S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8087
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                               May 15, 2025
                                ___________
 
 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 definition of overtime ceiling
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subdivision l of section 601 of the retirement and social
 security law, as amended by chapter 368 of the laws of 2017, is  amended
 to read as follows:
   l. (a) "Wages" shall mean regular compensation earned by and paid to a
 member  by a public employer, except that for members who first join the
 New York state and local employees' retirement system or  the  New  York
 state  teachers'  retirement system on or after January first, two thou-
 sand ten, overtime compensation paid in any year in excess of the  over-
 time  ceiling,  as defined by this subdivision, shall not be included in
 the definition of wages.
   (b) "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.
   (c) The "overtime ceiling" shall mean  fifteen  thousand  dollars  per
 annum  on  January  first,  two  thousand ten, and shall be increased by
 three per cent each year thereafter, provided, however, that:
   (i) for members who first become members of a public retirement system
 of the state on or after April first, two thousand twelve, OTHER THAN  A
 PENSION  AUTHORIZED  UNDER  SECTION  SIX HUNDRED FOUR-B OF THIS ARTICLE,
 "overtime ceiling" shall mean fifteen  thousand  dollars  per  annum  on
 April first, two thousand twelve, and shall be increased each year ther-
 eafter  by  a  percentage  to be determined annually by reference to the
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09452-02-5
              

 S. 8087                             2
 
 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  the  annual  inflation  as  determined  from  the increase in the
 consumer price index in the one year period ending on the December thir-
 ty-first preceding the overtime  ceiling  adjustment  effective  on  the
 ensuing April first.
   (ii)  Commencing  January  first, two thousand eighteen, and each year
 thereafter, the overtime ceiling percentage shall  be  increased  by  an
 amount  equal to the annual inflation as determined from the increase in
 the consumer price index in the one year period ending on the  September
 thirtieth  prior  to  the  overtime  ceiling adjustment effective on the
 ensuing January first.
   (d) For members who first join a public retirement system of the state
 on or after April first, two thousand twelve, the following items  shall
 not  be  included  in the definition of wages: 1. wages in excess of the
 annual salary paid to the governor pursuant to section three of  article
 four  of  the  state  constitution,  2.  lump  sum payments for deferred
 compensation, sick leave, accumulated vacation or other credits for time
 not worked, 3. any form of termination pay, 4.  any  additional  compen-
 sation paid in anticipation of retirement, and 5. in the case of employ-
 ees  who  receive  wages  from three or more employers in a twelve month
 period, the wages paid by the third and each additional employer.
   § 2. This act shall take effect immediately.
   FISCAL NOTE.-- Pursuant to Legislative Law, Section 50:
   SUMMARY: This proposed legislation would remove the  Overtime  Ceiling
 for  Tier  6  New York City Transit Authority (NYCTA) members subject to
 the 25-Year and Age 55 Retirement Program (the  55/25  NYCTA  Plan)  for
 wages used to calculate member contributions and pension benefits.
 
          EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
           by Fiscal Year for the first 25 years ($ in Millions)
 
                          Year      NYCERS

                          2026        20.2
                          2027        21.1
                          2028        22.1
                          2029        23.1
                          2030        24.0
                          2031        25.0
                          2032        26.0
                          2033        27.0
                          2034        28.1
                          2035        29.2
                          2036        30.2
                          2037        31.3
                          2038        32.4
                          2039        33.5
                          2040        34.6
                          2041        35.7
                          2042        26.1
                          2043        27.2
                          2044        28.2
                          2045        29.3
                          2046        30.3
 S. 8087                             3
 
                          2047        31.3
                          2048        32.3
                          2049        33.3
                          2050        34.3
 
  Projected contributions include future new hires that may be impacted.
 For Fiscal Year 2051 and beyond, the expected increase in normal cost as
 a level percent of pay for impacted new entrants is approximately 0.45%.
 
   The entire increase in employer contributions will be allocated to the
 New York City Transit Authority.
 
   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, 2024 ($ in Millions)
 
              Present Value (PV)                 NYCERS
 
              (1) PV of Employer Contributions:  220.1
              (2) PV of Employee Contributions:  84.3
              Total PV of Benefits (1) + (2):    304.3
 
   UNFUNDED  ACCRUED  LIABILITY  (UAL): Actuarial Accrued Liabilities are
 the portion of the Present Value of Benefits allocated to past  service.
 Changes  in UAL were amortized over the expected remaining working life-
 time of those impacted using level dollar payments.
 
                AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
 
                                                 NYCERS
 
              Increase (Decrease) in UAL:        97.0 M
              Number of Payments:                16
              Amortization Payment:              10.6 M
 
   CENSUS DATA: The estimates presented herein are based  on  preliminary
 census  data  collected  as  of  June  30, 2024. The census data for the
 impacted population is summarized below.
 
                                                 NYCERS
              Active Members
 
              - Number Count:                    21,909
              - Average Age:                     43.2
              - Average Service:                 5.4
              - Average Salary:                  86,000
 
   IMPACT ON MEMBER BENEFITS AND CONTRIBUTIONS: Under the proposed legis-
 lation, the Overtime Ceiling would become inapplicable  to  participants
 in the Tier 6 55/25 NYCTA Plan. As a result, overtime earnings exceeding
 the  Overtime  Ceiling  would be included in determining member contrib-
 ution rates and annual contributions to be paid by the  member.  Partic-
 S. 8087                             4
 
 ipants  may be entitled to a higher annual pension benefit if such earn-
 ings increase their Final Average Salary.
   ASSUMPTIONS  AND  METHODS:  The  estimates  presented herein have been
 calculated based on the Revised 2021 Actuarial Assumptions  and  Methods
 of the impacted retirement systems. In addition:
   * Future overtime earnings exceeding the Overtime Ceiling were assumed
 to  remain  level  based  on reported overtime for the last three fiscal
 years.
   * New entrants were assumed to replace exiting members so  that  total
 payroll  increases  by 3% each year for NYC Transit members. New entrant
 demographics were developed based on data for recent new hires and actu-
 arial judgement.
   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  2025-62  dated  May  14,
 2025  was prepared by the Chief Actuary for the New York City Retirement
 Systems and Pension Funds and is intended for use only during  the  2025
 Legislative Session.