Assembly Bill A5580

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5580
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 18, 2025
                                ___________
 
 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 2024                 $35,000
             2025 AND THEREAFTER          $100,000
   § 2. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04243-02-5
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   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.
   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 to $100,000.
   Insofar as this bill affects the New York State  and  Local  Employees
 Retirement  System  (NYSLERS), if this bill were enacted during the 2025
 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
 2025  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 33.7% to 52.8%. In age-based plans,
 average  billing  rates  could  increase from 16.5% to 21.4%. 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 closed Tiers. 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, 2024 was used in measuring the impact
 of the proposed change, the same data used in the April 1, 2024 actuari-
 al valuation. Distributions and other statistics can  be  found  in  the
 2024  Report  of the Actuary and the 2024 Annual Comprehensive Financial
 Report.  The actuarial assumptions and methods used are described in the
 2024 Annual Report to the Comptroller on Actuarial Assumptions, and  the
 A. 5580                             3
 
 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, 2024 New York State and Local Retirement System Financial Statements
 and Supplementary Information.
   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  13,  2025, and intended for use only
 during the 2025 Legislative Session, is  Fiscal  Note  No.  2025-37.  As
 Chief  Actuary  of  the  New  York State and Local Retirement System, I,
 Aaron Schottin Young, hereby certify that this  analysis  complies  with
 applicable  Actuarial  Standards  of  Practice  as  well  as the Code of
 Professional Conduct and Qualification Standards for  Actuaries  Issuing
 Statements of Actuarial Opinion of the American Academy of Actuaries, of
 which I am a member.