S08461 Summary:

BILL NOS08461
 
SAME ASNo Same As
 
SPONSORRITCHIE
 
COSPNSR
 
MLTSPNSR
 
Amd §§512, 608 & 1209, R & SS L
 
Permits wages earned through shared services agreements to be included in the computation of final average salaries regardless if such earnings make the final average salary exceed that of the previous two years by more than ten percent; provides any additional costs shall be borne by the participating members of the shared services agreement, not the state.
Go to top    

S08461 Actions:

BILL NOS08461
 
03/03/2022REFERRED TO CIVIL SERVICE AND PENSIONS
Go to top

S08461 Committee Votes:

Go to top

S08461 Floor Votes:

There are no votes for this bill in this legislative session.
Go to top

S08461 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          8461
 
                    IN SENATE
 
                                      March 3, 2022
                                       ___________
 
        Introduced  by  Sen. RITCHIE -- 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
          permitting  wages  earned  through  shared  services  agreements to be
          included in the computation of final average salaries

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Subdivisions a and b of section 512 of the retirement and
     2  social security law, subdivision a as amended by chapter 298 of the laws
     3  of 2016 and subdivision b as amended by chapter 18 of the laws of  2012,
     4  are amended and a new subdivision e is added to read as follows:
     5    a.  A  member's final average salary shall be the average wages earned
     6  by such a member during any three consecutive years  which  provide  the
     7  highest  average wage; provided, however, if the wages earned during any
     8  year included in the period  used  to  determine  final  average  salary
     9  exceeds  that  of the average of the previous two years by more than ten
    10  percent, the amount in excess of ten percent shall be excluded from  the
    11  computation  of  final average salary; provided however if the amount in
    12  excess of ten percent was earned while working under a  shared  services
    13  agreement, such excess shall be included in the computation of the final
    14  average salary.  Notwithstanding the preceding provisions of this subdi-
    15  vision  to  the contrary, for a member who first becomes a member of the
    16  New York state and local employees' retirement system on or after  April
    17  first,  two  thousand twelve, or for a New York city police/fire revised
    18  plan member, a New York city enhanced plan member who receives the ordi-
    19  nary disability benefit provided for in subdivision c-1 of section  five
    20  hundred  six  of  this  article  or  the  accidental  disability benefit
    21  provided for in paragraph three of subdivision c of section five hundred
    22  seven of this article, a New York city  uniformed  correction/sanitation
    23  revised  plan  member or an investigator revised plan member, a member's
    24  final average salary shall be the average wages earned by such a  member
    25  during  any  five  consecutive  years  which provide the highest average
    26  wage; provided, however, if the wages earned during any year included in
    27  the period used to determine final average salary exceeds  that  of  the
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14387-03-2

        S. 8461                             2
 
     1  average  of the previous four years by more than ten percent, the amount
     2  in excess of ten percent shall be excluded from the computation of final
     3  average salary. In determining final  average  salary  pursuant  to  any
     4  provision  of this subdivision, where the period used to determine final
     5  average salary is the period which  immediately  precedes  the  date  of
     6  retirement,  any  month  or months (not in excess of twelve) which would
     7  otherwise be included in computing final average salary but during which
     8  the member was on authorized leave of absence at partial pay or  without
     9  pay  shall  be excluded from the computation of final average salary and
    10  the month or an equal number of months immediately preceding such period
    11  shall be substituted in lieu thereof.
    12    b. Notwithstanding the provisions of subdivision a  of  this  section,
    13  with  respect  to  members  of  the New York state employees' retirement
    14  system who first become members of the New York state and local  employ-
    15  ees'  retirement system before April first, two thousand twelve, the New
    16  York state and local police and fire retirement system and the New  York
    17  city  teachers' retirement system, a member's final average salary shall
    18  be equal to one-third of the  highest  total  wages  earned  during  any
    19  continuous  period  of employment for which the member was credited with
    20  three years of service credit; provided, however, if  the  wages  earned
    21  during  any  year of credited service included the period used to deter-
    22  mine final average salary exceeds the average of the wages of the previ-
    23  ous two years of credited service by more than ten percent,  the  amount
    24  in excess of ten percent shall be excluded from the computation of final
    25  average  salary; provided however if the amount in excess of ten percent
    26  was earned while working under a    shared    services  agreement,  such
    27  excess shall be included in the computation of the final average salary.
    28  For  members  who  first become a member of the New York state and local
    29  employees' retirement system on  or  after  April  first,  two  thousand
    30  twelve,  with respect to members of the New York state and local employ-
    31  ees' retirement system, a member's final average salary shall  be  equal
    32  to  one-fifth  of  the  highest total wages earned during any continuous
    33  period of employment for which the member was credited with  five  years
    34  of  service  credit;  provided,  however, if the wages earned during any
    35  year of credited service included the period  used  to  determine  final
    36  average  salary  exceeds  the  average of the wages of the previous four
    37  years of credited service by more than ten percent, the amount in excess
    38  of ten percent shall be excluded from the computation of  final  average
    39  salary;  provided  however  if  the  amount in excess of ten percent was
    40  earned while working under a  shared   services agreement,  such  excess
    41  shall be included in the computation of the final average salary.
    42    e.  For the purposes of this section "shared services agreement" shall
    43  mean an agreement entered  into  between  two  or  more  municipalities,
    44  libraries,  or public or quasi-public organizations participating in the
    45  retirement system, whereby such participating entities  agree  to  share
    46  services described in such agreement.
    47    § 2.  Subdivisions a and b of section 608 of the retirement and social
    48  security  law, as amended by chapter 18 of the laws of 2012, are amended
    49  and a new subdivision f is added to read as follows:
    50    a. For members who first become members of a public retirement  system
    51  of  the  state before April first, two thousand twelve, a member's final
    52  average salary shall be the average wages earned by such a member during
    53  any three consecutive years which  provide  the  highest  average  wage;
    54  provided,  however,  if the wages earned during any year included in the
    55  period used to determine final average salary exceeds that of the  aver-
    56  age  of  the  previous two years by more than ten percent, the amount in

        S. 8461                             3
 
     1  excess of ten percent shall be excluded from the  computation  of  final
     2  average  salary; provided however if the amount in excess of ten percent
     3  was earned while working under a    shared    services  agreement,  such
     4  excess shall be included in the computation of the final average salary.
     5  For  members  who  first  become members of the New York state and local
     6  employees' retirement system or the New York state teachers'  retirement
     7  system  on  or  after April first, two thousand twelve, a member's final
     8  average salary shall be the average wages earned by such  member  during
     9  any  five  consecutive  years  which  provide  the highest average wage;
    10  provided, however, if the wages earned during any year included  in  the
    11  period  used to determine final average salary exceeds that of the aver-
    12  age of the previous four years by more than ten percent, the  amount  in
    13  excess  of  ten  percent shall be excluded from the computation of final
    14  average salary; provided however if the amount in excess of ten  percent
    15  was  earned  while  working  under a   shared   services agreement, such
    16  excess shall be included in the computation of the final average salary.
    17  Where the period used to determine final average salary  is  the  period
    18  which  immediately  precedes the date of retirement, any month or months
    19  (not in excess of twelve) which would otherwise be included in computing
    20  final average salary but during which the member was on authorized leave
    21  of absence at partial pay or without pay  shall  be  excluded  from  the
    22  computation  of final average salary and the month or an equal number of
    23  months immediately preceding such period shall be  substituted  in  lieu
    24  thereof.
    25    b.  Notwithstanding  the  provisions of subdivision a of this section,
    26  with respect to members who first became members of the New  York  state
    27  and  local  employees' retirement system and the New York city teachers'
    28  retirement system before April first, two thousand  twelve,  a  member's
    29  final  average  salary  shall be equal to one-third of the highest total
    30  wages earned by such member during any continuous period  of  employment
    31  for  which  the  member was credited with three years of service credit;
    32  provided, however, if the wages  earned  during  any  year  of  credited
    33  service  included  in  the period used to determine final average salary
    34  exceeds the average of the wages of the previous two years  of  credited
    35  service  by  more  than ten percent, the amount in excess of ten percent
    36  shall be excluded from the computation of final average salary; provided
    37  however if the amount in excess of ten percent was earned while  working
    38  under  a   shared   services agreement, such excess shall be included in
    39  the computation of the final average salary. With respect to members who
    40  first become members of the New York state and local employees'  retire-
    41  ment  system  and  the  New  York city teachers' retirement system on or
    42  after April first, two thousand twelve, a member's final average  salary
    43  shall  be  equal  to one-fifth of the highest total wages earned by such
    44  member during any continuous period of employment for which  the  member
    45  was  credited  with  five years of service credit; provided, however, if
    46  the wages earned during any year of credited  service  included  in  the
    47  period used to determine final average salary exceeds the average of the
    48  wages  of  the  previous four years of credited service by more than ten
    49  percent, the amount in excess of ten percent shall be excluded from  the
    50  computation  of  final average salary; provided however if the amount in
    51  excess of ten percent was earned while working under a  shared  services
    52  agreement, such excess shall be included in the computation of the final
    53  average salary.
    54    f. For the purposes of this section "shared services agreement"  shall
    55  mean  an  agreement  entered  into  between  two or more municipalities,
    56  libraries, or public or quasi-public organizations participating in  the

        S. 8461                             4
 
     1  retirement  system,  whereby  such participating entities agree to share
     2  services described in such agreement.
     3    §  3. Section 1209 of the retirement and social security law, as added
     4  by chapter 18 of the laws of 2012, is amended to read as follows:
     5    § 1209. Final average salary. a. For members who first become  members
     6  of  the New York state and local police and fire retirement system on or
     7  after April first, two thousand twelve, a member's final average  salary
     8  shall  be  equal  to one-fifth of the highest total wages earned by such
     9  member during any continuous period of employment for which  the  member
    10  was  credited  with  five years of service credit; provided, however, if
    11  the wages earned during any year of credited  service  included  in  the
    12  period used to determine final average salary exceeds the average of the
    13  wages  of  the  previous four years of credited service by more than ten
    14  percent, the amount in excess of ten percent shall be excluded from  the
    15  computation  of  final average salary; provided however if the amount in
    16  excess of ten percent was earned while working under a  shared  services
    17  agreement, such excess shall be included in the computation of the final
    18  average salary.  Wages in excess of the annual salary paid to the gover-
    19  nor pursuant to section three of article four of the state  constitution
    20  shall  be  excluded  from  the  computation  of final average salary for
    21  members who first become members of the New York state and local  police
    22  and fire retirement system on or after April first, two thousand twelve.
    23    b.  For the purposes of this section "shared services agreement" shall
    24  mean an agreement entered  into  between  two  or  more  municipalities,
    25  libraries,  or public or quasi-public organizations participating in the
    26  retirement system, whereby such participating entities  agree  to  share
    27  services described in such agreement.
    28    § 4. All costs associated with implementing the provisions of this act
    29  shall  be  borne by the entities involved in such shared services agree-
    30  ments and shall not be subject to the provisions of section  twenty-five
    31  of the retirement and social security law.
    32    § 5. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          This  bill  would allow earnings while working under a shared services
        agreement in excess of the ten percent limitation to be included in  the
        computation  of  final  average salary for tiers 3 through 6. Currently,
        earnings in any year used in computation of  the  final  average  salary
        cannot exceed the average of the previous two years (four years for tier
        6) by more than ten percent. A shared services agreement is an agreement
        between  two  municipalities, libraries or public or quasi-public organ-
        izations participating in the retirement system  which  agree  to  share
        services.
          The  exact  number  of  current  members as well as future members who
        could be affected by this legislation cannot be readily  determined.  In
        all  likelihood, very few members would be affected. However, if a large
        number of members earn salary under  these  shared  services  agreements
        there could be significant additional annual costs.
          If this bill is enacted, insofar as this proposal affects the New York
        State  and Local Employees' Retirement System (NYSLERS), any costs aris-
        ing from this legislation would be shared by the State of New  York  and
        the participating employers in the NYSLERS.
          Insofar  as  this proposal affects the New York State and Local Police
        and Fire Retirement System  (NYSLPFRS),  any  costs  arising  from  this
        legislation would be shared by the State of New York and the participat-
        ing employers in the NYSLPFRS.
          Summary of relevant resources:

        S. 8461                             5
 
          Membership  data as of March 31, 2021 was used in measuring the impact
        of the proposed change, the same data used in the April 1, 2021 actuari-
        al valuation. Distributions and other statistics can  be  found  in  the
        2021  Report  of the Actuary and the 2021 Comprehensive Annual Financial
        Report.
          The  actuarial  assumptions and methods used are described in the 2020
        and 2021 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, 2021
        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  February  18,  2022, and intended for use only
        during the  2022  Legislative  Session,  is  Fiscal  Note  No.  2022-66,
        prepared  by  the  Actuary  for  the New York State and Local Retirement
        System.
Go to top