STATE OF NEW YORK
________________________________________________________________________
5634
2025-2026 Regular Sessions
IN SENATE
February 26, 2025
___________
Introduced by Sens. PALUMBO, MATTERA, MAY -- 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
participation by free association libraries in the New York state and
local employees' retirement system
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The retirement and social security law is amended by adding
2 a new section 31-g to read as follows:
3 § 31-g. Participation by free association libraries. A free associ-
4 ation library as defined in section two hundred fifty-three of the
5 education law and which meets the criteria set forth in this section,
6 may by resolution adopted as provided in section seven hundred eight of
7 the not-for-profit corporation law by its board of trustees and subject
8 to the approval of the comptroller, elect to participate in the retire-
9 ment system. Acceptance of its employees for membership in the retire-
10 ment system shall be mandatory with the comptroller, who shall determine
11 the amounts of contribution payable by such library and its employees,
12 shall resolve questions of credit for prior service, and shall in all
13 other respects assure that such employees share the same rights, obli-
14 gations and benefits as other members of the retirement system. A free
15 association library shall be eligible to join the retirement system
16 under the following conditions:
17 (a) such library shall be chartered by the state board of regents;
18 (b) such library shall serve the entire population of its chartered
19 service area;
20 (c) the board of trustees of such library shall be elected by the
21 voters of its chartered service area;
22 (d) such library's budget shall be approved by the voters of its char-
23 tered service area;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07542-02-5
S. 5634 2
1 (e) at least fifty-one percent of such library's budget shall derive
2 from public sources; and
3 (f) such library shall file the annual report with the comptroller as
4 required of public libraries by section thirty of the general municipal
5 law.
6 § 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would permit any free association public library which meets
certain specific criteria to elect participation in the New York State
and Local Employees' Retirement System (NYSLERS).
If this bill is enacted during the 2025 Legislative Session, and an
eligible corporation elects participation, the future annual cost will
depend on the retirement plan adopted and the billable salary of the
affected employees.
The expected annual contributions of an electing corporation for the
fiscal year ending March 31, 2026 are as follows:
Tier Percent of Payroll
1 12.5 to 25.2
2 11.6 to 23.0
3 and 4 19.3
5 16.3
6 12.6
In addition to the annual contributions discussed above, there will be
a deficiency cost to the electing corporation which will be payable for
a 25-year period. This cost will depend on the age, service, salary,
plan and tier of the affected employees.
Internal Revenue Service (IRS) plan qualification issues: permitting
participation of non-governmental employees in the NYSLERS could jeop-
ardize the governmental plan status of the Retirement System ("the
System") and its exemption from the Employees Retirement Income Security
Act (ERISA). This development could result in the loss of qualified
status, which would mean the loss of tax benefits. This result would
substantially impair the System's value to the more than one million
participants.
Prior to the enactment of this legislation, we recommend that a favor-
able ruling be obtained from the IRS stating that these provisions would
not harm the qualification status of the System. It is estimated that
the costs to obtain such a ruling would be $38,000 for the services of
the IRS, and $1,000 per hour for legal consultants.
Summary of relevant resources:
Membership data as of March 31, 2024 was used in measuring the impact
of the proposed change, the same data used in the April 1, 2024 actuari-
al valuation. Distributions and other statistics can be found in the
2024 Report of the Actuary and the 2024 Annual Comprehensive Financial
Report. The actuarial assumptions and methods used are described in the
2024 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, 2024 New York State and Local Retirement System Financial Statements
and Supplementary Information.
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.
S. 5634 3
This estimate, dated February 24, 2025, and intended for use only
during the 2025 Legislative Session, is Fiscal Note No. 2025-67. As
Chief Actuary of the New York State and Local Retirement System, I,
Aaron Schottin Young, hereby certify that this analysis complies with
applicable Actuarial Standards of Practice as well as the Code of
Professional Conduct and Qualification Standards for Actuaries Issuing
Statements of Actuarial Opinion of the American Academy of Actuaries, of
which I am a member.
