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S05692 Summary:

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S05692 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          5692
 
                               2015-2016 Regular Sessions
 
                    IN SENATE
 
                                      May 28, 2015
                                       ___________
 
        Introduced  by  Sen.  SAVINO -- 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  wages  earned from multiple employers and of plan
          year for the New York city retirement systems
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Subdivision l of section 601 of the retirement and social
     2  security law, as amended by chapter 18 of the laws of 2012,  is  amended
     3  to read as follows:
     4    l.  "Wages"  shall  mean  regular compensation earned by and paid to a
     5  member by a public employer, except that for members who first join  the
     6  New  York  state  and local employees' retirement system or the New York
     7  state teachers' retirement system on or after January first,  two  thou-
     8  sand  ten, overtime compensation paid in any year in excess of the over-
     9  time ceiling, as defined by this subdivision, shall not be  included  in
    10  the  definition  of  wages.  "Overtime  compensation"  shall  mean,  for
    11  purposes of this section, compensation paid  under  any  law  or  policy
    12  under  which  employees  are  paid at a rate greater than their standard
    13  rate for  additional  hours  worked  beyond  those  required,  including
    14  compensation  paid  under  section  one hundred thirty-four of the civil
    15  service law and section ninety of the general municipal law. The  "over-
    16  time  ceiling"  shall mean fifteen thousand dollars per annum on January
    17  first, two thousand ten, and shall be increased by three per  cent  each
    18  year  thereafter,  provided,  however, that for members who first become
    19  members of a public retirement system of the state  on  or  after  April
    20  first,  two thousand twelve, "overtime ceiling" shall mean fifteen thou-
    21  sand dollars per annum on April first, two thousand twelve, and shall be
    22  increased each year thereafter by a percentage to be determined annually
    23  by reference to the consumer price index (all  urban  consumers,  CPI-U,
    24  U.S.  city  average,  all  items,  1982-84=100), published by the United
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11344-01-5
        S. 5692                             2
 
     1  States bureau of labor statistics, for each  applicable  calendar  year.
     2  Said  percentage shall equal the annual inflation as determined from the
     3  increase in the consumer price index in the one year  period  ending  on
     4  the  December thirty-first prior to the cost-of-living adjustment effec-
     5  tive on the ensuing April first. For members who  first  join  a  public
     6  retirement  system  of  the  state on or after April first, two thousand
     7  twelve, the following items shall not be included in the  definition  of
     8  wages:  1.  wages  in  excess  of the annual salary paid to the governor
     9  pursuant to section three of article four of the state constitution,  2.
    10  lump  sum  payments  for  deferred compensation, sick leave, accumulated
    11  vacation or other credits for time not worked, 3.  any  form  of  termi-
    12  nation  pay,  4.  any  additional  compensation  paid in anticipation of
    13  retirement, and 5. in the case of employees who receive wages from three
    14  or more employers in a twelve month period, the wages paid by the  third
    15  and each [successive] additional employer.
    16    § 2. Paragraphs 1 and 2 of subdivision a of section 613 of the retire-
    17  ment  and  social  security law, as amended by chapter 18 of the laws of
    18  2012, are amended to read as follows:
    19    1. Except as provided by paragraph two of  this  subdivision,  members
    20  shall  contribute three percent of annual wages to the retirement system
    21  in which they have membership, except that beginning  April  first,  two
    22  thousand  thirteen  for  members  who  first  become members of a public
    23  retirement system of the state on or after  April  first,  two  thousand
    24  twelve,  the  rate  at  which  each  such member shall contribute in any
    25  current plan year (April first to March thirty-first, except for members
    26  of the New York city employees' retirement system, New York city  teach-
    27  ers'  retirement  system and New York city board of education retirement
    28  system, plan year shall mean January first through December thirty-first
    29  commencing with the January first next succeeding the effective date  of
    30  the  chapter of the laws of two thousand fifteen that amended this para-
    31  graph) shall be determined by reference to the wages of such  member  in
    32  the  second  plan  year  (April  first to March thirty-first, except for
    33  members of the New York city employees' retirement system, New York city
    34  teachers' retirement system and New York city board of education retire-
    35  ment system, plan year shall mean January first through  December  thir-
    36  ty-first commencing with the January first next succeeding the effective
    37  date  of  the  chapter  of the laws of two thousand fifteen that amended
    38  this paragraph) preceding such current plan year as follows:
    39    (i) members with wages of forty-five thousand  dollars  per  annum  or
    40  less shall contribute three per centum of annual wages;
    41    (ii)  members  with  wages greater than forty-five thousand per annum,
    42  but not more than fifty-five thousand per annum shall  contribute  three
    43  and one-half per centum of annual wages;
    44    (iii)  members  with wages greater than fifty-five thousand per annum,
    45  but not more than seventy-five thousand per annum shall contribute  four
    46  and one-half per centum of annual wages;
    47    (iv)  members  with wages greater than seventy-five thousand per annum
    48  but not more than one hundred thousand per annum shall  contribute  five
    49  and three-quarters per centum of annual wages; and
    50    (v)  members  with  wages  greater than one hundred thousand per annum
    51  shall contribute six per centum of annual wages.
    52    Notwithstanding the foregoing, during each of  the  first  three  plan
    53  years (April first to March thirty-first, except for members of New York
    54  city  employees'  retirement  system, New York city teachers' retirement
    55  system and New York city board of education retirement system, plan year
    56  shall mean January first through December thirty-first  commencing  with
        S. 5692                             3
 
     1  the  January  first next succeeding the effective date of the chapter of
     2  the laws of two thousand fifteen that amended this paragraph)  in  which
     3  such  member has established membership in a public retirement system of
     4  the  state, such member shall contribute a percentage of annual wages in
     5  accordance with the preceding schedule based upon a projection of annual
     6  wages provided by the employer.
     7    The head of each retirement system shall promulgate  such  regulations
     8  as  may  be  necessary  and appropriate with respect to the deduction of
     9  such contribution from members' wages and for  the  maintenance  of  any
    10  special fund or funds with respect to amounts so contributed.
    11    2.  A  member of the New York city employees' retirement system who is
    12  eligible to be a participant in the twenty-five-year and age  fifty-five
    13  retirement  program,  as  defined  by paragraph five of subdivision a of
    14  section six hundred four-b of this article shall contribute two  percent
    15  of  annual  wages  to  such system effective on the starting date of the
    16  elimination  of  additional  member  contributions,  as  defined  in  an
    17  election  made pursuant to paragraph ten of subdivision e of section six
    18  hundred four-b of this article, except that beginning April  first,  two
    19  thousand  thirteen  for members who first become members of the New York
    20  city employees' retirement system on or after April first, two  thousand
    21  twelve,  the  rate  at  which  each  such member shall contribute in any
    22  current plan year (April first to March thirty-first, provided, however,
    23  that plan year shall mean January first  through  December  thirty-first
    24  commencing  with the January first next succeeding the effective date of
    25  the chapter of the laws of two thousand fifteen that amended this  para-
    26  graph)  shall  be determined by reference to the wages of such member in
    27  the second plan year  (April  first  to  March  thirty-first,  provided,
    28  however,  that plan year shall mean January first through December thir-
    29  ty-first commencing with the January first next succeeding the effective
    30  date of the chapter of the laws of two  thousand  fifteen  that  amended
    31  this paragraph) preceding such current plan year as follows:
    32    (i)  members  with  wages  of forty-five thousand dollars per annum or
    33  less shall contribute three per centum of annual wages;
    34    (ii) members with wages greater than forty-five  thousand  per  annum,
    35  but  not  more than fifty-five thousand per annum shall contribute three
    36  and one-half per centum of annual wages;
    37    (iii) members with wages greater than fifty-five thousand  per  annum,
    38  but  not more than seventy-five thousand per annum shall contribute four
    39  and one-half per centum of annual wages;
    40    (iv) members with wages greater than seventy-five thousand  per  annum
    41  but  not  more than one hundred thousand per annum shall contribute five
    42  and three-quarters per centum of annual wages; and
    43    (v) members with wages greater than one  hundred  thousand  per  annum
    44  shall contribute six per centum of annual wages.
    45    Notwithstanding  the  foregoing,  during  each of the first three plan
    46  years (April first to March thirty-first, provided, however,  that  plan
    47  year  shall  mean January first through December thirty-first commencing
    48  with the January first next succeeding the effective date of the chapter
    49  of the laws of two thousand fifteen  that  amended  this  paragraph)  in
    50  which  such  member  has  established  membership  in  the New York city
    51  employees' retirement system, such member shall contribute a  percentage
    52  of  annual  wages in accordance with the preceding schedule based upon a
    53  projection of annual wages provided by the employer.
    54    § 3. This act shall take effect immediately.
          FISCAL NOTE.-- Pursuant to Legislative Law, Section 50:
        S. 5692                             4
 
          PROVISIONS OF PROPOSED LEGISLATION: This  proposed  legislation  would
        amend Retirement and Social Security Law ("RSSL") Section 601 to clarify
        that the wages excluded for the purpose of calculating the Final Average
        Salary  for  Tier  VI  members due to multiple employers only applies to
        salaries earned concurrently.
          This  proposed  legislation  would  also  amend, for the New York City
        Employees' Retirement System ("NYCERS"), the  New  York  City  Teachers'
        Retirement  System  ("NYCTRS")  and the New York City Board of Education
        Retirement System ("NYCBERS"), RSSL Section  613,  for  the  purpose  of
        calculating  wages  used  to  determine  contribution  rates for Tier VI
        members, by changing the definition of Plan Year from the period April 1
        to March 31 to the Calendar Year (i.e. January 1 to December 31).
          The Effective Date of the proposed legislation would be  the  date  of
        enactment with the Plan Year period change effective as of the following
        January 1.
          FINANCIAL  IMPACT  -  ACTUARIAL  PRESENT  VALUE  OF BENEFITS, EMPLOYER
        NORMAL COST, ACTUARIAL ACCRUED LIABILITY AND EMPLOYER CONTRIBUTIONS: The
        enactment of this proposed legislation is expected to  result  in  a  de
        minimis  change  in  the  Actuarial  Present Value of Benefits, Employer
        Normal Cost, Actuarial Accrued Liability and employer  contributions  to
        NYCERS, NYCTRS and NYCBERS.
          FINANCIAL  IMPACT  -  ADMINISTRATIVE  EXPENSES:  The enactment of this
        legislation is expected to result in the more efficient and less  costly
        administration of NYCERS, NYCTRS and NYCBERS.
          STATEMENT OF ACTUARIAL OPINION: I, Robert C. North, Jr., am the Acting
        Chief Actuary for the New York City Retirement Systems. I am a Fellow of
        the Society of Actuaries and a Member of the American Academy of Actuar-
        ies. I meet the Qualification Standards of the American Academy of Actu-
        aries to render the actuarial opinion contained herein.
          FISCAL  NOTE  IDENTIFICATION:   This estimate is intended for use only
        during the 2015 Legislative Session. It is Fiscal  Note  2015-01,  dated
        January  20, 2015, prepared by the Acting Chief Actuary for the New York
        City Retirement Systems.