STATE OF NEW YORK
________________________________________________________________________
5634--A
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 -- recommitted to the Committee on Civil Service
and Pensions in accordance with Senate Rule 6, sec. 8 -- 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
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;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07542-03-6
S. 5634--A 2
1 (c) the board of trustees of such library shall be elected by the
2 voters of its chartered service area;
3 (d) such library's budget shall be approved by the voters of its char-
4 tered service area;
5 (e) at least fifty-one percent of such library's budget shall derive
6 from public sources; and
7 (f) such library shall file the annual report with the comptroller as
8 required of public libraries by section thirty of the general municipal
9 law.
10 § 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would permit any free association library which meets
certain specific criteria to elect participation in the New York State
and Local Employees' Retirement System (NYSLERS).
Internal Revenue Service (IRS) plan qualification risk: permitting
participation of non-governmental employees in NYSLERS jeopardizes the
Retirement System's governmental plan status and its exemption from the
Employees Retirement Income Security Act (ERISA). This would result in
the loss of critical tax benefits and would substantially impair the
System's value to over 1.25 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 Retirement System. It is esti-
mated that the costs to obtain such a ruling would be $50,000 for the
services of the IRS, and $1,000 per hour for legal consultants.
An electing corporation's annual contributions will depend on the
retirement plan adopted and the billable salary of the employees. Annual
costs will vary as the billing rates and salary of the affected employ-
ees change.
The expected annual contributions of an electing corporation for FYE
2027 are as follows:
Tier Percent of Payroll
1 14.4 to 27.8
2 13.8 to 26.0
3 and 4 21.1
5 18.1
6 13.6
In addition, there will be a deficiency cost to the electing corpo-
ration which may be amortized over a 25-year period. This cost will
depend on the age, service, salary, plan and tier of the affected
employees.
Summary of relevant resources:
Membership data as of March 31, 2025 was used to measure the impact of
the bill, the same data used in the Actuarial Valuations dated April 1,
2025. Distributions and other statistics can be found in the 2025 Report
of the Actuary and the 2025 Annual Comprehensive Financial Report. The
actuarial assumptions and methods used are described in the 2025 Annual
Report to the Comptroller on Actuarial Assumptions, and the Codes, Rules
and Regulations of the State of New York: Audit and Control. The fair
value of assets and GASB disclosures can be found in the 2025 Financial
Statements and Supplementary Information.
Assumptions, demographics, and other considerations may have been
modified to better reflect specific provisions of any proposed benefit
change(s).
S. 5634--A 3
This fiscal note does not constitute a legal opinion on the viability
of the bill, nor is it intended to serve as a substitute for the profes-
sional judgment of an attorney.
This estimate, dated February 6, 2026, and intended for use only
during the 2026 Legislative Session, is Fiscal Note Number 2026-104. As
Chief Actuary of the New York State and Local Retirement System
(NYSLRS), 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 Actu-
aries, of which I am a member. I am a member of NYSLRS but do not
believe it impairs my objectivity.
