STATE OF NEW YORK
________________________________________________________________________
7783
2025-2026 Regular Sessions
IN SENATE
May 6, 2025
___________
Introduced by Sens. JACKSON, HARCKHAM -- 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, 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 d 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 d. The percentage referred to in this section shall be determined
5 annually by reference to the consumer price index (all urban consumers,
6 CPI-U, U.S. city average, all items, 1982-84=100), published by the
7 United States bureau of labor statistics, for each applicable calendar
8 year. Said percentage shall equal fifty percent of the annual inflation,
9 as determined from the increase in the consumer price index in the one
10 year period ending on the March thirty-first prior to the cost-of-living
11 adjustment effective on the ensuing September first. Said percentage
12 shall then be rounded up to the next higher one-tenth of one percent and
13 shall not exceed three percent nor be less than one percent and effec-
14 tive the first day of September, two thousand twenty-seven, shall not
15 exceed five percent nor be less than one percent.
16 § 2. Subdivision d of section 378-a of the retirement and social secu-
17 rity law, as added by chapter 125 of the laws of 2000, is amended to
18 read as follows:
19 d. The percentage referred to in this section shall be determined
20 annually by reference to the consumer price index (all urban consumers,
21 CPI-U, U.S. city average, all items, 1982-84=100), published by the
22 United States bureau of labor statistics, for each applicable calendar
23 year. Said percentage shall equal fifty percent of the annual inflation,
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08218-03-5
S. 7783 2
1 as determined from the increase in the consumer price index in the one
2 year period ending on the March thirty-first prior to the cost-of-living
3 adjustment effective on the ensuing September first. Said percentage
4 shall then be rounded up to the next higher one-tenth of one percent and
5 shall not exceed three percent nor be less than one percent and effec-
6 tive the first day of September, two thousand twenty-seven, shall not
7 exceed five percent nor be less than one percent.
8 § 3. Subdivision d of section 532-a of the education law, as added by
9 chapter 125 of the laws of 2000, is amended to read as follows:
10 d. The percentage referred to in this section shall be determined
11 annually by reference to the consumer price index (all urban consumers,
12 CPI-U, U.S. city average, all items, 1982-84=100), published by the
13 United States bureau of labor statistics, for each applicable calendar
14 year. Said percentage shall equal fifty percent of the annual inflation,
15 as determined from the increase in the consumer price index in the one
16 year period ending on the March thirty-first prior to the cost-of-living
17 adjustment effective on the ensuing September first. Said percentage
18 shall then be rounded up to the next higher one-tenth of one percent and
19 shall not exceed three percent nor be less than one percent and effec-
20 tive the first day of September, two thousand twenty-seven, shall not
21 exceed five percent nor be less than one percent.
22 § 4. Subdivision d of section 13-696 of the administrative code of the
23 city of New York, as added by chapter 125 of the laws of 2000, is
24 amended to read as follows:
25 d. The percentage referred to in this section shall be determined
26 annually by reference to the consumer price index (all urban consumers,
27 CPI-U, U.S. city average, all items, 1982-84=100), published by the
28 United States bureau of labor statistics, for each applicable calendar
29 year. Said percentage shall equal fifty percent of the annual inflation,
30 as determined from the increase in the consumer price index in the one
31 year period ending on the March thirty-first prior to the cost-of-living
32 adjustment effective on the ensuing September first. Said percentage
33 shall then be rounded up to the next higher one-tenth of one percent and
34 shall not exceed three percent nor be less than one percent and effec-
35 tive the first day of September, two thousand twenty-seven, shall not
36 exceed five percent nor be less than one percent.
37 § 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 2027, the maximum percentage calculated
for the annual cost of living increase shall increase from three percent
to five percent.
Insofar as this bill affects the New York State and Local Employees'
Retirement System (NYSLERS), the increased costs would be shared by the
State of New York and the local participating employers in the NYSLERS.
If this bill were enacted during the 2025 Legislative Session, the
increase in the present value of benefits would be approximately $844
million.
In 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, pursuant to Section 25 of the Retire-
ment and Social Security Law, the State of New York will be required to
pay $819 million as of March 1, 2026.
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(2) To fund prospective costs, the annual contribution required of all
participating employers in NYSLERS is 0.04% of billable salary , or
approximately $4.8 million to the State of New York and approximately
$7.3 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.
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 $91.7 million.
NYSLPFRS Increase in present Increase in required
value of benefits contributions
Pensioners $ 63.1 mn $ 0.0 mn
Actives Tiers 1-5 (Closed) $ 17.6 mn $ 37.1 mn
Actives Tier 6 (Open) $ 11.0 mn $ 54.6 mn
Total $ 91.7 mn $ 91.7 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 0.2% of billable salary, or approxi-
mately $1.7 million to the State of New York and approximately $7.5
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.
The current corridor of 1% and 3% provides an average COLA percentage
that is approximately equal to half the rate of inflation over a
retiree's lifetime. By maintaining the 1% floor but increasing the maxi-
mum to 5%, this bill provides a larger retiree COLA percentage in high
inflationary environments but results in more volatile employer contrib-
ution rates. Prefunding COLA benefits cannot eliminate or mitigate the
increased volatility in the billing rates caused by this benefit
improvement.
To develop the costs above, our models included a Monte Carlo method
of 5,000 simulations, each consisting of 30-year CPI-U projections.
In approximately 3,700 of the 5,000 simulations, inflation exceeded 6%
at least once. In these simulations, high inflationary environments
persisted for a three-year period on average. Employer billing rates in
these simulations increased approximately 1.9% under this proposal,
instead of 1.1% under current law.
In approximately 1,400 of the 5,000 simulations, inflation exceeded
10% at least once. In these simulations, high inflationary environments
persisted for a six-year period on average. Employer billing rates in
these simulations increased approximately 4.2% under this proposal,
instead of 2.1% under current law.
Summary of relevant resources:
The inflation measurement used in this analysis was based on the
February 2025 Consumer Price Index for All Urban Consumers: U.S. City
average, published by the U.S. Bureau of Labor Statistics.
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
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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 April 22, 2025, and intended for use only during
the 2025 Legislative Session, is Fiscal Note No. 2025-95. 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.
