A09496 Summary:

BILL NOA09496
 
SAME ASSAME AS S06282
 
SPONSORSteck
 
COSPNSRColton
 
MLTSPNSR
 
Amd 78-a & 378-a, R & SS L; amd 532-a, Ed L; amd 13-696, NYC Ad Cd
 
Provides a cost-of-living adjustment for members of retirement systems.
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A09496 Actions:

BILL NOA09496
 
03/10/2016referred to governmental employees
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A09496 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A9496
 
SPONSOR: Steck
  TITLE OF BILL: 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   PURPOSE: To provide a cost-of-living adjustment for members of retirement systems by increasing the base benefit amount for computation to $25,000.   SUMMARY OF PROVISIONS: Section 1 amends § 78-a(c) of the Retirement and Social Security Law to provide that beginning September 1, 2016, the cost of living adjustment shall be computed on a base benefit amount not to exceed $25,000 of the annual retirement allowance. Section 2 amends § 378-a(c) of the Retirement and Social Security Law to provide that beginning September 1, 2016, the cost of living adjustment shall be computed on a base benefit amount not to exceed $25,000 of the annual retirement allowance. Section 3 amends § 532-a(c) of the Education Law to provide that begin- ning September 1, 2016, the cost of living adjustment shall be computed on a base benefit amount not to exceed $25,000 of the annual retirement allowance. Section 4 amends § 13-696(c) of the Administrative Code of the City of New York to provide that provide that beginning September 1, 2016, the cost of living adjustment shall be computed on a base benefit amount not to exceed $25,000 of the annual retirement allowance. Section 5 provides the effective date.   EXISTING LAW: Section 78-a of the Retirement and Social Security Law relates to the cost-of-living adjustment for retirement plans applicable to members of the New York State Employees' Retirement System generally. Pursuant to this title, a cost-of-living adjustment is payable to all pensioners who have attained age 62 and have been retired for five years, all pension- ers who have attained age 55 and have been retired for ten years, all disability pensioners regardless of age who have been retired for five years; and all recipients of an accidental death benefit regardless of age who have been receiving such benefit for five years. Subdivision (c) provides the cost-of-living adjustment shall be computed on a base benefit amount to exceed $18,000 of the annual retirement allowance defined in subdivision (b) of this section. Subdivision (b) provides the cost-of-living adjustment shall be a percentage of the annual retirement allowance otherwise payable, computed without optional modification, but including any benefit derived from subdivision (f) of this section and any prior year's cost- of-living adjustment derived from this section. Said percentage is set forth is subdivision (d) of this section. Subdivision (f) provides that all retired members who have retired prior to 1997 and meet the eligibility criteria listed above, shall be paid an adjusted benefit in monthly installments. The adjusted benefit shall be equal to a percentage of the change in Consumer Price Index, published by the United States Bureau of of retirement according to the Labor Statistics, measured from the year following schedule: Year of retirement Percentage 1968 through 1996 50% 1966 and 1967 55% 1965 60% 1964 65% 1936 70% 1962 80% 1961 90% Prior to 1961 100% The adjusted benefit shall be computed on a base benefit amount not to exceed $18,000 of the retirement allowance otherwise payable, computed without modification. Any benefit received pursuant to this subdivision shall be in lieu of any benefit received pursuant to § 78 of the Retire- ment and Social Security Law. Subdivision (d) provides that the percentage shall be determined annual- ly by reference to the Consumer Price Index, published by the United States Bureau of Labor Statistics, for year applicable calendar year. The percentage shall equal 50% of the annual inflation, as determined from the increase in the Consumer Price Index in the one year period ending on the March 31 prior to the cost-of-living adjustment effecting on the ensuing September 1st. The percentage is rounded up to the next higher one-tenth of one percent and shall not exceed 3% not be less than 1%. Section 378-a of the Retirement and Social Security Law relates to the cost of living adjustment for retirement plans applicable to members of the New York State Policemen's and Firemen's Retirement System general- ly. Pursuant to this section, a cost-of-living adjustment shall be paya- ble to all pensioners who have attained age 62 and have been retired for five years, all pensioners who have attained age 55 and have been retired for ten years, and all disability pensioners regardless of age who have been retired for five years. Subdivision (c) currently provides, the cost-of-living adjustment shall be computed on a base benefit amount to exceed $18,000 of the annual retirement allowance defined in subdivision (b) of this section. Subdivision (b) provides the cost-of-living adjustment shall be a percentage of the annual retirement allowance otherwise payable, computed without optional modification, but including any benefit derived from subdivision (1) of this section and any prior year's cost- of-living adjustment derived from this section. Said percentage is set forth is subdivision (d) of this section. Subdivision (f) provides that all retired members who have retired prior to 1997 and meet the eligibility criteria shall be paid an adjusted benefit in monthly installments. The adjusted benefit shall be equal to a percentage of the change in Consumer Price Index, published by the United States Bureau of Labor Statistics, measured from the year of retirement according to the following schedule: Year of retirement Percentage 1968 through 1996 50% 1966 and 1967 55% 1965 60% 1964 65% 1936 70% 1962 80% 1961 90% Prior to 1961 100% The adjusted benefit shall be computed on a base benefit amount not to exceed $18,000 of the retirement allowance otherwise payable, computed without modification. Any benefit received pursuant to this subdivision shall be in lieu of any benefit received pursuant to § 378 of the Retirement and Social Security Law. Subdivision (d) provides that the percentage shall be determined annual- ly by reference to the Consumer Price Index, published by the United States Bureau of Labor Statistics, for year applicable calendar year. The percentage shall equal 50% of the annual inflation, as determined from the increase in the Consumer Price Index in the one year period ending on the March 31 prior to the cost-of-living adjustment effecting on the ensuing September 1st. The percentage is rounded up to the next higher one-tenth of one percent and shall not exceed 3% not be less than 1%. Section 532-a of the Education Law pertains to the cost-of-living adjustment for retirement plans applicable to members of the State Teachers' Retirement System for Public School Teachers. Pursuant to this title, a cost-of-living adjustment is payable to all pensioners who have attained age 62 and have been retired for five years, all pensioners who have attained age 55 and have been retired for ten years, all disability pensioners regardless of age who have been retired for five years; and all recipients of an accidental death benefit regardless of age who have been receiving such benefit for five years. Subdivision (c) provides the cost-of-living adjustment shall be computed on a base benefit amount to exceed $18,000 of the annual retirement allowance defined in subdivision (b) of this section. Subdivision (b) provides the cost-of-living adjustment shall be a percentage of the annual retirement allowance otherwise payable, computed without optional modification, excluding any annuity derived from voluntary contributions made by members, except those made pursuant to elections under § 511-a(1) or § 516(3)(c) of this article, but including any benefit derived from subdivision (f) of this section. The percentage is set for in subdivision (d) of this section. Subdivision (f) provides that all retired members who have retired prior to 1997 and meet the eligibility criteria shall be paid an adjusted benefit in monthly installments. The adjusted benefit shall be equal to a percentage of the change in Consumer Price Index, published by the United States Bureau of Labor Statistics, measured from the year of retirement according to the following schedule: Year of retirement Percentage 1968 through 1996 50% 1966 and 1967 55% 1965 60% 1964 65% 1936 70% 1962 80% 1961 90% Prior to 1961 100% The adjusted benefit is computed on a base benefit amount not to exceed $18,000 of the retirement allowance otherwise payable, computed without optional modification excluding any annuity derived from voluntary contributions made by members, except those made pursuant to elections under § 511-a(1) or § 516(3)(c) of this article. Any benefits received pursuant to § 532 of this Article, unless such benefits are in excess of those provided by this section, in which case such benefits shall be paid by the retirement system pursuant to such provision. Subdivision (d) provides that the percentage shall be determined annual- ly by reference to the Consumer Price Index, published by the United States Bureau of Labor Statistics, for year applicable calendar year. The percentage shall equal 50% of the annual inflation, as determined from the increase in the Consumer Price Index in the one year period ending on the March 31 prior to the cost-of-living adjustment effecting on the ensuing September 1st. The percentage is rounded up to the next higher one-tenth of one percent and shall not exceed 3% not be less than 1%. Section 511-a of the Education Law refers to a special service retire- ment allowance. Section 516 Education Law refers to the annuity savings fund, including contributions and payments. Subdivision (3)(c) provides that any member by written notice duly acknowledged and filed with the retirement board before July 1, 1967 or within two years after he last became a member, whichever is later, may elect to contribute to the annuity savings fund in order to qualify for an increased pension for total service in excess of 25 years. Section 532 of the Education Law refers to the supplemental retirement allowance. A supplemental retirement allowance shall be paid to pension- ers who have retired from the retirement system prior to the calendar year 1994. Section 13-696 of the Administrative Code of the City of New York pertains to the cost-of-living adjustment for members of the New York City Employees' 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, and the Relief and Pension Fund of the Department of Street Cleaning. Subdivision (c) provides the cost-of-living adjustment shall be computed on a base benefit amount to exceed $18,000 of the annual retirement allowance defined in subdivision b of this section. Subdivision (b) provides the cost-of-living adjustment shall be a percentage of the annual retirement allowance otherwise payable, computed without optional modification, but including any benefit derived from subdivision (f) of this section and any prior year's cost-of-living adjustment derived from this section. The percentage is set for in subdivision (d) of this section. Subdivision (f) provides that all retired members who have retired prior to 1997 and meet the eligibility criteria shall be paid an adjusted benefit in monthly installments. The adjusted benefit shall be equal to a percentage of the change in Consumer Price Index, published by the United States Bureau of Labor Statistics, measured from the year of retirement according to the following schedule: Year of retirement Percentage 1968 through 1996 50% 1966 and 1967 55% 1965 60% 1964 65% 1936 70% 1962 80% 1961 90% Prior to 1961 100% The adjusted benefit is computed on a base benefit amount not to exceed $18,000 of the retirement allowance otherwise payable, computed without optional modification excluding any annuity derived from voluntary contributions made by members, except those made pursuant to elections under § 511-a(1) or § 516(3)(c) of this article. Any benefits received pursuant to § 532 of this Article, unless such benefits are in excess of those provided by this section, in which case such benefits shall be paid by the retirement system pursuant to such provision. Subdivision (d) provides that the percentage shall be determined annual- ly by reference to the Consumer Price Index, published by the United States Bureau of Labor Statistics, for year applicable calendar year. The percentage shall equal 50% of the annual inflation, as determined from the increase in the Consumer Price Index in the one year period ending on the March 31 prior to the cost-of-living adjustment effecting on the ensuing September 1st. The percentage is rounded up to the next higher one-tenth of one percent and shall not exceed 3% not be less than 1%.   JUSTIFICATION: This legislation provides a cost-of-living adjustment for members of the New York State Employees' Retirement System, New York State Policemen's and Firemen's Retirement System, New York State Policemen's and Fire- men's Retirement System, the New York City Employees' 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, and the Relief and Pension Fund of the Department of Street Cleaning, by increasing the base benefit amount to $25,000 from the current annual retirement allowance of $18,000. As incomes of active employees continue to rise to meet cost-of-living concerns, the caps placed on COLA covered benefits further erodes retirement income of those affected retirees. In particular, as noted above, medical costs including co-payments, premiums, and medication, have been rising at a rate far in excess of the CPR. Recent federal amendments to the Medicaid law, especially the prescription drug cover- age, are likely to cause a significant increase in retired public employee health care costs. By increasing the annual retirement allow- ance this bill will help ensure public retirees achieve a dignified and secure retirement and allowing them to continue to contribute more effectively to the long-term health of our economy.   LEGISLATIVE HISTORY: 2009: S.1816 - Referred to Civil Service & pensions 2008: S.7862 Referred to Civil Service & Pensions/A.8373 - Referred to Governmental Employees. 2007: S.7862 Referred to Civil Service & Pensions/A.8373 - Referred to Governmental Employees. 2006: S.4451 - Referred to Civil Service and Pensions/A.7236 - Referred to Governmental Employees. 2005: S.4451- Referred to Civil Service & Pensions A.7236 - Referred to Governmental Employees. 2004: A.10825 - Referred to Governmental Employees.   FISCAL IMPLICATIONS:   EFFECTIVE DATE: This act shall take effect immediately.
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A09496 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          9496
 
                   IN ASSEMBLY
 
                                     March 10, 2016
                                       ___________
 
        Introduced  by M. of A. STECK -- read once and referred to the Committee
          on Governmental Employees
 
        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:
 
     1    Section  1. Subdivision c of section 78-a of the retirement and social
     2  security law, as added by chapter 125 of the laws of 2000, is amended to
     3  read as follows:
     4    c. Said cost-of-living adjustment shall be computed on a base  benefit
     5  amount  not to exceed eighteen thousand dollars of the annual retirement
     6  allowance defined in subdivision b of this section.   Effective  on  the
     7  first  day  of  September,  two  thousand  sixteen,  said cost-of-living
     8  adjustment shall be computed on a base  benefit  amount  not  to  exceed
     9  twenty-five  thousand dollars of the annual retirement allowance defined
    10  in subdivision b of this section.
    11    § 2. Subdivision c of section 378-a of the retirement and social secu-
    12  rity law, as added by chapter 125 of the laws of  2000,  is  amended  to
    13  read as follows:
    14    c.  Said cost-of-living adjustment shall be computed on a base benefit
    15  amount not to exceed eighteen thousand dollars of the annual  retirement
    16  allowance  defined  in  subdivision b of this section.  Effective on the
    17  first day  of  September,  two  thousand  sixteen,  said  cost-of-living
    18  adjustment  shall  be  computed  on  a base benefit amount not to exceed
    19  twenty-five thousand dollars of the annual retirement allowance  defined
    20  in subdivision b of this section.
    21    §  3. Subdivision c of section 532-a of the education law, as added by
    22  chapter 125 of the laws of 2000, is amended to read as follows:
    23    c. Said cost-of-living adjustment shall be computed on a base  benefit
    24  amount  not to exceed eighteen thousand dollars of the annual retirement
    25  allowance defined in subdivision b of this section.   Effective  on  the
    26  first  day  of  September,  two  thousand  sixteen,  said cost-of-living
    27  adjustment shall be computed on a base  benefit  amount  not  to  exceed
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11017-02-5

        A. 9496                             2
 
     1  twenty-five  thousand dollars of the annual retirement allowance defined
     2  in subdivision b of this section.
     3    § 4. Subdivision c of section 13-696 of the administrative code of the
     4  city  of  New  York,  as  added  by  chapter 125 of the laws of 2000, is
     5  amended to read as follows:
     6    c. Said cost-of-living adjustment shall be computed on a base  benefit
     7  amount  not  to  exceed  eighteen  thousand  dollars of the annual fixed
     8  retirement allowance defined in subdivision b of this section.    Effec-
     9  tive  on the first day of September, two thousand sixteen, said cost-of-
    10  living adjustment shall be computed on a  base  benefit  amount  not  to
    11  exceed  twenty-five  thousand dollars of the annual retirement allowance
    12  defined in subdivision b of this section.
    13    § 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 2016 the annual cost of living adjust-
        ment will be computed on a base benefit amount not to exceed $25,000.
          Insofar as this bill affects the New York State and  Local  Employees'
        Retirement  System,  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. If this bill were enacted,  the  increase
        in the present value of benefits would be approximately $2.14 billion.
          Insofar  as  this bill affects the New York State and Local Police and
        Fire Retirement System (PFRS), the increased costs would  be  shared  by
        the  State  of  New York and the participating employers in the PFRS. If
        this bill were enacted, the increase in the present  value  of  benefits
        would be approximately $309 million. The estimated first year cost would
        be approximately $6.73 million to the State of New York and approximate-
        ly $30.3 million to the participating employers in the PFRS.
          Summary of relevant resources:
          The  membership  data  used  in  measuring  the impact of the proposed
        change was the same as that used in the March 31, 2015  actuarial  valu-
        ation.    Distributions  and  other  statistics can be found in the 2015
        Report of the  Actuary  and  the  2015  Comprehensive  Annual  Financial
        Report.
          The  actuarial  assumptions and methods used are described in the 2015
        Annual Report to the Comptroller on Actuarial Assumptions, 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, 2015
        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 estimate, dated December 4, 2015 and intended for use only during
        the  2016  Legislative  Session, is Fiscal Note No. 2016-13, prepared by
        the Actuary for the New  York  State  and  Local  Employees'  Retirement
        System  and  the  New  York  State  and Local Police and Fire Retirement
        System.
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