STATE OF NEW YORK
________________________________________________________________________
6638
2025-2026 Regular Sessions
IN SENATE
March 19, 2025
___________
Introduced by Sens. GOUNARDES, SANDERS -- read twice and ordered print-
ed, 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
calculating certain pensions
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision a of section 504 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 a. The service retirement benefit for general members at normal
5 retirement age with twenty or more years of credited service shall be a
6 pension equal to one-fiftieth of final average salary times years of
7 credited service, not in excess of thirty years, less fifty percent of
8 the primary social security retirement benefit as provided in section
9 five hundred eleven of this article. The service retirement benefit for
10 general members at normal retirement age with twenty or more years of
11 service who first become members of the New York state and local employ-
12 ees' retirement system on or after April first, two thousand twelve at
13 normal retirement age shall be a pension equal to the sum of [thirty-
14 five] forty per centum and one-fiftieth of final average salary for each
15 year of service in excess of twenty, but not in excess of thirty, times
16 final average salary times years of credited service.
17 § 2. Subdivisions a, b and b-1 of section 604 of the retirement and
18 social security law, subdivision a as amended and subdivision b-1 as
19 added by chapter 18 of the laws of 2012, subdivision b as amended by
20 chapter 266 of the laws of 1998 and the opening paragraph of subdivision
21 b as amended by section 8-b of part B of chapter 504 of the laws of
22 2009, are amended to read as follows:
23 a. The service retirement benefit at normal retirement age for a
24 member with less than twenty years of credited service[, or less than
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD06549-03-5
S. 6638 2
1 twenty-five years credited service for a member who joins the New York
2 state teachers' retirement system on or after January first, two thou-
3 sand ten,] shall be a retirement allowance equal to one-sixtieth of
4 final average salary times years of credited service. Normal retirement
5 age for members who first become members of a public retirement system
6 of the state on or after April first, two thousand twelve shall be age
7 sixty-three.
8 b. The service retirement benefit at normal retirement age for a
9 member with twenty years or more of credited service[, or with twenty-
10 five or more years credited service for a member who first joins the New
11 York state teachers' retirement system on or after January first, two
12 thousand ten,] shall be a retirement allowance equal to one-fiftieth of
13 final average salary times years of credited service not in excess of
14 thirty years.
15 Credited service in excess of thirty years shall provide an additional
16 retirement allowance equal to three-two hundredths of the final average
17 salary for each year of credited service in excess of thirty years.
18 b-1. Notwithstanding any other provision of law to the contrary, the
19 service retirement benefit for members with twenty or more years of
20 credit service who first become a member of a public retirement system
21 of the state on or after April first, two thousand twelve at age sixty-
22 three shall be a pension equal to the sum of [thirty-five] forty per
23 centum and one-fiftieth of final average salary for each year of service
24 in excess of twenty times final average salary times years of credited
25 service. In no event shall any retirement benefit payable without
26 optional modification be less than the actuarially equivalent annuitized
27 value of the member's contributions accumulated with interest at five
28 percent per annum compounded annually to the date of retirement.
29 § 3. Section 1312 of the retirement and social security law, as added
30 by chapter 18 of the laws of 2012, is amended to read as follows:
31 § 1312. Benefit enhancements. Notwithstanding any other law to the
32 contrary, eligible employees shall be permitted to retire, without
33 penalty, upon reaching age fifty-seven and completing at least thirty
34 years of credited service. Employees retiring pursuant to this section
35 shall receive a pension allowance equal to the sum of [thirty-five]
36 forty per centum and one-fiftieth of final average salary for each year
37 of service in excess of twenty times final average salary times years of
38 credited service.
39 § 4. Notwithstanding any other provision of law to the contrary, none
40 of the provisions of this act shall be subject to section 25 of the
41 retirement and social security law.
42 § 5. This act shall take effect immediately.
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 percent-
age of Final Average Salary payable to Tier 6 NYCERS, TRS, and BERS
members who retire with 20 or more years of Credited Service.
EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
by Fiscal Year for the first 25 years ($ in Millions)
Year NYCERS TRS BERS TOTAL
2026 65.7 78.1 8.5 152.3
2027 69.7 82.0 9.0 160.7
2028 73.9 86.3 9.4 169.6
2029 78.2 90.8 9.9 178.9
2030 82.6 95.8 10.4 188.8
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2031 87.2 101.1 10.9 199.2
2032 91.8 106.7 11.4 209.9
2033 96.5 112.8 12.0 221.3
2034 101.3 119.2 12.5 233.0
2035 106.1 126.0 13.1 245.2
2036 110.9 133.2 13.7 257.8
2037 115.7 140.7 14.2 270.6
2038 120.6 148.6 14.8 284.0
2039 125.4 156.8 11.7 293.9
2040 130.3 165.2 12.3 307.8
2041 109.5 173.8 12.9 296.2
2042 114.4 182.4 13.5 310.3
2043 119.3 190.9 14.1 324.3
2044 124.3 199.2 14.7 338.2
2045 129.3 176.7 15.3 321.3
2046 134.4 184.5 15.8 334.7
2047 139.6 192.1 16.4 348.1
2048 144.8 199.5 17.0 361.3
2049 150.1 206.6 17.6 374.3
2050 155.5 213.7 18.2 387.4
Projected contributions include future new hires that may be impacted.
For Fiscal Year 2051 and beyond, the expected increase in normal cost as
a level percent of pay for impacted new entrants is approximately 0.49%
for NYCERS, 0.77% for TRS, and 0.60% for BERS.
The initial increase in employer contributions of $152.3 million is
estimated to be $116.5 million for New York City and $35.8 million for
the other obligors of NYCRS.
PRESENT VALUE OF BENEFITS: The Present Value of Benefits is the
discounted expected value of benefits paid to current members if all
assumptions are met, including future service accrual and pay increases.
Future new hires are not included in this present value.
INITIAL INCREASE (DECREASE) IN ACTUARIAL PRESENT VALUES
as of June 30, 2024 ($ in Millions)
Present Value (PV) NYCERS TRS BERS
(1) PV of Employer Contributions: 701.3 1,057.6 85.7
(2) PV of Employee Contributions: 0.00.00.0
Total PV of Benefits (1) + (2): 701.3 1,057.6 85.7
UNFUNDED ACCRUED LIABILITY (UAL): Actuarial Accrued Liabilities are
the portion of the Present Value of Benefits allocated to past service.
Changes in UAL for active members were amortized over the expected
remaining working lifetime of those impacted using level dollar
payments. UAL attributable to inactive members was recognized in the
first year.
AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
NYCERS TRS BERS
Increase (Decrease) in UAL: 226.7 M 306.6 M 29.9 M
Number of Payments: 15 19 13
Amortization Payment: 25.7 M 30.7 M 3.7 M
Additional One-time Payment: 0.1 M 0.0 M 0.0 M
S. 6638 4
CENSUS DATA: The estimates presented herein are based on preliminary
census data collected as of June 30, 2024. The census data for the
impacted population is summarized below.
NYCERS TRS BERS
Active Members
- Number Count: 95,352 65,422 13,698
- Average Age: 42.6 38.6 47.5
- Average Service: 4.7 5.4 4.4
- Average Salary: 83,000 84,600 56,900
Term. Vested Members
- Number Count: 2 2 1
- Average Age: 51.0 54.0 59.0
IMPACT ON MEMBER BENEFITS: Currently, the service retirement benefit
for Tier 6 basic plan members of NYCERS, TRS, and BERS who have 20 or
more years of Credited Service is equal to 35% of Final Average Salary
(FAS) plus 2% of FAS for each year of Credited Service in excess of 20.
Under the proposed legislation, the service retirement benefit for
Tier 6 basic plan members of NYCERS, TRS, and BERS who have 20 or more
years of Credited Service would be equal to 40% of FAS plus 2% of FAS
for each year of Credited Service in excess of 20.
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:
* 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 2025-26 dated March 5,
2025 was prepared by the Chief Actuary for the New York City Retirement
Systems and Pension Funds and is intended for use only during the 2025
Legislative Session.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would amend Section 604 of the Retirement and Social Securi-
ty Law to improve the retirement benefit formula for Tiers 5 and 6
S. 6638 5
members of the New York State Teachers' Retirement System. The Tier 5
benefit formula would match the Tier 4 formula with eligibility for the
2% multiplier at 20 years of service instead of 25 years as it is
currently. The retirement benefit formula for Tier 6 members with 20 or
more years of service would be 40% of final average salary plus 2% for
each year of service in excess of 20 years. Currently, the benefit
formula for Tier 6 members with 20 or more years of service is 35% of
final average salary plus 2% for each year of service in excess of 20
years.
The annual cost to the employers of members of the New York State
Teachers' Retirement System for this benefit is estimated to be $92.5
million or 0.46% of payroll if this bill is enacted.
The System's "new entrant rate", a hypothetical employer contribution
rate that would occur if we started a new Retirement System without any
assets, is equal to 5.64% of pay under the current Tier 6 benefit struc-
ture. This can be thought of as the long-term expected employer cost of
Tier 6, based on the current actuarial assumptions. For the proposed
change to the Tier 6 benefit structure under this bill, this new entrant
rate is estimated to increase to 6.34% of pay, an increase of 0.70% of
pay.
Member data is from the System's most recent actuarial valuation files
as of June 30, 2024, 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,
2024. 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 will be provided in the System's Actuarial Valuation
Report as of June 30, 2024.
The source of this estimate is Fiscal Note 2025-6 dated March 7, 2025
prepared by the Office of the Actuary of the New York State Teachers'
Retirement System and is intended for use only during the 2025 Legisla-
tive Session. I, Richard A. Young, am the Chief Actuary for the New York
State Teachers' Retirement System. I am a member of the American Academy
of Actuaries and I meet the Qualification Standards of the American
Academy of Actuaries to render the actuarial opinion contained herein.
