STATE OF NEW YORK
________________________________________________________________________
7309--A
2023-2024 Regular Sessions
IN ASSEMBLY
May 17, 2023
___________
Introduced by M. of A. PHEFFER AMATO -- 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 committee
AN ACT to amend the retirement and social security law, in relation to
setting the increase to the overtime ceiling as a fixed percentage
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph (c) of subdivision 24 of section 501 of the
2 retirement and social security law, as amended by chapter 368 of the
3 laws of 2017, is amended to read as follows:
4 (c) [(i)] The "overtime ceiling" shall mean fifteen thousand dollars
5 per annum on January first, two thousand ten, and shall be increased by
6 three percent each year thereafter, provided, however, that [for]:
7 (i) For members who first become members of the New York state and
8 local employees' retirement system on or after April first, two thousand
9 twelve, "overtime ceiling" shall mean fifteen thousand dollars per annum
10 on April first, two thousand twelve, and shall be increased each year
11 thereafter by a percentage to be determined annually by reference to the
12 consumer price index (all urban consumers, CPI-U, U.S. city average, all
13 items, 1982-84=100), published by the United States bureau of labor
14 statistics, for each applicable calendar year. Said percentage shall
15 equal the annual inflation as determined from the increase in the
16 consumer price index in the one year period ending on the December thir-
17 ty-first preceding the overtime ceiling adjustment effective on the
18 ensuing April first.
19 (ii) Commencing January first, two thousand eighteen, and each year
20 thereafter, the overtime ceiling percentage shall be increased by an
21 amount equal to the annual inflation as determined from the increase in
22 the consumer price index in the one year period ending on the September
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03497-10-4
A. 7309--A 2
1 thirtieth prior to the overtime ceiling adjustment effective on the
2 ensuing January first.
3 (iii) Commencing January first, two thousand twenty-five, and each
4 year thereafter, for members who first become members of the New York
5 state and local employees' retirement system on or after April first,
6 two thousand twelve, the overtime ceiling percentage increase shall be
7 equal to the greater of: (A) three percent, or (B) the annual inflation
8 as determined from the increase in the consumer price index in the one
9 year period ending on the September thirtieth prior to the overtime
10 ceiling adjustment effective on the ensuing January first.
11 § 2. Paragraph (c) of subdivision l of section 601 of the retirement
12 and social security law, as amended by chapter 368 of the laws of 2017,
13 is amended to read as follows:
14 (c) The "overtime ceiling" shall mean fifteen thousand dollars per
15 annum on January first, two thousand ten, and shall be increased by
16 three [per cent] percent each year thereafter, provided, however, that:
17 (i) [for] For members who first become members of a public retirement
18 system of the state on or after April first, two thousand twelve, "over-
19 time ceiling" shall mean fifteen thousand dollars per annum on April
20 first, two thousand twelve, and shall be increased each year thereafter
21 by a percentage to be determined annually by reference to the consumer
22 price index (all urban consumers, CPI-U, U.S. city average, all items,
23 1982-84=100), published by the United States bureau of labor statistics,
24 for each applicable calendar year. Said percentage shall equal the annu-
25 al inflation as determined from the increase in the consumer price index
26 in the one year period ending on the December thirty-first preceding the
27 overtime ceiling adjustment effective on the ensuing April first.
28 (ii) Commencing January first, two thousand eighteen, and each year
29 thereafter, the overtime ceiling percentage shall be increased by an
30 amount equal to the annual inflation as determined from the increase in
31 the consumer price index in the one year period ending on the September
32 thirtieth prior to the overtime ceiling adjustment effective on the
33 ensuing January first.
34 (iii) Commencing January first, two thousand twenty-five, and each
35 year thereafter, for members who first become members of the New York
36 state and local employees' retirement system on or after April first,
37 two thousand twelve, the overtime ceiling percentage increase shall be
38 equal to the greater of: (A) three percent, or (B) the annual inflation
39 as determined from the increase in the consumer price index in the one
40 year period ending on the September thirtieth prior to the overtime
41 ceiling adjustment effective on the ensuing January first.
42 § 3. Notwithstanding any provision of law to the contrary, none of the
43 provisions of this act shall be subject to the appropriation requirement
44 of section twenty-five of the retirement and social security law.
45 § 4. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would change the overtime ceiling percentage increase for
Tier 6 members in the New York State and Local Employees' Retirement
System (NYSLERS) to the greater of three percent or the annual
inflation, beginning January 1, 2025. Under current law, the ceiling was
set at $15,000 at the inception of Tier 6 and is increased annually by
the inflation rate.
The provisions of Section 25 of the Retirement and Social Security Law
shall not apply.
Insofar as this bill affects the NYSLERS, the increased costs would be
shared by the State of New York and the local participating employers in
A. 7309--A 3
the NYSLERS. If this bill were enacted during the 2024 Legislative
Session, the increase in the present value of benefits would be approxi-
mately $263 million.
NYSLERS Increase in present Increase in required
value benefits contributions
Tiers 1 - 5 $0 $49 million
Tier 6 $263 million $214 million
Total $263 million $263 million
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
participating employers in NYSLERS is 0.1% of billable salary, or
approximately $13 million to the State of New York and approximately $19
million to the local participating employers. This permanent annual costwill increase as Tier 6 salary grows and will vary by employer based
upon the plan coverage and salary reported in Tier 6.
These estimated costs are based on 265,533 affected Tier 6 members,
with annual salary of approximately $12 billion as of March 31, 2023.
To develop the costs above, our models included a Monte Carlo method
of 5,000 simulations, each consisting of thirty-year CPI-U projections.
In every one of the 5,000 simulations, in at least one year of the thir-
ty-year period, the proposed legislation caused a higher overtime ceil-
ing based on the 3% inflation floor, compared to current law. This
occurred in approximately 64% of the 150,000 trial years.
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 8, 2024, and intended for use only during
the 2024 Legislative Session, is Fiscal Note No. 2024-104, prepared by
the Actuary for the New York State and Local Retirement System.