STATE OF NEW YORK
________________________________________________________________________
6639
2025-2026 Regular Sessions
IN SENATE
March 19, 2025
___________
Introduced by Sens. GOUNARDES, ADDABBO, GALLIVAN, JACKSON, MAYER,
RHOADS, WEBB -- 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
the limitation of overtime compensation in final average salary calcu-
lations
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 1203 of the retirement and social security law, as
2 added by section 1 of part A of chapter 504 of the laws of 2009, is
3 amended to read as follows:
4 § 1203. Overtime. A member's final average salary shall be calculated
5 in accordance with such provisions of article eight or article eleven of
6 this chapter as govern the member's benefits including overtime, except
7 that earnings classified as overtime compensation in an amount in excess
8 of [fifteen] thirty percent of a member's annual wages not classified as
9 overtime compensation shall be excluded from such calculation. "Overtime
10 compensation" shall mean, for purposes of this section, compensation
11 paid under any law or policy under which employees are paid at a rate
12 greater than their standard rate for additional hours worked beyond
13 those required, including compensation paid under section one hundred
14 thirty-four of the civil service law and section ninety of the general
15 municipal law.
16 § 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would increase the allowable overtime compensation included
in the final average salary calculation to 30 percent of a member's
annual wages for Tier 5 and Tier 6 members in the New York State and
Local Police and Fire Retirement System (NYSLPFRS). The current limit is
15 percent.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08189-02-5
S. 6639 2
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 2025 Legislative
Session, the increase in the present value of benefits would be approxi-
mately $611 million.
NYSLPFRS Increase in present Increase in required
value of benefits contributions
Actives Tiers 1-5 (Closed) $ 35 mn $ 84 mn
Actives Tier 6 (Open) $ 576 mn $ 527 mn
Total $ 611 mn $ 611 mn
In NYSLPFRS, this benefit improvement will be funded by increasing the
billing rates charged annually to cover both retrospective and prospec-
tive benefit increases. The annual contribution required of all partic-
ipating employers in NYSLPFRS is expected to increase by 1.2% of billa-
ble salary, or approximately $10 million to the State of New York and
$45 million to the local participating employers. This permanent annualcost 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, 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.
This estimate, dated March 14, 2025, and intended for use only during
the 2025 Legislative Session, is Fiscal Note No. 2025-66. As Chief Actu-
ary of the New York State and Local Retirement System, I, Aaron Schottin
Young, hereby certify that this analysis complies with applicable Actu-
arial Standards of Practice as well as the Code of Professional Conduct
and Qualification Standards for Actuaries Issuing Statements of Actuari-
al Opinion of the American Academy of Actuaries, of which I am a member.
