of section 78-a of the retirement and social
security law, as added by chapter 125 of the laws of 2000, is amended to
read as follows:
c. Said cost-of-living adjustment shall be computed on a base benefit
amount [not to exceed] OF eighteen thousand dollars of the annual
retirement allowance defined in subdivision b of this section, PROVIDED,
HOWEVER, SUCH BASE BENEFIT AMOUNT SHALL BE INCREASED ANNUALLY BY REFER-
ENCE TO THE CONSUMER PRICE INDEX (ALL URBAN CONSUMERS, CPI-U, U.S. CITY
AVERAGE, ALL ITEMS, 1982-84=100), PUBLISHED BY THE UNITED STATES
BUREAU OF LABOR STATISTICS, FOR EACH APPLICABLE CALENDAR YEAR BEGINNING
ON SEPTEMBER FIRST, TWO THOUSAND TWENTY-FOUR. THE ANNUAL PERCENTAGE
INCREASE TO THE BASE AMOUNT SHALL EQUAL FIFTY PERCENT OF THE ANNUAL
INFLATION, AS DETERMINED FROM THE INCREASE IN THE CONSUMER PRICE INDEX
IN THE ONE YEAR PERIOD ENDING ON THE MARCH THIRTY-FIRST PRIOR TO THE
COST-OF-LIVING ADJUSTMENT EFFECTIVE ON THE ENSUING SEPTEMBER FIRST.
SAID PERCENTAGE SHALL THEN BE ROUNDED UP TO THE NEXT HIGHER ONE-TENTH OF
ONE PERCENT AND SHALL NOT EXCEED THREE PERCENT NOR BE LESS THAN ONE
PERCENT.
§ 2. Subdivision c of section 378-a of the retirement and social secu-
rity law, as added by chapter 125 of the laws of 2000, is amended to
read as follows:
c. Said cost-of-living adjustment shall be computed on a base benefit
amount [not to exceed] OF eighteen thousand dollars of the annual
retirement allowance defined in subdivision b of this section, PROVIDED,
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03457-03-3
S. 6152 2
HOWEVER, SUCH BASE BENEFIT AMOUNT SHALL BE INCREASED ANNUALLY BY REFER-
ENCE TO THE CONSUMER PRICE INDEX (ALL URBAN CONSUMERS, CPI-U, U.S. CITY
AVERAGE, ALL ITEMS, 1982-84=100), PUBLISHED BY THE UNITED STATES
BUREAU OF LABOR STATISTICS, FOR EACH APPLICABLE CALENDAR YEAR BEGINNING
ON SEPTEMBER FIRST, TWO THOUSAND TWENTY-FOUR. THE ANNUAL PERCENTAGE
INCREASE TO THE BASE AMOUNT SHALL EQUAL FIFTY PERCENT OF THE ANNUAL
INFLATION, AS DETERMINED FROM THE INCREASE IN THE CONSUMER PRICE INDEX
IN THE ONE YEAR PERIOD ENDING ON THE MARCH THIRTY-FIRST PRIOR TO THE
COST-OF-LIVING ADJUSTMENT EFFECTIVE ON THE ENSUING SEPTEMBER FIRST.
SAID PERCENTAGE SHALL THEN BE ROUNDED UP TO THE NEXT HIGHER ONE-TENTH OF
ONE PERCENT AND SHALL NOT EXCEED THREE PERCENT NOR BE LESS THAN ONE
PERCENT.
§ 3. Subdivision c of section 532-a of the education law, as added by
chapter 125 of the laws of 2000, is amended to read as follows:
c. Said cost-of-living adjustment shall be computed on a base benefit
amount [not to exceed] OF eighteen thousand dollars of the annual
retirement allowance defined in subdivision b of this section, PROVIDED,
HOWEVER, SUCH BASE BENEFIT AMOUNT SHALL BE INCREASED ANNUALLY BY REFER-
ENCE TO THE CONSUMER PRICE INDEX (ALL URBAN CONSUMERS, CPI-U, U.S. CITY
AVERAGE, ALL ITEMS, 1982-84=100), PUBLISHED BY THE UNITED STATES
BUREAU OF LABOR STATISTICS, FOR EACH APPLICABLE CALENDAR YEAR BEGINNING
ON SEPTEMBER FIRST, TWO THOUSAND TWENTY-FOUR. THE ANNUAL PERCENTAGE
INCREASE TO THE BASE AMOUNT SHALL EQUAL FIFTY PERCENT OF THE ANNUAL
INFLATION, AS DETERMINED FROM THE INCREASE IN THE CONSUMER PRICE INDEX
IN THE ONE YEAR PERIOD ENDING ON THE MARCH THIRTY-FIRST PRIOR TO THE
COST-OF-LIVING ADJUSTMENT EFFECTIVE ON THE ENSUING SEPTEMBER FIRST.
SAID PERCENTAGE SHALL THEN BE ROUNDED UP TO THE NEXT HIGHER ONE-TENTH OF
ONE PERCENT AND SHALL NOT EXCEED THREE PERCENT NOR BE LESS THAN ONE
PERCENT.
§ 4. Subdivision c of section 13-696 of the administrative code of the
city of New York, as added by chapter 125 of the laws of 2000, is
amended to read as follows:
c. Said cost-of-living adjustment shall be computed on a base benefit
amount [not to exceed] OF eighteen thousand dollars of the annual fixed
retirement allowance defined in subdivision b of this section, PROVIDED,
HOWEVER, SUCH BASE BENEFIT AMOUNT SHALL BE INCREASED ANNUALLY BY REFER-
ENCE TO THE CONSUMER PRICE INDEX (ALL URBAN CONSUMERS, CPI-U, U.S. CITY
AVERAGE, ALL ITEMS, 1982-84=100), PUBLISHED BY THE UNITED STATES
BUREAU OF LABOR STATISTICS, FOR EACH APPLICABLE CALENDAR YEAR BEGINNING
ON SEPTEMBER FIRST, TWO THOUSAND TWENTY-FOUR. THE ANNUAL PERCENTAGE
INCREASE TO THE BASE AMOUNT SHALL EQUAL FIFTY PERCENT OF THE ANNUAL
INFLATION, AS DETERMINED FROM THE INCREASE IN THE CONSUMER PRICE INDEX
IN THE ONE YEAR PERIOD ENDING ON THE MARCH THIRTY-FIRST PRIOR TO THE
COST-OF-LIVING ADJUSTMENT EFFECTIVE ON THE ENSUING SEPTEMBER FIRST.
SAID PERCENTAGE SHALL THEN BE ROUNDED UP TO THE NEXT HIGHER ONE-TENTH OF
ONE PERCENT AND SHALL NOT EXCEED THREE PERCENT NOR BE LESS THAN ONE
PERCENT.
§ 5. Notwithstanding any other provision of law to the contrary, none
of the provisions of this act shall be subject to section 25 of the
retirement and social security law.
§ 6. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would provide an increase in the defined benefit cost-of-
living adjustment (COLA) for New York public retirement systems. Start-
ing with the payment in September 2024, the base benefit for computation
S. 6152 3
of the annual COLA will be increased annually by 50% of the annual
inflation rate not to exceed 3% or be less than 1%.
Insofar as this bill affects the New York State and Local Employees'
Retirement System (NYSLERS), increased costs would be shared by the
State of New York and all participating employers in the NYSLERS. If
this bill is enacted during the 2023 legislative session, there will be
an increase in the present value of future costs of approximately $1.19
billion.
Increase in present Increase in future
NYSLERS value benefits contributions
Tiers 1 - 5 $976 million $643 million
Tier 6 $215 million $549 million
Total $1.19 billion $1.19 billion
In the NYSLERS, this benefit improvement will be funded by increasing
the billing rates charged annually. The annual contribution required of
all participating employers in the NYSLERS is approximately 0.4% of
billable salary, or approximately $49 million to the State of New York
and $71 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.
Insofar as this bill affects the New York State and Local Police and
Fire Retirement System (NYSLPFRS), increased costs would be shared by
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 costs of approximately
$173 million.
Increase in present Increase in future
NYSLPFRS value benefits contributions
Tiers 1 - 5 $141 million $83 million
Tier 6 $32 million $90 million
Total $173 million $173 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 0.4% of
billable salary, or approximately $3.4 million to the State of New York
and $14 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.
S. 6152 4
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 March 30, 2023, and intended for use only during
the 2023 Legislative Session, is Fiscal Note No. 2023-28, prepared by
the Actuary for the New York State and Local Retirement System.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would amend subdivision c of Section 532-a of the Education
Law to annually increase the current cost-of-living adjustment (COLA)
base benefit amount by fifty percent of annual inflation. Currently the
base benefit amount to which the COLA percentage is applied is fixed at
$18,000 annually. The annual percentage increase shall be determined as
fifty percent of the increase in the Consumer Price Index, published by
the United States Bureau of Labor Statistics, in the one-year period
ending on the March thirty-first prior to the COLA effective on the
ensuing September first. The annual percentage increase shall not exceed
three percent nor be less than one percent. This annual COLA base bene-
fit adjustment would be effective beginning in September 2024.
The annual cost to the employers of members of the New York State
Teachers' Retirement System for this benefit is estimated to be $88.8
million or 0.48% of payroll if this bill is enacted.
Member data is from the System's most recent actuarial valuation
files, consisting of data provided by the employers to the Retirement
System. Data distributions and statistics can be found in the System's
Annual Report. System assets are as reported in the System's financial
statements and can also be found in the System's Annual Report. Actuari-
al assumptions and methods are provided in the System's Actuarial Valu-
ation Report.
The source of this estimate is Fiscal Note 2023-11 dated February 7,
2023 prepared by the Office of the Actuary of the New York State
TeachersÆ Retirement System and is intended for use only during the 2023
Legislative Session. I, Richard A. Young, am the Chief Actuary for the
New York State Teachers' Retirement System. I am a member of the Ameri-
can Academy of Actuaries and I meet the Qualification Standards of the
American Academy of Actuaries to render the actuarial opinion contained
herein.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY OF BILL: This proposed legislation, as it relates to the New
York City Retirement Systems and Pension Funds (NYCRS), would amend
Section 13-696 of the Administrative Code of the City of New York
(ACCNY) to increase the Cost-of-Living Adjustment (COLA) base limit of
$18,000 by 50% of CPI each year (limited to between 1% and 3%), starting
on September 1, 2024, for the New York City Employees' Retirement System
(NYCERS), the New York City Teachers' Retirement System (NYCTRS), the
New York City Board of Education Retirement System (BERS), the New York
City Police Pension Fund (POLICE), and the New York City Fire Pension
Fund (FIRE).
Note: To the extent that the implementation of the proposed legis-
lation deviates from the calculation method discussed herein, the costs
for the proposed legislation may be as much as 80% higher than the costs
disclosed in the table below.
S. 6152 5
Effective Date: Upon enactment.
IMPACT ON BENEFITS: Currently the COLA provides an annual increase
equal to a percentage of the maximum annual retirement allowance, but
limited to the first $18,000 of retirement allowance.
The costs in the table below are based on providing for an increase in
the $18,000 limit starting on September 1, 2024 and each year thereaft-
er. This increase would be equal to the increase in the consumer price
index (CPI) in the one-year period ending on the prior March 31, rounded
to the next higher one-tenth of one percent, but not more than 3% nor
less than 1%.
The alternate cost disclosed below uses the increasing $18,000 as the
base for calculating COLA rather than as the limit of the retirement
allowance subject to the COLA increase.
FINANCIAL IMPACT: The estimated financial impact to NYCRS is an
increase in Present Value of Future Benefits of approximately $1.4
billion and an increase in Fiscal Year 2024 annual employer contrib-
utions of approximately $734.1 million. The increase in Fiscal Year 2024
annual employer contributions of $734.1 million is estimated to be
$605.7 million for New York City and $128.4 million for the other obli-
gors of NYCRS. A breakdown of the financial impact by System is shown in
the table below.
Additional Estimated First Year
NYCRS Present Value of Future Benefits Annual Employer
($ Millions) Contributions*
($ Millions)
NYCERS $ 576.2 $ 298.5
NYCTRS 446.0 187.6
BERS 40.9 14.9
POLICE 251.8 184.2
FIRE 79.2 48.9
Total $ 1,394.1 $ 734.1
* Total employer contributions after the first year are estimated
to be approximately $90 million per year.
As noted above, to the extent that the implementation of this proposed
legislation, for purposes of calculating individual COLA amounts, uses
the increasing $18,000 base for all retirees, the increase in PVFB is
estimated to be approximately $2.5 billion.
New Unfunded Accrued Liability (UAL) attributable to benefit changes
are generally amortized over the remaining working lifetime of those
impacted by the benefit changes. For purposes of this Fiscal Note, it
has been assumed that increases in UAL attributable to current retirees
would be recognized immediately and that increases in UAL attributable
to active members would be amortized over periods ranging from 12 to 15
years depending on the System (11 to 14 payments under One-Year Lag
Methodology) using level dollar payments.
CENSUS DATA: The estimates presented herein are based on the census
data used in the June 30, 2022 actuarial valuation of NYCRS to determine
the Preliminary Fiscal Year 2024 employer contributions.
ACTUARIAL ASSUMPTIONS AND METHODS: The estimates presented herein have
been calculated based on the actuarial assumptions and methods used for
the Preliminary Fiscal Year 2024 employer contributions of NYCRS.
For the purposes of this Fiscal Note, it is assumed that the changes
would be reflected for the first time in the June 30, 2022 actuarial
S. 6152 6
valuations of NYCRS used to determine employer contributions for Fiscal
Year 2024.
RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend
highly on the realization of the actuarial assumptions used, demograph-
ics of the impacted population and other factors such as investment,
contribution, and other risks. If actual experience deviates from actu-
arial assumptions, the actual costs could differ from those presented
herein.
Costs are also dependent on the actuarial methods used, and therefore
different actuarial methods could produce different results. Quantifying
these risks is beyond the scope of this Fiscal Note.
Not measured in this Fiscal Note are the following:
* The initial, additional administrative costs to implement the
proposed legislation.
STATEMENT OF ACTUARIAL OPINION: I, Marek Tyszkiewicz, am the Chief
Actuary for, and independent of, the New York City Retirement Systems
and Pension Funds. I am an Associate of the Society of Actuaries and a
Member of the American Academy of Actuaries. I am a member of NYCERS but
do not believe it impairs my objectivity and I meet the Qualification
Standards of the American Academy of Actuaries to render the actuarial
opinion contained herein. To the best of my knowledge, the results
contained herein have been prepared in accordance with generally
accepted actuarial principles and procedures and with the Actuarial
Standards of Practice issued by the Actuarial Standards Board.
FISCAL NOTE IDENTIFICATION: This Fiscal Note 2023-12 dated March 22,
2023 was prepared by the Chief Actuary for the New York City Retirement
Systems and Pension Funds. This estimate is intended for use only during
the 2023 Legislative Session.
