Senate Bill S7783A

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  7783--A
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                                May 6, 2025
                                ___________
 
 Introduced by Sens. JACKSON, HARCKHAM -- read twice and ordered printed,
   and when printed to be committed to the Committee on Civil Service and
   Pensions -- recommitted to the Committee on Civil Service and Pensions
   in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill
   amended,  ordered reprinted as amended and recommitted to said commit-
   tee
 
 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 d 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:
   d. The percentage referred to in  this  section  shall  be  determined
 annually  by reference 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. Said percentage 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  AND  EFFEC-
 TIVE  THE  FIRST  DAY OF SEPTEMBER, TWO THOUSAND TWENTY-EIGHT, SHALL NOT
 EXCEED FIVE PERCENT NOR BE LESS THAN ONE PERCENT.
   § 2. Subdivision d 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:
   d.  The  percentage  referred  to  in this section shall be determined
 annually by reference to the consumer price index (all urban  consumers,

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08218-06-6
              

 S. 7783--A                          2
 
 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. Said percentage 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 AND EFFEC-
 TIVE THE FIRST DAY OF SEPTEMBER, TWO THOUSAND  TWENTY-EIGHT,  SHALL  NOT
 EXCEED FIVE PERCENT NOR BE LESS THAN ONE PERCENT.
   §  3. Subdivision d of section 532-a of the education law, as added by
 chapter 125 of the laws of 2000, is amended to read as follows:
   d. The percentage referred to in  this  section  shall  be  determined
 annually  by reference 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. Said percentage 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  AND  EFFEC-
 TIVE  THE  FIRST  DAY OF SEPTEMBER, TWO THOUSAND TWENTY-EIGHT, SHALL NOT
 EXCEED FIVE PERCENT NOR BE LESS THAN ONE PERCENT.
   § 4. Subdivision d 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:
   d.  The  percentage  referred  to  in this section shall be determined
 annually by reference 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. Said percentage 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 AND EFFEC-
 TIVE THE FIRST DAY OF SEPTEMBER, TWO THOUSAND  TWENTY-EIGHT,  SHALL  NOT
 EXCEED FIVE PERCENT NOR BE LESS THAN ONE PERCENT.
   § 5. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This  bill would increase the maximum cost-of-living adjustment (COLA)
 for retirees of the New York State  and  Local  Retirement  System.  The
 annual COLA would be capped at five percent. Currently, the cap is three
 percent.
   Insofar  as  this bill affects the New York State and Local Employees'
 Retirement  System  (NYSLERS),  the  present  value  of  benefits  would
 increase approximately $840 million.
   In  NYSLERS,  this benefit improvement will be funded by (1) billing a
 one-time  charge  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 $806 million as of March 1, 2027.
   (2) To fund prospective costs, the annual contribution required of all
 participating employers in NYSLERS  would  increase  0.04%  of  billable
 S. 7783--A                          3
 
 salary,  or  approximately  $5.5  million  to  the state of New York and
 approximately $8.2 million to local participating employers. This perma-
 nent annual cost will vary in future 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), the present value of  benefits  would
 increase approximately $94 million.
   This proposal primarily benefits current and former members of Tiers 1
 -  5.  The  cost  of this benefit improvement will primarily be borne by
 current and future members of Tier 6.
 
 NYSLPFRS                     Increase in present   Increase in required
                               value of benefits       contributions
 Pensioners                         $ 63 mn               $  0 mn
 Actives Tiers 1-5 (Closed)         $ 17 mn               $ 32 mn
 Actives Tier 6 (Open)              $ 14 mn               $ 62 mn
   Total                            $ 94 mn               $ 94 mn
 
   In NYSLPFRS, this benefit improvement will be funded by increasing the
 billing rates charged annually. The annual contribution required of  all
 participating  employers  in NYSLPFRS would increase by 0.2% of billable
 salary, or approximately $1.8 million to the state of New York and  $7.6
 million  to  local  participating  employers. This permanent annual cost
 will vary in future billing cycles with changes in the billing rate  and
 salary of the affected members.
   The  current corridor of 1% and 3% provides an average COLA percentage
 that is approximately equal  to  half  the  rate  of  inflation  over  a
 retiree's lifetime. By maintaining the 1% floor but increasing the maxi-
 mum  to  5%, this bill provides a larger retiree COLA percentage in high
 inflationary environments but results in more volatile employer contrib-
 ution rates. Prefunding COLA benefits cannot eliminate or  mitigate  the
 increased  volatility  in  the  billing  rates  caused  by  this benefit
 improvement.
   To develop the costs above, our models included a Monte  Carlo  method
 of 5,000 simulations, each consisting of 30-year CPI-U projections.
   In approximately 3,800 of the 5,000 simulations, inflation exceeded 6%
 at  least  once.  In  these  simulations, high inflationary environments
 persisted for a four-year period  on  average.  Employer  billing  rates
 increased  approximately 2.5% under this proposal, instead of 1.4% under
 current law.
   In approximately 1,400 of the 5,000  simulations,  inflation  exceeded
 10%  at least once. In these simulations, high inflationary environments
 persisted for a six-year  period  on  average.  Employer  billing  rates
 increased  approximately 4.2% under this proposal, instead of 2.1% under
 current law.
   Summary of relevant resources:
   Membership data as of March 31, 2025 was used to measure the impact of
 the bill, the same data used in the Actuarial Valuations dated April  1,
 2025. Distributions and other statistics can be found in the 2025 Report
 of  the  Actuary and the 2025 Annual Comprehensive Financial Report. The
 actuarial assumptions and methods used are described in the 2025  Annual
 Report to the Comptroller on Actuarial Assumptions, and the Codes, Rules
 and  Regulations  of  the State of New York: Audit and Control. The fair
 value of assets and GASB disclosures can be found in the 2025  Financial
 Statements and Supplementary Information.
 S. 7783--A                          4
 
   Assumptions,  demographics,  and  other  considerations  may have been
 modified to better reflect specific provisions of any  proposed  benefit
 change(s).
   This  fiscal note does not constitute a legal opinion on the viability
 of the bill, nor is it intended to serve as a substitute for the profes-
 sional judgment of an attorney.
   This estimate, dated January 9, 2026, and intended for use only during
 the 2026 Legislative Session, is Fiscal Note Number  2026-24.  As  Chief
 Actuary  of  the New York State and Local Retirement System (NYSLRS), 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.  I  am a member of NYSLRS but do not believe it
 impairs my objectivity.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   Bill Description:  This fiscal note is prepared for  legislative  bill
 draft  #08218-04-5. This bill would amend subdivision d of Section 532-a
 of the Education Law to increase the maximum allowable  upper  limit  on
 the  percentage used to compute the cost-of-living adjustment (COLA) for
 eligible retired  members.  The  upper-limit  cap  on  the  annual  COLA
 percentage  would  be  increased  from its current three percent to five
 percent. The minimum COLA percentage remains  one  percent.  The  annual
 COLA  percentage  remains  equal to fifty percent of the increase in the
 annual March-to-March Consumer Price Index (CPI). This benefit  improve-
 ment would be effective September 1, 2028.
   Cost:
   This bill would generate a cost in future years if the increase in the
 annual  March-to-March  CPI  exceeded 6.0% in any given year. The annual
 CPI last exceeded 6.0% in 2022 and before then  in  1974  through  1982.
 This bill would result in increases to the employer contribution rate if
 a  period  of  high inflation returns and the COLA rate increases beyond
 the current maximum. For each 1.0% increase over 6.0% in the annual CPI,
 the annual cost to the participating employers of  the  New  York  State
 Teachers' Retirement System is estimated to be $14.3 million or 0.07% of
 payroll.
   For example:
 Hypothetical Annual CPI  Estimated Cost
 7.0% annual CPI          $14.3 million or 0.07% of payroll
 8.0% annual CPI          $28.6 million or 0.14% of payroll
 9.0% annual CPI          $42.9 million or 0.21% of payroll
   Data:
   Member data as of June 30, 2025, prepared for the most recent actuari-
 al  valuation  was  used  in determining this cost. The most recent data
 distributions and statistics can be found in the System's Annual  Report
 for  the  fiscal year ended June 30, 2025. System assets are as reported
 in the System's financial statements which can be found in the  System's
 Annual Report. This data will also be provided in the SystemÆs Actuarial
 Valuation Report as of June 30, 2025.
   Methods and Assumptions:
   A summary of actuarial assumptions and methods will be provided in the
 System's Actuarial Valuation Report as of June 30, 2025. Further details
 can  be  found in the most recent Recommended Actuarial Assumptions 2025
 Report.
   Actuarial Certification:
 S. 7783--A                          5

   We, the undersigned actuaries for the New York State Teachers' Retire-
 ment System, certify the following:
   1.  The  actuarial  assumptions, methods, and data used are reasonable
 for the purposes of this fiscal note, internally consistent and  are  in
 accordance with standards of practice prescribed by the Actuarial Stand-
 ards Board and generally accepted actuarial principles and procedures.
   2. We relied on member data supplied by the participating employers of
 the New York State Teachers' Retirement System and assets as supplied in
 the annual Financial Statements by NYSTRS' Finance Department.
   3.  Results  were  prepared  based on our current understanding of the
 proposal as of the date of this fiscal note.  If  the  language  or  our
 understanding  of  the  proposal  changes,  the results could change and
 require the issuance of a new fiscal note. The next annual update of the
 actuarial valuation could also produce different results. Results should
 not be relied upon for any other purpose.
   4. This fiscal note was prepared in accordance  with  New  York  State
 Retirement and Social Security Law, New York State Education Law, appli-
 cable  Internal  Revenue Code, and accepted actuarial standards of prac-
 tice as of the date of this fiscal  note.  This  fiscal  note  does  not
 constitute  a  legal  opinion  on  the  viability  of  this  legislative
 proposal.
   5. We are members of the American Academy of Actuaries and the Society
 of Actuaries, and we meet the Qualification Standards  of  the  American
 Academy  of  Actuaries to render the actuarial opinion contained herein.
 We are currently compliant with the Continuing Professional  Development
 Requirement of the Society of Actuaries.
   Fiscal Note Identification:
   This Fiscal Note, 2026-19, dated January 30, 2026, was prepared by the
 Office  of the Actuary of the New York State Teachers' Retirement System
 and is intended for use only during the 2026 Legislative Session.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   SUMMARY: This proposed legislation, as it relates to the New York City
 Retirement Systems and Pension Funds (NYCRS), would increase the maximum
 COLA percentage from 3% to 5%  of  the  first  $18,000  of  the  maximum
 retirement allowance.
 
   ILLUSTRATION - EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
                     BASED ON ONE YEAR OF 8% INFLATION
           by Fiscal Year for the first 25 years ($ in Millions)
       Year   NYCERS TRS    BERS POLICE  FIRE    TOTAL
       2027   20.2   12.5   1.7  7.8     2.6     44.8
       2028   20.2   12.5   1.7  7.8     2.6     44.8
       2029   20.2   12.5   1.7  7.8     2.6     44.8
       2030   20.2   12.5   1.7  7.8     2.6     44.8
       2031   20.2   12.5   1.7  7.8     2.6     44.8
       2032   20.2   12.5   1.7  7.8     2.6     44.8
       2033   20.2   12.5   1.7  7.8     2.6     44.8
       2034   20.2   12.5   1.7  7.8     2.6     44.8
       2035   20.2   12.5   1.7  7.8     2.6     44.8
       2036   20.2   12.5   1.7  7.8     2.6     44.8
       2037   20.2   12.5   1.7  7.8     2.6     44.8
       2038   20.2   12.5   1.7  7.8     2.6     44.8
       2039   20.2   12.5   1.7  7.8     2.6     44.8
       2040   20.2   12.5   1.7  7.8     2.6     44.8
       2041   0.0    0.0    0.0  0.0     0.0     0.0
       2042   0.0    0.0    0.0  0.0     0.0     0.0
 S. 7783--A                          6

       2043   0.0    0.0    0.0  0.0     0.0     0.0
       2044   0.0    0.0    0.0  0.0     0.0     0.0
       2045   0.0    0.0    0.0  0.0     0.0     0.0
       2046   0.0    0.0    0.0  0.0     0.0     0.0
       2047   0.0    0.0    0.0  0.0     0.0     0.0
       2048   0.0    0.0    0.0  0.0     0.0     0.0
       2049   0.0    0.0    0.0  0.0     0.0     0.0
       2050   0.0    0.0    0.0  0.0     0.0     0.0
       2051   0.0    0.0    0.0  0.0     0.0     0.0
   The  increase  in employer contributions of $44.8 million is estimated
 to be $34.9 million for New York City and $9.9  million  for  the  other
 obligors of NYCRS.
 
   PRESENT  VALUE  OF  BENEFITS:  The  Present  Value  of Benefits is the
 discounted expected value of benefits paid to  current  members  if  all
 assumptions are met, including future service accrual and pay increases.
 Future new hires are not included in this present value.
 
          INITIAL INCREASE (DECREASE) IN ACTUARIAL PRESENT VALUES
                    as of June 30, 2025 ($ in Millions)
 Present Value (PV)                 NYCERS  TRS    BERS   POLICE  FIRE
 (1) PV of Employer Contributions:  170.9   105.5  14.3   66.1    22.1
 (2) PV of Employee Contributions:  0.0     0.0    0.0    0.0     0.0
 Total PV of Benefits (1) + (2):    170.9   105.5  14.3   66.1    22.1
 
   UNFUNDED  ACCRUED  LIABILITY  (UAL): Actuarial Accrued Liabilities are
 the portion of the Present Value of Benefits allocated to past  service.
 For  purposes  of  this fiscal note, the illustrated changes in UAL were
 recognized as experience losses.
 
                AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
                                    NYCERS  TRS      BERS    POLICE  FIRE
 Increase (Decrease) in UAL:        170.9 M 105.5 M  14.3 M  66.1 M  22.1 M
 Number of Payments:                14      14       14      14      14
 Amortization Payment:              20.2 M  12.5 M   1.7 M   7.8 M   2.6 M
 
   CENSUS DATA: The estimates presented herein are based  on  preliminary
 census  data  collected  as  of  June  30, 2025. The census data for the
 impacted population is summarized below.
 
                                    NYCERS  TRS      BERS    POLICE  FIRE
 Receiving Members
 - Number Count:                    175,815 95,699   21,602  56,371  17,043
 - Average Age:                     72.2    75.3     74.3    63.5    67.7
 
   IMPACT ON MEMBER  BENEFITS:  Currently,  the  annual  COLA  percentage
 applied  to benefits of up to $18,000 is equal to the annual increase in
 the Consumer Price Index -  Urban  (CPI-U)  as  of  the  previous  March
 divided  by  two, rounded to the nearest tenth of a percent, and limited
 to not less than 1% and not greater than 3%.
   Under the proposed bill, the upper limit of the maximum COLA  percent-
 age would be changed to not greater than 5%.
   The  following  table  provides examples of the impact of the proposed
 bill on the annual COLA percentage applied to benefits of up to $18,000:
 S. 7783--A                          7
 
 Annual Increase in the   Annual COLA Percentage applied to
 CPI-U as of March           benefits of up to $18,000
                               Current Law    Proposed Bill
 1.8%                          1.0%           1.0%
 3.2%                          1.6%           1.6%
 8.0%                          3.0%           4.0%
 12.0%                         3.0%           5.0%
 
   ASSUMPTIONS  AND  METHODS:  The  estimates  presented herein have been
 calculated based on the Revised 2021 Actuarial Assumptions  and  Methods
 of the impacted retirement systems.
   Based on the current economic assumptions future COLA is assumed to be
 1.5%,  which  is  below  the  current 3% maximum COLA. To illustrate the
 potential cost of this proposed legislation, the  costs  shown  in  this
 fiscal  note  are based on a hypothetical one-year increase in the CPI-U
 as of March 2026 equal to 8.00%.
   RISK AND UNCERTAINTY: The costs presented in this Fiscal  Note  depend
 highly  on  the  actuarial  assumptions, methods, and models used, demo-
 graphics of the impacted population, and other factors such  as  invest-
 ment,  contribution, and other risks. If actual experience deviates from
 actuarial  assumptions,  the  actual  costs  could  differ  from   those
 presented  herein.  Quantifying  these risks is beyond the scope of this
 Fiscal Note.
   This Fiscal Note is intended to measure  pension-related  impacts  and
 does  not  include other potential costs (e.g., administrative and Other
 Postemployment Benefits). This Fiscal Note does not reflect any  chapter
 laws that may have been enacted during the current legislative session.
   STATEMENT OF ACTUARIAL OPINION: Marek Tyszkiewicz and Gregory Zelikov-
 sky  are members of the Society of Actuaries and the American Academy of
 Actuaries. We are members of NYCERS, but do not believe it  impairs  our
 objectivity,  and  we  meet  the Qualification Standards of the American
 Academy of Actuaries to render the actuarial opinion  contained  herein.
 To  the  best  of  our 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  2026-85  dated  May  12,
 2026  was prepared by the Chief Actuary for the New York City Retirement
 Systems and Pension Funds and is intended for use only during  the  2026
 Legislative Session.