STATE OF NEW YORK
________________________________________________________________________
5809--D
2023-2024 Regular Sessions
IN SENATE
March 16, 2023
___________
Introduced by Sens. GOUNARDES, ADDABBO, HARCKHAM, THOMAS, WEIK -- read
twice and ordered printed, and when printed to be committed to the
Committee on Civil Service and Pensions -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee -- 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 -- committee discharged,
bill amended, ordered reprinted as amended and recommitted to said
committee
AN ACT to amend the retirement and social security law, the education
law and the administrative code of the city of New York, in relation
to providing cost-of-living adjustments
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision g of section 78-a of the retirement and social
2 security law, as added by chapter 125 of the laws of 2000, is amended to
3 read as follows:
4 g. Notwithstanding any other provision of law, effective the first day
5 of September, two thousand twenty-five, the surviving spouse of a
6 deceased retired member who retired under an option which provides that
7 benefits are to be continued for life to the surviving spouse after the
8 death of the retired member, shall be entitled to receive benefits
9 pursuant to this section. Said benefits shall be [fifty] one hundred
10 percent of the monthly benefits which the pensioner would be receiving
11 pursuant to this section if living, and shall commence (i) with a
12 payment for the month of September, two thousand twenty-five, or (ii)
13 the month following the death of the deceased retired member, whichever
14 is later.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08560-14-4
S. 5809--D 2
1 § 2. Subdivision g of section 378-a of the retirement and social secu-
2 rity law, as added by chapter 125 of the laws of 2000, is amended to
3 read as follows:
4 g. Notwithstanding any other provision of law, effective the first day
5 of September, two thousand twenty-five, the surviving spouse of a
6 deceased retired member who retired under an option which provides that
7 benefits are to be continued for life to the surviving spouse after the
8 death of the retired member, shall be entitled to receive benefits
9 pursuant to this section. Said benefits shall be [fifty] one hundred
10 percent of the monthly benefits which the pensioner would be receiving
11 pursuant to this section if living, and shall commence (i) with a
12 payment for the month of September, two thousand twenty-five, or (ii)
13 the month following the death of the deceased retired member, whichever
14 is later.
15 § 3. Subdivision g of section 532-a of the education law, as added by
16 chapter 125 of the laws of 2000, is amended to read as follows:
17 g. Notwithstanding any other provision of law, effective the first day
18 of September, two thousand twenty-five, the surviving spouse of a
19 deceased retired member who retired under an option which provides that
20 benefits are to be continued for life to the surviving spouse after the
21 death of the retired member, shall be entitled to receive benefits
22 pursuant to this section. Said benefits shall be [fifty] one hundred
23 percent of the monthly benefits which the pensioner would be receiving
24 pursuant to this section if living, and shall commence (i) with a
25 payment for the month of September, two thousand twenty-five, or (ii)
26 the month following the death of the deceased retired member, whichever
27 is later.
28 § 4. Subdivision g of section 13-696 of the administrative code of the
29 city of New York, as added by chapter 125 of the laws of 2000, is
30 amended to read as follows:
31 g. Notwithstanding any other provision of law, effective the first day
32 of September, two thousand twenty-five, the surviving spouse of a
33 deceased retired member of the New York city employees' retirement
34 system, the New York city teachers' retirement system, the New York city
35 police pension fund, the New York city fire department pension fund or
36 the New York city board of education retirement system who retired under
37 an option which provides that benefits are to be continued for life to
38 the surviving spouse after the death of the member, shall be entitled to
39 receive a benefit pursuant to this section. Said benefit shall be
40 [fifty] one hundred percent of the monthly benefit which the pensioner
41 would be receiving if living, and shall commence (i) with a payment for
42 the month of September, two thousand twenty-five, or (ii) the month
43 following the death of the deceased retired member, whichever is later.
44 § 5. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would provide an increase in the defined benefit cost-of-
living adjustment (COLA) for New York public retirement systems. Start-
ing with a payment in September 2025, the cost-of-living benefit payable
to a surviving spouse who is eligible for COLA will be increased from
fifty percent to one hundred percent of the benefit that the pensioner
would have received.
Insofar as this bill affects the New York State and Local Employees'
Retirement System (NYSLERS), pursuant to Section 25 of the Retirement
and Social Security Law, the increased costs would be borne entirely by
the State of New York and would require an itemized appropriation suffi-
cient to pay the cost of the provision. If this bill were enacted during
S. 5809--D 3
the 2024 Legislative Session, the increase in the present value of bene-
fits would be approximately $1.7 billion.
In the NYSLERS, this benefit improvement will be funded by (1) billing
a past service cost to cover retrospective benefit increases and (2)
increasing the billing rates charged annually to cover prospective bene-
fit increases, as follows:
(1) To fund retrospective costs, the State of New York will be
required to pay $1.82 billion (including interest) as of March 1, 2025.
(2) To fund prospective costs, the annual contribution required of all
participating employers in NYSLERS is 0.03% of billable salary, or
approximately $4.4 million to the State of New York and approximately
$6.6 million to the local participating employers. This permanent annu-
al cost will vary in subsequent billing cycles with changes in the bill-
ing rate and salary of the affected members.
Insofar as this bill affects the New York State and Local Police and
Fire Retirement System (NYSLPFRS), the increased costs would be shared
by the State of New York and the local participating employers in the
NYSLPFRS. If this bill were enacted during the 2024 Legislative Session,
the increase in the present value of benefits would be approximately
$180 million.
NYSLPFRS Increase in present Increase in required
value benefits contributions
Tiers 1-5 $173 million $86 million
Tier 6 $7 million $94 million
Total $180 million $180 million
In the NYSLPFRS, 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 NYSLPFRS is 0.4% of billable salary, or
approximately $3.4 million to the State of New York and approximately
$14 million to the local participating employers. This permanent annual
cost will vary in subsequent billing cycles with changes in the billing
rate and salary of the affected members.
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 January 26, 2024, and intended for use only
during the 2024 Legislative Session, is Fiscal Note No. 2024-45,
S. 5809--D 4
prepared by the Actuary for the New York State and Local Retirement
System.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
As it relates to the New York State Teachers' Retirement System, this
bill would amend subdivision g of Section 532-a of the Education Law to
increase the cost-of-living adjustment (COLA) benefit to surviving
spouse beneficiaries of deceased retirees who elected an option which
provides a lifetime benefit to their surviving spouse. The COLA survivor
benefit would be equal to 100% of the monthly benefit which the retiree
would be receiving if alive. The current COLA survivor benefit is equal
to 50% of the benefit the retiree would be receiving if alive. This
increase in spousal survivor benefit would also be applicable to the
"catch-up" supplementation provided under subdivision f to eligible
retirees who retired before January 1, 1997. This benefit improvement
would be effective in September of 2025.
The annual cost to the employers of members of NYSTRS for this benefit
is estimated to be $42.0 million or 0.22% of payroll if this bill is
enacted.
Member data is from the System's most recent actuarial valuation files
as of June 30, 2023, consisting of data provided by the employers to the
Retirement System. The most recent data distributions and statistics can
be found in the System's Annual Report for fiscal year ended June 30,
2023. System assets are as reported in the System's financial statements
and can also be found in the System's Annual Report. Actuarial assump-
tions and methods are provided in the System's Actuarial Valuation
Report as of June 30, 2023.
The source of this estimate is Fiscal Note 2024-8 dated February 2,
2024 prepared by the Office of the Actuary of the New York State Teach-
ers' Retirement System and is intended for use only during the 2024
Legislative Session. I, Richard A. Young, am the Chief Actuary for the
New York State Teachers' Retirement System. I am a member of the Ameri-
can Academy of Actuaries and I meet the Qualification Standards of the
American Academy of Actuaries to render the actuarial opinion contained
herein.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
SUMMARY: This proposed legislation, as it relates to the New York City
Retirement Systems and Pension Funds (NYCRS), would increase the Cost-
of-Living Adjustment (COLA), effective September 1, 2025, to an eligible
surviving spouse from 50% to 100% of the COLA the pensioner would be
receiving if still alive.
EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
by Fiscal Year for the first 25 years ($ in Millions)
Year NYCERS TRS BERS POLICE FIRE TOTAL
2025 446.9 188.7 20.7 43.9 12.0 712.2
2026 8.3 2.7 0.3 0.6 0.2 12.1
2027 8.3 2.7 0.3 0.6 0.2 12.1
2028 8.2 2.7 0.3 0.6 0.2 12.0
2029 8.2 2.7 0.3 0.5 0.2 11.9
2030 8.2 2.6 0.3 0.5 0.2 11.8
2031 8.1 2.6 0.3 0.5 0.2 11.7
2032 8.1 2.6 0.3 0.5 0.2 11.7
2033 8.1 2.6 0.3 0.5 0.2 11.7
S. 5809--D 5
2034 8.1 2.6 0.3 0.5 0.2 11.7
2035 8.1 2.6 0.3 0.5 0.2 11.7
2036 8.1 2.6 0.1 0.5 0.2 11.5
2037 3.3 2.6 0.1 0.2 0.1 6.3
2038 3.3 2.6 0.1 0.2 0.1 6.3
2039 3.3 1.0 0.1 0.2 0.1 4.7
2040 3.3 1.0 0.1 0.2 0.1 4.7
2041 3.4 1.0 0.2 0.2 0.1 4.9
2042 3.4 1.0 0.2 0.2 0.1 4.9
2043 3.4 1.0 0.2 0.2 0.1 4.9
2044 3.5 1.0 0.2 0.2 0.1 5.0
2045 3.5 1.0 0.2 0.2 0.1 5.0
2046 3.5 1.0 0.2 0.2 0.1 5.0
2047 3.6 1.0 0.2 0.2 0.1 5.1
2048 3.6 1.1 0.2 0.2 0.1 5.2
2049 3.7 1.1 0.2 0.2 0.1 5.3
Employer Contribution impact beyond Fiscal Year 2049 is not shown.
Projected contributions include future new hires that may be impacted.
The initial increase in employer contributions of $712.2 million is
estimated to be $460.7 million for New York City and $251.5 million for
the other obligors of NYCRS.
INITIAL INCREASE (DECREASE) IN ACTUARIAL LIABILITIES
as of June 30, 2023 ($ in Millions)
Present Value (PV) NYCERS TRS BERS POLICE FIRE
PV of Benefits: 459.7 191.1 20.9 43.5 12.6
PV of Employee Contributions: 0.0 0.0 0.0 0.0 0.0
PV of Employer Contributions: 459.7 191.1 20.9 43.5 12.6
Unfunded Accrued Liabilities: 433.2 181.6 19.8 41.6 11.7
AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
NYCERS TRS BERS POLICE FIRE
Number of Payments: 12 14 11 12 12
Fiscal Year of Last Payment: 2036 2038 2035 2036 2036
Amortization Payment: 4.8 M 1.6 M 0.2 M 0.3 M 0.1 M
Additional One-time Payment: 438.6 M 186.0 M 20.4 M 43.3 M 11.8 M
Unfunded Accrued Liability (UAL) increases for active members were
amortized over the expected remaining working lifetime of those impacted
by the benefit changes using level dollar payments. UAL attributable to
terminated vested members and current retirees was recognized in the
first year.
CENSUS DATA: The estimates presented herein are based on preliminary
census data collected as of June 30, 2023. The census data for the
impacted population is summarized below.
NYCERS TRS BERS POLICE FIRE
Active Members
- Number Count: 180,354 124,368 24,613 33,800 10,720
S. 5809--D 6
- Average Age: 47.8 44.4 51.4 37.6 40.8
- Average Service: 11.8 12.3 9.7 11.3 13.9
- Average Salary: 88,800 98,500 59,700 128,600 139,500
Term. Vested Members
- Number Count: 28,133 21,830 2,885 1,493 59
- Average Age: 51.8 47.0 51.9 38.2 43.9
Receiving Members
- Number Count: 43,599 26,140 3,099 4,354 1,150
- Average Age: 74.1 75.3 75.9 65.0 68.6
IMPACT ON MEMBER BENEFITS: The surviving spouse of a deceased retired
member who retired under an option which provides that benefits are to
be continued for life to the surviving spouse after the death of the
retired member is currently entitled to receive a COLA equal to 50% of
the COLA the pensioner would be receiving if living. This proposed
legislation would change from 50% to 100% the percentage of COLA a
surviving spouse receives after the death of the retired member.
ASSUMPTIONS AND METHODS: The estimates presented herein have been
calculated based on the Revised 2021 Actuarial Assumptions and Methods
of the impacted retirement systems. In addition:
* Assumptions for active members electing a form of pension at retire-
ment that would continue a payment to a surviving spouse (ranging from
15% to 30%) were made based on the distribution of current elections and
an estimate of future elections.
* New entrants were assumed to replace exiting members so that total
payroll increases by 3% each year for impacted groups. New entrant demo-
graphics were developed based on data for recent new hires and actuarial
judgement.
RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend
highly on the actuarial assumptions, methods, and models used, demo-
graphics of the impacted population; and other factors such as invest-
ment, contribution, and other risks. If actual experience deviates from
actuarial assumptions, the actual costs could differ from those
presented herein. Quantifying these risks is beyond the scope of this
Fiscal Note.
This Fiscal Note is intended to measure pension-related impacts and
does not include other potential costs (e.g., administrative and Other
Postemployment Benefits). This Fiscal Note does not reflect any chapter
laws that may have been enacted during the current legislative session.
STATEMENT OF ACTUARIAL OPINION: Marek Tyszkiewicz and Gregory Zelikov-
sky are members of the Society of Actuaries and the American Academy of
Actuaries. We are members of NYCERS but do not believe it impairs our
objectivity and we meet the Qualification Standards of the American
Academy of Actuaries to render the actuarial opinion contained herein.
To the best of our knowledge, the results contained herein have been
prepared in accordance with generally accepted actuarial principles and
procedures and with the Actuarial Standards of Practice issued by the
Actuarial Standards Board.
FISCAL NOTE IDENTIFICATION: This Fiscal Note 2024-74 dated June 5,
2024 was prepared by the Chief Actuary for the New York City Retirement
Systems and Pension Funds. This estimate is intended for use only during
the 2024 Legislative Session.
