Relates to increasing the earnings limitation for positions of public service; increases the earnings limitation from $35,000 to $50,000 in 2025 and thereafter.
STATE OF NEW YORK
________________________________________________________________________
6956--A
Cal. No. 1224
2025-2026 Regular Sessions
IN SENATE
March 27, 2025
___________
Introduced by Sens. C. RYAN, ADDABBO, BORRELLO, COMRIE, COONEY, FERNAN-
DEZ, GALLIVAN, HARCKHAM, HINCHEY, JACKSON, LANZA, MARTINEZ, MATTERA,
MAYER, MURRAY, ORTT, PALUMBO, RHOADS, ROLISON, SKOUFIS, WEBER -- read
twice and ordered printed, and when printed to be committed to the
Committee on Civil Service and Pensions -- reported favorably from
said committee and committed to the Committee on Finance -- reported
favorably from said committee, ordered to first and second report,
ordered to a third reading, amended and ordered reprinted, retaining
its place in the order of third reading
AN ACT to amend the retirement and social security law, in relation to
increasing the earning limitations for retired persons in positions of
public service
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 212 of the retirement and social security law is
2 amended by adding a new subdivision 2-a to read as follows:
3 2-a. Notwithstanding the provisions of subdivision two of this
4 section, the earnings limitation for retired persons in a position of
5 public service shall be increased to fifty thousand dollars from the
6 year two thousand twenty-five and thereafter.
7 § 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would allow a retired person from the New York State and
Local Retirement System who returns to public employment with an annual
salary of $50,000 or less to continue to receive their full retirement
benefit. Currently, the salary limit is $35,000.
Insofar as this bill affects the New York State and Local Employees'
Retirement System (NYSLERS), if this bill were enacted during the 2025
Legislative Session, the direct cost incurred would be the retiree's
pension benefit paid while post-retirement earnings are between $35,000
and $50,000 each calendar year. The pension benefit expected to be paid
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03695-03-5
S. 6956--A 2
by NYSLERS during that 2.5-month period is estimated to be $9,000 per
person.
In addition to the direct cost quoted above, there would be additional
costs in the form of lost employer contributions due to non-billable
post-retirement earnings, which are estimated to be $2,250 per person.
In NYSLERS, pursuant to Section 25 of the Retirement and Social Secu-
rity Law, the increased costs would be borne entirely by the State of
New York and would require an itemized appropriation sufficient to pay
the cost of the provision. For each retiree rehired pursuant to this
proposal, an annual cost of $11,250 is expected.
Insofar as this bill affects the New York State and Local Police and
Fire Retirement System (NYSLPFRS), if this bill were enacted during the
2025 Legislative Session, the direct cost incurred would be the
retiree's pension benefit paid while post-retirement earnings are
between $35,000 and $50,000 each calendar year. The pension benefit
expected to be paid by NYSLPFRS during that 1-month period is estimated
to be $7,500 per person.
In addition to the direct cost quoted above, there would be additional
costs in the form of lost employer contributions due to non-billable
post-retirement earnings, which are estimated to be $4,500 per person.
All costs will be shared by the State of New York and all participat-
ing employers in NYSLPFRS and spread over future billing cycles. For
each retiree rehired pursuant to this proposal, an annual cost of
$12,000 is expected.
In addition to the direct costs quoted above, insofar as this proposal
disrupts the usual pattern and timing of employee turnover (that is, if
members retire earlier than assumed and participating employers hire a
retiree instead of a new billable member), shifts in member behavior
could generate losses that increase the average billing rate in 20-year
and 25-year service-based plans from 33.7% to 43.3%. In age-based plans,
average billing rates could increase from 16.5% to 19.9%. The actual
increase in billing rates will depend upon member and employer utiliza-
tion, with the rates above representing an upper maximum.
Because this proposal exclusively benefits retirees, the increased
costs are primarily attributable to retirees from Tiers 1-4. Approxi-
mately half the contributions required to fund this proposal will be
collected on salary reported for current members of Tier 6.
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 12, 2025, and intended for use only during
the 2025 Legislative Session, is Fiscal Note No. 2025-71. 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
S. 6956--A 3
and Qualification Standards for Actuaries Issuing Statements of Actuari-
al Opinion of the American Academy of Actuaries, of which I am a member.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would add a new subdivision 2-a to Section 212 of the
Retirement and Social Security Law to increase the earnings-after-re-
tirement limitation to $50,000 for retired members who return to work in
positions of public employment for calendar year 2025 and thereafter.
Currently this earnings limitation is $35,000. There is no earnings
limitation for retirees age 65 and above.
It is expected that this increase in the earnings-after-retirement
limit could have an impact on the Retirement System's patterns of
retirement resulting in some members retiring earlier than they other-
wise would have. Earlier retirement generally increases plan costs since
members will be receiving their benefits for a longer period. If retire-
ment patterns shift more than expected, there will be additional costs.
The annual cost to the employers of members of the New York State
Teachers' Retirement System for this benefit is estimated to be $91.2
million or 0.45% of payroll if this bill is enacted.
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 retirement assumption which has been
modified from this report to reflect earlier patterns of retirement.
The source of this estimate is Fiscal Note 2025-24 dated May 29, 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.
