STATE OF NEW YORK
________________________________________________________________________
7023--A
2023-2024 Regular Sessions
IN ASSEMBLY
May 10, 2023
___________
Introduced by M. of A. PHEFFER AMATO, KELLES, LEVENBERG, THIELE, GANDOL-
FO, BURDICK -- read once and referred to the Committee on Governmental
Employees -- recommitted to the Committee on Governmental Employees in
accordance with Assembly Rule 3, sec. 2 -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
AN ACT to amend the retirement and social security law and the education
law, in relation to increasing the base benefit amount for computation
of pension 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. Subdivisions c and d of section 78-a of the retirement and
2 social security law, as added by chapter 125 of the laws of 2000, are
3 amended to read as follows:
4 c. [Said] (i) In calendar years two thousand two through two thousand
5 twenty-four, said cost-of-living adjustment shall be computed on a base
6 benefit amount not to exceed eighteen thousand dollars of the annual
7 retirement allowance defined in subdivision b of this section.
8 (ii) In calendar year two thousand twenty-five and thereafter, said
9 cost-of-living adjustment shall be computed on a base benefit amount not
10 to exceed twenty-one thousand dollars of the annual retirement allowance
11 defined in subdivision b of this section, except that effective on the
12 first day of September, two thousand twenty-five, the cost-of-living
13 adjustment shall be computed on a base benefit amount not to exceed
14 twenty-one thousand dollars of the annual retirement allowance defined
15 in subdivision b of this section.
16 d. The percentage referred to in this section shall be determined
17 annually by reference to the consumer price index (all urban consumers,
18 CPI-U, U.S. city average, all items, 1982-84=100), published by the
19 United States bureau of labor statistics, for each applicable calendar
20 year. Said percentage shall equal fifty percent of the annual inflation,
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09889-07-4
A. 7023--A 2
1 as determined from the increase in the consumer price index in the one
2 year period ending on the March thirty-first prior to the cost-of-living
3 adjustment effective on the ensuing September first. [Said] (i) In
4 calendar years two thousand two through two thousand twenty-three, said
5 percentage shall equal one hundred percent of the annual inflation, as
6 determined from the increase in the consumer price index in the one-year
7 period ending on the March thirty-first prior to the cost-of-living
8 adjustment effective on the next succeeding September first.
9 (ii) In calendar year two thousand twenty-four and thereafter, said
10 percentage shall then be rounded up to the next higher one-tenth of one
11 percent and shall not exceed three percent nor be less than one percent,
12 except that, commencing the first day of September, two thousand twen-
13 ty-five, the cost-of-living adjustments paid between the first day of
14 September, two thousand two and the first day of September, two thousand
15 twenty-three shall equal one hundred percent of the annual inflation, as
16 determined from the increase in the consumer price index in the one year
17 period ending on the March thirty-first prior to the cost-of-living
18 adjustment effective on the ensuing September first. Said percentage
19 shall then be rounded up to the next higher one-tenth of one percent and
20 shall not exceed three percent nor be less than one percent.
21 § 2. Subdivisions c and d of section 378-a of the retirement and
22 social security law, as added by chapter 125 of the laws of 2000, are
23 amended to read as follows:
24 c. Said cost-of-living adjustment shall be computed on a base benefit
25 amount not to exceed eighteen thousand dollars of the annual retirement
26 allowance defined in subdivision b of this section, except that, effec-
27 tive on the first day of September, two thousand twenty-five, the cost-
28 of-living adjustment shall be computed on a base benefit amount not to
29 exceed twenty-one thousand dollars of the annual retirement allowance
30 defined in subdivision b of this section.
31 d. The percentage referred to in this section shall be determined
32 annually by reference to the consumer price index (all urban consumers,
33 CPI-U, U.S. city average, all items, 1982-84=100), published by the
34 United States bureau of labor statistics, for each applicable calendar
35 year. Said percentage shall equal fifty percent of the annual inflation,
36 as determined from the increase in the consumer price index in the one
37 year period ending on the March thirty-first prior to the cost-of-living
38 adjustment effective on the ensuing September first. Said percentage
39 shall then be rounded up to the next higher one-tenth of one percent and
40 shall not exceed three percent nor be less than one percent, except
41 that, commencing the first day of September, two thousand twenty-five,
42 the cost-of-living adjustments paid between the first day of September,
43 two thousand two and the first day of September, two thousand twenty-two
44 shall equal one hundred percent of the annual inflation, as determined
45 from the increase in the consumer price index in the one year period
46 ending on the March thirty-first prior to the cost-of-living adjustment
47 effective on the ensuing September first. Said percentage shall then be
48 rounded up to the next higher one-tenth of one percent and shall not
49 exceed three percent nor be less than one percent.
50 § 3. Subdivisions c and d of section 532-a of the education law, as
51 added by chapter 125 of the laws of 2000, are amended to read as
52 follows:
53 c. Said cost-of-living adjustment shall be computed on a base benefit
54 amount not to exceed eighteen thousand dollars of the annual retirement
55 allowance defined in subdivision b of this section, except that effec-
56 tive on the first day of September, two thousand twenty-five, the cost-
A. 7023--A 3
1 of-living adjustment shall be computed on a base benefit amount not to
2 exceed twenty-one thousand dollars of the annual retirement allowance
3 defined in subdivision b of this section.
4 d. The percentage referred to in this section shall be determined
5 annually by reference to the consumer price index (all urban consumers,
6 CPI-U, U.S. city average, all items, 1982-84=100), published by the
7 United States bureau of labor statistics, for each applicable calendar
8 year. Said percentage shall equal fifty percent of the annual inflation,
9 as determined from the increase in the consumer price index in the one
10 year period ending on the March thirty-first prior to the cost-of-living
11 adjustment effective on the ensuing September first. Said percentage
12 shall then be rounded up to the next higher one-tenth of one percent and
13 shall not exceed three percent nor be less than one percent, except
14 that, commencing the first day of September, two thousand twenty-five,
15 the cost-of-living adjustments paid between the first day of September,
16 two thousand two and the first day of September, two thousand twenty-
17 three shall equal one hundred percent of the annual inflation, as deter-
18 mined from the increase in the consumer price index in the one year
19 period ending on the March thirty-first prior to the cost-of-living
20 adjustment effective on the ensuing September first. Said percentage
21 shall then be rounded up to the next higher one-tenth of one percent and
22 shall not exceed three percent nor be less than one percent.
23 § 4. Notwithstanding any other provision of law to the contrary, none
24 of the provisions of this act shall be subject to section 25 of the
25 retirement and social security law.
26 § 5. This act shall take effect September 1, 2025; provided, however,
27 that no benefits payable prior to the first day of September two thou-
28 sand twenty-five shall be affected by this act.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would provide an increase in the defined benefit cost-of-
living adjustment (COLA) for the New York State and Local Retirement
System. Starting with payments in September 2025, the annual COLA will
be computed on a base benefit amount not to exceed $21,000. Currently,
the base benefit amount does not exceed $18,000. Additionally, the COLA
increment from 2002 to 2023 will be recomputed based on one hundred
percent of annual inflation without retroactive payments. Future COLA
increments will be based on fifty percent of annual inflation.
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.
Insofar as this bill affects the New York State and Local Employees'
Retirement System (NYSLERS), the increased costs would be shared by the
State of New York and the local participating employers in the NYSLERS.
If this bill were enacted during the 2024 Legislative Session, the
increase in the present value of benefits would be approximately $5.43
billion.
NYSLERS Increase in present Increase in required
value benefits contributions
Tiers 1 - 5 $5.29 billion $2.92 billion
Tier 6 $0.14 billion $2.51 billion
Total $5.43 billion $5.43 billion
In the NYSLERS, 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
A. 7023--A 4
participating employers in NYSLERS is 1.9% of billable salary, or
approximately $240 million to the State of New York and approximately
$360 million to the local participating employers. This permanent annualcost will vary in subsequent 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 increased costs would be shared
by the State of New York and the local participating employers in the
NYSLPFRS. If this bill were enacted during the 2024 Legislative
Session, the increase in the present value of benefits would be approxi-
mately $626 million.
NYSLPFRS Increase in present Increase in required
value benefits contributions
Tiers 1 - 5 $604 million $299 million
Tier 6 $22 million $327 million
Total $626 million $626 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 1.3% of billable salary, or
approximately $11 million to the State of New York and approximately $46
million to the local participating employers. This permanent annual cost
will vary in subsequent billing cycles with changes in the billing rate
and salary of the affected members.
Further, we anticipate significant administrative costs to implement
the provisions of this legislation.
Summary of relevant resources:
Membership data as of March 31, 2023 was used in measuring the impact
of the proposed change, the same data used in the April 1, 2023 actuari-
al valuation. Distributions and other statistics can be found in the
2023 Report of the Actuary and the 2023 Annual Comprehensive Financial
Report.
The actuarial assumptions and methods used are described in the 2023
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, 2023
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 1, 2024, and intended for use only during
the 2024 Legislative Session, is Fiscal Note No. 2024-47, prepared by
the Actuary for the New York State and Local Retirement System.