The New York State Senate

 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6160
 
                        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 a 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:
   a. [A] EFFECTIVE ON THE FIRST DAY OF SEPTEMBER, TWO  THOUSAND  TWENTY-
 THREE,  A  cost-of-living  adjustment  shall  be  payable  on  the basis
 provided for in this section to: (i) all pensioners  who  have  attained
 age  [sixty-two]  FIFTY-FIVE  and have been retired for five years; (ii)
 [all pensioners who have attained age fifty-five and have  been  retired
 for  ten  years;  (iii)] all disability pensioners regardless of age who
 have been retired for five years; and [(iv)] (III) all recipients of  an
 accidental  death benefit regardless of age who have been receiving such
 benefit for five years.
   § 2. Subdivision a 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:
   a.  [A]  EFFECTIVE ON THE FIRST DAY OF SEPTEMBER, TWO THOUSAND TWENTY-
 THREE, A  cost-of-living  adjustment  shall  be  payable  on  the  basis
 provided  for  in  this section to: (i) all pensioners who have attained
 age [sixty-two] FIFTY-FIVE and have been retired  for  five  years;  AND
 (ii)  [all  pensioners  who  have  attained age fifty-five and have been
 retired for ten years; and (iii)] all disability  pensioners  regardless
 of age who have been retired for five years.
   §  3. Subdivision a of section 532-a of the education law, as added by
 chapter 125 of the laws of 2000, is amended to read as follows:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08563-02-3

 S. 6160                             2
 
   a. [A] EFFECTIVE ON THE FIRST DAY OF SEPTEMBER, TWO  THOUSAND  TWENTY-
 THREE,  A  cost-of-living  adjustment  shall  be  payable  on  the basis
 provided for in this section to: (i) all pensioners  who  have  attained
 age  [sixty-two]  FIFTY-FIVE  and have been retired for five years; (ii)
 [all  pensioners  who have attained age fifty-five and have been retired
 for ten years; (iii)] all disability pensioners regardless  of  age  who
 have  been retired for five years; and [(iv)] (III) all recipients of an
 accidental death benefit regardless of age who have been receiving  such
 benefit for five years.
   § 4. Subdivision a of section 13-696 of the administrative code of the
 city  of  New  York,  as  amended by chapter 288 of the laws of 2001, is
 amended to read as follows:
   a. [A] EFFECTIVE ON THE FIRST DAY OF SEPTEMBER, TWO  THOUSAND  TWENTY-
 THREE,  A  cost-of-living adjustment shall be payable to retired members
 of the New York city employees' retirement system,  the  New  York  city
 teachers'  retirement system, the New York city police pension fund, the
 New York city fire department pension fund, the New York city  board  of
 education  retirement  system  or  the  relief  and  pension fund of the
 department of street cleaning provided for in  subchapter  one  of  this
 chapter  on  the  basis provided for in this section to: (i) all retired
 members who have attained  age  [sixty-two]  FIFTY-FIVE  and  have  been
 retired  for five years; (ii) [all retired members who have attained age
 fifty-five and have been retired for ten years; (iii)] all  members  who
 retired  for disability regardless of age who have been retired for five
 years; and [(iv)] (III) all recipients of an  accidental  death  benefit
 regardless of age who have been receiving such benefit for five years.
   § 5. 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 a payment in September 2023, COLA will be payable to pensioners
 who have attained age fifty-five and have been  retired  at  least  five
 years.
   Insofar  as  this bill affects the New York State and Local Employees'
 Retirement System (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 suffi-
 cient to pay the cost of the provision. If this bill is  enacted  during
 the 2023 legislative session, the increase in the present value of bene-
 fits would be approximately $617 million.
   In the NYSLERS, this benefit improvement will be funded by (1) billing
 a  past  service  cost  to cover retrospective benefit increases and (2)
 increasing the billing rates charged annually to cover prospective bene-
 fit increases, as follows:
   (1) To fund retrospective  costs,  the  State  of  New  York  will  be
 required to pay $409 million as of March 1, 2024.
   (2) To fund prospective costs, the annual contribution required of all
 participating  employers  in the NYSLERS is 0.09% of billable salary, or
 approximately $11.4 million to the State of New York  and  approximately
 $16.5 million to local participating employers in the fiscal year ending
 March 31, 2025. This PERMANENT ANNUAL COST will vary in subsequent bill-
 ing  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), the increased costs would be shared
 by the State of New York and the local participating  employers  in  the
 S. 6160                             3
 
 NYSLPFRS. If this bill were enacted during the 2023 legislative session,
 the  increase  in  the  present value of benefits would be approximately
 $132 million.
 
             NYSLPFRS     Increase in present  Increase in future
                          value benefits       contributions
             Tiers 1 - 5  $111 million         $70 million
             Tier 6       $21 million          $62 million
             Total        $132 million         $132 million

   In the NYSLPFRS, this benefit improvement will be funded by increasing
 the  billing  rates  charged  annually  to  cover both retrospective and
 prospective benefit increases. The annual contribution required  of  all
 participating  employers  in  NYSLPFRS  is  0.3%  of billable salary, or
 approximately $2.6 million to the State of New  York  and  approximately
 $10  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 March 30, 2023, and intended for use only during
 the 2023 Legislative Session, is Fiscal Note No. 2023-108,  prepared  by
 the Actuary for the New York State and Local Retirement System.